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How we set ourselves up as an LLP

Robert Oliver explains how his practice's limited liability partnership works and why his practice has decided to move to a community interest partnership.

Why start up as an LLP?

We are a PMS practice and started in 2001. Until 2004, the practice was run as a standard partnership by two GPs. After one of the GPs left, we decided to become an LLP.

I had done a bit of practice management for the practice, and we sat down alongside a nurse practitioner and said ‘Why don't we do something different?' We went down a Limited Liability Partnership route.

In 2004, it was quite unusual and PCTs were less inclined to be supportive of these structures. But we were lucky as they were willing to support us doing something different.

For us, it was a valid vehicle. You don't have to put any money in to buy into a practice and, if you leave, you don't take anything out either. If you were a partner and you left, then you would get a huge payout when you left in x number of years time.

It felt sensible, certainly for me with a commercial background, to have limited liability. I couldn't think of any reason why you wouldn't want limited liability should anything go terribly wrong.

Having limited liability does not absolve you of responsibility should you do anything that is fraudulent or illegal in any way, and of course any company or commercial business tries to take due care to prevent these things from happening.

Another reason was to encourage nurses – who may have never had any commercial exposure - to move into a more entrepreneurial role.

How did you set yourself up as an LLP?

It is really straightforward. You can get something off the shelf and modify it, but we sat down with our accountants and solicitors and drew up an LLP agreement and that was it.

The only difference with a normal partnership is that you have to be registered with Companies House and you have to submit your accounts slightly differently, but it is no big deal really.

The disadvantage for some organisations, is that your accounts are open to public scrutiny. You have to submit your accounts to Companies House and anybody can download them for a £1.

The reality is that it doesn't make much difference to the way we work. You look at a business and the way you want it to run, and then look for a suitable vehicle to support that. If you want to have a rally, then you don't plump for a mini. You might need something better.

How much difference does it make to the services you can offer to patients?

It does not make one iota of difference. This is more about trying to give people who are working for our organisation a chance to be more business orientated, rather than it being the same job year in year out. People think these things are really exciting, but actually they can be bloody boring.

How has having a nurse practitioner as a partner made a difference?

It has toughened her up a bit. When you are pat of a business you can be critical, but when you have to make the tough decisions there is nowhere else to go. When you are a partner - that is it. You have to make some contentious decisions for the greater good.

What would your advice be to anyone thinking of becoming an LLP?

They need to think what they want to give patients and their staff, and then look for what model would be best for them.

An LLP is very simple; a standard partnership, with a limited liability. If you look at large accountants or solicitors, they are all LLPs, it does not make a big difference to the way they work, but the limitation on the liability is important.

I think having LLP or some other sort of limited liability is going to be essential when the NHS cuts do really kick in this year. Just because you are a social enterprise or you are an LLP won't stop you from going out of business, but it might protect you personally if you are in one of those organisations that are not going to make it.

What about the future?

We are an LLP but we are thinking about moving towards a more structured type of business.

We would like to retain a percentage of profits in the business in a more structured way. One of the things we are looking at is moving towards more of a social enterprise model, whether that be a Community Interest Company or some other model that might be more appropriate. We are currently going through a process to decide which model is more appropriate for the business.

We are only part way through the journey yet, this is not the finished product.

Robert Oliver, is a business partner at Maple Access Partnership LLP in Northampton

Robert Oliver explains the benefits of operating as a limited liability partnership