Consumer and corporate affairs minister Kim Howells said today that the bill was 'very important' and one of the functions will be to help partnerships attract new partners who had been fearful of taking up leadership roles because of the unlimited liability.
But his office confirmed that several major issues including the ability of an LLP to trade out of financial difficulty, and the status of partners under employment law, have yet to be finalised.
The English ICA raised these two concerns as serious flaws in the draft bill issued during the summer, but deputy president Graham Ward told Accountancy Age that he was not surprised by the response.
'If they are still looking at this then it is fair enough given the speed with which the Bill has been introduced. If they are looking to get it through parliament and up and running by 2001 it shows that it has been fasttracked,' he said.
The Bill will only include details on the setting up of an LLP while regulatory issues will be introduced after the bill has been given Royal assent.However, a DTI official hinted that the issue of employement status may swing favourably towards the profession.
'It is not the intention that they (partners) should be treated as employees for employment law purposes,' she said.
Howells added, however, that in return for LLP status firms would be expected to offer greater disclosure in the form of filed audited annual accounts.
'If you have limited liability you have disclosure so that someone who deals with the firm can make an informed decision,' he said.
Firms with an annual turnover of less than £350,000 will be able to file unaudited accounts as the law for LLPs will match that for companies.
This exemption would also increase in line once the review of small company exemption is finalised. The new turnover figure is tipped to be £1m.
The DTI has also received assurance from the Inland Revenue that it will publish a tax bulletin for LLPs before the regulation goes before the House. LLPs will be tax neutral as they will continue to be taxed as a partnership.
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