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The comparatively light regulatory regime has long been seen as one advantage of preferring a partnership to a limited company as a business entity. 

The general rule is that partnerships (including limited partnerships) don't have to file annual accounts at Companies House.  However, since 1993 there has been a statutory obligation on any partnership, all of whose partners are limited companies (or equivalent overseas entities), to prepare and file annual accounts and reports as if the partnership was a company.

These regulations, updated in 2008, did not become widely known - partly, perhaps, because any partnership with at least one partner who is an individual falls outwith the regulations.

The Government is about to alter the regulations and, in particular, how they apply to limited partnerships.  When amended, the regulations will apply to limited partnerships if all the general partners are:

• limited companies; or
• unlimited companies, each of whose members is a limited company; or
• Sottish partnerships, each of whose members is a limited company.

Whether any of the limited partners is an individual will no longer matter, and we think the amended regulations will catch a large number of limited partnerships which weren't previously obliged to file annual accounts.

The amended regulations are still in draft form but the plan of the Department for Business, Innovation and Skills is that the update version will apply to financial years beginning on or after 6 April 2011.

If you are a partner in a general or limited partnership and would like further information about the regulations and how they may affect you, or if you would like information or advice about partnerships in general, please contact Malcolm Holmes.

 
Malcolm Holmes