The Introduction of LLPs in Hong Kong
吕欣
【关键词】LLP,limite liability partnership,partnership,limited liability
【全文】
Briefly, limited liability partnership (“LLP”) is a form of organization in which the individual partners are protected from the liabilities of other partners. In recent years, the issue of introduction of LLPs in Hong Kong has attracted much attention, especially within the professionals such as solicitors and accountants. Some make a comparison with the introduction of single shareholder companies , which is deemed to properly reflect the needs of the business community, and hold that this time the HKSAR government has given little weight to the views of the business community and interested parties by deciding not to proceed with the introduction of LLPs in Hong Kong. As far as I am concerned, I would consent with this observation without hesitation.
There are many reasons behind the Government’s decision not to introduce LLPs in Hong Kong. On the one hand, the government considered that it would not be rational or fair to introduce LLPs for only the legal profession or the accountancy profession, because there are many other professions extreemely concerned about the potential risk of their professional liability. On the other hand, the government was afraid about the impact and implications of the replacement of the well-known and well-understood concept of joint and several liability of tort-feasors and that the fundamental change of the general law of tort and the introduction of any of the major forms of limiting liability would shift the burden of risk from the professionals to their clients.
In my opinion, the views of the HKSAR Government are debatable. There are numerous reasons why I strongly agree to introduce LLPs in Hong Kong and I would explore some of the major ones here. Firstly, the LLP shows a great deal of benefits as a business vehicle. An LLP combines elements of partnerships and corporations. In an LLP, all partners have a form of limited liability, similar to that of the shareholders of a corporation. The difference is that the partners have the right to manage the business directly, and a different level of tax liability than in a corporation. Moreover, since the profits of an LLP are distributed among the partners for tax purposes, it could effectively avoid the problem of "double taxation" often found in corporations.
