June 8, 2023 A guide to the new Economic Crime Bill, Limited Partnerships and ACSPs
The Economic Crime and Corporate Transparency Bill 2022 (the ‘ECCT Bill’) published in September 2022, spells major changes for all UK companies. The Bill pays particular attention to overhauling rules regarding Limited Partnerships (LPs).
As the ECCT Bill nears Royal Assent, we take a closer look at the new obligations for LPs with a particular focus on new reporting requirements and the instances where LPs will need the services of an Authorised Corporate Services Provider (ACSP).
Background
Since 2022 the Government has stepped up efforts to fight economic crime with the introduction of the Economic Crime (Transparency and Enforcement) Act 2022. As part of that Act, in August 2022 the UK Register of Overseas Entities was introduced. Soon after its introduction the ECCT Bill was published. A large part of the ECCT Bill looks to bring the archaic rules that govern LPs up to date and tackle what the government has referred to as ‘abuse’ and ‘misuse’ of the practice. They aim to do this by:
- Increasing frequency of reporting requirements
- Introducing new reporting requirements.
- Improving the integrity of reporting, in part through the introducing the role of
The new rules apply to both new and existing LPs (including Scottish LPs). We provide an overview of some of the most important reporting considerations, by taking a before and after view of what LPs need to do and how an ACSP, such as Elemental, can help. For further information on ACSPs, read our previous guide.
Limited Partnership Compliance Requirements: Before and After
Pre-ECCT Bill | Post-ECCT Bill | Notes |
|
|---|---|---|---|
Register an LP | No restrictions on who can register an LP | Applications must be registered by an ACSP. | |
Confirmation Statements/b> | No existing requirement to file a Confirmation Statement. | Will be required and must be filed by ACSP. | Existing LPs to file first confirmation statement within 6 months of the Act coming into force. New LPs to file 12 months after registration. Requirement to file Form LP6 (to notify changes to partnership) to continue. |
UK Registered Office | No requirement to have UK Registered Office | Must have address in jurisdiction of registration and must be an appropriate address. Changes must be filed by ACSP | General Partners will be required to ensure the registered office is in the part of the UK where the LP is registered and is one of the following: (i) the principal place of business; (ii) residential address of a general partner (individual); (iii) registered or principal office address of a general partner (legal entity); (iv) address of an ACSP. |
Information about Partners | Only Partner name required. | New information requirements introduced (see notes) and changes must be filed by ACSP | Information for an individual includes date of birth, residential address and, if a general partner, service address. Information for a legal entity includes service address, legal form and governing law, and, if a general partner, registration number. |
Registered Officer of Corporate General Partner | Not currently required. | Registered Officer will need to be appointed and changes must be filed by ACSP. | A general partner which is a legal entity must have a registered officer who is: (i) an individual; (ii) a managing officer of the legal entity; (iii) not disqualified; and (iv) whose identity has been verified. |
Named contact of corporate managing officers | Not currently required. | Named contact required and changes must be filed by ACSP. | A corporate general partner having one or more corporate managing officers (directors) must provide a named contact for each. |
Notice of Change | No existing restrictions on who can deliver changes. | Changes must be delivered by an ACSP. | For examples changes such as to name (of the partnership) the principal place of business, partner liability/contributions as well as new information relating to registered officers, named contacts of corporate managing officers. |
Elemental’s View
We have expected changes in the rules governing LPs for a number of years. In many instances, they bring the reporting requirements for LPs in line with other UK entities. However, we would encourage LPs to understand the new requirements and to start gathering the information needed, for example on partners. LPs should also consider their own timelines and internal processes for appointing and onboarding an ACSP, which can often lead to unexpected delays. Failure to meet the timings set by the government can be severe. The ECCT Bill includes a provision for Companies House to deregister an LP that has failed to meet the deadline.
Elemental is an industry leader in supporting law firms and their clients with economic crime compliance. Elemental was the number 1 UK Regulated Agent during the UK Register of Overseas Entities transition period having completed more filings than any other provider (Source: Companies House). The firm has written on the subject for Practical Law, LexisNexis and Companies House. We will be supporting new and existing clients with the new filing and Companies House identify verification requirements once the Bill becomes law. If any of our clients or partner firms have any questions in the meantime please don’t hesitate to get in touch.
