The Limited Liability Partnership Act 2000 received Royal Assent in July and from 6 April, 2001, it will be possible to form a Limited Liability Partnership (LLP). The regulatory framework for LLPs will be complete this month, and we can therefore expect the first UK-based LLPs to be registered during next year.
Why should a firm become an LLP?
A partner’s financial exposure resulting from the
misdeeds of fellow partners can be capped so that the partner avoids the consequences of unlimited liability. However, the entire personal interest in the LLP remains at risk, plus any additional exposure arising from personal guarantees and ‘excessive drawings’ made in the previous two years.
