SUCCESSION PLANNING FOR BUSINESS OWNERS TRADING THROUGH LIMITED LIABILITY PARTNERSHIPS

Since the introduction of a limited liability partnership (LLP) as a third choice of business medium (in addition to a conventional partnership or a limited company) the issues surrounding succession planning for business owners running a business through this medium have become a little more complex. At least this is the general perception. With an LLP being a corporate entity on the one hand (for legal purposes) and a collection of individuals on the other (for tax purposes), it is no surprise that some confusion exists as to how to treat these business entities and their owners, especially in the area involving life assurance planning and trusts, including succession (share purchase) arrangements and keyperson cover. However, clear understanding of the LLP structure and the issues involved should prevent any confusion.