Amendment Paper as at
Wednesday 28th June 2000
CONSIDERATION OF BILL
New Amendments handed in are marked thus *
LIMITED LIABILITY PARTNERSHIPS BILL [LORDS], AS AMENDED
NEW CLAUSES
Duty of care
Mr Austin Mitchell
Mr Jim Cousins
NC1
To move the following Clause:—
'. When a limited liability partnership is to carry on business as either an auditor or an insolvency practitioner, it shall lodge with the registrar a commitment to accept a duty of care to all stakeholders served by the audit or liquidation.'.
Returns to registrar
Mr Austin Mitchell
Mr Jim Cousins
NC2
To move the following Clause—
' .—(1) Each limited liability partnership shall make an annual return to the registrar setting out—
(a) all claims made against the partnership for work performed by it;
(b) a statement by the relevant regulator that the partnership has complied with the relevant regulatory framework in its field of business; and
(c) the average rate of pay for the partnership's employees in the top and bottom quartiles (in terms of remuneration).
(2) Any returns or reports made by limited liability partnerships to the registrar shall be made available for public inspection.'.
Separate incorporation of different sectors of business
Mr Austin Mitchell
Mr Jim Cousins
NC3
To move the following Clause—
' .—Existing partnerships which have separated their audit businesses from their service and consultancy businesses in the United States in compliance with the requirements of the Securities Exchange Commission shall incorporate each sector separately if they incorporate as limited liability partnerships in the United Kingdom.'.
Report of regulatory infractions and censures
Mr Austin Mitchell
Mr Jim Cousins
NC4
To move the following Clause—
' .—Limited liability partnerships trading outside the United Kingdom shall report to the registrar all infractions of regulatory rules and all censures by regulators in other jurisdictions.'.
Utility companies
Mr Austin Mitchell
Mr Jim Cousins
NC5
To move the following Clause—
' .— Publicly regulated utility companies shall not be permitted to incorporate any part of their businesses as limited liability partnerships.'.
Maximum number of partners
Mr Austin Mitchell
Mr Jim Cousins
NC6
To move the following Clause—
' .— No limited liability partnership shall have more than five hundred partners.'.
Disclosure of emoluments
Mr Austin Mitchell
Mr Jim Cousins
NC7
To move the following Clause—
' .—Any limited liability partnership in which the amount of profit before member remuneration and profit share exceeds £200,000 shall publish details of director emoluments comparable in detail to those required of companies by Schedule 6 to the Companies Act 1985.'.
Statement of assets, etc.
Mr Austin Mitchell
Mr Jim Cousins
NC8
To move the following Clause—
' . Each limited liability partnership shall, when filing annual accounts with the registrar, submit a statement showing—
(a) the value of the net assets of each partner; and
(b) whether any partner is at that time involved in litigation.'.
Mr Austin Mitchell
Mr Jim Cousins
9
Page 1, line 8 [Clause 1], after 'legal', insert ', fiscal and financial'.
Mr Austin Mitchell
Mr Jim Cousins
10
Page 1, line 20 [Clause 1], leave out 'Accordingly'.
Mr Austin Mitchell
Mr Jim Cousins
12
Page 1, line 21 [Clause 1], leave out 'does not apply' and insert 'applies'.
Mr Austin Mitchell
Mr Jim Cousins
22
Page 1, line 29 [Clause 2], after 'document', insert 'indicating the nature of the businesses to be pursued as a limited liability partnership and their qualifications for pursuing it'.
Mr Austin Mitchell
Mr Jim Cousins
26
Page 1, line 29 [Clause 2], after 'document', insert—
'(ii) must have submitted a statement that they are not and have not been the subject of insolvency proceedings, and
(iii) must have submitted a list of outstanding financial or tax claims against them and the amounts thereof;'.
Mr Austin Mitchell
Mr Jim Cousins
13
Page 2, line 8 [Clause 2], at end insert—
'(d) where those persons are currently carrying on a business as a limited company, the registrar shall require proof that all tax and regulatory obligations of the limited company have been fulfilled; and
(e) where a limited company is re-registering itself as a limited liability partnership, it shall be required to lodge a deposit of 5 million pounds with the registrar, returnable after three years.'.
Mr Austin Mitchell
Mr Jim Cousins
21
Page 2, line 17 [Clause 2], after 'incorporation', insert 'indicating in each case—
(i) what limited companies they are, or have been, directors of, and
(ii) whether any member has been, or is, subject to proceedings for insolvency, fraud or other malpractice'.
Mr Austin Mitchell
Mr Jim Cousins
14
Page 2, line 20 [Clause 2], at end insert—
'(g) specify any other countries where the partnership is to carry on its business and the arrangements within the partnership for debts, tax and regulatory obligations arising in each country.'.
Mr Austin Mitchell
Mr Jim Cousins
25
Page 2, line 20 [Clause 2], at end insert—
'(g) indicate, in the case of accountancy partnerships transferring to limited liability partnership status, the number and size of all claims against the existing partnership in respect of audits performed, advice given or work done, and the reserves set aside for meeting such claims, and
(h) indicate in the case of limited companies all debts and claims against the company, its trading history and the nature of provisions made for all liabilities of the existing company.'.
Mr Austin Mitchell
Mr Jim Cousins
17
Page 2, line 37 [Clause 3], after '(b)', insert 'after one year of trading.'.
Mrs Angela Browning
Mr Nick Gibb
Mrs Eleanor Laing
1
Page 3 [Clause 5], 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.'.
Mr Austin Mitchell
Mr Jim Cousins
18
Page 3, line 23 [Clause 5], at end insert—
'(1A) Any agreement made shall be lodged with the registrar on incorporation and shall be made available for public inspection.'.
Mr Austin Mitchell
Mr Jim Cousins
19
Page 3, line 35 [Clause 6], at end insert—
'(2A) A statement of the scope of authority to act of each member shall be lodged with the registrar, displayed in all partnership offices and made available to clients.'.
Mr Austin Mitchell
Mr Jim Cousins
20
Page 3, line 43 [Clause 6], at end insert ', or
(c) the person has been dead for five years.'.
Mr Austin Mitchell
Mr Jim Cousins
23
Page 4, line 6 [Clause 7], leave out 'died' and insert 'been dead for five years'.
Mr John Burnett
5
Page 4, line 18 [Clause 7], after 'not', insert 'by reason of that event'.
Mr Austin Mitchell
Mr Jim Cousins
24
Page 5, line 7 [Clause 9], after 'days', insert 'giving full details of the address, financial and property interests and other trading activities of new designated members, and, in the case of those ceasing to be designated members, the reasons why they are leaving'.
Mr John Burnett
29
*Page 8 [Clause 10], leave out lines 2 to 8 and insert—
'156A.—(1) Where the consideration for which a member of a limited liability acquired his interest in the partnership is treated as reduced under section 152 or 153, he shall be treated as if a chargeable gain equal to the amount of the reduction accrued to him immediately before the time of cessation of trade.'.
Mr John Burnett
30
*Page 8, line 18 [Clause 10], at end add—
'(4) Tax charged as a result of subsections (1) or (2) above shall be due and payable as if the chargeable gains mentioned in those subsections accrued when the member makes a disposal of his interest in the limited liability partnership and not earlier.'.
Mr Austin Mitchell
Mr Jim Cousins
27
Page 8, line 18 [Clause 10], at end add—
'(5) No adverse tax consequences shall be incurred by any small company (within the meaning of the Companies Act 1985) if a two-thirds majority of the shareholders agree to convert that company into a limited liability partnership.'.
