Eversheds set to review voting rights for fixed-share partners
Eversheds is reviewing voting rights for its fixed-share partners after asking them to contribute 25% of their annual earnings to the firm.
April 08, 2014 at 07:16 PM
2 minute read
Eversheds is reviewing voting rights for its fixed-share partners after asking them to contribute 25% of their annual earnings to the firm.
The firm has called on 164 fixed-share partners to make the contributions in light of changes to the way HM Revenue & Customs (HMRC) determines the employee status of partners at limited liability partnership (LLPs).
Partners will be deemed as employees if they have less than 25% of their salary attached to the equity, so firms would need to pay national insurance contributions for them.
Firms were required put in place a binding commitment to increase capital before 6 April, with capital to be put in within three months of the date. Eversheds did not disclose the amount it is asking partners to contribute.
Eversheds CEO Bryan Hughes (pictured) has said the firm will hold an extended consultation to discuss voting rights with the group of partners affected by the changes.
Hughes said: "Following a series of discussions our fixed share partners (FSP) will be making capital contributions equivalent to 25% of their profit share. During the course of these discussions, associated issues such as voting rights, were raised.
"We obviously had to act quickly to ensure that the capital payments were in place in line with the timescales set down by HMRC. We have however agreed with our FSP group that we will engage with them in an extended consultation to discuss these associated concerns in more detail."
Other firms to respond to the tax changes include Stephenson Harwood, which has increased contributions from its 55 fixed equity partner to meet the threshold.
The news comes after Hogan Lovells revealed it would call on 65 non-equity partners to contribute between £60,000-£100,000 in capital to the firm in response to the tax changes. The firm has said that loans will be available from banks on the same terms as those available to equity members.
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