Advising on Partnership Agreements and LLPs
A partnership tends to start on trust and good intentions. That’s a fine place to begin, but it won’t decide how profits are split, or what happens when a partner wants to leave. A written agreement will. We draft partnership and LLP agreements that reflect how your business actually works, whether you’re setting one up for the first time or updating an arrangement that no longer fits. We can also work around exit agreements and dissolving partnerships.
What a partnership or LLP agreement covers
Every agreement is different, but most set out:
- What the business does, how it’s run, and how long it’s meant to last
- The role each partner plays, and what they’re responsible for
- How much each partner puts in, and how profits and losses are shared
- What happens if a partner is off for a long stretch, or dies
- How a partner leaves, and how a new one joins
- Succession planning for the longer term
- How disputes get resolved if they come up
Why it matters if you don’t have one
Plenty of partnerships run for years on nothing more than an informal understanding. It works until it doesn’t. If there’s no written agreement, the law fills the gap for you: a general partnership falls back on the Partnership Act 1890, and an LLP on the Limited Liability Partnerships Act 2000. Both give you a default set of rules, but the 1890 Act in particular was written for a very different kind of business, and the result rarely matches how you’d actually want things handled. Sorting that out after a disagreement has started costs far more than agreeing it in advance.
Setting one up, or putting one right
Whether you’re starting a partnership from scratch or updating an agreement that’s drifted out of date, we’ll draft something that fits. Every agreement we prepare is tailored to your partnership and the people in it, rather than pulled off a shelf. We’ll talk through what you’ve agreed between you, flag the things you might not have thought about yet, and put it into a document that holds up if it’s ever tested.
The time to agree on what happens if things go wrong is while everyone still believes they won’t.
A well-drafted agreement is the strongest protection you have against a partnership dispute. It won’t stop every disagreement, but it gives you an agreed way to handle one. If a dispute has already started, our Partnership disputes page covers how we can help.
If you’re not sure which of these fits your situation, call us, and we’ll point you in the right direction.
