Implications for limited liability partnerships

Identity verification 

Although not yet in force, perhaps the most significant of the Act’s reforms is the introduction of compulsory identification procedures for all LLP members and for persons with significant control (PSCs) of LLPs.   

From autumn 2025, all new members of LLPs will be required to verify their identity and it will be an offence for a member to fail to do so. Where a member is a corporate entity, its individual directors (or equivalents) will be required to verify their identity.

All new PSCs of an LLP will also need to verify their identity. Where a registrable PSC is a legal entity, that entity will have to nominate a managing officer who is an individual, and whose identity has been verified.

In relation to existing LLPs, all members and PSCs will have a 12-month transition period to verify their identity with Companies House. The transition period will start from autumn 2025. It is anticipated that voluntary identification will be available from spring 2025.

Many LLPs provide formation and filing services. From spring 2026, if an LLP wishes to deliver documents to Companies House in the course of providing these services for another company or firm, the LLP must register as an Authorised Corporate Service Provider (ACSP). All ACSPs must be supervised for anti-money laundering purposes in the UK.

Identity verification will be available directly with Companies House, or through an ACSP.

(For more information on identity verification under the Act, see Identity verification and Authorised Corporate Service Providers).  

Registered office and registered email address

From 4 March 2024, the Act introduces a requirement for all LLPs to maintain a registered appropriate email address and to ensure that their registered office is at an “appropriate address”.

Failure to comply with either requirement, without reasonable excuse, is an offence committed by the LLP and by every designated member who is in default.

A registered office address will be an “appropriate address” if, in the ordinary course of events:

• a document addressed to the LLP and delivered there by hand or by post, would be expected to come to the attention of a person acting on behalf of the LLP; and
• the delivery of documents there is capable of being recorded by the obtaining of an acknowledgement of delivery.

PO Boxes and unstaffed addresses are unlikely to satisfy this test.

Any LLP that does not have its registered office at an appropriate address when it next makes a confirmation statement with a statement date from 5 March 2024 onwards, will be required to change their registered office at the same time that they deliver their confirmation statement. The registrar can change an LLP’s registered office to a default address if that registered address is not appropriate.

An email address will be an “appropriate email address” if, in the ordinary course of events, emails sent to it by the registrar would be expected to come to the attention of a person acting on behalf of the LLP. An LLP’s email address will not be available to public inspection and will only be used by Companies House to communicate with the LLP.

Newly incorporated LLPs will be required to include their chosen email address in their registration documents. Existing LLPs will be required to confirm their registered email address with the registrar when they file their next confirmation statement with a statement date from 5 March 2024.

Statement of lawful purposes and confirmation statements

From 4 March 2024, all LLPs will have to confirm annually in their confirmation statement that the LLP’s future activities will be lawful.

The Act also envisages that LLPs will make various other confirmations in their annual confirmation statement as required by regulations that have yet to be published. These include confirmations relating to PSC exemptions and to the verification of members’ identities (see below).  

LLP Names

With effect from 4 March 2024, the Act introduces greater controls over LLP names. It prohibits LLPs from using a name (including on incorporation) in specified circumstances, including if that name:

• is intended to facilitate an offence of dishonesty or deception;
• suggests a connection with a foreign government or its off-shoots (e.g. NATO);
•  consists of or includes computer code; and
• is one that has been changed following a direction by the registrar, and the LLP seeks to re-register using the same or a similar name.

The Act gives the registrar additional powers to direct an LLP to change its name and to remove the name from the register where the LLP fails to comply with a direction to change it. 

Disqualification of LLP members 

From 4 March 2024, the Act prohibits a person becoming a member of an LLP if they are disqualified under relevant director disqualification legislation. 

Members of an LLP are required to take any necessary steps to ensure that a disqualified person ceases to be a member of the LLP. Failure to comply will constitute an offence committed by each member in default.

Registrar’s powers (including financial penalties)

The Act introduces new statutory objectives for the registrar to improve the accuracy and integrity of information on the register, and also gives the registrar new powers to support those objectives. Under these new powers (effective from 4 March 2024), the registrar will be able to reject and query filings submitted by LLPs and remove material more quickly if it impacts on the integrity of the register.

Also, in support of the registrar’s new objectives (and once the relevant secondary legislation is in force), the registrar will have the power to impose civil financial penalties on an LLP if satisfied that the LLP has committed misconduct amounting to a relevant offence under the Companies Act 2006. Financial penalties are an alternative to starting criminal proceedings.

Again, once the secondary legislation is in force, the registrar will have the additional power to remove an LLP from the register (which will result in its dissolution). Before using this power, the registrar must have reasonable grounds to believe the application for incorporation of the LLP (or administrative restoration) contained false or misleading information or was based on a false statement.

Protection of LLP member’s residential address

The Act introduces processes whereby any individual listed on the Companies House register (including members of an LLP) will be able to apply to have specified information suppressed from public disclosure. Implementing regulations will be required to bring each element of the process into force.

Expected to come into force on 27 January 2025, the first set of implementing regulations set out the procedure for a person to apply to protect their usual residential address (URA) where it was formerly a registered office address. (It is not currently possible to protect a URA if it has ever been used as a registered office address.) An individual will not be permitted, however, to hide their URA if it is an LLP’s current registered office address.

If the LLP in question has been dissolved, the member will need to wait six months from dissolution before applying for protection of their URA.

Failure to prevent fraud

The Act introduces a new corporate offence of “failure to prevent fraud”. The new offence, which comes into effect on 1 September 2025, will make it easier for LLPs (and other corporates and partnerships) to be criminally prosecuted.

In-scope organisations will be criminally liable if an “associate” commits a specified fraud offence in order to benefit the organisation or its clients, and the organisation does not have reasonable fraud prevention procedures in place.

The new offence will apply to “large organisations” wherever incorporated or formed, provided that the relevant fraud involves a link to the UK. An LLP will be “large” if it meets at least two of the following criteria in the financial year preceding the year in which the fraud is alleged to have taken place:

• more than 250 employees;
• more than £36 million turnover; and
• more than £18 million in total assets.

The Government has recently published guidance (Guidance) on the new offence, outlining its key elements and offering practical advice on implementing fraud prevention procedures.

For more information on the new offence, see Corporate criminal liability: New failure to prevent fraud offence.

Resources

Companies House Fact sheet: Impact of corporate transparency reforms on limited liability partnerships
The Registrar (Annotation, Removal and Disclosure Restrictions) Regulations 2024
Limited Liability Partnerships (Application of Company Law) Regulations 2024
Limited Liability Partnerships (Application of Company Law) (No. 2) Regulations 2024
Draft Companies and Limited Liability Partnerships (Protection and Disclosure of Information and Consequential Amendments) Regulations 2024
Draft Unique Identifiers (Application of Company Law) Regulations 2024