On 10 December the government announced new measures to increase transparency and prevent abuse of Limited Partnerships. These measures will require more stringent checks of those registering a Limited Partnership, some of which have been used by criminals to launder dirty money through the UK.
Limited Partnerships are formed by at least 2 partners, one of which must be a general partner – who is liable for any debts incurred – and one limited partner – who has limited liability but cannot play a role in how the partnership is run. Limited Partnerships in England and Wales or Northern Ireland (in contrast to Scotland) are not recognised as separate legal entities, meaning that contracts, for instance, must be taken out in the name of the partners.
New filing requirements for all Limited Partnerships will make them more transparent with their information, preventing their abuse while at the same time enabling investors to continue to use them legitimately and invest in the UK.
The key proposals are:
- Those registering Limited Partnerships must demonstrate they are registered with an official anti-money laundering supervised agent, such as an accountant or a lawyer, or an overseas equivalent;
- The Limited Partnership must demonstrate an ongoing link to the UK, for example by keeping its principal place of business in the UK;
- All Limited Partnerships 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 Limited Partnerships as well as those which are not carrying on business.
The proposed reforms will apply to all Limited Partnerships in the UK.