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Scottish Limited Partnership (SLP)

A Scottish Limited Partnership (SLP) is a business structure very similar to Limited Liability Partnership (LLP). SLPs also have a legal identity and are fully independent of its partners which allows them to enter into contractual relationships, borrow money and own assets, e.g. a real estate.

SLPs have two types of partners: general partners who are responsible for managing SLP and liable for any debts and obligations of the partnership and limited partners who are only liable up to the value they have invested in the partnership. Limited partners are not allowed to participate in management of the SLP.

There is limited amount of information that SLPs are required to report. Unlike Limited Liability Partnerships, SLPs are not required to file annual accounts when there is no business activity in the UK.

Tax Liability

SLPs do not pay corporation tax, however each partner must declare their profits received from the SLP. It means that if an SLP has no activity in the UK and its partners are not UK tax residents, then partners will have to pay taxes only in the country of their tax residency.

In addition, usually no Stamp Duty on real estate brought into or taken out of the SLP.

Key requirements for registration of a partnership:

  • It must be registered with the Companies House in Edinburg
  • It must have at least one general partner and one limited partner; partners can be either individuals or legal entities (e.g. company)
  • There are no requirements for citizenship/ jurisdiction and residency of partners
  • It must have a unique name

A partnership agreement is not obligatory on registration; in this case relationships between partners will be governed by the legislation in force. However, it is recommended to stipulate terms and conditions of cooperation between general and limited partners in a partnership agreement, including their corresponding paid up shares. The agreement should be governed under the laws of Scotland.

Specialists of Imperial & Legal will be happy to recommend you the right business structure and register it with the Companies House. We can also assist in drafting a partnership agreement and evaluating tax consequences for the partners.

To discuss your requirements, please contact our specialists or call us on +44 (0)203 490 41 21.

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