The legislation will reform Companies House and improve UK company transparency with an aim of reducing economic crime and improving the reliability of the companies register.
In October 2022, we wrote on the Act’s implications for UK limited partnerships (UK LPs) and highlighted various changes which could have resulted in significant new obligations for private fund managers who use UK LPs in their fund investment structures. Since then, Macfarlanes has worked closely with the British Private Equity & Venture Capital Association (BVCA) and the Law Society of England and Wales to represent the views of general and limited partners during the process of parliamentary amendments.
The good news is that the Government has listened to many of the concerns raised and as a result made several amendments to the Act that address some of the potential burdens and risks for fund managers and investors. This note provides an overview of the relevant requirements for general partners and limited partners and the likely timeline in which to comply.
Key changes
Now that the Act is in final form, we can summarise the key changes to limited partnership law that the Act will impose through new obligations on general partners and limited partners in respect of Companies House as follows:
GP obligations
The application for a UK LP will need to contain the information set out below (the Required Information) for each proposed general partner and limited partner. This is significantly more information than currently required, although fund managers are likely to already have obtained this information from their investors when performing AML/KYC checks. The date of birth and residential address information are considered protected information, which will not be made publicly available by the registrar.
Partners
Individuals:
- name, date of birth and nationality;
- any relevant former names;
- usual residential address;
- part of the United Kingdom in which the individual is usually resident, or if outside of the United Kingdom, that country or state; and
- in the case of a general partner, a service address, which may be stated as “The limited partnership’s registered office”.
Legal entities:
- name;
- principal office;
- service address;
- legal form of entity and law by which it is governed; and
- in the case of a general partner, any register in which the general partner is entered and the registration number.
Registered officers:
- name, date of birth and nationality;
- any relevant former names;
- usual residential address;
- part of the United Kingdom in which the individual is usually resident, or if outside of the United Kingdom, that country or state; and
- a service address, which may be stated as “The limited partnership’s registered office”.
Named contacts:
- name;
- usual residential address; and
- email address.
The application must contain a statement that none of the proposed general partners is disqualified under the directors disqualification legislation (see section: Removal of disqualified general partners).
If the general partner is a legal entity, it must name a proposed registered officer who is one of the general partner’s managing officers, not disqualified under directors disqualification legislation and whose identity is verified (see section: Registered officer/named contact). This means that the general partner must have at least one managing officer who is a natural person.
The general partner must also provide a statement either:
- confirming that it does not have any corporate managing officers; or
- specifying the name of the proposed named contact for each of its corporate managing officers, accompanied by the Required Information and a statement by that individual confirming they are a managing officer of the corporate managing officer concerned.
The application must specify the intended registered office and email address of the limited partnership (see section: Registering and maintaining a registered office and email address).
The registered office of a UK LP will need to be an “appropriate address”. To satisfy this requirement, the address must meet the following conditions:
- it is in the part of the UK where the UK LP is registered;
- if a document is delivered to the address, it would be expected to come to the attention of a person acting on behalf of the UK LP; and
- it is either the principal place of business of the UK LP, the address of its general partner or the address of an authorised corporate service provider (ACSP) (and, in the last case, the ACSP has provided a statement with the application confirming that the address is its address).
Notice must be given to the registrar of a change of address within 14 days of the change.
Any UK LP which has a general partner outside the UK, and which uses the non-UK general partner’s address as its principal place of business will now need to ensure it also has a registered office in the UK. This will not impact the fact that its principal place of business remains outside the UK.
A UK LP will also need to provide an “appropriate email address”. An email address will be “appropriate” if, in the ordinary course of events, emails sent to it by the registrar would be expected to come to the attention of a person acting on behalf of the UK LP. Notice must be given to the registrar of a change of a UK LP’s registered email address within 14 days if the change.
The general partner must maintain a registered officer and, if it has multiple corporate managing officers, a named contact for each corporate managing officer at all times. The registered officer needs to be an individual whose identity is verified. The process for verification will be determined by the Secretary of State shortly.
Notice must be given to the registrar of a change of registered officer/named contact within 14 days of the change occurring.
Within 14 days of each review period, the general partner must deliver a statement to the registrar confirming any notices required where certain requirements under the Act have not been met. For existing UK LPs, the first review period will begin with the date of registration and end with the period 6 months after the Act comes into force, with 12-month periods following thereafter.
This is a new annual filing that general partners will need to comply with on an ongoing basis.
If requested by HMRC, the general partner will need to prepare audited accounts of the partnership in such form as HMRC may require. As most UK LPs will already prepare audited accounts, we do not expect that HMRC will request these in a different form as already prepared, and in any case they will not be need to be filed publicly at Companies House.
General partners who are disqualified under the directors disqualification legislation must be removed as general partner. This means that, reading the obligations on a director under the Company Directors Disqualification Act 1986 as applicable to general partners, a general partner would be disqualified if a director would have been disqualified in the same situation.
If a partnership has at least one general partner who is solvent and not disqualified under the directors disqualification legislation (see section: Removal of disqualified general partners) when the partnership is being dissolved, the general partner must wind the partnership up or ensure this is done so by a person who is not a partner at the time.
The registrar must be notified within 14 days of the general partner’s knowledge of the dissolution.
Notice must be given to the registrar within 14 days where:
- a person becomes or ceases to be a general partner or limited partner in the UK LP (the general partner is prohibited from acting in the management of the partnership until notified to the registrar);
- there is any change in the Required Information (see section: Applications for registration and information requirements) about a limited partner or general partner;
- there is a change of registered officer/named contact, or the required information of a registered officer/named contact;
- there is any general change such as to firm name or address of principal business of the UK LP, or, if not a private fund limited partnership, in the general nature of the UK LP’s business, term or character of the UK LP; or
- a legal entity becomes a corporate managing officer of the general partner.
The general partner must not use or disclose protected residential address information (that is, information that a director has applied to Companies House not to disclose publicly under the relevant provisions in Companies Act 2006), except for communicating with the individual concerned, or protected date of birth information.
Not making false statements to the registrar
General partners may not make false statements to the registrar. This includes delivering a document that is misleading, false or deceptive, or making similar statements.
If delivered knowingly, this is an aggravated offence which can lead to indictment and imprisonment for a term not exceeding two years.
LP obligations
The general partner will ask the limited partners to provide the Required Information (see section: Applications for registration and information requirements). The limited partners are obliged to inform the general partner if there are any changes to this information.
If a partnership has no general partner which is solvent and not disqualified under the directors disqualification legislation (see section: Removal of disqualified general partners) when being dissolved, a limited partner must take all reasonable steps to ensure that the partnership’s affairs are wound up by a person who is not a limited partner and will not be regarded as taking part in the management of the partnership business by performing this action.
The registrar must be notified of the dissolution within 14 days of the limited partner’s knowledge of the dissolution.
Any limited partner must not use or disclose protected residential address information (that is, information that a director has applied to Companies House not to disclose publicly under the relevant provisions in Companies Act 2006), except for communicating with the individual concerned, or protected date of birth information.
Limited partners may not make false statements to the registrar. This includes delivering a document that is misleading, false or deceptive, or making similar statements.
If delivered knowingly, this is an aggravated offence which can lead to indictment and imprisonment for a term not exceeding two years.
Failure to comply with these obligations may result in criminal liability. For most of the obligations, this amounts to a summary conviction or fine. Indictment or imprisonment (for a term not exceeding two years) can only be imposed for knowingly providing false statements to the registrar, or, in the case of general partners only, for a breach of a HMRC request for audited accounts.
Next steps and implications
Although the Act is now in force, there is a time period for general partners and limited partners to adjust to the new obligations, as most provisions of the Act are expected to come into force within the course of 2024, with an additional six-month transitional period for certain obligations as Companies House will require this time to create an internal framework to process the additional information being requested.
To be prepared, general partners will need to adjust to the new requirements to inform the registrar of the UK LP’s appropriate registered office address and email address, and the general partner’s ID-verified registered officers/named contacts. They will also need to make limited partners aware of the requirement to notify the general partner of any changes to details provided at admission (e.g. change of address) promptly so that the general partner can update the registrar accordingly.
Our view is that the final version of the Act should not cause material issues for general partners and limited partners. The recent amendments reflect feedback and concerns raised by the private capital sector and provide a better balance between the need for enhanced transparency and accountability, and the need to maintain the UK's attractiveness and competitiveness as a global financial centre. We expect that the market for private capital will continue to use UK LPs once the Bill comes into force.
We will keep you informed of any developments and updates on the Act and its implementation, and we will be happy to assist you with any queries or issues that may arise.
