LLP - Members' and Designated Members' Responsibilities
A guide to administering and managing a limited liability partnership. It covers limited liability partnerships formed and registered in England, Wales and Scotland.
- explains some of the main responsibilities of a limited liability partnership's members and designated members; and
- deals with the key filing requirements as they relate to Companies House.
You will find the relevant law in the Limited Liability Partnerships Act 2000, and in the Limited Liability Partnerships Regulations 2001.
Membership of a limited liability partnership
When a limited liability partnership is formed, the members are the people named on the incorporation document. At least two members must be appointed as designated members.
A limited liability partnership must have at least two members. If membership falls to only one member and the limited liability partnership continues to carry on business for more than 6 months, then the benefits of limited liability are lost.
Every member is the agent of the limited liability partnership and the partnership is bound by anything done by a member on its behalf unless:
- the member had no authority to act in that capacity on behalf of the limited liability partnership; and
- the person with whom the member is dealing knows that they had no authority to act or had no knowledge of his or her membership of the limited liability partnership.
When does a member cease to be a member of a limited liability partnership?
Members cease to be members:
- on death (or dissolution in the case of a corporate member); or
- by agreement with the other members; or
- by giving reasonable notice to the other members.
- given to the person with whom the former member was dealing; or
- delivered to the Registrar.
Ex-members must not interfere with the management or administration of the limited liability partnership.
Must any change of members be notified to the Registrar?
Yes. Notice that a person has become a member or ceased to be a member must be delivered to the Registrar within 14 days on the following forms:
- Form LLP288a - Appointment of a member
- Form LLP288b - Terminating the appointment of a member
If, on appointment, a member is also appointed as a 'designated member', this is stated on Form LLP288a.
Notice that an existing member has changed their name or address must be delivered to the Registrar within 28 days on the following form:
- Form LLP288c - Change of particulars of a member
Who are the Designated Members of a limited liability partnership?
There must be at least two designated members.
The incorporation document must say:
- that the partnership has specific individual designated members; or
- that all members are designated members.
The members may decide at any time to reverse the position by delivering notice to the Registrar on Form LLP8. If the Form LLP8 says that specific members will be designated members, then details of each member's status must be delivered to the Registrar within 28 days on Form LLP288c.
Where specific members are designated members, a member may become a designated member - or vice versa - at any time by agreement with the other members. Again, notice of the member's change of status must be delivered to the Registrar within 28 days on Form LLP288c.
A designated member that ceases to be a member is automatically no longer a designated member.
If, for any reason, the number of designated members falls to one, or none, then all members will be deemed designated members.
What responsibilities do the designated members have?
Designated members have the same rights and duties towards the limited liability partnership as any other member. These mutual rights and duties are governed by the limited liability partnership agreement or by law. However, the law also places extra responsibilities on designated members. In particular, designated members are responsible for:
- appointing an auditor (if one is needed);
- signing the accounts on behalf of the members;
- delivering the accounts to the Registrar;
- notifying the Registrar of any membership changes or change to the registered office address or name of the limited liability partnership;
- preparing, signing and delivering to the registrar an annual return (Form LLP363); and
- acting on behalf of the limited liability partnership if it is wound up and dissolved.
Designated members are also accountable in law for failing to carry out these legal responsibilities.