Limited Liability Partnerships Act 2000
Infobox UK Legislation
short_title=Limited Liability Partnerships Act 2000
parliament=United Kingdom Parliament
long_title=An Act to make provision for limited liability partnerships
statute_book_chapter=2000 c. 12
territorial_extent=England and Wales; Scotland; ss. 10-13 Northern Ireland
royal_assent=20 July 2000
commencement=6 April 2001
amendments=2004 c. 27
related_legislation=2002 c. 12 (N.I.)
The Limited Liability Partnerships Act 2000 is an
Act of Parliamentwhich introduced the concept of the limited liability partnershipinto English and Scottish law. It created an LLP as a body with legal personality separate from its members (unlike a normal partnership) which is governed under a hybrid system of law partially from company lawand partially from partnership law. Unlike normal partnerships the liability of members of LLP on winding up is limited to the amount of capital they contributed to the LLP.
Section 2 of the act provides that an LLP may be incorporated when two or more persons associated for the purpose of carrying on legal business subscribe their names to an incorporation document; that incorporation document, or an approved copy of it, has been delivered to the Companies Registrar at
Companies House; and a statement either by a solicitor or one of the subscribers that the formalities have been complied with has also been delivered to the registrar. The incorporation document must take either the prescribed form or a form as close to the prescribed form as possible. It must contain the address of the registered officeof the LLP, state the name of the LLP, state the name of the members of the LLP on incorporation, state which of those members are to be "designated members" or that all members will be "designated members" and also say whether the LLP's registered office is to be situated in England and Wales, Wales or Scotland.
Section 3 provides that once the formalities have been complied with the registrar retains the incorporation document or a copy of it and issues a certificate of incorporation. That certificate is regarded as conclusive evidence that the incorporation formalities have been complied with.
Membership of the LLP is initially those who subscribed to the incorporation document. A person may become a new member of an LLP with the agreement of existing members and cease to be a member with their agreement as well. As with a normal partnership a partner of an LLP is not regarded as being employed by the LLP—they are
self employed. The relationship between members is governed by agreement between the members. If such an agreement does not exist the act provides that regulations may be made specifying the default form of such an agreement. As with normal partnerships the members of an LLP are agents of the LLP, and the LLP is liable for the actions of a member when that member acts in a wrongful way or makes an omission. However unlike a normal partnership the members of an LLP are not jointly and severally liablefor the actions of another member. This is due to the fact that the LLP itself has legal personality separate from its members. If the membership of an LLP changes then the registrar must be informed within 14 days and if a member changes address the registrar must be informed within 28 days.
Members of an LLP are subject to
income taxon their income as trading income in the same way as a normal partnership. They also pay class 4 National Insurancecontributions in the same way as anyone else who is self employed. Capital gains taxapplies to members of LLPs as to those in a normal partnership. Within one year of incorporation of an LLP there is an exception to stamp dutyon land transferred to the LLP if the person transferring the property is a member of the LLP and that the proportions of the property are the same as those before the transaction.
wound upand subject to insolvencyin much the same way as companies. Section 14 of the act makes provision for regulations to be made applying certain provisions of the Insolvency Act 1986to LLP's. Similarly section 15 makes provision for the making of regulations to apply company law or disapply company law and to apply partnership law as seem appropriate.
Currently, despite the passing of the
Companies Act 2006and its gradual entry into force, the new law does not apply to LLP's. The commencement orders for the Companies Act 2006 have so far included saving provisions for the provisions of the Companies Act 1985to remain in force as applied to LLP's.
* [http://www.opsi.gov.uk/acts/acts2000/20000012.htm Full text of act]
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