Life in old Act yet, say Tories

The Conservative and Liberal Democrat opposition parties last week reissued their call for the Limited Liability Partnerships (LLPs) Bill not to disapply existing partnership law, as the Bill reached the House of Commons.The Bill received a warm welcome on its second reading, except from Labour MP Austin Mitchell, the parliamentary scourge of the professions.

However, Tory spokesman Nick Gibb told the House: 'We can never anticipate all the problems that will arise, but a hundred years of case law [since the Partnership Act 1890] will probably have covered almost every likely contingency.'Mr Gibb also criticised the series of specific default provisions proposed by the government for inclusion in secondary legislation.

'Key provisions such as fundamental partnership rules should appear in primary legislation,' he said.Liberal Democrat legal affairs spokesman John Burnett, a solicitor, backed the call, saying it was a 'shame' that the 'excellent' 1890 Act would not apply.

'Heaven knows what chaos there will be in the circumstances in which an oral agreement forms a basis of an LLP,' he said.Both parties tried and failed to force this issue when the Bill was in the House of Lords.In his opening statement, trade and industry minister Kim Howells said the decision to disapply partnership law relates to 'how far we treat LLPs as partnerships and how far we treat them as companies'.

He said later that 'it is not usual for default provisions to appear in primary legislation'.Mr Howells added that LLPs will have to publish the same information as companies.

This means they will have to disclose their total earnings, total number of members and, where their profits exceed 200,000, the earnings of the highest-paid member.Mr Mitchell concentrated his fire on the accountancy profession, saying the Bill 'is a concession to a major vested interest, that of the big five accountancy houses'.

He said he objected to these firms 'diluting' the auditing process by offering their clients other services.A date has not yet been set for the Bill's committee stage.

Neil Rose