Scottish Limited Partnership
Main uses & advantages
The Scottish Limited Partnership (SLP) is governed by the Limited Partnerships Act 1907 and for registration purposes, must have its principal place of business in Scotland. Unlike LP’s registered under the 1907 Act in England & Wales, a Scottish LP has a separate legal personality meaning that it can amongst other things, contract and hold assets in its own name.
Scottish Limited Partnership (SLP)
A Scottish limited partnership (SLP) is a unique vehicle. Although it has been around for over a century, the SLP has been used in recent times for modern business purposes such as private equity and property investment fund structures. This article looks at the advantages of the SLP which make it so attractive to fund managers, promoters and investors, both domestic and overseas.
Uses of a Scottish Limited Partnership
A Scottish LP is an ideal solution for those who prefer to operate a company incorporated in the EU and to have a totally tax-free facility at the same time.
- Funds structures.
- SLPs can be used flexibly in funds structures.
- SLP as the main fund vehicle.
- The SLP can be a main funds vehicle because:
- It can hold assets in its own name;
- There can be multiple but passive investors (the limited partners);
- Only one person manages the investments and business of the partnership (the general partner);
- Tax transparency means that each partner is taxed on the profits it receives, the amount of which will be determined by the limited partnership agreement.
SLP as a participant
The above structure comprises the main funds’ vehicle which is a limited partnership (and could be an SLP). The SLP is itself made one of the limited partners in the main funds’ vehicle. This is only possible because the SLP has a separate legal personality: limited partnerships registered in other jurisdictions could not fulfil this function. The fund manager is one of the limited partners of the SLP. The profits from the main funds’ vehicle filter through to the SLP and from there to the fund manager (how and when this happens is determined by the limited partnership agreements). As the SLP is tax transparent, the fund manager is taxed directly on the profits it receives.
Register of Partners
Each Scottish LP company must file a register of its Partners with the Register of Enterprises of Scotland.
Authorised share capital
Company names containing restricted words such as “Bank”, “Insurance”, “Trust”, “Assurance”, “Building Society”, “England”, “British”, “European”, “Irish”, “National”, etc. will not be permitted unless an appropriate national operating license or special permit has been obtained by the company. Also the words “International”, “Holding”, “Group” are subject to individual acceptance by Companies House.
Beneficial ownership information
Filing of annual return
Filing of financial statements
Taxation of partners in an SLP
Tax planning and mitigation
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