Salaried Members: Condition B: Hierarchy of members
It is common for there to be a hierarchy of membership with different groups of members having different rights and responsibilities. As a result some members will have more influence than others to decide matters relating to the management of the business.
When dealing with Condition B the question is: what are the terms of the class of membership for this individual?
This should be shown by the LLP Agreement, including the appropriate documentation under which an individual became a partner.
This is an example of a firm with different rights given to different members.
Legal Eagles LLP is a professional legal firm with 20 members. They meet each month for meetings at which the major business decisions are discussed and made. All members attend these meetings and all are entitled to speak.
Junior members are entitled to attend these meetings (though not to vote).
On the facts, the junior members satisfy Condition B.
As noted in ESM64015, the way that the firm conducts its business may differ from that in the written agreement. Suppose that it is found that:
It has become the practice of the firm that votes are never taken and all decisions are made by consensus.
The test is applied on a realistic view of the facts. In this example, the written agreement does not reflect the entire agreement, the implied agreement is now that all members have an equal say. As a result all members fail to satisfy Condition B.