House of Commons - Explanatory Note
Limited Liability Partnerships Bill [H.L.] - continued          House of Commons

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Clause 13

This clause ensures that Class 4 national insurance contributions, which are chargeable on partners' shares of partnership profit, are chargeable in the same way on members of LLPs.


Clause 14

Subsection (1) The Secretary of State is required to make regulations applying or incorporating, with such modifications as appear appropriate, Parts I to IV, VI and VII of the Insolvency Act 1986.

The Insolvency Act provides a comprehensive code of procedures relating to both corporate and individual insolvency. This subsection ensures that the major corporate insolvency and winding up procedures including company voluntary arrangements, administration, receivership and voluntary and compulsory winding up, will be applied to LLPs. Such procedures will be adapted as necessary to suit LLPs.

Subsection (2) The Secretary of State may make regulations making other provision about the winding up and insolvency of an LLP or an oversea limited liability partnership by applying or incorporating with or without modifications, or disapplying, any law relating to the insolvency or winding up of companies or other corporations.

There is at this stage no intention to exercise the power in relation to oversea limited liability partnerships and any decision to do so will be subject to separate consultation.

Clause 15

Clause 15 allows the Secretary of State to make regulations applying or incorporating the law relating to corporations, companies and partnerships (with appropriate modifications) to LLPs.

Clause 16

This clause allows for enactments, in particular those affecting companies, corporations or partnerships, to be amended in consequence of the provisions in the Bill or of any regulations which may be made under it.

Clause 17

This clause makes general provision about regulations under the Bill, and in particular allows regulations to provide that failure to comply with their requirements is a criminal offence. The clause provides which of the regulations require the affirmative resolution procedure and which the negative resolution procedure.


Clause 19

Subsection (3) is designed to enable the regulation-making functions relating to the process of winding up of a Scottish LLP to be exercised by Scottish Ministers.


Part I - Names

The name of a LLP must end with limited liability partnership, llp or LLP. Should the incorporation document give the registered office as situated in Wales it must end with either limited liability partnership, partneriaeth atebolrwydd cyfyngedig, llp, LLP, pac or PAC.

An LLP cannot be registered by a name which has one of the above expressions or abbreviations in it (unless it is at the end). Neither can it have a name that is already used by a registered company or another LLP, nor where the Secretary of State considers the use of the name would constitute a criminal offence or the name to be offensive.

An LLP shall not be registered by a name that is likely to give the impression that it is connected with HM Government or with a local authority.

An LLP can change its name at any time. However, where an LLP has registered by a name which, in the opinion of the Secretary of State, is misleading or the same or very similar to one already used by a registered company or another LLP, the Secretary of State may direct the LLP to change its name.

Should an LLP carry on business using the expression "limited liability partnership" or "partneriaeth atebolrwydd cyfyngedig" or an imitation of either expression the person who does so and is not registered as an LLP will be guilty of an offence.

When an LLP changes its name it should notify the registrar. Once the registrar has received notification and if the name is satisfactory a certificate of change of name will be issued and the change will be effective from the date of issue.

Changing the name of the LLP will not affect any of its rights and obligations, or make any difference to any legal proceedings by or against it.

Part II - Registered Offices

An LLP has to have a registered office at all times and this must be situated in either England and Wales, Wales or Scotland. Details of the LLP's registered office must be included in the incorporation document. Where the registered office is in Wales but the incorporation document does not state that it is situated in Wales (as opposed to England and Wales) the LLP can notify the registrar that the registered office is situated in Wales.

An LLP can change its registered office by sending notification to the registrar.


24. There is no net public expenditure cost arising from the administration of the provisions of the Bill. Companies House expects to recover the costs of registering and maintaining records of the affairs of the new LLPs, including the development costs of new systems, by charging fees as it already does in the case of companies.


25. The Bill will not require any increase in the number of permanent staff in the public service.


26. Becoming an LLP will be purely voluntary.


27. The Bill will come into force on such day as the Secretary of State shall determine.


27. Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement before Second Reading about the compatibility of the provisions of the Bill with the convention rights (as defined by section 1 of that Act). The Secretary of State for Trade and Industry has made the following statement:

    In my view the provisions of the Limited Liability Partnerships Bill [H.L] are compatible with the Convention rights.

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Prepared: 7 April 2000