Protecting the cuff-links

18 October 2000

Issue: 3779 / Categories: Companies

Joshua Shields BA(Hons)(Cantab), barrister considers the practical aspects of limited liability partnerships

In England a member of a partnership is personally liable to meet claims against the firm insofar as they exceed the assets of the partnership. In the case of liability arising out of the professional negligence it is not fanciful to imagine circumstances in which the claim exceeds the firm's insurance cover so that the proverbial cuff-links are at risk of going under the hammer. Furthermore the personal liability of a partner in no way depends upon personal fault: the sins of the auditor are visited upon the tax partner (and vice versa).
The unlimited liability of partners is out of place in modern conditions and this has been recognised by the enactment of the Limited Liability Partnership Act 2000 which received Royal Assent on 20 July. The Act will not come into force before 2001 but readers who are not aware of...

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