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STAR CAPITAL

UK ASSOCIATES LIMITED

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SE25 6EJ London

United Kingdom

Star Capital
UK Associates Limited

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UK Limited Partnership (LP)
Most frequent Uses and Advantages

A UK Limited Partnership (LP) is a popular and flexible business structure with various uses and advantages, especially for investment and international structuring. Below is a breakdown of the most frequent uses and key advantages

1. Private Equity and Venture Capital Funds
LPs are commonly used as investment fund vehicles.
General Partner manages the fund; Limited Partners are passive investors.
Suitable for fund structures due to limited liability and tax transparency.

2. Property and Real Estate Investment
Investors pool capital into an LP to acquire and manage property portfolios.
Income is distributed to Limited Partners.

3. Joint Ventures
Two or more parties collaborate on a specific project.
Allows clear separation between managing (general) and passive (limited) partners.

4. International Tax Planning
Often used in cross-border structures to optimize tax treatment.
LPs are tax-transparent, so income is taxed at partner level, not at entity level.

Family or Private Investment Vehicles

Used to structure family-owned investment portfolios.

Parents may act as General Partners with children as Limited Partners.

Asset Protection Structures

Limited Partners’ liability is capped to their capital.

Useful for separating assets from trading risk.

Key Advantages of a UK Limited Partnership

1. Limited Liability (for Limited Partners)
Liability is limited to the amount of capital contributed.
No risk of losing personal assets unless they engage in management.

2. Tax Transparency
LP itself is not taxed.
Profits/losses “flow through” to partners and are taxed at their respective rates.
Avoids double taxation (unlike companies).

3. Flexible Internal Structure
No strict statutory rules on profit distribution, voting rights, or decision-making.
All can be customized via a partnership agreement.

4. No Ongoing Filing Requirements
LPs have minimal reporting to Companies House (no annual accounts or confirmation statements).
Changes in partnership composition must still be reported.

5. Privacy (Compared to LLPs or Companies)
Only the names of partners and principal place of business are on public record.
No requirement to disclose financials publicly.

6. Simple and Low-Cost Setup
No capital minimums.
No need to appoint directors or company secretaries.

7. International Recognition
UK LPs (especially Scottish LPs) are familiar structures in global finance and legal systems.

Common in fund and holding structures due to their clarity and predictability.

Caution / Disadvantages to Consider

While LPs have many advantages, they also come with some limitations:

Limited partners cannot manage the business – doing so removes their liability protection.

LPs cannot be used to avoid taxes – tax transparency means partners are still liable for taxes where they are resident.

Reputation risks – UK LPs (especially Scottish LPs) were previously misused in certain fraud cases; regulators are now more cautious.