The Department of Trade and Industry's current disclosure requirements for limited liability partnerships (LLPs) would be a step too far for law firms, according to accountants Clark Whitehill.
Speaking at a seminar on the proposed legislation, Clark Whitehill chair James Gemmell invited lawyers to join him in lobbying the new government to remove some of the “complicated and excessive proposals of the previous administration”.
Gemmell said the proposals, made in a consultation paper issued by the DTI in February this year, required too much disclosure of financial information which would be of benefit to competitors.
He said only the balance sheet should be filed on the public register rather than the full accounts. Clawbacks and financial guarantees by partners should be replaced by a requirement to have a minimum amount of capital in reserve.
David Furst, Clark Whitehill's head of professional practices, said that from talks he had had with the Inland Revenue, he understood that firms might have to prepare two separate accounts – one a “true and fair” view following the strict accounting procedures to comply with LLP status and another for the Revenue prepared in the conventional way for partnerships.
Furst also attacked the Revenue for its position on Jersey LLP legislation. It has told Ernst & Young and Price Waterhouse that they would be taxed as companies if they registered as LLPs in Jersey. Yet, said Furst, US law firms with London offices had been allowed to move from being conventional partnerships to LLPs without the UK Government forcing them to reveal their accounts.