Q&As

Where an employee is employed by and a member of a limited liability partnership (LLP), can that LLP assign its goodwill to another LLP without the consent of that member?

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Published on LexisPSL on 03/05/2017

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • Where an employee is employed by and a member of a limited liability partnership (LLP), can that LLP assign its goodwill to another LLP without the consent of that member?

Where an employee is employed by and a member of a limited liability partnership (LLP), can that LLP assign its goodwill to another LLP without the consent of that member?

The mutual rights and duties of the members of a limited liability partnership (LLP) are governed by agreement between the members or between the LLP and its members. In the absence of an agreement, certain default provisions under the Limited Liability Partnerships Regulations 2001 (LLPR 2001), SI 2001/1090 apply, the following of which may be relevant:

  1. every member of an LLP may take part in its management

  2. any difference arising as to ordinary matters connected with the business of an LLP may be decided by a majority of its members, but a change to the nature of an LLP's business can only be made with the consent of all of its members

For further information, see Practice Note: The nature of a limited liability partnership and its legal framework and Q&A: How do the members of an LLP make decisions on the conduct of its business?

It is a question of fact what constitutes an 'ordinary matter' connected with an LLP's business. There is no statutory definition of the term and very little case law on this or the corresponding provision in section 24(8) of the Partnership Act 1890.

A number of commentators have opined that decisions involving

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