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Member departures: Tackling repudiatory breaches and competing businesses

Is there an amicable way for LLPs and their members to part ways? Paul Nicholls QC, Tim Spillane and Peter Nicholson consider members’ rights and duties

24 November 2014

The limited liability partnership (LLP) has become the corporate vehicle of choice for many businesses, particularly in the legal services sector. However, uncertainty persists as to members' rights and duties in the UK.

This article considers two issues:

  1. whether an LLP member can terminate membership in response to a repudiatory breach by the LLP or another member; and

  2. the duties of LLP members who wish to leave and set up in competition.

Repudiatory breach

The question whether an LLP member can terminate his or her membership in response to a repudiatory breach by the LLP or another member (i.e. whether a member can claim constructive dismissal) is important. There is ...

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