THE UK Government has launched a nationwide review of limited partnership businesses after allegations that some registered in Scotland were being exploited by criminals involved in money-laundering and tax evasion.
According to the Department for Business, Energy and Industrial Strategy (BEIS), Scottish Limited Partnerships (SLPs) have their own “legal personalities” and differ from those set up in England, Wales and Northern Ireland.
This means they can hold assets including properties, borrow money from banks and enter into contracts. SLPs are under no obligation to file financial reports if their business is conducted overseas.
International investigation agency Kroll last year published a report linking several SLPs to an alleged $1 billion (£634 million) fraud against three banks in Moldova, the former Soviet republic.
The BEIS said: “There have been a number of media reports alleging that some of those limited partnerships registered in Scotland are being used as vehicles for a number of different forms of criminality.
“There has also been a recent and significant increase in the number of registrations of limited partnerships in Scotland compared to England, Wales and Northern Ireland, but little evidence to explain why, or information to demonstrate that this increase is benefitting the Scottish economy (or the UK as a whole) as a result.
“We are therefore publishing this call for evidence seeking views and evidence on the possible reasons why registration of limited partnerships in Scotland has increased, and to a lesser extent in England, Wales and Northern Ireland."
The BEIS will consider where the Scottish partnerships have "legal characteristics are that might act as the enabler to possible criminal activity.”
UK Business Minister Margot James said: “I am concerned about recent reports relating to the use of limited partnerships, suggesting that some are being used for criminal activity. This undermines the many legitimate uses this form of incorporation can give.
“The UK Government is fully committed to stamping out criminal activity, so I have launched this call for evidence and would encourage businesses and other interested parties to respond with their views on whether the rules and scrutiny around limited partnerships need to be tightened up to prevent them being exploited.”
David Mundell, the Scottish Secretary, said: “I would urge businesses and organisations in Scotland to share their views. It is important we are able to gather as much information as we can.”
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