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    Handout 3 - SS' Handout

    Uploaded by

    Nguyễn Xuân Phương

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    Handout 3 - SS' Handout

    Uploaded by

    Nguyễn Xuân Phương
    4 views2 pages

    Original Title

    Handout 3_Ss' Handout (1)

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    Copyright:

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    4 views2 pages

    Handout 3 - SS' Handout

    Uploaded by

    Nguyễn Xuân Phương

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Draft Limited Liability Partnership Bill Act formulae.

    Annual accounts must be


    prepared, and if the turnover of the llP
    The limited liability Partnership Bill was exceeds £350,000 annually, the accounts
    introduced into the House of Commons in must be professionally audited.
    July this year in response to the grOVving
    concems surrounding large accountancy 4 These additional reqUirements have made
    firms moving their business operations a further restriction on the management
    offshore. large accountancy practices had freedom of llPs necessary. Each llP will
    expressed their unhappiness about have to appoint a 'designated member'
    organising their affairs by way of who will be responsible for administrative
    partnership, especially since a partner is obligations and may incur criminal liability
    liable under the Partnership Act 1890 for in certain circumstances. On the subject of
    his own acts as well as for those of his liability, it is worth noting that an llP
    colleagues. It is unrealistic to assume that member will enjoy less limited liability
    each partner can stay informed about his than a company director. In the ordinary
    fellow partners' actions, let alone control course of events, a company director is
    them. not liable to a third party for his negligent
    acts or omissions in the course of his
    2 Thus, the Bill sets out to create a new duties. His liability is to the company of
    institution, the limited liability partnership which he is a director. The position is
    (lLP), in which obligations accrue to the reversed in relation to an llP member.
    name of the partnership rather than the The claw-back provisions of the Insolvency
    Joint names of its individual members. The Act 1986 will also apply to llPs. Thus, a
    only personal liability thai an Individual liquidator will be able to set aside any
    partner has will be In respect of his pre- transactions (drawings of salary or
    determined contributIons to partnership repayment of money 0'Ned) within two
    funds. This is somewhat similar to a years prior to insotvency where the
    shareholder in a limited liability company. member kne"N, or had reasonable grounds
    HCMleVer, unlike a company, the llP will for believing. that the llP was or 'NOUld
    be more flexible in terms of decision- thereby become insolvent
    making. and board meetings, minutes
    books, and annual or extraordinary general 5 Indeed, limited liability is ohen highly
    meetings are not required. In addition, the illusory or perhaps even over-rated,
    llP will enjoy the tax status of a especially when one considers that banks
    partnership and limited liability of its ohen require personal investment
    members. guarantees from directors in order to lih
    the corporate veil which protects company
    3 The Bill is not without its weaknesses, officers. The same will undoubtedly apply
    however. One weakness which has been to LlPs.
    observed is the fact that the accounting
    requirements contained in Part VII of the 6 In conclusion, the value of this new
    Companies Act 1985 are proposed to institution has been weakened by the
    apply to the llP. Not only are these rules proposed incorporation of the accounling
    some of the most demanding in Europe, requirements. That is its single most
    they will also prove expensive to comply noticeable weakness; otherwise, It could
    with for small and medium-sized llPs. For be said that the Bill is long overdue and
    example, the llP must submit an annual will hopefully have the effect of appeasing
    return to Companies House and maintain those businesses which are consldenng
    a list of accounts according to Companies moving their operations overseas.

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