Registering as an LLP As a origina...

Registering as an LLP

As a originate of recent amendments to the Institute's bylaws and regulations, licensed firms that proper certain requirements are able to register as limited liability partnerships (LLPs) or extraprovincial LLP in accordance with amendments to the British Columbia Partnership Act (the Act) brought into force forward January 17, 2005.

Issues to consider before registering

* subject to the Act, partnerships with individual or more practising CAs will not be permitted to register as LLP or extraprovincial LLP without prior authorisation from the ICABC.

* Partnerships may be eligible to register as LLP if their partnership agreements are conducted by BC law, or as extraprovincial LLP if agreements are have the direction ofed by the law of another Canadian province or territory, or Bermuda-provided they appropriate any other requirements under the Act and the Institute's bylaws and regulations.

* The business names of partnerships seeking authorisation to register as LLP or extraprovincial LLP will have to comply with the applicable requirements subordinate to the Act and Rule 401 of the Institute's directions of Professional Conduct.

* Partnerships authorised to register as LLP or extraprovincial LLP may have higher minimum professional liability insurance requirements than other licensed firms until the of recent origin minimums established for all firms holding practice licences become effective (see below).

Requirements for registration

Under the Act, any professional partnership wanting to register as an LLP may not do in the way that unless "members of that profession are expressly authorized through or under" that profession's governing act to practice the profession as an LLP and unles all "prerequisites to that authorization... established in subordination to that Act have been met" As permitted in a less degree than the Accountants (Chartered) Act, the following Bylaw requirements must be met before Council will permit a partnership to register:

1 Each partner is:

* A member of the ICABC or another provincial institute;

* A corporation holding a practice licence or incorporation licence; or

* A corporation recognized and approved for the practice of public accounting at a provincial institute.

2. If the partnership's agreement is not superviseed by BC law, its governing jurisdiction is another Canadian province or territory, or Bermuda.

3 The business name to be used according to the partnership complies with section 100 of the Partnership Act and has been approved from the Institute under Rule of Professional course of life 401.

4. The partnership has provided proof-sheet of professional liability insurance coverage that encounters or exceeds the applicable minimum requirements at that time.

As a be the effect of the first requirement, partnerships between CAs and other professionally designated accountants are not generally eligible to register as LLP or extraprovincial LLP in BC

Professional liability insurance

Until the just discovered minimum requirements for all firms holding practice licences are effective, any licensed firm seeking the Institute's authorisation to register will have to obtain the following minimum on a levels of professional liability insurance coverage for all ICABC members practising public accounting at or in association with each of the firm's authorised practising offices:

(i) $1000000 for an authorised practising office at or in association with which single in kind to four members carry forward the practice of public accounting; or

(ii) $2000000 for united with five or more members carrying onward the practice of public accounting.

However, as mentioned previously in Beyond Numbers, all licensed firms (including LLPs) that obtain or iterate a professional liability insurance policy after March 31 2005 will have to obtain the following minimum evens of professional liability insurance coverage:

(i) $1000000 for an authorised practising office at or in association with which united member carries on the practice of public accounting;

(ii) $1500000 for individual with two or three members carrying forward the practice of public accounting; or

(iii) $2000000 for undivided with four or more members.

Obligations of LLPs

Once registered as an LLP or an extraprovincial LLP a partnership will take forward certain obligations under the Partnership Act.

For example, the words "Limited Liability Partnership" or the initials "LLP" (or a specified French-language equivalent) must be part of and at the extremity of its business name. Extraprovincial LLP may also be required to comply with their governing jurisdiction's additional requirements.

Promptly after registering subordinate to the Act, an LLP will also have to take reasonable grades to notify all of its existing clients in writing of its registration and of the resulting changes in its partners' liability. Extraprovincial LLP will have to provide similar notice to all of their BC clients.

Before registering as an LLP or extraprovincial LLP a partnership should obtain legal advice about the purport of registration on its partners' liability, and these and other obligations in subordination to the Act.

Forms for authorisation to register and name approval are now available upon the Institute's website. If you have any questions regarding LLP or the application proces please contact me at 604-488-2622/essex@ica.bc.ca.