The government has concluded that limited partnerships (LPs) continue to fulfil important functions in key sectors of the economy, while confirming it will introduce changes to limit their potential misuse.
The government has concluded that limited partnerships (LPs) continue to fulfil important functions in key sectors of the economy, while confirming it will introduce changes to limit their potential misuse.
BEIS received 41 responses to its consultation on Reform of limited partnership law, which ran between April and July 2018, including 24 from representative bodies and groups, 13 from individual businesses (such as law firms and fund managers), two from non-governmental organisations and one from each of academia and a private individual. The government additionally engaged businesses, representative bodies and non-governmental organisations through meetings to discuss the proposals and gather further views.
The evidence received demonstrated that the LP, including in its Scottish form, continues to fulfil important functions in key sectors of the economy, but also highlighted that the legal framework around them could be strengthened and updated. The government intends to take action to limit the potential misuse of LPs whilst ensuring that they remain attractive for legitimate business use, in particular as an investment vehicle.
The government therefore intends to make it mandatory for new applicants for registration of LPs to demonstrate that they are registered with an anti-money laundering supervisory body, with evidence to be provided on the application form. It is also considering options to ensure that overseas applications will be subject to equivalent standards, such as limiting applications to EEA jurisdictions.
The government intends to request information about a LP’s connection to the UK on application for registration and on an ongoing basis. On application for registration, a UK principal place of business must be provided and, with regard to demonstrating ongoing connection, the LP will need to either:
retain its principal place of business in the UK;
demonstrate that it is continuing some legitimate business activity at a UK address; or
demonstrate that it continues to engage the services of an agent registered with a UK anti-money laundering supervisory body, which has agreed to provide its address as a service address for the LP.
Changes to a LP’s principal place of business or ways it demonstrates its ongoing connection to the UK will need to be notified to the registrar. Consideration is to be given to how this should apply to existing LPs.
The government further intends to introduce a requirement for LPs to file a confirmation statement at least every 12 months. The purpose is for the LP to confirm all details on the register are correct.
The registrar will have new powers to strike off LPs that are dissolved or which it concludes are not carrying on business or in operation.
No firm timescale is given for implementation of the changes. The response document merely states that the government ‘intends to legislate when Parliamentary time allows’.
The government has concluded that limited partnerships (LPs) continue to fulfil important functions in key sectors of the economy, while confirming it will introduce changes to limit their potential misuse.
The government has concluded that limited partnerships (LPs) continue to fulfil important functions in key sectors of the economy, while confirming it will introduce changes to limit their potential misuse.
BEIS received 41 responses to its consultation on Reform of limited partnership law, which ran between April and July 2018, including 24 from representative bodies and groups, 13 from individual businesses (such as law firms and fund managers), two from non-governmental organisations and one from each of academia and a private individual. The government additionally engaged businesses, representative bodies and non-governmental organisations through meetings to discuss the proposals and gather further views.
The evidence received demonstrated that the LP, including in its Scottish form, continues to fulfil important functions in key sectors of the economy, but also highlighted that the legal framework around them could be strengthened and updated. The government intends to take action to limit the potential misuse of LPs whilst ensuring that they remain attractive for legitimate business use, in particular as an investment vehicle.
The government therefore intends to make it mandatory for new applicants for registration of LPs to demonstrate that they are registered with an anti-money laundering supervisory body, with evidence to be provided on the application form. It is also considering options to ensure that overseas applications will be subject to equivalent standards, such as limiting applications to EEA jurisdictions.
The government intends to request information about a LP’s connection to the UK on application for registration and on an ongoing basis. On application for registration, a UK principal place of business must be provided and, with regard to demonstrating ongoing connection, the LP will need to either:
retain its principal place of business in the UK;
demonstrate that it is continuing some legitimate business activity at a UK address; or
demonstrate that it continues to engage the services of an agent registered with a UK anti-money laundering supervisory body, which has agreed to provide its address as a service address for the LP.
Changes to a LP’s principal place of business or ways it demonstrates its ongoing connection to the UK will need to be notified to the registrar. Consideration is to be given to how this should apply to existing LPs.
The government further intends to introduce a requirement for LPs to file a confirmation statement at least every 12 months. The purpose is for the LP to confirm all details on the register are correct.
The registrar will have new powers to strike off LPs that are dissolved or which it concludes are not carrying on business or in operation.
No firm timescale is given for implementation of the changes. The response document merely states that the government ‘intends to legislate when Parliamentary time allows’.
