LLPs to be the norm in five years
While accountancy firms are unlikely to rush to register as limited liability partnerships, the new structure will probably become common within four or five years, according to Ernst & Young chairman Nick Land.
‘There won’t be a stampede, but (LLP status) will be the norm in four to five years time,’ he said.
Land put accountancy practices’ apparent reluctance to adopt the new structure when it becomes available next week down to forces of conservatism within the profession.
But he also acknowledged that many would wait to see how other businesses fared under the reporting and disclosure requirements of the new act.
‘It’s a good piece of legislation, as far as we’re concerned. I think you will see businesses adopting it. But I think that because of this load of requirements you’re going to see people being a bit cautious to begin with,’ he went on.
Under the new act, professional partners will be able to limit their liability to the capital they invest in their firms and protect their personal wealth. In return, firms will have to file audited accounts and disclose fee income.
Ernst & Young is the only Big Five firm to declare its intention to register for LLP status and now faces the process of transferring its business from a professional partnership to an LLP.
‘It’s a big project. We’ve had a group working on it for about four or five months already and that will continue until June,’ said Land.
Links
Profile: Nick Land – A line in the sand
LLPs – Is an LLP the right choice for you?
Resources & Whitepapers
Accounting Software The power of customisation in accounting systems
Insight: LLPs – Safety in numbers