The first reference to a Limited Liability Levy I can find was thanks to Colman's provocation which gave rise to this debate back in January 2007
Iraqi oil etc
complete with the obligatory fisticuffs with HiD.
More recently in the
Risk Risk
thread on 5th April this year I posted this
Well what happened is that partners did (and still do, in the large number of professional partnerships still left unconverted to LLP's)insure themselves against these risks using Professional Indemnity Insurance. These premiums started to rise rapidly, and led to the demand for limitation of liability. The government refused until they were essentially blackmailed into doing so when PriceWaterhouse and Ernst & Young paid City lawyers Simmons & Simmons around £1m in respect of the legislation that went through in Jersey in 1997 for a Jersey LLP. Prem Sikka tells the story. Essentially the UK government is handing out free insurance - as they do to every shareholder in a limited company. ie the LLP does not quite "do way with that" it socialises what were private risks. In my view, there should be a "Limited Liability Levy" or tax applied to gross revenues of any entity which has limited liability. Jersey actually got one thing right in the end. They insisted on a bloody great bond being lodged by LLP's (either £5m or £10m) and this somewhat limits their appeal as a vehicle.....
These premiums started to rise rapidly, and led to the demand for limitation of liability. The government refused until they were essentially blackmailed into doing so when PriceWaterhouse and Ernst & Young paid City lawyers Simmons & Simmons around £1m in respect of the legislation that went through in Jersey in 1997 for a Jersey LLP.
Prem Sikka tells the story.
Essentially the UK government is handing out free insurance - as they do to every shareholder in a limited company.
ie the LLP does not quite "do way with that" it socialises what were private risks.
In my view, there should be a "Limited Liability Levy" or tax applied to gross revenues of any entity which has limited liability.
Jersey actually got one thing right in the end. They insisted on a bloody great bond being lodged by LLP's (either £5m or £10m) and this somewhat limits their appeal as a vehicle.....
Plus a good few more references by me in the last couple of weeks....
So, more power to MfM's elbow in developing the argument so much better than I could, but I think I can claim precedence on the concept... "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
