Scotland has gained its first-ever limited liability partnership firm – ahead of the LLP Bill being passed by Parliament.
New firm Semple Kennedy was approved on 30 June with Walter Semple and former Faulds Gibson & Kennedy managing partner Ewan Kennedy. Semple was formerly a partner at Bird Semple, which has merged with DLA.
Semple Kennedy opted for the new structure following changes to Scottish law which allow it to avoid tax penalties.
Kennedy says: “We decided to turn ourselves into a limited liability company because the partnership structure is old-fashioned and has obvious problems in relation to unlimited liability, having to divide client and firm monies, succession problems and legal entity definition [English and Scottish partnerships operate differently]. Partnerships can also create tensions in a firm, particularly when they get to a certain size.”
English firms are hoping the UK bill follows Scotland and removes tax penalties imposed on firms becoming limited liability companies.
Kennedy is confident that commercial practices will see the advantages. “Corporate models will be of interest to larger firms,” he says.