The provisions which come into effect on the 1 October 2009 implementation of the Companies Act 2006 are in essence to bring limited liability partnerships (LLPs) into line with company legislation.
Here we have summarised some of the provisions.
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A register of members is required to be maintained by the LLP which is to be available for inspection. Notification of the place where the register is held is to be filed with the Registar of Companies.
The register must contain the following information on each member of the LLP:
- Name
- Service address
- Date of birth
- Whether or not a designated member
- Area of the UK he usually resides in.
The Register of Members is to be available for inspection free of charge to members of the LLP with a fee being charged to others who wish to inspect the register.
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Members can now provide two addresses to Companies House, one being a service address which will be available on the public file, the second being their residential address which will remain out of the public domain. Companies House will under the provisions of the new Act have the power to disclose the residential address to certain third parties under the legislation, for example the police, government departments and certain credit rating agencies. In certain circumstances Companies House will use the residential address to correspond with the member. The service address and residential address can be the same.
However, if the member’s residential address was shown on the public register prior to 1 October 2009, then it will remain in the public domain. An application can be made to request the removal of the address. However, the conditions which are required to be met are similar to those for a confidentiality order, in that there must be a possible threat to the member.
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The LLP is required to maintain a register of members’ residential addresses, from 1 October 2009, which will not be open to inspection.
It is important that this register is kept separate from the Register of Members as it is not open to inspection at all.
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The details required to be displayed on all LLP correspondence are brought in line with those of Companies, for example:
- Full registered name
- Registered in England and Wales
- Registration number
- If any member’s name appears, then all must be named.
The LLP is also required to disclose the details listed above on its website and any e-mail correspondence.
The name of the LLP must be displayed at the Registered Office and any other place of business. The location of the name must be such that visitors are able to view it with ease.
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A previous loophole in the legislation has been closed, in that previously an LLP could not register with a specific name if a company name already existed. However a company could use the same name as a registered LLP, which was of course nonsense.
The provisions relating to registration of LLP names have been brought in line with those of companies and the new companies names adjudicator provisions apply equally to LLPs as they do to companies.
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The rules in relation to the execution of documents have been clarified, in that an LLP can execute documents in the following ways:
- By the LLP under its common seal*; or
- A person acting for the LLP either under express or implied authority; or
- Entered into by a member
*An LLP is not required to have a company seal but can if it so wishes.
It is now possible for documents to be executed by an LLP by a single member signing the document in the presence of a witness who attests the signature.
This additional provision supplements the existing provisions of:
- Affixing the company seal; or
- by the signature of two members
A document can only be validly executed as a deed if it has been duly executed and is delivered as a deed.
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Members of an LLP have the right to seek redress in their capacity as a member by bringing an unfair prejudice claim. Unlike members of a company they do not have the right to bring a derivative action against the directors where they feel the company has been wronged.
A member of an LLP can bring unfair prejudice proceedings on the grounds that the affairs of the LLP have been or are being conducted in a manner that appears to be prejudicial against all or some of the members of the LLP.
The terms of the LLP agreement can specifically disapply the right of any member to seek action on the basis of unfair prejudice. The members of the LLP should consider whether they wish to insert such a clause to the LLP agreement.
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It will now be possible to restore an LLP which has been struck off the register for non-compliance and the assets of the LLP have reverted to the Crown under the bona vacantia rules.
The application for an administrative restoration can only be made by a former member of the LLP. The application can only be made if two conditions are satisfied:
- The LLP must have been carrying on business at the time of its
striking off; and
- any property or rights have become invested in the Crown as bone vacantia, and the Treasury Solicitor has indicated the Crown’s consent to the LLP’s restoration to the register.
There is a six year limitation period for administrative restoration applications. The effect of such a restoration is that the LLP is deemed to have continued in existence as if it had not been dissolved and struck off the register.
An application may also be made to the Court for the restoration of an LLP to the register for the purpose of bringing proceedings against the LLP for damages for personal injury. When an application is made for the purpose of bringing personal injury proceedings against the LLP, there is no time limit.