In recent times Scottish Limited Partnerships (SLP) have attracted much attention in light of their involvement in fraudulent activities. Scottish LPs were established in 1907 as part of the ‘Limited Partnership Act 1907’ to help farmers with their farm holdings. Since then it has evolved and taken its form in the modern world as a popular option amongst private equity firms and investors.
Although there are a few Scottish LPs that are owned by legitimate businesses, there have been several money laundering schemes that have been discovered that exploit a century-old loophole to launder money through the UK. One such laundering scheme used 100 SLPs to shift around $80 billion in Russian cash in about four years. This has caused the UK government to tighten their laws concerning SLPs.
Risks of Scottish LPs
Business owners who currently own or are planning to establish SLPs have to face many risks in the upcoming months as the UK government will implement several changes regarding SLPs.
New laws that were put in place to regulate SLPs last year have resulted in an 80% drop in the number of new SLPs reducing its popularity
The negative press surrounding SLPs will affect businesses that have been established in the Scottish region as it will inhibit people or companies from being involved with an SLP
The UK government plans on implementing several new laws this summer along with ‘unexplained wealth orders’ for businesses to prove the legitimacy of their earnings
The internal structure requirements for an SLP might change. For example, in the current system, it requires firms to have its principal place of business and domicile in Scotland but allows its activities to be carried out in other countries.
Many uncertainties are surrounding Scottish LPs which doesn’t make it an ideal location to establish a new business or open a new bank account. Many companies will most likely have to adjust to any new laws or schemes introduced and may even have to change where and how their activities are conducted.
Even though the Scottish region is a risky location to establish a business, this doesn’t mean that companies cannot reach the UK market. There are several alternatives that More Group offers which can help you build a company in the UK.
Alternative Incorporation Options
More Group has helped several businesses establish companies not only in the UK but also internationally. Our head office is located in London which makes us an expert in conducting business in the UK. The best incorporation alternatives include:
UK Incorporation (Branches, Private Limited Company, Public Limited Company, Limited Liability Partnership)
Ireland Incorporation (Branches, Private Limited Company, Private Unlimited Company, Partnerships)
Our experts are knowledgeable about all incorporation laws in the UK and can advise you on how to establish a business in a preferred location and can also advise you on which jurisdiction will be the ideal one for your business so that it not only suits your business structure but also strengthens it.