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How To Register Scottish Limited Partnership (SLP)

A Scottish Limited Partnership (SLP) is a convenient form of limited partnership for running a business in the UK. Foreign entrepreneurs prefer an SLP because it allows them to optimise their taxes and avoid complex corporate reporting. Until recently, it was possible to withhold information about the ultimate beneficiaries of an SLP.

Imperial & Legal’s specialists explore the limitations and benefits of SLPs in this article to help you decide whether this type of company is suitable for your business.

Features of Scottish Limited Partnership (SLP)

SLP structure is very similar to that of other limited liability partnerships; all are regulated by the Limited Liability Partnerships Act 1907.

This law prescribes the following:

  1. A limited partnership must have a general partner who is liable for all debts and obligations of the partnership.
  2. One or more people must be appointed as limited partners. In other words, the liability of these partners is limited to the amount of their contributions to the partnership. However, limited partners cannot participate in the management of the Scottish limited partnership unless they are liable for its debts.
  3. An SLP agreement that governs relationships between the partnership and its founders is regulated by Scottish corporate law. In addition, SLPs are subject to the jurisdiction of the Scottish courts where legal proceedings will be brought to settle disputes relating to the activities or assets of such partnerships.
  4. The principal place of business of an SLP must be in Scotland, even if all business activities are carried out outside the UK.
  5. Partners of a Scottish limited partnership can be either individuals or corporate entities. There are no restrictions as to the nationality or tax status of SLP partners.

Benefits of Scottish Limited Partnership (SLP)

  1. SLPs have a legal identity and are fully independent of their partners. What opportunities does it offer? It allows them to enter into contracts, attract funding and acquire property. A Scottish limited partnership can sue in court as a separate legal entity.
  2. A Scottish limited partnership uses pass-through taxation. It means that SLPs do not pay corporation tax. Each partner must declare their income received from the SLP and pay tax on it only in the country of their tax residency.
  3. Scottish limited partnerships are not required to file annual accounts to the Companies House if they have been trading outside the UK. However, they must submit tax returns and reports to the HMRC.

Registering Scottish Limited Partnership (SLP)

A Scottish limited partnership can be registered at Companies House by submitting a completed and signed LP5 form with a cheque for £20 to the Scottish branch of Companies House in Edinburgh.

What Information Must Be Included In Application For SLP Registration?

  1. The name of the company (it must contain the words ‘Scottish Limited Partnership’).
  2. Nature of business.
  3. Legal address in Scotland.
  4. Information about partners: names of each partner, residential / registered address, a list of general partners and limited partners.
  5. The term for which the partnership is entered into (if it is agreed between partners).
  6. The amount contributed by each limited partner, and whether it’s paid in cash or otherwise.
  7. Information about persons with significant control or a statement that there’s no registerable person or Relevant Legal Entity in relation to the SLP. From 24 July 2017, SLPs have an obligation to investigate their ownership and control and register this information.

Who Is Person with Significant Control In SLP?

Persons with significant control in an SLP, be it an individual or a company, have the following characteristics:

  1. They hold, directly or indirectly, the right to more than 25% of any surplus assets in the SLP on winding up.
  2. They control, directly or indirectly, more than 25% of the voting rights in the company.
  3. They can appoint or remove the majority of the persons authorised to run and manage the SLP.
  4. They have the right to exercise, or exercise, significant influence or control over the SLP.
  5. They can significantly influence or control the activities of the company whose owners have, directly or indirectly, any of the rights set out in points 1-4 above.

Providing information about all persons with significant control is a new requirement that has been introduced relatively recently to stop SLPs from withholding information about their ultimate beneficial owners. Even if an SLP does not conduct business in the UK, it is still required to send a confirmation statement to Companies House each year and confirm or update its partners’ information.

How Much Is Application Fee?

You will need to submit the application for an SLP by post and include a cheque or postal order for £20 to cover the registration fee.

The whole registration process looks easy. However, a start-up entrepreneur has to deal with a lot of other issues, for example, finding an office or post office box in Scotland to rent as a legal address or filling in the LP5(s) form correctly.

Imperial & Legal’s team have prepared 3 incorporation packages to resolve most SLP registration matters. It frees the entrepreneur’s time and energy that they can spend on business development.

If you want to find out more about what Imperial & Legal’s advisors offer for start-up entrepreneurs, book a consultation or check the company’s website.

FAQ About Scottish Limited Partnership Registration

When are limited partners fully liable for an SLP?

There are at least two cases in which limited partners of a Scottish limited partnership are fully liable for the debts of the company:

  1. When a limited partner has taken a part or all of their shares in the partnership before it is wound up.
  2. When a limited partner has taken part in the management of the company, and it has been reflected in the SLP documents.

What is a confirmation statement?

Until recently, it was possible to list a foreign company registered in an offshore jurisdiction as a partner of an SLP partnership and thereby conceal the identity of ultimate beneficial owners.

From 24 July 2017, all SLPs must:

  1. Provide to Companies House full information about all persons with significant control.
  2. Notify the Companies House of any changes in the partnership structure wherever there are persons with significant control within 14 days.
  3. Every 12 months, submit to Companies House a confirmation statement, a report that confirms or updates the information previously provided on partners with significant control.

SLPs must submit a confirmation statement at least once every 12 months. However, the law does not regulate the number of such submissions per year if an SLP need to file it more often.

What information about persons with significant control in SLPs is released to the public?

The Companies House register, which can be viewed by anyone, contains only the full name of the partner and the month and year of birth. The address and date of birth of a person with significant control in an SLP are not included on the public register, but this data can be provided on request to authorities.

You can limit access to your personal data by writing to Companies House if you have a valid reason.

The government authorities usually make concessions for a person with significant control and remove their personal data from the public register if they or their relatives are at risk of being attacked or threatened. Another reason for the request may be that the applicant belongs to a religious community whose rules prohibit members of the community from entering into commercial partnerships.

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