Deed of adherence to limited liability partnership agreement
Written with our partners at:
What's a deed of adherence to limited liability partnership agreement and when do you need it?
Use this template when you want to join a new member (this is what partners are called) to an existing limited liability partnership (LLP). It accompanies our template limited liability partnership agreement, which you would use when first constituting this kind of partnership.
The deed of adherence is an efficient way to ensure that subsequent new members are bound by the same rules and arrangements as the original members, without the need for the original LLP agreement itself to be revised each time someone joins, or leaves.
The new member will be provided with a copy of the original LLP agreement and agrees with the existing members that they shall all observe, perform and be bound by the existing provisions of the LLP agreement as though the new member were one of the original members.
The deed clarifies the amount of capital contribution that the new member will pay into the membership, the new member’s liabilities on joining the LLP (including to activities taking place before the joining date) and how shares in profits and losses will be handled.
The arrangement is typically done by deed, rather than a normal contract. Deeds are contracts, but they have more exacting signature provisions, incorporating witnesses of signatures, which means they tend to be used in certain circumstances where a straightforward contract would be considered insufficient. The point of including the witnesses is to make clear, unequivocally, that both the signing parties fully understood what they were signing and that they intended to agree to the terms set out in the deed.
Powers of attorney, transfers of property and other valuable items will usually be done by way of a deed. Setting up an LLP or joining one is also a situation where a deed is considered most appropriate to evidence that the persons identified as members fully intended to commit to the obligations and responsibilities of partners in this business.
If you operate a general partnership, there is a separate template deed of adherence appropriate for joining new partners to that type of business.