The ADGM Limited Liability Partnership

Professional firms want partnership economics — profits shared, partners as owners rather than employees, flexible internal arrangements — without the historic sting of a general partnership, where one partner's negligence could reach every other partner's house.

The LLP resolves that. Each partner's exposure is limited to their interest in the partnership[ADGM RA — Schedule of Fees], so a claim arising from another partner's conduct does not reach their personal assets.

It is the standard vehicle for law firms, accountancy practices, consultancies and advisory businesses in common-law jurisdictions, and ADGM — applying English common law directly[ADGM Courts — English common law] — is familiar ground for partnerships used to the English model.

ADGM's guidance on legal entity types sets out the minimum composition of an LLP[ADGM RA — Legal Entity Types]:

• Members / partners — minimum two. They may be individuals or bodies corporate, and one must be a designated member.
• Authorised signatory — minimum one, and it must be an individual.

Three things follow that catch people out.

You cannot run a one-person LLP. Two members is a floor, not a default. If you are a sole practitioner, this form is not available to you and a private company limited by shares is the realistic alternative.

Corporate members are permitted. Both members can be companies — useful where professional practices hold their interests through corporate vehicles rather than personally.

The authorised signatory must be a human. Even in an LLP owned entirely by corporate members, a named individual carries the signing authority. Decide who that is early; it is a real appointment with real exposure, not a formality.

What the designated member is for

The designated member requirement is the LLP's answer to a problem the form creates. An LLP has no directors and no secretary, so without it there would be nobody specifically accountable for the entity's administrative and filing obligations. Designating at least one member fixes responsibility on a named party.

If you are drafting the LLP agreement, that is the clause to spend time on — who is designated, what they are responsible for, how the role transfers, and what happens if the designated member leaves.

A note on the source

ADGM's entity types guidance is published as version 1.1, dated September 2017[ADGM RA — Legal Entity Types]. It remains the guidance ADGM publishes, and we quote it as such — but for anything load-bearing, confirm the current position against the ADGM Limited Liability Partnership Regulations 2015 or with the Registration Authority before you rely on it.

Three forms that sound similar and behave differently.

LLP — all partners participate; each partner's liability is limited to their interest[ADGM RA — Schedule of Fees]. For a firm whose partners all work in the business.

Limited Partnership — ADGM defines it as an arrangement where two or more partners unite to conduct a business jointly and one or more of the partners is liable only to the extent of the amount that partner has invested[ADGM RA — Schedule of Fees]. The general partner runs it; limited partners contribute capital. This is the fund structure, not the professional-firm structure.

General Partnership — ADGM defines it as an arrangement where partners conducting a business jointly have unlimited liability, meaning personal assets are liable for the partnership's obligations[ADGM RA — Schedule of Fees]. Rarely the right answer, and worth being certain you have not chosen it by accident.

Private company — shares, directors, limited liability. Better where outside investment, share options or a future sale are in prospect, because buyers and investors understand shares.

Standard ADGM registration: settle the activity and category, reserve the name, file through the Online Registry Solution, and maintain a registered office in ADGM[ADGM RA — Registration & Incorporation].

The document that does the real work is the LLP agreement — profit sharing, admission and retirement of partners, decision-making, what happens on a dispute. ADGM's Limited Liability Partnerships Regulations set the statutory framework and are published in ADGM's official rulebook[ADGM Legislation]; the agreement is where a firm's actual arrangements live.

We have not reproduced the statutory minimums — number of partners, designated members, filing requirements — because we have not read that instrument in full. Read it in the rulebook, or confirm with your provider.

Fees follow the activity category, not the form. A professional services LLP is non-financial (Category B): USD 5,800 to register and USD 5,300 a year[ADGM RA — Schedule of Fees]. See ADGM licence types.

Note that non-financial activities on one licence must be complementary[ADGM — Permitted Activities] — relevant for a multi-disciplinary practice.

Ongoing: annual renewal plus the separate USD 300 data protection renewal[ADGM RA — Schedule of Fees], a registered office at all times, and annual accounts and reports — ADGM's filing schedule applies that requirement to companies and LLPs, excluding only Restricted Scope Companies[ADGM RA — Schedule of Fees].

Once the LLP employs people, the Employment Regulations 2024 apply.