A great deal of my work concerns advising and assisting LLP members who are exiting from an LLP, wish to do so, or have already done so.
LLP exits sometimes give rise to underlying problems, issues or matters that need to be addressed:
- Interpretation of the provisions of any LLP members’ agreement (written or oral)
- Application of the default terms relating to LLPs
- Unfair prejudice
- Just and equitable winding up
- Garden leave/suspension
- Disputed LLP accounts
- Bad faith
- Breach of fiduciary duty
- Discrimination (age, sex, sexual orientation, race, nationality, religion/no religion)
- Harassment and bullying
- Breach of/release from restrictive covenants
- Equitable compensation
- Other compensation
- Reputational issues
- Regulatory issues
There are often a number of key legal questions, the answers to which can have a radical effect on the outcome. These fundamental legal issues are not always apparent to the parties. They should be identified and considered as early as possible so that mistakes are avoided.
The provisions of any LLP members’ agreement will not provide all of the answers. The Limited Liability Partnerships Act and Regulations can impose additional rules on LLPs. There is also an overlay of judge-made case law since 2001 (when it first became possible to create an English LLP), plus over a century of case law relating to partnerships, which sometimes gives insight and guidance into how similar cases concerning LLPs might be determined.
Other statutes and regulations create extensive further rights and obligations, and again there is an overlay of case law which adds both complexity and clarity.
It is important to gain an understanding at the very outset as to the relative strengths and weaknesses of your case or position, before any steps are taken. The importance of this cannot be over-emphasised. A strategy can then be designed and implemented with a view to maximising the prospects of achieving a resolution at an early stage, at reasonable cost and on terms which achieve your desired objectives so far as possible.
I have experience of acting for clients exiting from LLPs in a wide variety of business sectors including professional practices (solicitors, accountants, surveyors, patent attorneys, doctors, dentists), private equity, corporate finance, investment advisory, investment management, property investment/development, construction, music industry, leisure, farming, retail, and care homes.