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SCOTTISH STATUTORY INSTRUMENTS

2001 No. 128

PARTNERSHIPS

Limited Liability Partnerships (Scotland) Regulations 2001

	Made	28th March 2001
	Coming into force	6th April 2001

ARRANGEMENT OF REGULATIONS

PART I
CITATION, COMMENCEMENT, EXTENT AND INTERPRETATION

1.	Citation, commencement and extent.

2.	Interpretation.

PART II
COMPANIES ACT 1985

3.	Application to limited liability partnerships of the Companies Act 1985

PART III
WINDING UP AND INSOLVENCY

4.	Application of the Insolvency Act 1986 to limited liability partnerships.

PART IV
MISCELLANEOUS

5.	General and consequential amendments.

6.	Application of subordinate legislation.

SCHEDULES

Schedule 1 -

Modifications to provisions of the Companies Act 1985.

Schedule 2 -

Provisions of the Insolvency Act 1986.

Schedule 3 -

Modifications to provisions of the Insolvency Act 1986.

Schedule 4 -

General and consequential amendments in other legislation.

The Scottish Ministers, in exercise of the powers conferred by sections 14(1) and (2), 15, 16 and 17(1) and (3) of the Limited Liability Partnerships Act 2000[

1

PART I

CITATION, 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

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 II

COMPANIES 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-

PART III
WINDING 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

5

6

PART IV

MISCELLANEOUS

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

JAMES R WALLACE

SCHEDULE 1

Regulation 3

MODIFICATIONS TO PROVISIONS OF THE 1985 ACT

Formalities of Carrying on Business
36B[8] (execution of documents by companies)
Floating charges and Receivers (Scotland)
462 (power of incorporated company to create floating charge)[9]	In subsection (1), for the words "an incorporated company (whether a company within the meaning of this Act or not)," substitute "a limited liability partnership", and the words "(including uncalled capital)" are omitted.
463 (effect of floating charge on winding up)[10]
466[11] (alteration of floating charges) Subsections (1), (2), (3) and (6)
486 (interpretation for Part XVIII generally)[12]	For the definition of "company" substitute " "company" means a limited liability partnership;"
487 (extent of Part XVIII)

SCHEDULE 2

Regulation 4(1)

PROVISIONS 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 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 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 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;

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.

SCHEDULE 3

Regulation 4(2)

MODIFICATIONS TO PROVISIONS OF THE 1986 ACT

Provisions	Modifications
Section 84 (circumstances in which company may be wound up voluntarily)
Subsection (3)	For subsection (3) substitute the following- " (3) Within 15 days after a limited liability partnership has determined that it be wound up there shall be forwarded to the registrar of companies either a printed copy or a copy in some other form approved by the registrar of the determination." After subsection (3) insert a new subsection-
Subsection (4)	" (4) If a limited liability partnership fails to comply with this regulation the limited liability partnership and every designated member of it who is in default is liable on summary conviction to a fine not exceeding level 3 on the standard scale."
Section 91 (appointment of liquidator)
Subsection (1)	Delete "in general meeting".
Subsection (2)	For subsection (2) substitute the following- " (2) On the appointment of a liquidator the powers of the members of the limited liability partnership shall cease except to the extent that a meeting of the members of the limited liability partnership summoned for the purpose or the liquidator sanctions their continuance." After subsection (2) insert- " (3) Subsections (3) and (4) of section 92 shall apply for the purposes of this section as they apply for the purposes of that section."
Section 92 (power to fill vacancy in office of liquidator)
Subsection (1)	For "the company in general meeting" substitute "a meeting of the members of the limited liability partnership summoned for the purpose".
Subsection (2)	For "a general meeting" substitute "a meeting of the members of the limited liability partnership".
Subsection (3)	In subsection (3), for "articles" substitute "limited liability partnership agreement".
new subsection (4)	Add a new subsection (4) as follows- " (4) The quorum required for a meeting of the members of the limited liability partnership shall be any quorum required by the limited liability partnership agreement for meetings of the members of the limited liability partnership and if no requirement for a quorum has been agreed upon the quorum shall be 2 members."
Section 93 (general company meeting at each year's end)
subsection (1)	For "a general meeting of the company" substitute "a meeting of the members of the limited liability partnership".
new subsection (4)	Add a new subsection (4) as follows- " (4) Subsections (3) and (4) of section 92 shall apply for the purposes of this section as they apply for the purposes of that section."
Section 94 (final meeting prior to dissolution)
subsection (1)	For "a general meeting of the company" substitute "a meeting of the members of the limited liability partnership".
new subsection (5A)	Add a new subsection (5A) as follows- " (5A) Subsections (3) and (4) of section 92 shall apply for the purposes of this section as they apply for the purposes of that section."
subsection (6)	For "a general meeting of the company" substitute "a meeting of the members of the limited liability partnership".
Section 95 (effect of company's insolvency)
subsection (1)	For "directors'" substitute "designated members'".
subsection (7)	For subsection (7) substitute the following- " (7) In this section 'the relevant period' means the period of 6 months immediately preceding the date on which the limited liability partnership determined that it be wound up voluntarily."
Section 100 (appointment of liquidator)
subsection (1)	For "The creditors and the company at their respective meetings mentioned in section 98" substitute "The creditors at their meeting mentioned in section 98 and the limited liability partnership".
subsection (3)	Delete "director,".
Section 101( appointment of liquidation committee)
subsection (2)	For subsection (2) substitute the following- " (2) If such a committee is appointed, the limited liability partnership may, when it determines that it be wound up voluntarily or at any time thereafter, appoint such number of persons as they think fit to act as members of the committee, not exceeding 5."
Section 105 (meetings of company and creditors at each year's end)
subsection (1)	For "a general meeting of the company" substitute "a meeting of the members of the limited liability partnership".
new subsection (5)	Add a new subsection (5) as follows- " (5) Subsections (3) and (4) of section 92 shall apply for the purposes of this section as they apply for the purposes of that section."
Section 106 (final meeting prior to dissolution)
subsection (1)	For "a general meeting of the company" substitute "a meeting of the members of the limited liability partnership".
new subsection (5A)	After subsection (5) insert a new subsection (5A) as follows- " (5A) Subsections (3) and (4) of section 92 shall apply for the purposes of this section as they apply for the purposes of that section."
subsection (6)	For "a general meeting of the company" substitute "a meeting of the members of the limited liability partnership".
Sections 110 ( acceptance of shares, etc, as consideration for sale of company property)
	For the existing section substitute the following: " (1) This section applies, in the case of a limited liability partnership proposed to be, or being, wound up voluntarily, where the whole or part of the limited liability partnership's business or property is proposed to be transferred or sold to another company whether or not it is a company within the meaning of the Companies Act ("the transferee company") or to a limited liability partnership ("the transferee limited liability partnership"). (2) With the requisite sanction, the liquidator of the limited liability partnership being, or proposed to be, wound up ("the transferor limited liability partnership") may receive, in compensation or part compensation for the transfer or sale, shares, policies or other like interests in the transferee company or the transferee limited liability partnership for distribution among the members of the transferor limited liability partnership. (3) he sanction required under subsection (2) is- (a) in the case of a members' voluntary winding up, that of a determination of the limited liability partnership at a meeting of the members of the limited liability partnership conferring either a general authority on the liquidator or an authority in respect of any particular arrangement, (subsections (3) and (4) of section 92 to apply for this purpose as they apply for the purposes of that section), and (b) in the case of a creditor's voluntary winding up, that of either court or the liquidation committee. (4) Alternatively to subsection (2), the liquidator may (with the sanction) enter into any other arrangement whereby the members of the transferor limited liability partnership may, in lieu of receiving cash, shares, policies or other like interests (or in addition thereto), participate in the profits, or receive any other benefit from the transferee company or the transferee limited liability partnership. (5) A sale or arrangement in pursuance of this section is binding on members of the transferor limited liability partnership. (6) A determination by the limited liability partnership is not invalid for the purposes of this section by reason that it is made before or concurrently with a determination by the limited liability partnership that it be wound up voluntarily or for appointing liquidators; but, if an order is made within a year for winding up the limited liability partnership by the court, the determination by the limited liability partnership is not valid unless sanctioned by the court."
Section 111 (dissent from arrangement under section 110)
subsections (1) - (3)	For subsections (1) - (3) substitute the following- " (1) This section applies in the case of a voluntary winding up where, for the purposes of section 110(2) or (4), a determination of the limited liability partnership has provided the sanction requisite for the liquidator under that section. (2) If a member of the transferor limited liability partnership who did not vote in favour of providing the sanction required for the liquidator under section 110 expresses his dissent from it in writing addressed to the liquidator and left at the registered office of the limited liability partnership within 7 days after the date on which that sanction was given, he may require the liquidator either to abstain from carrying the arrangement so sanctioned into effect or to purchase his interest at a price to be determined by agreement or arbitration under this section. (3) If the liquidator elects to purchase the member's interest, the purchase money must be paid before the limited liability partnership is dissolved and be raised by the liquidator in such manner as may be determined by the limited liability partnership."
subsection (4)	Omit subsection (4).
Section 126 (power to stay or restrain proceedings against company)
subsection (2)	Delete subsection (2).
Section 127 ( avoidance of property dispositions, etc)
	For "any transfer of shares" substitute "any transfer by a member of the limited liability partnership of his interest in the property of the limited liability partnership".
Section 165 ( voluntary winding up)
subsection (2)	In paragraph (a) for "an extraordinary resolution of the company" substitute "a determination by a meeting of the members of the limited liability partnership".
subsection (4)	For paragraph (c) substitute the following- " (c) summon meetings of the members of the limited liability partnership for the purpose of obtaining their sanction or for any other purpose he may think fit."
new subsection (4A)	Insert a new subsection (4A) as follows- " (4A) Subsections (3) and (4) of section 92 shall apply for the purposes of this section as they apply for the purposes of that section."
Section 166 (creditors' voluntary winding up)
subsection (5)	In paragraph (b) for "directors" substitute "designated members".
Section 171 (removal, etc (voluntary winding up))
subsection (2)	For paragraph (a) substitute the following- " (a) in the case of a members' voluntary winding up, by a meeting of the members of the limited liability partnership summoned specially for that purpose, or".
subsection (6)	In paragraph (a) for "final meeting of the company" substitute "final meeting of the members of the limited liability partnership" and in paragraph (b) for "final meetings of the company" substitute "final meetings of the members of the limited liability partnership".
new subsection (7)	Insert a new subsection (7) as follows- " (7) Subsections (3) and (4) of section 92 apply for the purposes of this section as they apply for the purposes of that section ."
Section 173 (release (voluntary winding up))
subsection (2)	In paragraph (a) for "a general meeting of the company" substitute "a meeting of the members of the limited liability partnership"
Section 187 (power to make over assets to employees)
	Delete section 187
Section 194 (resolutions passed at adjourned meetings)
	After "contributories" insert "or of the members of a limited liability partnership".
Section 206 (fraud, etc in anticipation of winding up)[13]
subsection (1)	For "passes a resolution for voluntary winding up" substitute "makes a determination that it be wound up voluntarily".
Section 207 (transactions in fraud of creditors)
subsection (1)	For "passes a resolution for voluntary winding up" substitute "makes a determination that it be wound up voluntarily".
Section 210 (material omissions from statement relating to company's affairs)
subsection (2)	For "passed a resolution for voluntary winding up" substitute "made a determination that it be wound up voluntarily".
Section 214 (wrongful trading)
subsection (2)	Delete from "but the court shall not" to the end of the subsection.
After section 214	Insert the following new section 214A " Adjustment of withdrawals 214A{/d} {d2} {n2} (1) This section has effect in relation to a person who is or has been a member of a limited liability partnership where, in the course of the winding up of that limited liability partnership, it appears that subsection (2) of this section applies in relation to that person. (2) This subsection applies in relation to a person if- (a) within the period of two years ending with the commencement of the winding up, he was a member of the limited liability partnership who withdrew property of the limited liability partnership, whether in the form of a share of profits, salary, repayment of or payment of interest on a loan to the limited liability partnership or any other withdrawal of property, and (b) it is proved by the liquidator to the satisfaction of the court that at the time of the withdrawal he knew or had reasonable grounds for believing that the limited liability partnership- (i) was at the time of the withdrawal unable to pay its debts within the meaning of section 123 of the Act, or (ii) would become so unable to pay its debts after the assets of the limited liability partnership had been depleted by that withdrawal taken together with all other withdrawals (if any) made by any members contemporaneously with that withdrawal or in contemplation when that withdrawal was made. (3) Where this section has effect in relation to any person the court, on the application of the liquidator, may declare that that person is to be liable to make such contribution (if any) to the limited liability partnership's assets as the court thinks proper. (4) The court shall not make a declaration in relation to any person the amount of which exceeds the aggregate of the amounts or values of all the withdrawals referred to in subsection (2) made by that person within the period of 2 years referred to in that subsection. (5) The court shall not make a declaration under this section with respect to any person unless that person knew or ought to have concluded that after each withdrawal referred to in subsection (2) there was no reasonable prospect that the limited liability partnership would avoid going into insolvent liquidation. (6) For the purposes of subsection (5) the facts which a member ought to know or ascertain, the conclusions which he ought to reach and the steps which he ought to have taken are those which would be known or ascertained, or reached or taken, by a reasonably diligent person having both: (a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that member in relation to the limited liability partnership, and (b) the general knowledge, skill and experience that that member has. (7) For the purposes of this section a limited liability partnership goes into insolvent liquidation if it goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up. (8) In this section "member" includes a shadow member. (9) This section is without prejudice to section 214."
Section 215 (proceedings under ss 213, 214)
subsection (1)	Omit the word "or" between the words "213" and "214" and insert after "214" "or 214A".
subsection (2)	For "either section" substitute "any of those sections".
subsection (4)	For "either section" substitute "any of those sections".
subsection (5)	For "Sections 213 and 214" substitute "Sections 213, 214 or 214A".
Section 218 (prosecution of delinquent officers and members of company)[14]
subsection (1)	For "officer, or any member, of the company" substitute "member of the limited liability partnership"
subsections (4) and (6)	For "officer of the company, or any member of it," substitute "officer or member of the limited liability partnership".
Section 233 (supplies of gas, water, electricity etc.)[15]
subsection (1)	For paragraph (c) substitute the following- " (c) a voluntary arrangement under Part I has taken effect in accordance with section 5".
subsection (4)	For paragraph (c) substitute the following- " (c) the date on which the voluntary arrangement took effect in accordance with section 5".
Section 251 (expressions used generally)
	Delete the word "and" appearing after the definition of "the rules" and insert the word "and" after the definition of "shadow director". After the definition of "shadow director" insert the following- ""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 him in a professional capacity);"
Section 416 (monetary limits (companies winding up))
subsection (1)	In subsection (1), omit the words "section 117(2) (amount of company's share capital determining whether county court has jurisdiction to wind it up);" and the words "section 120(3) (the equivalent as respects sheriff court jurisdiction in Scotland);".
Section 436 (expressions used generally)
	The following expressions and definitions shall be added to the section- "designated member" has the same meaning as it has in the Limited Liability Partnerships Act 2000; "limited liability partnership" means a limited liability partnership formed and registered under the Limited Liability Partnership Act 2000; "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.
Schedule 2
Paragraph 17	For paragraph 17 substitute the following- " 17. Power to enforce any rights the limited liability partnership has against the members under the terms of the limited liability partnership agreement"
Schedule 10[16]
Section 93(3)	In the entry relating to section 93(3) for "general meeting of the company" substitute "meeting of members of the limited liability partnership".
Section 105(3)	In the entry relating to section 105(3) for "company general meeting" substitute "meeting of the members of the limited liability partnership".
Section 106(6)	In the entry relating to section 106(6) for "company" substitute "the members of the limited liability partnership"

SCHEDULE 4Regulation 5

GENERAL 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-

In subsection (4), for the words "may," onwards substitute

" may-

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-

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.";

(6) In paragraph 1 of Schedule 1-

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";