LLP Assistance - CCJs
Discussion
There is an LLP that has been running since 2004, there are two partners, who provide Financial Advice.
One of the partners has revealed that he has a number of CCJs against him which means he cannot practice as an IFA
Has anyone had experience of dealing with something like this? The other partner had no knowledge of these and he has been lied to about it.
Can the partner be expelled from the LLP without it affecting the company?
Grateful for any assistance.
One of the partners has revealed that he has a number of CCJs against him which means he cannot practice as an IFA
Has anyone had experience of dealing with something like this? The other partner had no knowledge of these and he has been lied to about it.
Can the partner be expelled from the LLP without it affecting the company?
Grateful for any assistance.
Putting the limited liability status to one side, an LLP is still a partnership and it's basic principle of partnership law that you have to have more than one person to form a partnership.
If one partner is expelled, surely the LLP would no longer meet the LLP qualifying critera as it would only have one partner. So, someone else would need to be appointed in his place, I'd have thought. Or the remaining guy carries on effectively as a sole trader - but that leaves him without the limited liability protection that the LLP was almost certainly created in the first place to provide.
There also needs to be consideration as to whether the partnership deed, or whatever document regulates the constitution of the LLP, provides for a mechanism for removing a partner and whether these facts allow that mechanism to be activated.
If one partner is expelled, surely the LLP would no longer meet the LLP qualifying critera as it would only have one partner. So, someone else would need to be appointed in his place, I'd have thought. Or the remaining guy carries on effectively as a sole trader - but that leaves him without the limited liability protection that the LLP was almost certainly created in the first place to provide.
There also needs to be consideration as to whether the partnership deed, or whatever document regulates the constitution of the LLP, provides for a mechanism for removing a partner and whether these facts allow that mechanism to be activated.
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