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LLP partner shares

Possible to run a salary for a partner too?

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We have been approached by an LLP.

Currently there is an split of 60/40 voting rights/equity profit share as drawn up in the members agreement.

is it possible however to put one of the members on a PAYE salary. So that they receive the PAYE income and then a share of the profits/loss which has been reduced by the PAYE salary? 

If so would the members agreement need amending for such?

Currently based on extractions one member is going to have an overdrawn account so we are trying to forward plan.

Also telephone expenses - like with a limited company do they need to be in the llp name or can they be in the individual members names and recharged back? 

Thanks in advance 


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13th Jun 2018 18:44

It's good to forward plan. Beats backward planning, which is what Anonymous normally asks for. But... not this plan. Think about it.

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14th Jun 2018 05:59

Yes they can change the profit sharing to give one member a prior profit tranche, but that’s for them to decide, not for you. If they go down that route your idea that the prior tranche is subject to PAYE is misconceived.

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14th Jun 2018 09:32

I think there may be an historic problem here: Solicitors used to regularly refer to a partner's 'salary', i.e. a fixed amount due to someone prior to making the % profit split. But of course this has nothing to do with salaries / PAYE as generally understood today.

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