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Review Your SQE 1 Practice Records

Examination Timing: 00H00M05S

Jane Smith and John Brown have been running a successful business in partnership for several years. They have decided to incorporate their business into a Limited Liability Partnership (LLP) and transfer the existing business into the LLP. Both Jane and John will continue to own and manage the LLP equally but are uncertain about the structural requirements for the LLP. 

What advice should they receive regarding the structure of the LLP?

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According to the Limited Liability Partnership Act 2000, an LLP must have at least two designated members (s.8(2)). Designated members have additional administrative and compliance responsibilities compared to ordinary members. In this scenario, since it is intended that Jane and John will be the only members of the LLP, they must both be designated members to satisfy the statutory requirement of having at least two designated members. This ensures the LLP meets legal obligations regarding filings and compliance with regulatory requirements. 

Key Point: An LLP must have a minimum of two designated members who are responsible for specific administrative duties and legal compliance. This is crucial to understand when forming an LLP, as failing to meet this requirement can lead to non-compliance issues.

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