Scottish Limited Partnerships: Now transparent in Companies House Register
Up until recently, the Scottish Limited Partnership (SLP) presented an option for individuals interested in forming a corporate structure being a legal entity of its own and allowing the ultimate owners a level of confidentiality at the same time.
An SLP must have at least one general partner, who is responsible for management, debts and other obligations and at least one limited partner, who has no managerial control and is only liable up to the value of their capital contribution. These aspects, along with the fact that only the partners are taxed on the basis of their share, were very much complementary when conducting business via an SLP holding and a trading company formed in Malta.
No more confidentiality concerning shareholders in Scottish holding structures
However, since 26 June 2017 the Scottish Partnership Regulations 2017 have been in force and the ultimate owners and controllers, referred to as people with significant control, now need to be registered with Companies House, much like their UK counterparts. This is a result of an initiative to make legal entities more transparent and prevent possible money laundering or tax evasion, both in the UK and the EU as a whole.
For the purpose of the new regulation, people with significant control (PSC) are generally speaking the following:
- The general partner
- Any person who regularly or consistently directs or influences a significant section of the management
- Any limited partner with more than 25% of total interest in the partnership
In practice, SLPs are now obliged to maintain a register of persons with significant control over them, which is to be registered at the respective Companies House and being publically available. SLPs are required to disclose this information upon their formation and inform the Companies House of any change within 14 days of the change taking place. Furthermore, an annual report is required, confirming that no changes have taken place. Should an SLP not comply with the new regulation, it may be subject to a fine of up to GBP 500 a day.
The approximately 30.000 already existing SLPs had to therefore disclose the identities of their beneficial owners by 7th August 2017 at the latest
International business set-ups with operational Maltese Trading and Foreign Holding
When forming an international business set-up composed of a Maltese trading limited and a foreign holding company, interested clients being Maltese tax residents should take these changes into consideration. They may rather opt for a different solution in such case, a viable option would be to form a holding company in Cyprus with nominee shareholder ship.
Do not hesitate to contact us should you – as a (future) Maltese tax resident - be interested in forming a foreign holding company, and wish to discuss the topic further.