England Limited Partnership – LPs are an effective tax planning tool that allows you to conduct international commerce, in fact, in a tax-free regime (if the partners are not residents of the UK and the partnership does not have domestic activities). English partnerships gained particular popularity in 2017, when the Law required all Scottish limited liability partnerships LP, in which all partners are legal entities, to submit information about the controllers (beneficiaries) to the Register of Companies.

English LPs have identical legal form and similar benefits. At the moment, the main advantage of this type of partnership is that they are not and will not be subject to legislative acts on the disclosure of information about controlling persons (beneficiaries).

LP partnerships registered in England are governed by the Limited Partnership Act 1907. Just like “ordinary” companies, this form of LP is subject to state registration with the Registrar of Companies and tax office. Despite this, for rather historical reasons, these partnerships are not considered separate legal entities.

This means that the legal owners of their property are not the partnerships themselves, but their general partners. But this does not prevent the partnership from acting and conducting its activities precisely as a separate entity – the partnership has a Certificate of Incorporation with the indicated company registration number, as well as a separate tax number.

Our practical experience has proven that English LPs are a good alternative to Scottish LPs in order to maintain confidentiality, as well as an effective tax planning tool.

Features

• Quick and easy registration
• Low cost of registration/purchase and annual maintenance
• The need for state registration in the Register of Companies (Companies House), similar to “ordinary” companies
• Limited liability of partners for debts and obligations of the enterprise only up to the amount agreed in advance between the partners
• The possibility of non-taxation in the absence of commercial activity in the UK (for the same reason, the company cannot obtain the status of a tax resident of the UK)
• Inability for a partnership consisting of non-resident members to obtain a certificate of tax resident status

• England (GREAT Britain) and benefit from the treaties concluded by great Britain for the avoidance of double taxation
• Not subject to legislative acts on the disclosure of information about controlling persons (beneficiaries)
• No need to maintain and submit financial statements (England Limited Partnership does not undergo audits and does not require additional accounting costs)
• Opportunity to conduct trading activities with both European countries and the UK
• Automatic assignment of a UTR (Partnership Unique Taxpayer Reference) tax number when registering a partnership
• Possibility to obtain VAT and EORI numbers

Requirements for the establishment

• There must be at least two members, one of whom is designated as a managing partner and the other becomes a limited partner. Partner – an individual or a legal entity, there are no requirements for residency.
• Partners can be nominees.
• Partners and the beneficiary must provide photo identification and proof of permanent residence. Legal entities provide documents confirming their registration and structure.

• The authorized capital is the contribution of the partners, which is distributed among them and is not paid at registration.
• The partnership must have a registered office in England.

Time

• Ready-made LP companies are available.
• Registration of a new partnership is offered on the same terms, will take 5-10 working days.

Documents required for opening a partnership.

If a legal entity acts as the founder, then an extract from the register of the country of registration, registration documents of the legal entity, as well as documents confirming its structure will be required.

From the partners and the beneficiary are required copies of the passport and confirmation of permanent residence, as well as a questionnaire in which the customer indicates his wishes regarding the structure of the company.

As a confirmation of the place of permanent residence, citizens of other countries can provide a copy of the internal national passport: a copy of the first spread + a copy of the second spread + a copy of the page with a stamp of registration. Or a recent utility bill where the name and address are visible.

Name

The name of the English limited partnership should end with the abbreviation “LP”.

When registering a company of any type in the UK, the restrictions on the names are relatively numerous – without special permission, it is not allowed to register a company in the UK, in the name of which there are the words “Bank”, “Insurance”, “Trust”, “Assurance”, “Building Society”, “England”, “European”, “British”, “Irish”, “Royal”, “King”, “Queen”, “Duke”, etc. The use of the words “National”, “International”, “Holding”, “Group”, etc. is also limited.

Structure

There are no shareholders, directors or secretaries in the partnership structure. Created by two parties: one managing partner with unlimited liability and one or more England Limited Partnership.

Partners can be individuals of any citizenship and residence, as well as legal entities registered in any country of the world. The shares of the partnership are distributed among the partners in equal (equal) shares. The functions of the director are usually performed by the general partner.

The founders have the right to appoint managers who will manage the affairs of the partnership on behalf of and on behalf of the partners of the LP. Only natural persons can be managers (attorneys).

Local address

A local registration address is required. This should be a business address in England, not a PO Box, etc.

All official messages will be sent to the legal address, for example, letters from the state register – Companies House. This must be a physical address in England. You can use a PO Box, but you must still include a physical address and zip code.

Nominee services

Nominee partners will formally appear in all the main registration documents of the partnership, a general power of attorney for the right to manage the partnership will be issued to the owner (or to a person specified by him).

In addition, a declaration of trust will be issued between the nominee partners and the owner (representative), which confirms that the nominee partner owns a share in the partnership in favor of the owner and without the consent of the latter has no right to perform any actions with it.

Authorized capital and shares

Payment of any capital at the establishment is not required.

There is no authorized capital in the structure of the LP; funds invested by partners are used (the size of the investments is determined by the partners themselves).

Register of beneficiaries (controllers – person with significant control (PSC))

England Limited Partnership are not required to disclose persons with substantial control i.e. beneficiaries.

Taxation

The limited partnership itself is not subject to taxation in the UK. The profit of the partnership is distributed among the partners of the company, who must pay tax at the place of their tax residence.

Partners of LP, as a rule, are legal entities and individuals who are residents in tax-free jurisdictions, which allows you to completely avoid taxation in the UK.

LP is not a UK corporate tax payer. In the event that the partnership has foreign participants and the company does not carry out activities in the UK, there is no taxation on its territory, and the participants must independently fulfill their tax obligations in the country of registration. If the partners are offshore companies, they are exempt from taxes if they do not conduct activities in the territory where they are registered. Under English law, in such a partnership, owners and managers are not personally liable for its debts and obligations. Thus, a tax-free company with an “English face” is created.

This form of LP is subject to state registration in the Register of Companies and the tax inspectorate and receives a tax number.

An LP consisting of non-resident members will not be able to obtain a certificate of uk tax resident status and benefit from double taxation treaties concluded by the UK.

In order to obtain a VAT number, it is necessary to document that the company’s taxable turnover exceeds or will soon exceed £ 85,000 (this is the registration threshold in 2017). When voluntarily registering VAT, the registering authority requests additional information: type of activity, contact details of the company and business partners in Europe.

Every company registered in the VAT system must submit quarterly reports to the UK tax authorities – HMRC. If for several consecutive reporting periods an English company submits zero reports, then there is a possibility of its exclusion from the register of VAT payers and cancellation of the number.

Value Added Tax (VAT) is levied in the UK at a rate of 20% (2017). When trading with partners from EU countries who also have a VAT number, a tax rate of 0% is applied.

LPs that do not conduct commercial activities in the UK and whose members are located outside the country are required to submit a zero tax return

It is possible to obtain EORI (Economic Operator Registration and Identification) – a unique identification number assigned to entrepreneurs engaged in foreign trade when registering in the Registration and Identification System of Entrepreneurs. It is used to identify entrepreneurs and other persons when communicating with customs agencies.

Reporting

Unlike other UK legal forms, such as the LTD company and the LLP limited liability partnership, the LP partnership is not required to submit financial statements to the public authorities.

LPs that do not conduct commercial activities in the UK and whose members are located outside the country are required to submit a zero tax return

In the case of registration as a payer of value added tax, VAT returns are usually submitted once a quarter.