Select Committee on Trade and Industry Annxes to the Report

Follow-up Questions


It would be helpful to have an indication of the Government's latest thinking on the possible introduction of regulations on overseas LLPs

  The Limited Liability Partnership Act 2000 gives the Secretary of State the power to make regulations on oversea LLPs. At present we have no plans to introduce regulations on oversea LLPs. In our response to the Trade and Industry Committee's Report we said that should we decide to make regulations on overseas LLPs we would consult widely. That remains the position.

  (NB Any regulations would be subject to affirmative resolution.)

  However, during the Bill's progress through Parliament two issues were raised in relation to oversea LLPs:

    —  To allow oversea LLPs which already have a place of business in the UK to use the words "Limited Liability Partnership" after their name; and

    —  Identifying oversea registered LLPs from UK registered LLPs.

  An amendment was made to the Schedule to the Bill which will allow oversea LLPs to use the words "Limited Liability Partnership" or "LLP" after their name.

  As a corollary, the draft LLP Regulations require an oversea LLP to exhibit in every place where it carries on business in Great Britain, and on its letters and official publications, its name and the country in which it is incorporated.

  This is to avoid confusion between an oversea LLP and an LLP registered under the LLP Act 2000.


A note on any figures available on the uptake to date of LLP status would be of interest

  It is our intention to commence the LLP legislation in early 2001. Companies House carried out a market survey during July this year. There are still great uncertainties as to the number but Companies House best guess is that there is likely to be in the region of 8000 LLP registrations in the three years following implementation of the new legislation.

Draft Insolvency Bill, Second Report of 1999-2000, HC 112; Government Response, Fourth Special Report, HC 227

  1.  In September 1999 draft clauses, intended primarily to provide for a moratorium on creditors' actions to allow a company to come to a voluntary arrangement with its creditors were sent out by DTI for "a short technical consultation". The Committee decided that this constituted draft legislation, and accordingly undertook a brief inquiry, reporting in December 1999.

  2.  The Government's response, received in February 2000, was brief and uninformative. Two recommendations for change were accepted:

    —  the clause imposing on secured creditors an obligation to give notice of appointment of an administrative receiver was dropped;

    —  the proposed prohibition of a nominee subsequently acting towards the company in a different capacity was also dropped.

  Most of the Committee's other specific recommendations and concerns were summarily dismissed. This included the Committee's view that the provisions allowing those other than licensed insolvency practitioners act as nominees or supervisors should be left out of the bill.

  3.  A number of issues raised by the Committee were pursued in the course of proceedings in both Houses. Its concerns about the need for affirmative rather than negative resolution in relation to powers to extend the scope of the bill to large companies, which had been "noted" by the DTI, were taken up by the Lords Delegated Powers Committee, and following their recommendations the bill was amended accordingly. A number of the points raised by the Committee were pursued in the Commons at both committee and report stage.

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