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The Partnerships and Unlimited Companies (Accounts) Regulations 1993 require companies which are members of 'qualifying partnerships' to prepare and attach accounts of the partnership to their own accounts.
1. What is a qualifying partnership?
A qualifying partnership is a partnership that is governed by the laws of any part of Great Britain if each of the members is:
(i) a limited company; or
(ii) an unlimited company or a Scottish firm, each of whose members is a limited company.
Note
(a) Any reference to a qualifying partnership in relation to a limited partnership is a reference to the general partners only.
(b) Any reference to a limited company, an unlimited company, a Scottish firm or another partnership includes any comparable undertaking formed under the laws of another state.
| The partnership regulations will apply to most limited partnerships that have limited companies as their general partners and are registered under the Limited Partnerships Act 1907, as these partnerships must have their principal place of business in Great Britain on registration. |
2. What accounts must the partnership prepare?
The partnership must prepare and have audited accounts as if it were a company formed under the Companies Act 1985 so as to conform to Part VII of that Act. The Act has been amended to take account of the circumstances of qualifying partnerships. However, the partnership may take advantage of regulation 7, which permits the accounts to be dealt with on a consolidated basis as group accounts prepared by either:
- a member of the partnership which is established under the law of a member state of the European Economic Area (EEA); or
- a parent undertaking of such a member.
In these cases, the accounts must be prepared on a consolidated basis under the law of the member state in accordance with the Seventh Company Law Directive. A note must be included to say that the accounts have been prepared to take advantage of this regulation.
3. For what period must the partnership accounts be prepared?
The accounts may cover any period up to 18 months which may be specified in the partnership agreement. If a period is not specified in the agreement, the partnership accounts must be drawn up for each 12-month period ending on 31 March in each year.
4. When must the accounts be prepared?
The partnership accounts must be prepared within a period of 10 months after the end of the financial year.
5. When must the accounts be delivered or published? When partnership accounts are prepared, they must be attached to the next accounts of each partner that is a limited company and delivered to Companies House. A limited company that is a member of a qualifying partnership must supply to any person on request:
- the name of each partner required to deliver copies of the partnership accounts to the Registrar; and
- the name of each partner incorporated in another EEA member state who is required to publish the partnership accounts in that state.
When a qualifying partnership has its head office in Great Britain and each of the partners is:
- an undertaking comparable to a limited company incorporated outside the United Kingdom or other EEA state; or
- an undertaking comparable to an unlimited company or partnership formed under the law of such a country with each of its members a limited or comparable undertaking; then
the partnership must:
(a) make the latest accounts of the partnership available for inspection by any person, without charge, during business hours at the head office of the partnership, together with a certified translation, if the original is not in English; and
each member of the partnership must:
(b) supply to any person on request a copy of the latest accounts of the partnership (together with a translation if the original is not in English). A fee may be charged to cover the administrative cost of supplying the copy, but no more.
6. Are there any exemptions from the publication rules?
The members of a qualifying partnership may be exempted from the above publication rules if the partnership accounts are consolidated as group accounts prepared by:
- a member of the partnership formed under the law of a member state; or
- a parent undertaking of such a member so established.
In this case the consolidated accounts must be prepared and audited under the law of the member state, and the notes to the accounts must show that advantage has been taken of this regulation. If this exemption is used, any member of the partnership must disclose on request the name of at least one member or parent undertaking in whose group accounts the partnership accounts are consolidated.
7. Are there any penalties for non-compliance?
Yes. Every partner in a qualifying partnership or every director of a company that is a partner may be prosecuted and fined up to £5,000. |
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