The Department for Business Innovation and Skills (BIS) has published a consultation following proposals on increasing the public transparency of corporate ownership. As Deloitte explains, corporate directors will be generally prohibited, but following the responses received to a previous consultation BIS now accepts that there should be some exceptions. No significant changes are proposed to the status quo in the condoc as far as corporate members of LLPs are concerned, though further views are invited, especially about detailed rules. The resulting legislation will be included in the Small Business, Enterprise and Employment Bill, which is currently going through Parliament, and/or regulations made thereunder. Comments are invited on Corporate directors: exceptions to prohibition by 8 January 2015. See www.bit.ly/1puP2Cq.
Meanwhile, the CIOT welcomed the BIS announcement that companies can continue to be allowed to be members of LLPs. Andrew Gotch, chairman of the CIOT’s owner-managed business sub-committee, commented the LLP structure is ‘often used for valid commercial reasons in farming partnerships, for property development and investment, and alternative business structures for law firms … A corporate LLP structure is often the vehicle of choice for property developments purely for reasons of commercial flexibility’, adding: ‘It is an easier way to do business with third parties than, for example, complex shareholder arrangements within a company or group of companies.
‘In many cases, a substantial corporate group will be one of the members; either providing the capital or the expertise … There may also be times where a corporate partner is required for local jurisdictional or regulatory requirements. There is a theoretical risk that corporate membership of LLPs might be used to mask beneficial ownership, but that should not be an issue if the beneficial owners of the corporate member are made public as the government propose.’
The Department for Business Innovation and Skills (BIS) has published a consultation following proposals on increasing the public transparency of corporate ownership. As Deloitte explains, corporate directors will be generally prohibited, but following the responses received to a previous consultation BIS now accepts that there should be some exceptions. No significant changes are proposed to the status quo in the condoc as far as corporate members of LLPs are concerned, though further views are invited, especially about detailed rules. The resulting legislation will be included in the Small Business, Enterprise and Employment Bill, which is currently going through Parliament, and/or regulations made thereunder. Comments are invited on Corporate directors: exceptions to prohibition by 8 January 2015. See www.bit.ly/1puP2Cq.
Meanwhile, the CIOT welcomed the BIS announcement that companies can continue to be allowed to be members of LLPs. Andrew Gotch, chairman of the CIOT’s owner-managed business sub-committee, commented the LLP structure is ‘often used for valid commercial reasons in farming partnerships, for property development and investment, and alternative business structures for law firms … A corporate LLP structure is often the vehicle of choice for property developments purely for reasons of commercial flexibility’, adding: ‘It is an easier way to do business with third parties than, for example, complex shareholder arrangements within a company or group of companies.
‘In many cases, a substantial corporate group will be one of the members; either providing the capital or the expertise … There may also be times where a corporate partner is required for local jurisdictional or regulatory requirements. There is a theoretical risk that corporate membership of LLPs might be used to mask beneficial ownership, but that should not be an issue if the beneficial owners of the corporate member are made public as the government propose.’
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