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Fixed share partners are not employees, CoA rules

some facts that were no recorded in the Cof A Judgement. when the LLP was formed in the 2 may 2007,there were 19 members defined as "Full Equity Partners(FEP)". They contributed 150K each. They held between them 1900 voting points. There were 11 members defined as "Fixed Share Partners ( "FSP)"" . The 9 FSP with 5 points contributed 6.25K each and the two with 10 points contributed 12.5K. In total the 11 FSP's contributed just over 80K. The FSP held 65 votes. There were no members who fell within the definition of salaried partners. They arrived later and were previously solicitors with between 3-6 years PQE. Under a LLP structure all members , even salaried members are treated by HMRC as self employed. As a LLP is a tax transparent structure it is an very useful vehicle to avoid paying employer NI. That is one of the reasons why there are now 40,000 LLP's registered at companies house.The decision means that the LLP structure is now an excellent way to avoid employment rights as well as avoiding employer NI at 12.8%.

2-Feb-2012

10:04 am