The government has published a response to the consultation ‘Limited Partnerships: Reform of Limited Partnership Law’. The consultation examined how to limit the risk of misuse of limited partnerships and ways in which laws could be updated.

The consultation response set out a range of proposals, including:

  • The tightening of registration requirements for limited partnerships.
  • Requiring limited partnerships to demonstrate a firmer connection to the UK.
  • Increasing transparency requirements.
  • Enabling the Registrar to strike from the register limited partnerships which are dissolved or which are no longer carrying on a business.

Following the publication of this response, the government issued a press release detailing planned reforms to limited partnership laws. The government intends to legislate when parliamentary time allows.

BEIS Consultation response: Limited partnerships: Reform of limited partnership law

Consultation Background

In 2017 the Department for Business, Energy and Industrial Strategy (BEIS) launched a call for evidence ‘Review of limited partnership law’ on the use and potential abuse of partnerships, in particular Scottish Limited Partnerships.

Unlike partnerships in the rest of the UK, Scottish Limited Partnerships (‘Scottish LPs’) have their own ‘legal personality’ which allows them to hold property, enter into contracts etc. in their own right.

The government is concerned that this feature of Scottish LPs is being abused.

  • Recent media reports suggest they are being used as vehicles for criminal activity, including money laundering, organised crime and tax evasion.
  • There has been a significant increase in the number of Scottish LPs registered: a 237% increase between 2011/12 and 2015/16 vs only 42% for the rest of the UK.
  • There are fears Scottish Partnerships are being aggressively marketed outside the UK. Over 95% of Scottish limited partnerships have non-naturalised persons as partners.

The government decided to review the framework governing Limited Partnerships. In its call for evidence, it sought views on why the registration of Scottish LPs may have increased. In particular:

  • The importance of Limited Partnerships to the economy.
  • Why a limited partnership may be preferable to any other trading vehicle.
  • What sectors of the economy are particularly well suited to Scottish LPs.
  • The economic uses of Limited Partnerships.

Views were also sought on:

  • Transparency requirements.
  • The role of formation agents.
  • Whether there should be a requirement for Limited Partnerships (or their partners) to maintain a presence in the UK.
  • Striking Limited Partnerships off the register.

Views were only sought on Limited Partnerships. Limited Liability Partnerships (LLPs) were out of its scope.

The consultation ran until 17 March 2017.

The response of the consultation was published in December 2018.


Partnerships: Tax planning guides
We have different guides for different business combinations.

Partnerships (unlimited or limited?)
An introduction to partnerships.

External links

The initial consultation document:  Limited partnerships: Review of limited partnership law 

Press release on new measures to tackle international money laundering