UK Limited Partnership

LP has no legal personality. It must have at least one “General” partner and one “Limited” partner. A partner can be an individual or a company. It is impossible to be a General and a Limited Partner at the same time.

Limited partners:

• Contribute money or property to the business at its inception
• Are only liable for debts up to the amount they paid
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• Must register with HMRC to pay taxes.

General partners:

• Are liable for any debts that the business cannot pay
• Control and manage the business
• Can make final (“binding”) business decisions
• Can apply to act as a partnership in an authorized contractual scheme

Registration procedure

The registration procedure consists of the following steps:

1. Choosing the name of the Partnership and legal address

   The Partnership may trade under the name of Partners or choose another name for its Partnership. The name of Partners does not need to be registered. The names of all partners and the name of the Partnership (if any) must be included on official documents such as invoices and letters.

   The name of an LP must not contain “limited liability partnership”, “LLP”, “public limited company”, “plc”, must not be offensive or identical to an existing trademark or company name, must not contain prohibited words or suggest association with the government or local authorities.

   All official communications, such as letters from Companies House, will be sent to the legal address. This must be a UK physical address located in the same country where the partnership is registered. For example, a Partnership registered in Scotland must have a registered office in Scotland. In addition, it should be the main place of business. You can also use the home address of one of the Partners, but keep in mind that it will be available to the general public.

2. Registration of the Partnership in Companies House

   To register a Partnership with Companies House, you must download and complete the Limited Partnership Registration Form (LP5). After all partners have signed the form, it must be sent by mail along with proof of payment of the registration fee (check, or postal order).

   Companies House usually registers a limited partnership within 5 days of receiving the application.

   A partnership can be registered on the same day if Companies House receives the completed and signed LP5 form by 3:00 pm Monday through Friday. The envelope must contain the inscription "Same Day Registration" and a check or postal order for the amount of the relevant registration fee. If the form is received after 15:00, the Partnership will be registered on the next business day.

3. Registration as a tax payer

   The “Eligible Partner” must register the partnership as a tax payer with HMRC by October 5 of the partnership’s second tax year. He is also responsible for sending the tax return. Other partners must register separately with HMRC and submit their tax returns as individuals.

   This can be done online on the HMRC website or using the SA400 form, and you can register as a partner using the SA401 form. To obtain a VAT number, it is necessary to register if the Partnership's turnover is planned to be more than 85,000.

   An agent can be assigned to work with HMRC on behalf of a partnership or on behalf of a partner.

After registering an LP, the client receives the following package of documents:

1. Certificate of Confirmation
2. Certificate of Collation
3. Application for registration of a company (Form LP5 - Application for Registration)
4. Certificate of Incorporation
5. Pre-Incorporation Memorandum of Association
6. Partnership Agreement
7. Minutes of the First Meeting of members
8. Resolution of Members
9. Certificate of Capital (Certificate of Capital) - 2 pcs.
10. Instruments of Transfer
11. Declaration of Trust
12. General Power of Attorney
13. Agreement for the Provision of Nominee Services
14. Seal

Requirements to the authorized capital and shares

LLP has neither shares nor authorized capital. Contribution requirements are also not set.

Leadership Requirements

At least one of the participants must be the General Partner performing management functions

Beneficiary

All UK companies are required to establish and maintain a register of persons with significant control, known as the PSC. This information must be submitted annually to Companies House as part of the Confirmation Statement. However, since LPs do not have the status of a legal entity, this requirement does not apply to them. Although it is possible that in the near future such a requirement will appear.

Membership Requirements

• Participants can be both individuals and legal entities (corporate participants)
• Participants can be both residents and non-UK residents
• The minimum total number of participants is two, the maximum is unlimited;
• The minimum number of general participants is one, the minimum number of limited participants is one;
• Each member must register for self-paying taxes with HMRC.

Partnership Office

• There is a requirement to have a legal address, which is called the main place of business, and it must be real
• The registered office must be in the same country in which the Partnership is registered (for example, if the Partnership is registered in Scotland, its registered office must also be in Scotland)
• The information on the legal address is contained in the public register

Reporting, audit

• LPs must maintain appropriate records of their financial affairs to enable the financial position of the LP to be determined at any time.
• LPs are not required to file reports with Companies House, unless it is provided for in the partnership agreement.

On April 6, 2017, legislation came into force that introduces a new type of partnership - Private Fund Limited Partnership (PFLP), aimed at creating a more flexible mechanism for managing private funds, infrastructure and real estate funds. Existing and new LPs can be defined as PFLPs if the following conditions are met:

• The partnership is formed by a written agreement;
• The partnership is a collective investment scheme (within the meaning of section 235 of the Financial Services and Markets Act 2000).

These conditions are expected to be met by most funds and other alternative investment vehicles. The main differences between PFLP and regular LP:

• • PFLP partners will not be required to contribute capital to the partnership.
• • If they contributed capital, they would be allowed to withdraw it without being liable for debts and liabilities on the withdrawn amount.
• The Limited Partners will be able to decide to terminate the Partnership if there are no General Partners and appoint a third party to liquidate the Partnership on their behalf.
• The Partnership will not be required to advertise the change in a London, Edinburgh or Belfast Gazette, other than requiring an announcement in the event of a change in General Partner status.
• Limited partners will not be required to perform statutory duties that are inappropriate for the role of a passive investor.
• The Rules include a non-exhaustive list of activities that may be permitted for a Limited Partner, but do not count as participation in management.

Newly established foundations wishing to operate under the PFLP form will use the new LP7 form to register, which requires only: (a) the name and signature of each General Partner; (b) the name and signature of each Limited Partner; And (c) the address of the main place of business of the PFLP. Upon completion of the registration process for the new PFLP, a Certificate of Incorporation and a Certificate of Appointment will be issued, although Companies House may issue a combined certificate at its sole discretion. Any LP that is not defined as a PFLP will still be subject to the “old” rules.

Great Britain's Corporate Law