BEIS publishes consultation on reforms to limited partnership lawPrint publication
On 30 April 2018 the Department for Business, Energy and Industrial Strategy (BEIS) published a consultation seeking views on its proposals to reform the law of limited partnerships (LPs). The proposals are intended to limit the misuse of LPs, particularly Scottish LPs, believed to have been involved in laundering proceeds of crime from abroad. Scottish LPs have a distinct legal personality separate from the partners themselves and can own property and enter into contracts.
The proposals include:
- Requiring presenters of applications to register LPs to provide evidence of their supervision under money laundering regulations. If the information is not disclosed, or cannot be checked, the application would be refused. It is noted this would mean applications would have to be made by formation agents, and could not be made directly. Views are also sought on how this should be applied to registrations from overseas.
- Requiring LPs to do business in the UK or at least maintain a service address in the UK. The first option would require an LP’s principal place of business (PPoB) to remain in its jurisdiction of registration; that address could be used by authorities for communication and service of proceedings; and all LPs would have to return an annual confirmation statement confirming the PPoB, with evidence of real commercial activity at that address. The alternative would allow a PPoB to move outside the UK but introduce a requirement for a service address to be maintained within the jurisdiction of registration; that would be the address for communication and service; and LPs would have to return a confirmation statement confirming the service address and PPoB.
- Requiring LPs to file an annual confirmation statement confirming the information on the register is correct. Views are also sought on whether LPs should have to prepare accounts and reports in line with the requirements for private companies.
- Giving the registrar of companies the power to strike off LPs in circumstances mirroring those for limited companies. Failure to deliver a confirmation statement may form the basis for the registrar’s belief that an LP is not carrying on business or in operation. Views are also sought on procedures to mitigate the risk of LPs being struck off in error.
The government states that the following measures will not form part of the consultation:
- increased regulation of formation agents
- LP registration fees
- electronic registration of LPs.
The consultation closes on 23 July 2018.
If you are thinking about preparing a response to the consultation and would like some input please get in touch.