Institute Of Chartered Accountants Of Ontario

Institute Of Chartered Accountants Of Ontario

October 19, 2006 16:56 ET

Media Advisory: CAs Welcome Ontario's Move to Implement Full Shield LLPs

Change needed to attract, retain top professional talent

TORONTO, ONTARIO--(CCNMatthews - Oct. 19, 2006) - Plans to address legal liability concerns by implementing "full shield" Limited Liability Partnerships (LLPs) are a welcome and needed part of the Ministry of Government Services' Consumer Protection and Service Modernization Act, 2006, according to the Institute of Chartered Accountants of Ontario. Minister Gerry Phillips is ensuring that Ontario can continue to attract and retain top professional talent by giving them the legal protection they need to do their jobs without fear of unfair and potentially ruinous liability.

"The McGuinty government has taken needed action to bring our outdated Limited Liability Partnership laws into harmony with fairer rules found in other Canadian jurisdictions and the United States," said Brian Hunt, FCA, Institute President and CEO. "Legal liability reform is welcomed by the Chartered Accounting profession as a crucial step in restoring a level playing field for Ontario's professionals."

LLPs are business structures designed to limit an individual partner's personal assets from exposure to legal liability, while maintaining access to a firm's assets to satisfy any judgments against it. However, in Ontario, LLPs only enjoyed "partial shield" protection, which means all partners are personally responsible for a partnership's obligations merely because of their position in the firm. Managing partners can be found responsible for the acts of negligence, wrongful acts or omissions of another partner or employee, even if they knew nothing about them.

"Under the full shield LLP system being introduced by the McGuinty government, a partner is still fully responsible for acts he or she committed or was responsible for overseeing," said Hunt. "However, the partner would no longer be liable for personal damages in cases where he or she was not directly involved or in an oversight role.

"The CA profession commends the McGuinty government for its work to improve the current system and promote fairness, competitiveness and confidence in our business environment."

About the Institute of Chartered Accountants of Ontario:

The Institute of Chartered Accountants of Ontario is the qualifying and regulatory body of Ontario's 32,000 CAs and 4,000 CA students. Since 1879, the Institute has protected the public interest through the CA profession's high standards of qualification and the enforcement of its rules of professional conduct. Recognized internationally, the CA designation denotes financial expertise, strategic thinking, business insight and leadership. The Institute website is: www.icao.on.ca.

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