Scottish LP Limited Partnership
A Scottish Limited Partnership is a limited liability partnership established in Scotland and governed by the Limited Partnership Act 1907 and the Partnership Act 1890. The Scottish LP partnership is an independent legal entity and a separate corporate entity. As a partnership, an LP is not subject to UK corporation tax. If the partnership has foreign partners and does not operate in the UK, then there is no taxation in the UK, and the participants must independently fulfill their tax obligations in the country of registration. If the partners are offshore companies and the partnership does not operate in the UK and does not receive income from sources in the UK, then a nil report is submitted.
The Scottish LP has almost all the advantages of the English LLP and Ltd, however, it compares favorably with the absence of accounting costs. So, a Limited Partnership can own assets, introduce new participants as general and limited partners, carry out various transactions, take loans, etc. At the same time, a Scottish LP does not submit a financial report to the registry, is not subject to audit, allows only a zero tax return.
SCOTLAND - LP - SHORT OPTION
Features
- Fast and easy registration
- Low cost of registration/purchase and annual maintenance
- The need for state registration in the Companies House (Companies House), like "ordinary" companies (unlike partnerships in England and Wales, if a partnership is registered in Scotland, it, according to local law, is considered a separate legal entity, despite being regulated the same UK regulation)
- Limited liability of partners for debts and liabilities of the enterprise only within the amount agreed in advance between the partners
- Possibility of not taxing in the absence of commercial activities in the UK (for the same reason, the company can not obtain the status of a UK tax resident)
- Inability for a partnership of non-resident members to obtain a Scottish (UK) tax resident certificate and benefit from UK double tax treaties
- Open online register of partners and beneficiaries (controllers)
- No need to maintain and submit financial statements, undergo audits, as well as the absence of additional costs for bookkeeping
- Automatic assignment of the UTR (Partnership Unique Taxpayer Reference) tax number when registering a partnership
- Automatic assignment of the UTR (Partnership Unique Taxpayer Reference) tax number when registering a partnership
- Possibility to obtain a VAT and EORI number
Requirements for the establishment
- There must be at least two partners (members), one of which is appointed by the managing partner, and the second one becomes a limited partner. Partner is a natural person or a legal entity, there are no requirements for residency.
- Partners can be nominees.
- Partners and a beneficiary must provide ID cards with photo and proof of permanent residence. Legal entities provide documents confirming their registration and structure.
- Уставный капитал представляет собой вклад партнеров, который распределяется между партнерами и не оплачивается при регистрации.
- Партнерство должно иметь юридический адрес на территории Шотландии.
Timing
- The registration of a new partnership is offered under the same conditions, it will take 5-10 working days.
- Ready-made LP companies are available.
SCOTLAND - LP - FULL VERSION
Documents required for opening of the partnership
If a legal entity acts as a founder, then an extract from the register of the country of registration, registration documents of the legal entity, documents confirming its structure will be required.
Partners and the beneficiary are required the copies of the passports and confirmation of the permanent place of residence, as well as a questionnaire in which the customer indicates his wishes for the structure of the company.
As a confirmation of the place of permanent residence, the citizens of Russia, Ukraine and Belarus can provide a copy of the internal national passport: a copy of the first spread + a copy of the second spread + a copy of the page with the stamp on the residence permit. Or a recent utility bill where the name and address are visible.
Name
As a confirmation of the place of permanent residence, the citizens of Russia, Ukraine and Belarus can provide a copy of the internal national passport: a copy of the first spread + a copy of the second spread + a copy of the page with the stamp on the residence permit. Or a recent utility bill where the name and address are visible.
Structure
There are no shareholders, directors and secretaries in the partnership structure.
Created by two parties: one managing partner with unlimited liability and one or more partners with limited liability.
Partners can be individuals of any citizenship and residence, as well as legal entities registered in any country in the world.
Partnership shares are distributed among partners in identical (equal) shares. The functions of the director are usually performed by the general partner.
The founders have the right to appoint managers who will manage the affairs of the partnership on behalf of and on the instruction of the LP partners. Only natural persons can be managers (attorneys).
Local address
A local registered address is required. This must be a business address in Scotland, not a PO box etc.
All official messages will be sent to the legal address, for example, letters from the state register - Companies House. This must be a physical address in Scotland. You can use a PO Box, but you must still include the physical address and zip code.
Nominee services
Nominee partners will formally appear in all the main registration documents of the partnership, the owner (or the person specified by him) will be issued a general power of attorney for the right to manage the partnership. In addition, a declaration of trust will be drawn up between the nominee partners and the owner (representative), which confirms that the nominee partner owns a share in the partnership in favor of the owner and without the consent of the latter has no right to take any action with it.
Authorized capital and shares
Payment of any capital at the establishment is not required. There is no authorized capital in the LP structure; funds invested by partners are used (the size of investments is determined by the partners themselves).
The register of beneficiaries (controllers - person with significant control (PSC))
All Scottish LP partnerships are required to establish and maintain a register of persons with substantial control i.e. beneficiaries.
From June 26, 2017, all Scottish limited liability partnerships LP, in which all partners are legal entities, are required to submit information about the controllers (beneficiaries) to the Registrar of Companies.
This information is filed annually with Companies House and is available under Persons with significant control.
Scotland has an open register of shareholders, directors and beneficiaries (controllers). Information about them is publicly available and is stored in the online Business Registry for England, Scotland and Wales. Data such as name, address, date of birth, citizenship, country of residence, nature of control, as well as the dates from which information is subject to entry into the PSC are publicly available.
The beneficiary (controller) is any person who controls more than 25% of the shares, voting rights of the company.
As an alternative to Scottish partnerships, we offer the registration of English, Welsh (Wales) and Irish LP partnerships, which have identical legal form and similar benefits. At the moment, the main advantage of this type of partnership is that they are not and will not be subject to legislative acts on the disclosure of information about controlling persons (beneficiaries).
Partnerships registered in England, Wales, Northern Ireland and a separate Republic of Ireland, from the point of view of the Tax Office, are absolutely identical to Scottish partnerships. Our practical experience has proven that Irish, English and Welsh (Wales) LPs are a good alternative to Scottish LPs, allowing for privacy, as well as an effective tax planning tool.
Taxation
The limited partnership itself is not subject to UK taxation.
The profit of the partnership is distributed among the partners of the company, who must pay tax at the place of their tax residence.
Legal entities and natural persons who are residents in tax-free jurisdictions, as a rule, act the partners of LP which allows to avoid taxation in the UK completely.
LP is not subject to UK corporation tax. In the event that the partnership has foreign participants and the company does not operate in the UK, taxation in the UK does not arise, and the participants must independently fulfill their tax obligations in the country of registration. If partners are offshore companies, they are exempt from taxes if they do not operate in the territory where they are registered. Under English law, in such a partnership, the owners and managers are not personally liable for its debts and obligations. Thus, a tax-free company with an "English face" is created. This form of LP is subject to state registration with the Registrar of Companies and the tax office and receives a tax number.
LP, consisting of non-resident members, will not be able to obtain a certificate of the status of a UK tax resident and benefit from UK treaties on avoidance of double taxation.
In order to obtain a VAT number, it is necessary to document that the taxable turnover of the company has exceeded or will soon exceed £85,000 (this is the registration threshold in 2017). In case of voluntary VAT registration, the registration authority requests additional information - type of activity, contact details of the company and business partners in Europe.
Each company registered in the VAT system must submit quarterly reports to the UK tax authorities - HMRC. If an English company submits zero reports for several reporting periods in a row, then there is a possibility of its exclusion from the register of VAT payers and cancellation of the number. Value Added Tax (VAT) is levied in the UK at a rate of 20% (2017). When trading with partners from EU countries who also have a VAT number, a 0% tax rate applies.
There is an opportunity to receive EORI (Economic Operator Registration and Identification) - a unique identification number assigned to foreign trade entrepreneurs when registering with the Business Registration and Identification System. It is used to identify entrepreneurs and other persons when communicating with customs authorities.
Reporting
Unlike other British legal forms such as LTD and Limited Liability Partnership (LLP), the LP is not required to submit financial statements to public authorities.
LPs that do not do business in the UK and whose members are located outside the UK are required to file a nil tax return.
In case of registration as a payer of value-added tax, VAT returns are usually submitted once a quarter.
After registration, the client receives such a package of documents:
- Certificate of Collation
- Registration form LP5 (Application for Registration)
- Certificate of Registration
- Initial Protocol on the establishment of a partnership (Pre-Incorporation of Association)
- Memorandum of Understanding (Partnership Agreement)
- Minutes of the First Meeting of Members
- Registration form LP5 (Application for Registration)
- Certificate of Registration
- Initial Protocol on the establishment of a partnership (Pre-Incorporation of Association)
- Memorandum of Understanding (Partnership Agreement)
- Minutes of the First Meeting of Members
- Decision on the appointment of a general partner (Resolution of Members)
- Share Certificates
- Declaration of Trust
- General Power of Attorney
- Forms of transfer of shares with signatures and seals of nominal partners (Instruments of Transfer)
- Letter of refusal from the managing partner signed and stamped (Letter ofResignation)
- Agreement for the Provision of Nominee Services
- Seal
