What has changed?
On 6 April 2016 new requirements for making available information on “people with significant control” (“PSC”) of certain UK entities such as UK private limited companies and limited liability partnerships came into force. Entities subject to the requirements had to create and maintain a register of PSCs (see further: Persons with significant control register: Your questions answered).
A further regulation was recently introduced, which – from 24 July 2017 – extended the scope of these requirements to limited partnerships, as well as to certain general partnerships in Scotland (see also Changes to the Persons of Significant Control (PSC) Regime).
For those affected, action is required by Monday 7 August 2017. If a body covered by the regulation is created after 7 August, the regulation must be complied with from the outset.
Who is affected?
The further regulation applies to any “eligible Scottish partnerships”, which are: (1) any limited partnership which is registered in Scotland, including limited partnerships which have been set up for the purposes of an agricultural lease being granted to the partnership; or (2) a Scottish general partnership of which the partners are, directly or indirectly, all limited companies.
What must be done?
Registration with the registrar of companies for Scotland must be made of any PSC of an eligible Scottish partnership. A PSC is one who fulfils any of five conditions. The first four are:
- The person holds, directly or indirectly, the right to more than 25% of any surplus assets in an eligible Scottish partnership on its being wound up.
- The person holds, directly or indirectly, more than 25% of the equivalent to voting rights in an eligible Scottish partnership.
- The person holds the right, directly or indirectly, to appoint or remove the majority of the persons who are entitled to take part in the management of an eligible Scottish partnership.
- The person has the right to exercise, or actually exercises, significant influence or control over an eligible Scottish partnership.
The fifth applies where a trust or other entity without legal personality is involved. If this fits your circumstances, please seek further advice.
If there is only one general partner in a limited partnership, that general partner will be a PSC. Where there are several general partners, whether they are PSCs depends on the circumstances of each instance.
The information which must be provided includes name, address, and the nature of control over the eligible Scottish partnership, as well as other details which vary depending on whether the PSC is an individual or a company or the like. Provision is made for the protection of a person’s usual residential address. The information must be submitted to the registrar, but will not be made available generally to the public. On application, certain other information can also be withheld from general public inspection.
If there are no PSCs, that information must also be sent to the registrar by the deadline of 7 August.
Who is responsible?
The eligible Scottish partnership is responsible for gathering the information and the PSCs are obliged to provide it.
What happens if the deadline is missed?
Failure to meet the deadline is an offence, punishable by fine.
What are the ongoing responsibilities?
The registered information must be kept up to date. Failure to do so within the statutory time frame is an offence punishable by imprisonment, fine, or both.
If the partnership ceases to be a qualifying partnership, that is also a change which must be registered, but no further registration is required after that.
If you are the limited partner in a limited partnership, can you do anything?
Yes. Although limited partners must not take part in the management of the partnership business, they are able to advise with the general partner(s). As the partnership as a whole can incur liabilities for failure to comply with the regulation, limited partners should consider doing so in this case.