A review looking at the uses of limited partnerships in the UK has been launched.
- call for evidence to better understand uses of limited partnership businesses launched by UK government
- Scottish limited partnerships have their own ‘legal personalities’ which are allegedly being exploited by criminals
- review aims to better understand the economic benefit of limited partnerships and what is behind their popularity
A review looking at the uses of ‘limited partnerships’ in the UK has been launched following recent allegations that some businesses registered in Scotland are being used for criminal purposes.
The UK government is gathering evidence on the use of limited partnerships across the country, with a particular focus on those registered in Scotland. Unlike those set up in England, Wales and Northern Ireland, Scottish Limited Partnerships have their own ‘legal personality’, meaning they can hold assets, borrow money from banks and enter into contracts.
A limited partnership is a particular type of business made up of a number of partners, who can be people or other business entities.
The call for evidence launched today (16 January 2017) will help inform what further action, if any, is required to prevent limited partnerships being used as a front for unlawful activities such as money laundering and tax evasion, while also ensuring that the limited partnership business model continues to provide an efficient and flexible vehicle for legitimate business use.
Between 2011 to 2012 and 2015 to 2016, the number of limited partnerships registered in Scotland increased by 237%. Registrations for limited partnerships registered in England, Wales and Northern Ireland for the same period was 42%.
Businesses and other interested parties are being called upon to take part in this call for evidence to help the UK government better understand what has led to such an increase in the number of limited partnerships being set up and what they are being used for.
UK government Business Minister Margot James said:
I am concerned about recent reports relating to the use of limited partnerships, suggesting that some are being used for criminal activity. This undermines the many legitimate uses this form of incorporation can give.
The UK government is fully committed to stamping out criminal activity, so I have launched this call for evidence and would encourage businesses and other interested parties to respond with their views on whether the rules and scrutiny around limited partnerships need to be tightened up to prevent them being exploited.
Secretary of State for Scotland David Mundell said:
It is right the UK government launches this call for evidence into the use of Scottish limited partnerships for possible criminal activity.
Work by campaign groups and a series of media reports have highlighted growing concerns which require to be taken very seriously.
I would urge businesses and organisations in Scotland to share their views. It is important we are able to gather as much information as we can.