The Economic Crime and Corporate Transparency Bill (“Specification) is about to implement “the most significant reform to the UK business registration framework in 170 years”.
These important reforms are set to affect not only corporations, but also limited partnerships through certain amendments proposed to the Limited Partnerships Act 1907 (“LPA 1907Limited partnerships are used in the UK for a variety of purposes, including as a fund vehicle across many asset classes.
In this blog, limited partnerships are listed in addition to their principal place of business (“PPB“), registered office in the United Kingdom.
UK Registered Office
As set out in the notes to the bill, the rationale behind this additional requirement is to ensure that limited partnerships remain connected to the UK while providing a destination for communications to which Companies House can send. That’s it.
The registered office must be one of the following:
- The address of the principal place of business of the limited partnership.
- Usual address of the general partner who is an individual;
- Registered office or principal office address of the general partner who is a legal entity.
- The address of a qualified corporate service provider acting on behalf of the limited partnership.
For UK Limited Partnerships with overseas PPBs and General Partners, you must rely on the address of your ‘Authorized Corporate Service Provider’.
Authorized Corporate Service Provider
This bill introduces the definition of “licensed corporate service provider” into the Companies Act 2006, which directly applies to LPA 1907.Registrar“) to be a “Certified Corporate Service Provider”.
Given their status as “affiliates,” certain intermediaries, including law firms, accountants, and corporate service providers, are expected to be in a position to apply to become “licensed corporate service providers.” Use of Address as Registered Office of Limited Partnership.
The bill envisages a six-month transition period that would require the general partner of each limited partnership to provide details of its registered office to the Registrar. Failure to do so constitutes criminal conduct by the General Partner (including the managing her officer in default) and may result in conviction and fines.
A General Partner or its Managing Officer will be in “Failure” if it fails to take all reasonable steps to authorize, authorize, participate in, or prevent violations of the Registrar Notification Requirements. Timely compliance with this obligation becomes important given the consequences of penalties.
In addition to practical considerations, there are certain anticipated regulatory implications to consider. The City of London Law Society and the Law Society of England and Wales recently published their responses to the bill (“answer sheet”), which raised certain concerns, including those related to the need to maintain a registered office in the UK. In their view, the change would allow a limited partnership with a principal place of business abroad to become a UK Alternative Investment Fund (“England AIF”).
Results of classification as UK AIF
Classification as an AIF in the UK (despite the fact that AIF is not marketed in the UK) has certain regulatory implications, including but not limited to the following requirements:
- Certain information must be made available to investors prior to investment.
- A single depository will be designated and AIF’s assets will be entrusted to that depository for custody.
- An annual report will be provided to investors and the FCA each fiscal year.When
- Certain information will be disclosed to the FCA for each UK AIF and alternative investment fund manager (“AIFM“) is managed by
Given the six-month transition period, affected limited partnership AIFMs will have a significantly shorter timeframe to ensure compliance with the additional requirements applicable to the UK AIF.
Implementation of bill
At this time, the time frame and format in which the bill will be implemented is unknown.