Key takeaways from this Ten-Minute Talk:
- The three common ‘gaps’ in LLP Agreements in relation to potential future mergers or transactions are usually (i) unachievable decision-making thresholds for approving a merger/transaction, (ii) lack of clarity on how any capital proceeds will be distributed and (iii) how dissenting partners can be addressed in a manner that avoids the transaction being thwarted;
- Failure to address constitutional gaps can mean that firms may miss out on any merger opportunities that arise as they are not able to move forward quickly enough; and
- An obvious ‘work-around’ is to amend the LLP Agreement during a merger process; however, this can be a high-risk strategy and may leave the firm open to challenge by disgruntled partners.
If you have any questions arising from this video, or would like specific advice on preparing your LLP agreement for a potential merger, or in relation to LLP agreements more generally, please contact Zulon Begum or Clare Murray.
CheckYourLLPAgreement – Online Tool:
Use our free online tool to help review and update your LLP agreement, ensuring it is robust, aligned with best practice and agile. You can access the tool here.