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Thursday 8th June 2000

Dr Kim Howells That, during proceedings on the Limited Liability Partnerships Bill [Lords], the Committee do meet on Tuesdays at half-past Ten o'clock and at half-past Four o'clock and on Thursdays at Ten o'clock and at half-past Two o'clock.

New Amendments handed in are marked thus *




Mr Nick Gibb


*Clause     5,     page     3,     leave out lines 22 and 23 and insert—

      '(b) subject to paragraph (a), by the rules and principles which would apply if the law relating to partnerships applied to them (and the property of the limited liability partnership were partnership property).'.


Mr Nick Gibb


*Clause     5,     page     3,     leave out lines 22 and 23 and insert—

      '(b) in the absence of agreement as to any matter, in so far as they relate to that matter, by the following rules—

          (i) All the members are entitled to share equally in the capital and profits of the business.

          (ii) The LLP must indemnify every member in respect of payments made and personal liabilities incurred by him—

          (a) in the ordinary and proper conduct of the business of the LLP; or

          (b) in or about anything necessarily done for the preservation of the business or property of the LLP.

          (iii) Every member may take part in the management of the LLP.

          (iv) No member shall be entitled to remuneration for acting in the business of the LLP.

          (v) No member may be introduced as a member without the consent of all existing members.

          (vi) Any difference arising as to ordinary matters connected with the business of the LLP may be decided by a majorty of the members, but no change may be made in the nature of the business of the LLP without the consent of all members.

          (vii) No majority of the members can expel any member unless a power to do so has been conferred by express agreement between the members.

          (viii) Where no fixed term has been agreed for the duration of his membership, any member may retire from the LLP at any time on giving notice of his intention to do so to the other members.

          (ix) The books of the LLP are to be kept at the place of business of the LLP and (or the principal place if there is more than one) and every member of the LLP may when he thinks fit have acccess to and inspect and copy any of them.

          (x) If a member, without the consent of the LLP, carries on any business of the same nature as and competing with the LLP, he must account for and pay over to the LLP all profits made by him in that business.

          (xi) Every member must account to the LLP for any benefit derived by him without the consent of the LLP from any transaction concerning the LLP, or from any use by him of the LLP property, name or business connection.'.


Mr Nick Gibb


*Clause     5,     page     3,     line     23,     at end insert—

    '(1A) Every member of a limited liability partnership shall owe to every other member and to the limited liability partnership the following duties:—

      (a) a duty of honesty and good faith;

      (b) a duty not to conceal from others and the limited liability partnership information which is relevant to the business;

      (c) a duty not to profit to the detriment of the firm or in rivalry with it;

      (d) a duty to act in favour of the firm;

      (e) a duty to treat fellow members fairly;

      (f) a duty not to compete with the limited liability partnership or make profits at the expense of other members.'.


Dr Kim Howells


*Clause     7,     page     4,     line     19,     leave out from 'partnership' to end of line 21 and insert—

    '(3) But subsection (2) does not affect any right to receive an amount from the limited liability partnership in that event.'.


Mr John Burnett


*Clause     7,     page     4,     line     21,     at end insert—

    '(3) Subsection (2) shall have effect subject to the terms of any agreement between the former member (or any of the persons referred to in paragraphs (a) to (d) of subsection (2)) and the other members.'.


Mr Nick Gibb


*Page     10,     line     23,     leave out Clause 16.


Mr Nick Gibb


*Clause     17,     page     10,     line     29,     at end insert—

    '(1A) A statutory instrument containing regulations under the Act shall be submitted to the Trade and Industry Committee of the House of Commons for that commmittee's possible investigation prior to being laid before both Houses of Parliament.'.


Mr Nick Gibb


*Clause     17,     page     10,     line     43,     at end insert—

    '(4A) No regulations to which this subsection applies shall create criminal offences which provide for imprisonment or trial on indictment.'.


Dr Kim Howells


*Clause     17,     page     11,     line     4,     after 'in' insert 'or made under'.


Dr Kim Howells


*Clause     17,     page     11,     line     7,     after 'in' insert 'or made under'.


Dr Kim Howells


*Clause     19,     page     12,     line     18,     leave out subsection (6).




Mr John Burnett


*To move the following Clause:—

    'The Lord Chancellor may make regulations amending or modifying any provision of any enactment or instrument having effect in relation to solicitors and their practice, with such additions or omissions as appear to the Lord Chancellor to be necessary or expedient, for the purpose of enabling solicitors to practiCe in limited liability partnerships or for the purpose of regulating the provision of solicitors' services through limited liability partnerships.'.

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