Reforms to limited partnership law move a step closerPrint publication
The Government has announced plans to reform limited partnership law to combat concerns that some limited partnerships are used as vehicles for criminal activity.
As reported in May 2018, the Department for Business, Energy and Industrial Strategy (BEIS) published a consultation last year seeking views on proposals to reform the law of limited partnerships (LPs). The proposals were 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.
BEIS has now published its response to the consultation which sets out a range of proposals which attempt to limit the potential misuse of LPs but at the same time ensure that they remain attractive as an investment vehicle. The key proposals are:
- those registering LPs must demonstrate that they are registered with an anti-money laundering supervised agent, such as an accountant or lawyer, or an overseas equivalent
- the LP must demonstrate an ongoing link to the UK, for example by keeping its principal place of business in the UK
- all LPs must submit a confirmation statement at least every 12 months to Companies House to ensure their information is accurate and up to date
- Companies House will be given powers to strike off dissolved LPs and LPs which are not carrying on business.
The proposed reforms will apply to all LPs in the UK and will be introduced ‘as soon as Parliamentary time allows’. When this will be in practice is anyone’s guess, but we will keep you updated with its progress.