PART ICITATION, COMMENCEMENT EXTENT AND INTERPRETATION

Citation, commencement and extent

1.—(1) These Regulations may be cited as the Limited Liability Partnerships (Scotland) Regulations 2001 and shall come into force on 6th April 2001.

(2) These Regulations extend to Scotland only.

Interpretation

2.  In these Regulations–

“the 1985 Act” means the Companies Act 1985(2);

“the 1986 Act” means the Insolvency Act 1986(3);

“limited liability partnership agreement”, in relation to a limited liability partnership, means any agreement, express or implied, made between the members of the limited liability partnership or between the limited liability partnership and the members of the limited liability partnership which determines the mutual rights and duties of the members, and their rights and duties in relation to the limited liability partnership;

“the principal Act” means the Limited Liability Partnerships Act 2000; and

“shadow member”, in relation to a limited liability partnership, means a person in accordance with whose directions or instructions the members of the limited liability partnership are accustomed to act (but so that a person is not deemed a shadow member by reason only that the members of the limited liability partnership act on advice given by that person in a professional capacity).

PART IICOMPANIES ACT

Application of the 1985 Act to limited liability partnerships

3.  The provisions of the 1985 Act specified in the first column of Schedule 1 to these Regulations shall apply to limited liability partnerships, with the following modifications–

(a)references to a company shall include references to a limited liability partnership;

(b)references to the Companies Acts shall include references to the principal Act and any regulations made thereunder;

(c)references to the 1986 Act shall include references to that Act as it applies to limited liability partnerships by virtue of Part III of these Regulations;

(d)references in a provision of the 1985 Act to other provisions of that Act shall include references to those other provisions as they apply to limited liability partnerships by virtue of these Regulations; and

(e)the modifications, if any, specified in the second column of Schedule 1 of the provision specified opposite them in the first column.

PART IIIWINDING UP AND INSOLVENCY

Application of the 1986 Act to limited liability partnerships

4.—(1) Subject to paragraph (2), the provisions of the 1986 Act(4) listed in Schedule 2 shall apply in relation to limited liability partnerships as they apply in relation to companies.

(2) The provisions of the 1986 Act referred to in paragraph (1) shall so apply, with the following modifications–

(a)references to a company shall include references to a limited liability partnership;

(b)references to a director or to an officer of a company shall include references to a member of a limited liability partnership;

(c)references to a shadow director shall include references to a shadow member;

(d)references to the 1985 Act, the Company Directors Disqualification Act 1986(5), the Companies Act 1989(6) or to any provisions of those Acts or to any provisions of the 1986 Act shall include references to those Acts or provisions as they apply to limited liability partnerships by virtue of the principal Act or these Regulations; and

(e)the modifications set out in Schedule 3 to these Regulations.

PART IVMISCELLANEOUS

General and consequential amendments

5.  The enactments referred to in Schedule 4 shall have effect subject to the amendments specified in that Schedule.

Application of subordinate legislation

6.—(1) The Insolvency (Scotland) Rules 1986(7) shall apply to limited liability partnerships with such modifications as the context requires for the purpose of giving effect to the provisions of the Insolvency Act 1986 which are applied by these Regulations.

(2) In the case of any conflict between any provision of the subordinate legislation applied by paragraph (1) and any provision of these Regulations, the latter shall prevail.

Regulation 3

SCHEDULE 1MODIFICATIONS TO PROVISIONS OF THE 1985 ACT

Regulation 4(1)

SCHEDULE 2PROVISIONS OF THE 1986 ACT

The relevant provisions of the 1986 Act are as follows:

• Sections 50 to 52;

• Section 53(1) and (2), to the extent that those subsections do not relate to the requirement for a copy of the instrument and notice being delivered to the registrar of companies;

• Section 53(4), (6) and (7);

• Section 54(1), (2), (3) (to the extent that that subsection does not relate to the requirement for a copy of the interlocutor to be delivered to the registrar of companies), and subsections (5), (6) and (7);

• Sections 55 to 58;

• Section 60, other than subsection (1);

• Section 61, including subsections (6) and (7) to the extent that those subsections do not relate to anything to be done or which may be sent to the registrar of companies;

• Section 62, including subsection (5) to the extent that that subsection does not relate to anything to be done or which may be sent to the registrar of companies;

• Sections 63 to 66;

• Section 67, including subsections (1) and (8) to the extent that those subsections do not relate to anything to be sent to the registrar of companies;

• Section 68;

• Section 69, including subsections (1) and (2) to the extent that those subsections do not relate to anything to be done or which may be done by the registrar of companies;

• Sections 70 and 71;

• Subsection 84(3) to the extent that it does not concern the copy of the resolution being forwarded to the registrar of companies within 15 days;

• Sections 91 to 93;

• Section 94, including subsections (3) and (4) to the extent that those subsections do not relate to the liquidator being required to send to the registrar of companies a copy of the account and a return of the final meeting;

• Section 95;

• Section 97;

• Sections 100 to102;

• Sections 104 to105;

• Section 106, including subsections (3), (4) and (5) to the extent that those subsections do not relate to the liquidator being required to send to the registrar of companies a copy of the account of winding up and a return of the final meeting/quorum;

• Sections 109 to 111;

• Section 112, including subsection (3) to the extent that that subsection does not relate to the liquidator being required to send to the registrar of companies a copy of the order made by the court;

• Sections 113 to 115;

• Sections 126 to 128;

• Section 130(1) to the extent that that subsection does not relate to a copy of the order being forwarded by the court to the registrar of companies;

• Section 131;

• Sections 133 to 135;

• Sections 138 to 140;

• Sections 142 to146;

• Section 147, including subsection (3) to the extent that that subsection does not relate to a copy of the order being forwarded by the company to the registrar of companies;

• Section162 to the extent that the section concerns the matters set out in Section C.2 of Schedule 5 to the Scotland Act 1998 as being exceptions to the reservation of insolvency;

• Sections 163 to 167;

• Section 169;

• Section 170, including subsection (2) to the extent that that subsection does not relate to an application being made by the registrar to make good the default;

• Section 171;

• Section 172, including subsection (8) to the extent that that subsection does not relate to the liquidator being required to give notice to the registrar of companies;

• Sections 173 and 174;

• Section 177;

• Sections 185 to 189;

• Sections 191 to 194;

• Section 196;

• Section 199;

• Section 200;

• Sections 206 to 215;

• Section 218 subsections (1), (2),(4) and (6);

• Sections 231 to 232 to the extent that the sections apply to administrative receivers, liquidators and provisional liquidators;

• Section 233 to the extent that that section applies in the case of the appointment of an administrative receiver, of a voluntary arrangement taking effect, of a company going into liquidation or where a provisional liquidator is appointed;

• Section 234 to the extent that that section applies to situations other than those where an administration order applies;

• Section 235 to the extent that that section applies to situations other than those where an administration order applies;

• Sections 236 to 237 to the extent that those sections apply to situations other than administration orders and winding up;

• Sections 242 to 243;

• Section 244 to the extent that that section applies in circumstances other than a company which is subject to an administration order;

• Section 245;

• Section 251;

• Section 416(1) and (4) to the extent that those subsections apply to section 206(1)(a) and (b) in connection with the offence provision relating to the winding up of a limited liability partnership;

• Section 430;

• Section 436;

• Schedule 2;

• Schedule 3;

• Schedule 4;

• Schedule 8 to the extent that that Schedule does not apply to voluntary arrangements or administrations within the meaning of Parts I and II of the 1986 Act;

• Schedule 10 to the extent that it refers to any of the sections referred to above.

Regulation 4(2)

SCHEDULE 3MODIFICATIONS TO PROVISIONS OF THE 1986 ACT

Regulation 5

SCHEDULE 4GENERAL AND CONSEQUENTIAL AMENDMENTS IN OTHER LEGISLATION

Insolvency Act 1986 c. 45

1.—(1) Section 110 is amended as follows.

(2) In subsection (1), after “sold” insert “(a)” and at the end insert – “, or (b) to a limited liability partnership (the “transferee limited liability partnership”).”

• In subsection (2), for the words “sale”, onwards substitute

  • “sale–

    (a)

    in the case of the transferee company, shares, policies or other like interests in the company for distribution among the members of the transferor company, or

    (b)

    in the case of the transferee limited liability partnership, membership in the limited liability partnership for distribution among the members of the transferor company.”.

• In subsection (4), for the words “may,” onwards substitute

  • “may–

    (a)

    in the case of the transferee company, in lieu of receiving cash, shares, policies or other like interests (or in addition thereto) participate in the profits of, or receive any other benefit from, the company, or

    (b)

    in the case of the transferee limited liability partnership, in lieu of receiving cash, or membership (or in addition thereto) participate in some other way in the profits of, or receive any other benefit from, the limited liability partnership.”

Criminal Procedure (Scotland) Act 1995 c. 46

1.  In section 70 (8) insert at the end–

• “; and “officer” and “any person having or being one of the persons having the management of the affairs of the body corporate”, in relation to a limited liability partnership, means a member of the limited liability partnership”.

2.  In section 141(2), insert at the end–

• “; and in sub-paragraph (b)(i) of this subsection references to the director or secretary or other official, in relation to a limited liability partnership, are to any member of the limited liability partnership”.

3.  In section 143(3), insert at the end–

• “; and in paragraph 3(b) of this subsection references to the managing director or the secretary, in relation to a limited liability partnership, are to any member of the limited liability partnership”.

Requirements of Writing (Scotland) Act 1995 c. 7

4.  In section 7 (7) after “companies,” insert “limited liability partnerships,”.

5.  After paragraph 3 of Schedule 2, insert–

“Limited Liability Partnerships

3A.—(1) Except where an enactment expressly provides otherwise, where a granter of a document is a limited liability partnership, the document is signed by the limited liability partnership if it is signed on its behalf by a member of the limited liability partnership.

(2) This Act is without prejudice to paragraph 9 of Schedule 1, paragraph 9 of Schedule 2, and paragraph 7 of Schedule 4, to the Insolvency Act 1986.

(3) Sub-paragraphs (1) and (2) of this paragraph apply in relation to the signing of an alteration made to a document as they apply in relation to the signing of a document.

(4) Where a granter of a document is a limited liability partnership, section 3 of and Schedule 1 to this Act shall have effect subject to the modifications set out in sub-paragraphs (5) and (6) below.

(5) In section 3–

(a)for subsection (1) there shall be substituted the following subsections–

“(1) Subject to subsections (1A) to (7) below, where–

(a)a document bears to have been subscribed on behalf of a limited liability partnership by a member of the limited liability partnership;

(b)the document bears to have been signed by a person as a witness of the subscription of the member of the limited liability partnership and to state the name and address of the witness; and

(c)nothing in the document, or in the testing clause or its equivalent, indicates–

(i)that it was not subscribed on behalf of the limited liability partnership as it bears to have been so subscribed; or

(ii)that it was not validly witnessed for any reason specified in paragraphs (a) to (e) of subsection (4) below,

the document shall be presumed to have been subscribed by the limited liability partnership.

(1A) Where a document does not bear to have been signed by a person as a witness of the subscription of the member of the limited liability partnership it shall be presumed to have been subscribed by the limited liability partnership if it bears to have been subscribed on behalf of the limited liability partnership by two members of the limited liability partnership.

(1B) A presumption under subsection (1) or (1A) above as to subscription of a document does not include a presumption that a person bearing to subscribe the document as a member of the limited liability partnership was such member.”;

(b)in subsection (4) after paragraph (g) there shall be inserted the following paragraph–

“(h)if the document does not bear to have been witnessed, but bears to have been subscribed on behalf of the limited liability partnership by two of the members of the limited liability partnership, that a signature bearing to be the signature of a member is not such a signature, whether by reason of forgery or otherwise;”.

(6) In paragraph 1 of Schedule 1–

(a)for sub-paragraph (1) there shall be substituted the following sub-paragraphs–

“(1) Subject to sub-paragraphs (1A) to (7) below, where–

(a)an alteration to a document bears to have been signed on behalf of a limited liability partnership by a member of the limited liability partnership;

(b)the alteration bears to have been signed by a person as a witness of the signature of the member of the limited liability partnership and to state the name and address of the witness; and

(c)nothing in the document or alteration, or in the testing clause or its equivalent, indicates–

(i)that the alteration was not signed on behalf of the limited liability partnership as it bears to have been so signed; or

(ii)that the alteration was not validly witnessed for any reason specified in paragraphs (a) to (e) of sub-paragraph (4) below,

the alteration shall be presumed to have been signed by the limited liability partnership.

(1A) Where an alteration does not bear to have been signed by a person as a witness of the signature of the member of the limited liability partnership it shall be presumed to have been signed by the limited liability partnership if it bears to have been signed on behalf of the limited liability partnership by two members of the limited liability partnership.

(1B) For the purposes of sub-paragraph (1)(b) above, the name and address of the witness may bear to be stated in the alteration itself or in the testing clause or its equivalent.

(1C) A presumption under sub-paragraph (1) or (1A) above as to signing of an alteration to a document does not include a presumption that a person bearing to sign the alteration as a member of the limited liability partnership was such member”;

(b)in sub-paragraph (4) after paragraph (g) there shall be inserted the following–

“; or

(h)if the alteration does not bear to have been witnessed, but bears to have been signed on behalf of the limited liability partnership by two of the members of the limited liability partnership, that a signature bearing to be the signature of a member is not such a signature, whether by reason of forgery or otherwise;”.”

Culpable officer provision

6.—(1) A culpable officer provision applies in the case of a limited liability partnership as if the reference in the provision to a director (or a person purporting to act as a director) were a reference to a member (or a person purporting to act as a member) of the limited liability partnership.

(2) A culpable officer provision is a devolved provision in any Act or subordinate legislation (within the meaning of the Interpretation Act 1978 or the Scotland Act 1998 (Transitory and Transitional Provisions) (Publication and Interpretation etc. of Acts of the Scottish Parliament) Order 1999(17)) to the effect that where–

(a)a body corporate is guilty of a particular offence, and

(b)the offence is proved to have been committed with the consent or connivance of, or to be attributable to the neglect on the part of, (among others) a director of the body corporate,

he (as well as the body corporate) is guilty of the offence.

(3) In this paragraph “devolved provision” means any provision that would be within devolved competence for the purposes of section 101 of the Scotland Act 1998.

Explanatory Note

(This note is not part of the Regulations)

The Limited Liability Partnerships Act 2000 c. 12. (“the 2000 Act”) provided for the creation of limited liability partnerships (“LLPs”) and for the making of regulations concerning them. These Regulations, which are made under sections 14(1) and (2), 15, 16 and 17(1) and (3) of that Act, regulate LLPs by applying to them, with appropriate modifications, the appropriate provisions of the existing law which relate to companies and partnerships.

The 2000 Act is of application to Great Britain. Section 19(3) of the 2000 Act provides that the Act shall be a pre-commencement enactment for the purposes of the Scotland Act 1998. Specifically, these Regulations:

(a)Apply Scots law in relation to winding up and insolvency of LLPs;

(b)Extend certain provisions of the Companies Act 1985, as appropriate, to LLPs registered in Scotland to ensure that such an LLP should be able to create floating charges over its assets.

The Regulations are structured in four parts accompanied by four schedules. They apply to LLPs, with appropriate modifications to reflect the structure of LLPs, a large number of the provisions contained within the Companies Act 1985 and the Insolvency Act 1986.

The Regulations amend the relevant primary legislation by way of general modifications which, provide that references to a company includes references to a limited liability partnership, and references to a director or officer include a reference to a member of an LLP. Throughout the Schedules to the Regulations there are references to designated members. This category of member is responsible for a number of administrative and filing duties of the LLP but is also representative of the LLP and its membership in circumstances such as the appointment, removal and remuneration of auditors.

Part I of the Regulations contains the citation, commencement, extent and interpretation provisions to be applied to the Regulations, and gives the date on which they come into force.

Part II of, and Schedule 1 to, the Regulations apply to LLPs certain provisions of the Companies Act 1985.

Part III of, and Schedules 2 and 3 to, the Regulations apply to LLPs the provisions of the First and Third Groups of Parts of the Insolvency Act 1986, with appropriate modifications. Schedule 2 to the Regulations lists those provisions contained in the First and Third Group of Parts of the Insolvency Act 1986. Schedule 3 lists those sections which have been modified or omitted in their application to LLPs.

The insolvency provisions as applied to LLPs include provisions for voluntary arrangements, receivership, winding-up and liquidations. The most notable modification of the provisions which apply to companies is, an additional section, section 214A.

The new section 214A provides that withdrawals made by members during the two years prior to the commencement of winding-up will be subject to claw back if it is proved that at the time of the withdrawal the member knew or had reasonable grounds for believing that the LLP was, or would be made, insolvent.

Part IV of, and Schedule 4 to, the Regulations apply a number of general and consequential amendments to other enactments.

Part IV of the Regulations apply to LLPs the Insolvency (Scotland) Rules 1986.

The Regulations apply to Scotland only.