New rules for Limited Liability Partnerships

New Regulations applying the terms of the Companies Act 2006 to LLPs will come into effect on 1 October 2009. Important changes include:

Names

Currently it is possible to form a limited company with the same name as an existing LLP.  From 1 October the same rules will apply to companies and LLPs.

Minimum Membership

LLPs will still need to have 2 or more members but after 6 months a sole member will be jointly and severally liable with the LLP for debts incurred after expiry of the 6 month period.

Members' Details

Every LLP will be required to keep a register of members containing a service address for each individual member.  The LLP must tell Companies House where the register is available for inspection unless it is held at the registered office.  The register must be open for inspection by members free of charge and for any other person on payment of a fee.  Residential addresses will need to be kept on a separate register and disclosed only to the Registrar of Companies.

Publication of Details

The new trading disclosures regime which applies to companies will apply equally to LLPs from 1 October.  This will require LLPs to display their name and registered office at their registered office and any other business location, the name need not be placed on the outside of a building but must be in a place clearly visible to any visitor.  The LLP’s name, number and details must also be included on correspondence including emails and on any website.

Accounts

The same penalties which apply to companies for late filing of accounts will apply to LLPs for financial years beginning on or after 1 October 2008.  These have increased and now start at £150 just for a one month delay in filing, so it is particularly important that accounts are filed on time.  Incidentally, the method by which penalties could be avoided as long as accounts were filed within 14 days of the filing deadline shall cease to exist from 1st October 2009.  A company or an LLP will therefore no longer have 14 days from the date of the rejection letter in which to amend and return accounts in an acceptable format.

Auditors

Audit reports for LLPs will need to be signed by the senior statutory auditor who is a named individual for years commencing after 1 October 2008.

Service of Documents

The new rules for companies contained in Sections 1139 to 1142 of the 2006 Act will apply to LLPs.  These clarify what addresses are valid for the purposes of service of documents and define "service".

Execution of Documents

In England and Wales and Northern Ireland a document is to be executed by an LLP by applying its common seal, by signature of two members or by signature of a member of the LLP in the presence of a witness.  An LLP may by a document executed as a deed empower a person as its attorney to execute deeds or other documents on its behalf and a deed or document so executed in the UK or elsewhere will have effect if executed by the LLP.  Execution formalities in Scotland remain unchanged.