LLP Members' Agreement

What's included

• Questionnaire to capture how your LLP will run
• Members' capital contributions and whether interest is paid on them
• Profit and loss sharing, and drawings
• Decision-making: day-to-day and major decisions
• Roles of designated members
• Admission of new members
• Retirement, expulsion and death of a member
• Restrictions on competing and confidentiality
• Dispute resolution
• Editable draft and final version ready to sign

What an LLP members' agreement is

A limited liability partnership (LLP) is owned and run by its members, not by shareholders and directors. The members' agreement is the private contract between the members and the LLP. It is the LLP's rulebook: who puts in what, who gets what, and who decides what.

The agreement is not filed at Companies House and does not appear on the public register.

Why you need one

The law does not require an LLP to have a written agreement. But if there is none, default rules apply. Under those rules, for example:

• all members share profits equally, whatever each one contributed;
• a member cannot be expelled unless all members have agreed this in advance;
• members are not entitled to a salary for their work.

These rules rarely match what the founders intended. A written agreement avoids costly arguments later.

What the agreement covers

• Each member's capital contribution and how it is repaid
• How profits and losses are shared, and when drawings can be taken
• Which decisions need a majority and which need everyone to agree
• The duties of designated members (every LLP must have at least two)
• How new members join
• What happens when a member retires, is expelled, becomes ill or dies
• Restrictions on competing with the LLP, and confidentiality
• How disputes are resolved

How it works

1. Order the agreement and complete our short questionnaire.
2. We draft the agreement to match your answers.
3. You review the draft and tell us about any changes.
4. We send the final version for every member to sign.

What you need to provide

• The LLP name and number, or the proposed name if not yet formed
• Names of the members and which are designated members
• Capital each member is putting in
• How you want to share profits and losses
• Any special rules you have already agreed

If you have not formed your LLP yet, see our Limited Liability Partnership formation service. We can prepare the agreement at the same time.

Important to know

The agreement covers common situations for small and medium LLPs. Profit sharing in an LLP can affect how each member is taxed, and complex arrangements — for example with corporate members or investors — may need advice from a lawyer or accountant. We will tell you if your situation looks like it needs specialist advice.

Common mistakes

• Relying on a verbal agreement between the members.
• Not updating the agreement when a member joins or leaves.
• Using a general partnership template. An LLP is a different legal structure, and the agreement must reflect that.

Frequently asked questions

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