Limited Liability Partnerships

Limited Liability Partnerships are a new type of business entity in the UK - they are classed as partnerships for tax reasons, but the partners can limit their liability. In contrast to a limited company the LLP doesn't have directors, share capital or articles of association. They sound like they offer a lot of flexibility and, if this guy is to be believed, then they open up a whole new type of organisation: the Open Corporate Partnership:

The first innovative use of the LLP relates to the fact that any stakeholder, whether investor, supplier, customer, management or staff may if he wishes subscribe to the Member Agreement (rather than signing supplier Terms and Conditions, Contract of Employment etc etc).

i.e. a true “partnership” Enterprise Model is now possible wherein all stakeholders are Members, exchanging Economic Value and sharing Risk and Reward within the scope and terms of the Member Agreement.

Secondly, and revolutionary in its effects, is the fact that the proportional “shares”/ partnership interests (e.g. one half, three tenths, seven millionths) constitute an entirely new form of “Open” Capital which is infinitely divisible, infinitely flexible and grows with the growth of the Enterprise.

It looks like an interesting way to structure a new start-up.

More on LLCs: Companies House guidance, Act of Parliament, factsheet.

Permalink: http://blog.iandavis.com/2003/01/limited-liability-partnerships/


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