ACCA F4 - Corp and Business Law (ENG)

174 11: Partnerships  Part D The formation and constitution of business organisations

Examples of duties of an LLP's designated members include:

 Filing certain notices with the Registrar, such as when a member leaves

 Signing and filing accounts

 Appointing auditors if appropriate

The Registrar will maintain a file containing the publicised documents of the LLP at Companies House.

6.4 External relationships

Every member is an agent of the LLP. As such, where the member has authority, the LLP will be bound by

the acts of the member.

The LLP will not be bound by the acts of the member where:

 They have no authority and the third party is aware of that fact

 They have ceased to be a member, and the third party is aware of that fact

6.5 Dissolution

An LLP does not dissolve when a member leaves in the same way that a traditional partnership does.

Where a member has died or (for a corporate member) been wound up, that member ceases to be a

member, but the LLP continues in existence.

An LLP must therefore be wound up when the time has come for it to be dissolved. This is achieved

under provisions similar to company winding up provisions.

6.6 Limited partnership

The other form of partnership that is seen, rarely, in the UK is the limited partnership. Under the Limited

Partnership Act 1907, a partnership may be formed in which at least one partner (the general partner)

must have full, unlimited liability. The other partners have limited liability for the debts of the

partnership beyond the extent of the capital they have contributed. The rules are as follows:

 Limited partners may not withdraw their capital

 Limited partners may not take part in the management of the partnership

 Limited partners cannot bind the partnership in a contract with a third party without losing the

benefit of limited liability

 The partnership must be registered with Companies House

Partnership questions in scenarios often revolve around a partner's authority to enter into contracts and

the liability of all the partners when debts are incurred.

Exam focus

point