Glossary

Definition of a partnership for accounting purposes

Clifford McDowell

Definition of a partnership for accounting purposes

The Partnerships (Accounts) Regulations of 2008 require the members of any qualifying partnership to prepare accounts. If a member of the partnership is also a limited company, they are then required to attach these accounts to their own for filing with Companies House.

Definition of a Partnership

According to the Partnerships (Accounts) Regulations of 2008, a qualifying partnership is defined as any partnership formed under the law in any part of the United Kingdom, if each partner or member meets specific criteria. If the partnership formed and in a financial year before 1 October 2013, the Partnerships (Accounts) Regulations of 2008 qualifies on the following criteria:

  • The organisation is a limited company
  • The organisation is an unlimited company or part of a Scottish partnership whose members are a limited company

If a partnership was formed in a financial year that began on or after 1 October 2013, the qualifying criteria includes the following:

  • The organisation is a limited company
  • The organisation is an unlimited company whose members include a limited company
  • The organisation is a Scottish limited partnership that classifies every general partner as a limited company
  • The organisation is any other Scottish partnership that classifies every member as a limited company

Accounts the Partnership is Responsible for Preparing

Every member of a qualifying partnership has to prepare audited accounts for the limited partnership or organisation as if it was a limited company. Each account the partners prepare has to fall in line with the requirements and regulations that the Companies Act of 2006 set.

The limited partnership has to pay special attention to Regulation 7 of the Partnerships (Accounts) Regulations of 2008. Regulation 7 states that the members of the qualifying partnership are not required to prepare partnership accounts if the partnership is dealt with on a consolidated basis when the group accounts are prepared by:

  • A member of the qualifying partnership. The European Economic Area (EEA) established the member under the law of member state.
  • A parent undertaking of such a member

Should this be the case of the partnership in question, all of the groups’ accounts are required to get prepared and audited in accordance with the law of the EEA State. They also must fall in line with the Seventh Company Law Directive or under the International Accounting Standards. Additionally, the law requires that the group of accounts get a note that discloses the advantage that the group has received from this exemption.

What a Partnership Must Deliver and When They Publish Accounts

If the organisation is a limited company and they are a member of the qualifying partnership, they’re required to attach the partnership accounts to the next set of accounts they will deliver to Companies House. Additionally, they’re required to supply the following when requested.

  • The name of each member who was responsible for delivering copies of the partnership accounts to Companies House
  • The name of each member that is incorporated in another EEA State who is required to publish the partnership accounts in their specific state.

If none of the members of the qualifying partnership classifies as a limited company, or if an undertaking is comparable to a limited company that is incorporated into another EEA State, the partnership is required to make their accounts available for an inspection by any person. They cannot charge for this inspection, and it must be during business hours. Additionally, it must be carried out at the principal place where the partnership conducts business. If the original document is not in English, a certified translation must be made available to the inspecting party.

If the principal place of business for the partnership relocates outside of the UK and their accounting years began on or after the date of 1 October 2013, the partnership is required to make their accounts available for any inspections in the same way as outlined above. This will take place at:

  • The head office or principal place of business for any member of the partnership that has a principal place of business or head office in the UK
  • A place where no member of the partnership has a principal place of business or head office in the UK. This can be at an address in the UK that the qualifying partnership members nominate.

Also, each member of the partnership is required to supply any person a copy of the most recent accounts of the partnership at their request. This includes a certified translation if the original accounts are not in English. They may charge a fee to cover the administrative cost associated with supplying the copies, but nothing in excess of this.

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