BERR has published a consultation paper on the application of the Companies Act 2006 to LLPs.
At present the Companies Act 1985 applies to LLPs with modifications. BERR is seeking views on applying the material parts of the 2006 Act with modifications in place of the relevant 1985 Act provisions.
Provisions which will not apply to LLPs
A key point is that the consultation paper states that BERR does not propose to apply a number of provisions of the 2006 Act to LLPs as there is no distinction between those running the business and the owners. These provisions include:
- Directors' duties;
- Derivative actions; and
- Narrative reporting.
Another area of the 2006 Act that has no application to LLPs are the new provisions allowing auditors to limit their liability by contract. This is because the general rule prohibiting limitation has never applied to LLPs.
Provisions which could apply to LLPs
BERR is also consulting on areas of the 2006 Act that could be applied to LLPs but where doing so would either introduce a new approach for LLPs and/or their members or make changes to the existing regime, including:
- Execution of deeds;
- LLP names;
- Members' residential addresses; and
- Statutory auditors.
Timing for LLP changes BERR is proposing to implement most of the changes for LLPs in October 2009. However, it is proposing to apply a few provisions before that date:
- From April 2008, the deadline for filing LLP accounts with Companies House will be reduced from 10 to 9 months and the new method for calculating the filing time for accounts will apply.
- Most of the provisions on accounts and audit will apply to LLPs from October 2008.
- If there is support for applying the new 2006 Act sections on e-communications to LLPs, these will be applied from October 2008.
The consultation paper is available on http://www.dti.gov.uk/bbf/llp/page39897.html. The consultation period closes on 6 February 2008.