§ Mr. BatisteTo ask the President of the Board of Trade what progress his Department has made with developing proposals for limited liability partnership legislation in the United Kingdom. [17296]
§ Mr. LangI am pleased to announce that the Government are publishing today a consultation paper, "Limited Liability Partnership: A New Form of Business Association for Professions". The consultation paper sets out detailed proposals for legislation to create a new structure for professional businesses, in line with the Government's commitment to maintain a competitive and up-to-date legal framework for business in the United Kingdom.
The publication of the consultation paper today follows my announcement on 7 November in answer to a question from my hon. Friend the Member for Colchester, North (Mr. Jenkin), Official Report, column 700, that the Government intended to bring forward legislation at the earliest opportunity to make limited liability partnership available to regulated professions in the UK, subject to appropriate safeguards to protect the interests of those doing business with the limited liability partnership. I said then that we would publish our proposals before Easter.
The proposals are being made in response to the concerns of many in the professions that, under present partnership law in the UK, the personal assets of the 725W active members of the partnership are at risk from the business decisions of other partners even though, in modern business conditions, it may well be impossible for partners even to know all the other partners.
Limited liability partnership is already widely available in the USA and in an increasing number of other countries. It should be available in the UK too: the present gap in our legal framework risks undermining the confidence of businesses which play a key role in the success of the UK economy.
The proposals are designed to retain the tried and tested benefits of partnership—flexibility of its capital requirements, the flexibility and privacy of its internal constitution, its avoidance of the separation of ownership and management, and the way in which earning are taxed—while protecting individual members against unlimited personal liability for matters in which they are not personally at fault. A robust package of safeguards is proposed to protect the interests of those dealing with the partnership, including the public disclosure of information about the partnership and safeguards in the case of insolvency.
The closing date for responses to the consultation is 16 May 1997. I look forward to receiving the views of the professions, those dealing with them and business generally.