Partnerships and LLPs

Partnerships and their LLPs are in a very different position to other businesses and their employees, often subjected to different regulation and terms of partnership agreements. Specialist advice is often needed to advise on the terms of member appointments, negotiating exits, dealing with team moves and restraints on moving firms and dealing with issues associated with whistleblowing or unlawful discrimination.
 

Partners and LLP members are (to a greater or lesser extent) part-owners of, and co-venturers in, the business, rather than merely serving the business. As a result, true partners (and their LLP equivalents) do not have some employment-related rights such as the right not to be unfairly dismissed. However, most partnership and LLP agreements deal with the removal of partners or LLP members and partners/LLP members may have important rights under those provisions.

Partners and LLP members do have some of the rights that employees have, such as the right not to be discriminated against on grounds of protected characteristic such as race, sex or age and rights associated with the protection of whistleblowers.

In some cases, people are held out to the external world as partners, but in reality they are salaried employees, with all associated employment rights. Hybrid arrangements such as fixed share or junior equity partners can further complicate the position. Often, the first question to be asked is whether the particular partner/LLP equivalent is in fact a disguised employee.

Further information

If you have any questions or require employment advice, please call or email our employment law team.