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Consultation on reform of limited partnership law

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The Department for Business, Energy and Industrial Strategy has released a consultation on various reforms to partnership law aimed at curtailing the misuse of limited partnerships. This follows last year’s call for evidence into Scottish limited partnerships, which unlike partnerships in England, Wales and Northern Ireland, have a separate legal personality from the partners themselves. This has led to a significant increase in the registration of limited partnerships in Scotland, and allegations that Scottish limited partnerships in particular were being used for illicit purposes. The consultation looks at how these concerns can be addressed, while still allowing legitimate businesses across the UK to benefit from structuring as limited partnerships.

The consultation is structured around five chapters:

1. History, use and misuse of limited partnerships: Highlighting the rise in the number of limited partnerships being registered, this section sets out the ways in which it is suspected that Scottish limited partnerships (SLPs) are misused. It requests any further information that may help explain the trends in partnership registration over recent years.

2. Reform of registration requirements: The consultation proposes that all presenters (those seeking to register a limited partnership) should be required to register with an anti-money laundering (AML) supervisory body. Registrations from presenters who cannot show evidence of AML supervision would be rejected.

3. Principal place of business (PPoB): Recognising that limited partnerships should maintain some connection with the UK, two proposals are set out. The first would require the limited partnership’s PPoB to remain in the UK, with a yearly confirmation supported by evidence of business activity taking place at the PPoB. The second would allow a PPoB outside the UK, but with the requirement that a service address be maintained in the UK, again with a yearly confirmation filing required.

4. Reporting and transparency requirements: For most limited partnerships, reporting and transparency requirements are less onerous than the requirements applicable to limited companies. The consultation asks whether all limited partnerships should be required to file an annual confirmation statement, and what information this should contain. It also asks for views on whether limited partnerships should be required to file accounts and reports.

5. Strike off provisions: The consultation proposes that the registrar of companies be given powers to strike off the register certain limited partnerships, including those that have voluntarily ceased trading, or those that the registrar believes are no longer trading.

The consultation also sets out the following proposals from last year’s call for evidence that will not be taken forward at this time:

  • bringing formation agents under greater regulatory control;
  • revising the registration fee structure; and
  • allowing for digital registration of limited partnerships. 

Jane Crotty, KPMG (KPMG’s Tax Matters Digest)

The consultation closes on 23 July 2018. Details are available via

Issue: 1399
Categories: In brief