For lawyers looking at how to practice and on the assumption that they would like to operate with a likely limit on their personal liabilities, there are two main options: the limited liability partnership (LLP) or a limited company. Both are now well established business vehicles, so which option should be used?
Both are reasonably easy to establish, both provide a level of limited liability and both are separate legal entities distinct from their owners. An LLP is perhaps somewhat more flexible in ownership terms as the rights to income and capital can be adjusted reasonably easily and new partners can be admitted or existing ones removed with relative ease. In a company, the shareholders have a fixed shareholding. Convertible shares or options may provide some flexibility but essentially, the share ownership structure is fixed. Additional members can be admitted by issuing new shares or via the sale of shares by existing members. Retiring partners may have their shares purchased by the company or its shareholders.
