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Limited Liability Partnership Update
LLP enabling legislation and regulations
became effective in New Brunswick on January 1, 2004. As such,
upon registration as an LLP, the personal assets of non-negligent
partners will be beyond the reach of creditors. All partnership
assets, including insurance and capital accounts as well as all
personal assets of negligent partner(s), remain available to satisfy
claims of creditors.
Full shield protection is offered under
the New Brunswick legislation - protection from all debts and
liabilities of partnership (rather than just professional claims
for negligence/malpractice - partial shield approach).
Only eligible profession (i.e. lawyers,
accountants, dentists, doctors, engineers etc.) governed by statute
are entitled to register as an LLP. In addition, the governing
body of each eligible profession must sanction that specific profession
to be carried on via LLP. The NBICA Council has authorized its
members and firms to carry on the practice of public accounting
in New Brunswick through an LLP.
The legislation recognizes the need to continue
to protect the public interest. The partnership continues to be
liable for the acts (i.e. errors & omissions) of all partners.
Each LLP must carry mandatory liability insurance, and the limits
of liability insurance coverage are to be determined by governing
body of eligible profession rather by each member of eligible
profession. If minimum liability insurance coverage is not maintained,
LLP protection will automatically lapse. Finally, firms registering
as an LLP must take appropriate steps to provide notice to clients
and the public at large, including ensuring that the partnership
name includes the words "Limited Liability Partnership" or abbreviation
"LLP", and sending letters to clients and providing newspaper
ads advising of the change of status to an LLP.
The required forms to register as an LLP
can be obtained as follows:
Corporate Affairs
Service New Brunswick
PO Box 1998
432 Queen Street
Fredericton, NB E3B 5G4
Tel: 506-453-2703
Fax: 506-453-2613
http://www.snb.ca
Please draw your attention to Box #4 re:
Form 7.1 Certificate of Designation. The proper name of our governing
legislation is the “Chartered Accountants Act 1998”.
If there are any questions, please contact
Jack Blackier, LL.B.,
FCA at your convenience.
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