Many senior associates and salaried partners will be
considering the impact of a move away from employment and into
self-employment over the coming months as professional practices
appoint new equity and fixed share partners for the next financial
year. Here is what to consider:
What does the LLP agreement say?
A surprising number of LLPs still operate without an up-to-date
LLP agreement but, whether or not there is one, you should be aware
of the arrangements for capital contributions, profit sharing, the
firm's drawings policy and tax reserving policy.
How much capital will you need to pay in?
Partners in professional practices are usually required to make
a capital contribution which is repayable upon leaving the firm.
The amount of capital will vary according to many different
factors, e.g. the firm's size and its cash flow requirements.
Generally speaking, we see capital contributions ranging from
£50,000 to £400,000. The most common way to finance
them
