COMPANY LAW: fears of unjustified 'twin-track approach'


Legislation governing limited liability partnerships (LLPs) is in danger of falling behind general company law and ratcheting up costs, experts have warned.



Responding to a Department of Trade and Industry consultation on the extent to which the Companies Act 2006 should be implemented in relation to LLPs, the Association of Partnership Practitioners (APP) said the material parts of the Act should, with appropriate modifications, be applied to LLPs in place of the Companies Act 1985 provisions which currently apply.



Failure to bring LLPs into step with the rest of company law risked an unjustified 'twin-track approach', it said.



John Machell, a barrister at Serle Court Chambers, in London, who led the APP's working party, said: 'An important aspect of the policy underpinning the introduction of LLPs was the requirement that LLPs comply with regulatory aspects of the law applicable to companies, such as the requirement to file publicly available accounts. The APP believes it is important that the law applicable to LLPs is kept up to date with the changes made to company law so that unnecessary complexity and cost is avoided.'



In its response, the Law Society agreed that the provisions in the 1985 Act that apply to LLPs and are being replaced should be updated. It said: 'Where the 2006 Act introduces substantively new provisions in relation to companies, these should only be extended to LLPs where this can be justified in the light of the different structure of LLPs as compared with companies.'



Both agreed that the 2006 Act be implemented for LLPs in October 2008 but no later. Parts of the Act come into force this October.



Anita Rice