house of lords official report - United Kingdom Parliament

GC 281 Limited Liability Partnerships Regs 2009 [LORDS]
Companies Act 2006 Regs 2009 GC 282
[LORD DE MAULEY]
Other noble Lords may have received a communication
regarding these regulations from the Institute of Chartered
Accountants in England and Wales, an institute of
which, I should disclose, I am a member. While most
of its concerns with earlier drafts appear to have been
allayed, it raised the following points. Perhaps the
Minister could address them.
The first concerns Regulation 18, which would
apply Sections 162 to 165 of the 2006 Act, which
concern the registry of directors’ names to LLPs with
modifications. That will require an LLP to keep available
for inspection a register of members containing certain
particulars, including a service address for each individual
member and whether a member is a designated member.
In practice, the institute notes that most LLPs currently
maintain a list of all members at their principal place
of business and do not object to the requirement being
imposed. However, particularly given that failure to
comply will be an offence, it feels—and I can see the
point—that it is important that the Minister’s department
provides LLPs with adequate information about that
new requirement to ensure compliance as from 1 October.
The institute also notes that the department has
postponed the decision on whether to apply the overseas
company disclosure regime to LLPs. It understands
that it would be undesirable to hold up the application
of the remainder of the Act to LLPs while the difficult
question of overseas LLPs is considered, but it would
like to know when the issue will be tackled, as there is
now a discrepancy between the treatment of overseas
companies, as against overseas LLPs.
Lastly, as a drafting point, the institute draws attention
to the fact that in Regulation 51 applying Section
1007(1) and 1007(5)(a), reference is made to an application
being made by an LLP. It says that that should refer
to an application being made on behalf of an LLP.
I should be interested to hear whether the Minister
can respond to those points.
Lord Razzall: I make one point in support of the
regulations, which is to congratulate whoever in the
Government or the department was responsible for
producing them in this format. Before the Minister’s
time, when we ground our way through the Companies
Bill in the august Chamber, we argued from these
Benches that it was important that the Company Law
Reform Bill became a consolidating Act, for the reasons
that the Minister gave—that it was important that
people could read legislation in a digestible form,
rather than having to leap from one section and one
Act to the other, the only benefit of which being to
increase the profits of Butterworths. I welcome this
approach and hope that the Government will continue
to follow it when we have further legislation in this area.
Lord Young of Norwood Green: I thank the noble
Lord, Lord Razzall, for that comment. The Acts have
been implemented in stages, which will need to be
reflected in our evaluation. We will begin to evaluate
some provisions commenced in 2007 next year, but we
will wait until 2011 to evaluate most provisions
commenced in October 2009.
The regulations for LLPs come into effect on 1 October
2009, in line with the implementation date for the
remaining provisions of the Companies Act 2006 for
companies. We will take steps to ensure that LLPs
know about these changes, particularly the new register
of members, given the importance of the situation in
which they find themselves. Companies House will
send a mailshot to all LLPs telling them about the
changes. It will highlight the new requirement to keep
a register of members available for inspection, and it
will mention that a failure to do so will be an offence.
Guidance and specimen forms will be available on the
Companies House website from 1 July. We will look at
the drafting point raised by the ICAEW to see whether
it needs amendment. No consensus has emerged about
how or whether to change the way in which we regulate
overseas LLPs. The regulations before us therefore
continue the approach in the existing regulations.
I believe that I have dealt with all the questions.
I am grateful to noble Lords for their contributions to
this debate. The regulations represent the last step
towards the application of the Companies Act 2006 to
limited liability partnerships. They ensure that the
regulations under which LLPs form and operate are in
step with modern company law. In summary, by applying
the remaining provisions of the Companies Act 2006
to LLPs, as set out in the regulations, where necessary
and appropriate, we make essential changes to align
the requirements for LLPs with those for companies.
This will ensure that LLPs enjoy some of the same
benefits and savings as companies, and remain an
attractive and distinctive corporate vehicle for business,
with different characteristics from companies and other
types of partnerships. I commend these regulations to
the Committee.
Motion agreed.
Companies Act 2006 (Accounts, Reports
and Audit) Regulations 2009
Considered in Grand Committee
4.27 pm
Moved By Lord Young of Norwood Green
That the Grand Committee do report to the
House that it has considered the Companies Act
2006 (Accounts, Reports and Audit) Regulations
2009.
Relevant document: 15th Report from the Joint
Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State,
Department for Business, Innovation and Skills (Lord
Young of Norwood Green): The main purpose of this
instrument is to complete the implementation of the
company reporting directive, directive 2006/46, in relation
to corporate governance statements that publicly traded
companies publish separately from the directors’ report.
The regulations before the Committee today amend
the Companies Act 2006 to make provision for the
filing of separate corporate governance statements at
Companies House. They also implement the directive’s
requirement for an auditor’s report on any separate
corporate governance statement. Rules made last year
by the Financial Services Authority implemented the
requirement for a corporate governance statement and
set out what it should contain. As permitted under the