New Government Factsheet published on Limited Partnerships
The Government is planning major reform to company law over the next year. The Economic Crime and Corporate Transparency Bill sets out a range of measures aimed at reducing the abuse of UK corporate structures and to help tackle economic crime. If passed by Parliament, this will include major Companies House Reform.
More on this to come as it is very detailed, but it follows the Economic Crime (Transparency and Enforcement) Act 2022 which became law this year. As part of this Bill, the Government has recently published a fact sheet on limited partnerships. It follows reports that some limited partnerships have been abused so the government is planning to crack down on their misuse. The Bill is aimed at limited partnerships formed under the Limited Partnerships Act 1907. It affects businesses based in England, Wales and Northern Ireland. The rules in Scotland differ and separate advice should be taken.
Changes planned include:
- Tightening registration requirements
- Requiring limited partnerships to maintain a connection to the UK
- Increasing transparency requirements, for example requiring fuller information about partners;
- Enabling the Registrar of Companies to deregister limited partnerships which are dissolved, which no longer carrying on business or where a court determines that it is in the public interest to do so.
The new legislation will apply to all limited partnerships, both new and existing and there will be a transitional period (likely to be six months) for existing limited partnerships to meet the new requirements to update statements to include newly required information on partners, their registered office address (which must be in the original jurisdiction of registration) and an email address. Failure to comply means the limited partnership will be deregistered at the end of the transitional period.
Any new limited partnerships will have to submit a confirmation statement within one year of the date of registration.
Failure to comply with the legislation may result in fines and or prison sentences for the general partners and the managing officers of legal entity general partners, along with the threat of deregistration where a limited partnership is not compliant (as it will be assumed to be dormant).
Limited Liability Partnerships (formed under the Limited Liability Partnerships Act 2000) are not included in these reforms but other parts of the Bill will include them in the future, such as identity verification requirements.
If your business is affected by these changes and you would like to discuss them, please get in touch with our team today.