International firm Hogan Lovells is asking 65 of its non-equity members to contribute capital to the firm, as a response to controversial limited liability partnership tax changes coming into force next week.
The crackdown by HMRC to clarify the definition of LLP membership takes effect on 6 April, and will mean some LLP members who have previously been taxed as self-employed will be taxed as employees.
Hogan Lovells said non-equity members will contribute capital of £60,000-£100,000 each. Capital loans are available from banks on the same terms as those available to equity members.
For calendar 2013 the firm posted global fee income of $1.718bn (£1.1bn) and an increase in profit per equity partner of 10%, its ‘best-ever year’.
A spokeswoman for Hogan Lovells said: ‘We are having to act in anticipation of the final rules. Our approach is to ensure that the terms for non-equity members are fair to both them and the firm and that our non-equity members are treated by HMRC as the partners that they are.
‘The capital itself doesn’t need to be paid until early July.’
Meanwhile, Syscap, the Law Society’s endorsed finance provider, is offering a funding product for fixed-salary partners to acquire equity to help firms through this period.