LLP Member or Employee?

**SimonMac** · 19 October 2013, 11:14

Originally posted by mogsy View Post

Hi, please forgive me if I have posted in the wrong area but I am hoping for some advice.
I worked for nearly 13 years for a company and this company was an LLP that has now gone into liquidation.
The liquidator sent me forms to fill in and I claimed for 12 years plus holidays and notice and was denied them all.
The reason- I was listed as a member of the company.

My question is this;
I was paid a fixed salary, I received no bonus or profit share, had fixed hours Monday to Friday, wore a uniform, did not attend board meetings, sign cheques, hire or fire staff, my tax was paid by the company, I had the standard minimum holiday entitlement, my SA returns which I did not see or sigh were filed online so that by doing this I would never have to sign them.
Was I an employee and do I have a case to claim redundancy from the RPO?

Any help or advice would be greatly appreciated.

What does your contract say?

**mogsy** · 19 October 2013, 11:27

That's just it, I didn't have a contract but neither was there a partnership agreement.

**northernladuk** · 19 October 2013, 12:11

You need legal advice. The musings of a contractor forum isn't really the place for answers. Try an employment lawyer or similar. You need to go in with all guns blazing from the off so get a professional involved first off.

**stek** · 19 October 2013, 12:18

What kind of IT role required a uniform?

**craig1** · 19 October 2013, 12:33

Go to Companies House, search for the LLP, pay the money for a list of members via the Annual Return. If you're listed as a Member then the insolvency practitioner (IP) is right at the first pass but also may be wrong. At some point you must have signed a form that acknowledged that you were a Member and that's been rolled over in their Annual Returns each year.

Many large LLPs such as lawyers or accountancy firms have almost 1/4-1/3 of their fee-earning staff as LLP Members, or Partners. They won't attend any management meetings or anything else you mentioned and most have about as many rights as a middle manager at a typical company.

If you find that you are a member as listed on the last Annual Return then you now need legal advice. Proper advice from a legally qualified professional. Advice from a forum is not enough, you must get this clarified. If you're not going to listen to the advice in this paragraph, stop reading now.

That said, here's my take on it (not as a legally valid opinion or meant for you to use as fact, just my own personal views on the subject):

Here's why I think the IP is both right and wrong: You CAN still be an employee of a LLP while being a Member of that LLP, you could still have the same rights as an employee. You're probably helped by HMRC's new interpretations of employees in LLPs (read here) although coming at it from a completely different angle to how most will! Unfortunately, I think it would take a law suit and court ruling to get the IP to recognise you as an employee as it's only recently that it's been acknowledged that you can be both a Member and employee; I don't think you've a great chance of getting this retrospectively recognised for more than 6 years though as you'll run into legal time limitations. You'd also run into the point that it'll cost you good money to do this as well as time and you may find there's no money in the company for you to claim anyway meaning it could be pointless.

One to be aware of: The veil of incorporation in LLPs is a far thinner one than in Ltd Companies, if there's the first hint of dodgy dealings an IP can seek to reclaim illegally distributed drawings, or your "salary", if the company was insolvent at the time they were made. The more firmly you can get yourself classified as "employee", the harder it would be for them to do so.

Finally, if you gave someone permission to fill your SA in on your behalf and you didn't know what they were putting on it then that's 100% irrelevant, you're still 100% responsible for your SA return if you've delegated it to someone else. If you mean the LLP's SA return then that's one for the Designated Members of the LLP, you're entitled to a copy but that's it in a standard LLP as it's a fairly basic document that ties in reported profit against who it was distributed to. HMRC is fairly intolerant of LLP members who know nothing about how the company they're a Member of operates, they quite rightly say that it's your responsibility to understand what you've signed and what you're responsible for doing. You really need to hope that your name doesn't come out in HMRC's monthly draw to find those lucky people due an audit at any point in the next 6 years or so!

**mogsy** · 19 October 2013, 12:34

Thanks Northern lad and Stek it was a transport company and we all wore embroidered shirts and ties with company logo

**mogsy** · 19 October 2013, 12:41

Thanks Craig, you have pretty much summed up what I thought was the case. As there are 7 of us in the same position we have arranged a meeting with a company hat deals with this thing.
The IP and RPO are both sympathetic but also standing there ground on each of our individual cases.

I will let everyone know the outcome of the meeting with a legal professional

**TykeMerc** · 19 October 2013, 12:41

Definitely need advice from a legal professional who understands the ins and outs of LLP's and can ask the right questions, most of us on here are familiar with Ltd companies and tax as it applies to IT type contracting.

**mogsy** · 19 October 2013, 12:44

Just to let you know I have been lucky enough to have the accountancy firm that dealt with this companies affairs assist me in having HMRC adjust my returns as they had been over declared.

There has been a massive abuse of the LLP system by the designated members so hopefully we can turn this in to a positive by assisting the RPO and IP

LLP Member or Employee?