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Small Limited Liability Partnerships (Accounts) Regulations 2008

rose to move, That the Grand Committee do report to the House that it has considered the Small Limited Liability Partnerships (Accounts) Regulations 2008. The noble Baroness said: We are considering three sets of draft regulations to be made under the Limited Liability Partnerships Act 2000: the Limited Liability Partnerships (Accounts and Audit) (Application Of Companies) Act 2006 Regulations 2008; the Small Limited Liability Partnerships (Accounts) Regulations 2008, and the Large and Medium-Sized Limited Liability Partnerships (Accounts) Regulations 2008. The first set of regulations applies, with modification, the provisions of Parts 15, 16 and 42 of the Companies Act 2006, dealing with the accounts of limited liability partnerships and the audit of those accounts. The other two sets of regulations apply to small and to large and medium-sized limited liability partnerships respectively provisions on the form and content of accounts previously contained in schedules to the Companies Act 1985 and the Companies (Northern Ireland) Order 1986 as applied to limited liability partnerships. Limited liability partnerships were created by the Limited Liability Partnerships Act 2000 and its Northern Ireland equivalent in 2002. A great deal of the substance of the law applying to limited liability partnerships is created by regulations applying parts of company law, particularly the Companies Act 1985, to limited liability partnerships with appropriate modifications. A similar approach is taken in Northern Ireland. Since its creation seven years ago, the limited liability partnerships structure has appealed to businesses of all sizes and sectors. The number of businesses choosing to operate as limited liability partnerships continues to rise—from 24,555 in May 2007 to nearly 30,000 by February this year. The Companies Act 2006 has introduced important reforms to company law. In light of these changes, the Government will apply the relevant provisions of the 2006 Act to limited liability partnerships. This will be done in two stages. The first is the draft regulations we are debating today. These apply the accounts and audit provisions of the 2006 Act to limited liability partnerships. These will come into effect for financial years beginning on or after 1 October 2008; and the new Companies Act provisions on accounts and audit came into force for companies on 6 April 2008. Our consultees told us that they would like the equivalent provisions to be brought into force for limited liability partnerships on 1 October 2008. The second stage will be to apply the remaining relevant provisions of the 2006 Act to LLPs with effect from 1 October 2009 in line with the implementation timetable for the Companies Act. For these provisions we plan to publish draft regulations for comment later this year. The regulations before the Committee are the result of consultations on the broad approach to applying the 2006 act to LLPs, and then on the detail. The vast majority of respondents to the consultations supported our approach. Following the principles of ““think small first”” and to improve the clarity of the legislation, we have taken this opportunity to change the structure of the legislation applying aspects of company law to LLPs. The 2001 LLP regulations apply large parts of the Companies Act 1985 with modification of varying degrees made by textual amendment in schedules to those regulations. This creates a complex set of regulations that have to be read together with the 1985 Act. A similar approach is taken in Northern Ireland. In contrast, the regulations we are debating today set out the 2006 Act provisions applied to LLPs in full, as modified to take account of particular characteristics of LLPs. As is the case for companies, separate regulations for small LLPs and for medium-sized and large LLPs will apply the provisions on form and content of accounts previously contained in schedules to the 1985 Act and the 1986 Northern Ireland order. By applying the 2006 Act in this way we ensure that LLPs reap the benefits of simpler, clearer and more cost-effective legislation in more modern language. In line with the extension of company law to Northern Ireland, the regulations applying the 2006 Act to LLPs will also extend to LLPs in Northern Ireland. In summary, the draft regulations are the first phase of the application of the Companies Act 2006 to limited liability partnerships. They restate in full the provisions as applied, in a set of stand alone regulations that are more user-friendly for LLPs, particularly small LLPs and their advisers. I commend the draft regulations to the Committee. I beg to move. Moved, That the Grand Committee do report to the House that it has considered the Small Limited Liability Partnerships (Accounts) Regulations 2008. 22nd report from the Joint Committee on Statutory Instruments.—(Baroness Vadera.)