Tiffin v Lester Aldridge LLP [2012] EWCA Civ 35; [2012] WLR (D) 19
“Section 4(4) of the Limited Liability Partnerships Act 2000 required an assumption that the business of the limited liability partnership had been carried on by two or more of its members as partners and upon that assumption, required an inquiry as to whether or not the person whose status was in question would have been one of the partners. If the answer to that inquiry was that he would have been a partner then he could not have been an employee of the partnership; if the answer was that he would not have been a partner there would have to be further inquiry as to whether his relationship would have been that of an employee. It was implicit that the primary source material for the purpose of answering those questions would be the members’ agreement although that would not necessarily represent the totality of what might be looked at.”
WLR Daily, 1st February 2012
Source: www.iclr.co.uk
A LLP is not a partnership. ss1(5)of the LLLP Act 2000 is quite clear when it states that partnership law does not apply to LLP’s.
By assuming a LLP is a partnership fails to recognise that the parties have agreed to run their business as a LLP. The obligations a member of a LLP assumes are different to those of a partner in a partnership. Members act as agents for the LLP. Partners act as agents for each other. There is no use of the word ” in common” in the so called definition of a LLP. Zahid tells us that if their is an esentail feature of a partnership it is the ability of the partners to bind one another which in turns leads to the obligations on partners to act in utmost good faith. There is no such requirement in a LLP structure. Some commentators have expressed a view that to assume the LLP is a partnership is contrary to the supreme Court’s approach/decision in Autoclenz.The concept of partnership and employment being mutually exclusive is based on the decision of Cowell( 1989). he so called definition of employment used in that case is different to that in the ERA 1996, which is much wider. The conceptual difficulty on not having a separate legal entity faced in Cowell is not present in a LLP.