Company Law Reforms extended to Limited Liability Partnerships

On 4th March 2024, regulations were published which applied the first company law reforms set out in the Economic Crime & Corporate Transparency Act 2023 (ECCTA) to limited liability partnerships (LLPs), taking effect on that date. 

The regulations made the following changes to LLPs (which largely mirror those correspondingly applicable to companies):

• on incorporation, LLPs will need to confirm that their intended future activities are lawful (with this being repeated in each confirmation statement thereafter);
• an LLP must ensure that its registered office is situated at an appropriate address where it can acknowledge receipt of documents; 
• an LLP must provide with its next confirmation statement, a registered email address to which Companies House can send electronic communications; 
• further restrictions introduced on the use of certain names, specifically any name designed to facilitate criminal purposes or which suggests a connection with a foreign government or which contains computer codes are prohibited; and
• a person may not be a member of an LLP if they are disqualified from acting as a company director.

For existing LLPs as there is no power under statute to expel a member of an LLP, it is particularly important that the LLP agreement permits them to do so. If a member becomes disqualified, the members of the LLP are required to remove that member and failure to do so is a criminal offence. 

Considering this as well as all the above changes, we have updated our existing basic LLP agreement, our long form LLP agreement and each of our LLP deeds of adherence related to our basic form and long form LLP agreements respectively. We have also created a new members’ confirmation letter where members confirm that they are not (and never have been) disqualified as a company director.

Note that many of the changes under the ECCTA and how they will apply to LLPs, are still to be confirmed. This particularly applies to identity verification for all LLP members, PSCs and for those delivering documents to Companies House. Secondary legislation and government guidance is required to confirm the timetable for additional changes and how all new provisions will operate in practice.