These days, there are many different corporate vehicles available to practices. The most common are:
Traditional partnerships carrying unlimited liability, where partners (even salaried partners!) are jointly and severally liable for the liabilities of the partnership.
Limited Liability Partnerships (LLP). Partner Liability is limited to the level of capital held in the practice. Many partnerships are considering conversion for the lower risk that an LLP offers. An LLP also begins to offer alternative partner funding methods, such as loan capital secured on assets, secondary to bank security.
Limited Company – This has shareholders rather than partners and their liability is limited to the amount of share capital they have invested.
For solicitors practices, the Legal Services Act 2007, is bringing more flexibility to the legal entities allowed in legal practices. Alternative Business Structures (ABS) allows a wider range of ownership and management models. These include the above plus, for example, Legal Disciplinary Practices (LDP) which are already in place but not much used and Multi-Disciplinary Practices (MDP). The act allows for the provision of legal services under any or any mix of the above.
Hybrid approach. Whilst these are the legal entities available, practices are increasingly looking at a mixed structure with for example Limited Company members of an LLP.