When considering the employment status of "members" of an LLP, the starting point is section 4(4) of the Limited Liability Partnerships Act 2000. This provides that a member of an LLP will not be regarded as employed by the LLP unless he would have been regarded as employed by a general partnership.
Tribunals must first decide whether an LLP member would have been a partner in the partnership and then apply the usual common law employment status tests. If a tribunal concludes that the person is not a partner, it does not necessarily follow that the person is an employee; the common law employment tests must still be applied.
In a recent case, the tribunal thought there was enough evidence to support the conclusion that the member was not an employee, particularly considering he:
- agreed to be bound by a members' agreement;
- was paid gross and accounted for his own income tax;
- was entitled to a discretionary distribution of surplus profit and was entitled to a share of the proceeds upon any winding up or sale; and
- had not suggested at any point that he was an employee until he was voted out of the LLP.
(M Kovats v (1) TFO Management LLP (2) The Family Group of Companies)  UKEAT 0357/08)