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Scottish limited partnership formation vs English limited partnership registration: Scottish limited partnerships registration and English limited partnerships formation are very similar in some ways and very different in others. When forming a limited partnership in either country you must have at least two partners, a general partner and a limited partner. You can have more but the minimum to you need to form the Scottish or English limited partnership is two.
General partners are liable for any partnership debts or obligations, whereas limited partners are only liable for the same amount as they have invested into the partnership. Limited partners can invest cash or property into the business. General partners, because of their increased stake in the partnership, have control over how the business is run. If a limited partner takes part in running the business in any way they he risks being seen as liable over and above his stake in the partnership.
Scottish limited partnerships as a separate legal entity: unlike English limited partnerships, Scottish limited partnerships can have their own legal identity. This separates the Scottish limited partnership from its partners and can be advantageous because it lessens the partner's responsibilities and liabilities.
Having the partnership as a separate entity means that it can raise legal actions and own property in its own name, an option not open to English limited partnerships. With an English limited partnership, the partners do not have the option to register the business as a separate legal entity so they remain fully liable for any debts and obligations throughout the partnership's lifetime.
It is worth noting that registering a Scottish limited partnership as a separate legal entity in Scotland doesn't necessarily mean that it will be known as such in other countries. This means that outside of Scotland, the limited partnership could be seen as a single legal entity with its partners, making them personally liable for obligation and debt fulfilment in that country.
A review of partnership law was carried out in 2003 between the Scottish, English and Welsh Law Commissions with the view to enabling limited partnerships in England and Wales to be registered as separate entities. However, it could be some time before this happens.