Limited Liability Partnerships Bill [H.L.] - continued        House of Lords
Membership - continued

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Members as agents.     6. - (1) Every member of a limited liability partnership is the agent of the limited liability partnership.
 
      (2) Subsection (1) does not apply if-
 
 
    (a) a member in fact has no authority to act for the limited liability partnership in a particular matter, and
 
    (b) the person with whom he is dealing in that matter either knows that he has no authority or does not know or believe him to be a member of the limited liability partnership.
      (3) Where a person deals with a limited liability partnership after a person has ceased to be a member of the limited liability partnership, he is entitled to treat the former member as still being a member of the limited liability partnership unless-
 
 
    (a) he has notice that the former member has ceased to be a member of the limited liability partnership, or
 
    (b) notice that the former member has ceased to be a member of the limited liability partnership has been delivered to the registrar.
Ex-members.     7. - (1) This section applies where a member of a limited liability partnership has either ceased to be a member or-
 
 
    (a) has died,
 
    (b) has become bankrupt or had his estate sequestrated or has been wound up,
 
    (c) has granted a trust deed for the benefit of his creditors, or
 
    (d) has assigned the whole or any part of his share in the limited liability partnership (absolutely or by way of charge or security).
      (2) In such an event the former member or-
 
 
    (a) his personal representative,
 
    (b) his trustee in bankruptcy or permanent or interim trustee (within the meaning of the Bankruptcy (Scotland) Act 1985) or liquidator,
 
    (c) his trustee under the trust deed for the benefit of his creditors, or
 
    (d) his assignee,
  may not interfere in the management or administration of any business or affairs of the limited liability partnership but may receive from the limited liability partnership any amount to which the former member, or member, would have been entitled but for that event.
 
Designated members.     8. - (1) If the incorporation document specifies who are to be designated members-
 
 
    (a) they are designated members on incorporation, and
 
    (b) any member may become a designated member by and in accordance with an agreement with the other members,
  and a member may cease to be a designated member in accordance with an agreement with the other members.
 
      (2) But if there would otherwise be no designated members, or only one, every member is a designated member.
 
      (3) If the incorporation document states that every person who from time to time is a member of the limited liability partnership is a designated member, every member is a designated member.
 
      (4) A limited liability partnership may at any time deliver to the registrar-
 
 
    (a) notice that specified members are to be designated members, or
 
    (b) notice that every person who from time to time is a member of the limited liability partnership is a designated member,
  and, once it is delivered, subsection (1) (apart from paragraph (a)) and subsection (2), or subsection (3), shall have effect as if that were stated in the incorporation document.
 
      (5) A notice delivered under subsection (4)-
 
 
    (a) shall be in a form approved by the registrar, and
 
    (b) shall be signed by a designated member of the limited liability partnership or authenticated in a manner approved by the registrar.
      (6) A person ceases to be a designated member if he ceases to be a member.
 
Registration of membership changes.     9. - (1) A limited liability partnership must ensure that-
 
 
    (a) where a person becomes or ceases to be a member or designated member, notice is delivered to the registrar within fourteen days, and
 
    (b) where there is any change in the name or address of a member, notice is delivered to the registrar within 21 days.
      (2) Where all the members from time to time of a limited liability partnership are designated members, subsection (1)(a) does not require notice that a person has become or ceased to be a designated member as well as a member.
 
      (3) A notice delivered under subsection (1)-
 
 
    (a) shall be in a form approved by the registrar, and
 
    (b) shall be signed by a designated member of the limited liability partnership or authenticated in a manner approved by the registrar,
  and, if it relates to a person becoming a member or designated member, shall contain a statement that he consents to becoming a member or designated member signed by him or authenticated in a manner approved by the registrar.
 
      (4) If a limited liability partnership fails to comply with subsection (1), the partnership and every designated member commits an offence.
 
      (5) But it is a defence for a designated member charged with an offence under subsection (4) to prove that he took all reasonable steps for securing that subsection (1) was complied with.
 
      (6) A person guilty of an offence under subsection (4) is liable on summary conviction to a fine not exceeding level 5 on the standard scale.
 
 
Taxation
Income tax and chargeable gains.     10. - (1) In the Income and Corporation Taxes Act 1988, after section 111 insert-
 
 
"Limited liability partnerships.     111A. For the purposes of the Tax Acts, a trade, profession or business carried on by a limited liability partnership shall be treated as carried on in partnership by its members (and not by the limited liability partnership as such); and accordingly the property of the limited liability partnership shall be treated for those purposes as partnership property."
 
      (2) In the Taxation of Chargeable Gains Act 1992, after section 59 insert-
 
 
"Limited liability partnerships.     59A. Where a limited liability partnership carries on a trade or business-
 
    (a) assets held by the limited liability partnership shall be treated for the purposes of tax as held by its members as partners, and
 
    (b) any dealings by the limited liability partnership shall be treated for those purposes as dealings by its members in partnership (and not by the limited liability partnership as such),
  and tax in respect of chargeable gains accruing to the members of the limited liability partnership on the disposal of any of its assets shall be assessed and charged on them separately."
 
Inheritance tax.     11. In the Inheritance Tax Act 1984, after section 267 insert-
 
 
"Limited liability partnerships.     267A. For the purposes of this Act and any other enactments relating to inheritance tax-
 
    (a) property to which a limited liability partnership is entitled, or which it occupies or uses, shall be treated as property to which its members are entitled, or which they occupy or use, as partners,
 
    (b) any business carried on by a limited liability partnership shall be treated as carried on in partnership by its members,
 
    (c) incorporation, change in membership or dissolution of a limited liability partnership shall be treated as formation, alteration or dissolution of a partnership, and
 
    (d) any transfer of value made by or to a limited liability partnership shall be treated as made by or to its members in partnership (and not by or to the limited liability partnership as such)."
 
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Prepared 24 November 1999