The U.K. government has introduced a package of measures to increase transparency and tackle corruption in limited partnerships (LPs), which have long been identified as vehicles for money laundering. The measures, based on responses to a consultation paper issued by the Department for Business, Energy & Industrial Strategy (BEIS), are designed to increase transparency for both Scottish Limited Partnerships (SLPs) and LPs by ensuring these arrangements can still be used legitimately by pension funds and other investors while preventing abuse. The four main proposals are:
- those registering LPs must demonstrate they are registered with an official anti-money laundering (AML) supervised agent, such as an accountant or a lawyer, or an overseas equivalent
- the LP must demonstrate an ongoing link to the United Kingdom, for example by keeping its principal place of business in the United Kingdom
- all LPs must submit a confirmation statement at least every 12 months to Companies House, the U.K. registrar of companies, to ensure their information is accurate and up-to-date
- Companies House will be given powers to strike off dissolved LPs and LPs which are not carrying on business
It will now be mandatory for “presenters,” as they are termed, of new applications for an LP registration to show that they are registered with an AML supervisory body and to provide evidence of this on the application form. Applications from overseas will be subject to equivalent standards, though the government has yet to determine how to ensure compliance here. One option being considered would be to limit applications from overseas to countries within the European Economic Area (EEA). Overseas jurisdictions with equivalent standards to the EEA would be reviewed and potentially added to the list of acceptable countries. The regulations note that this will end direct registrations of LPs.
