INTRODUCTION

The principal juristic persons available for carrying on business in the UK are:

• • A company (a ‘company’) incorporated under the Companies Act 2006 (the ‘CA 2006’).

• • A partnership (a ‘partnership’) formed under the Partnership Act 1890 (the ‘1890 Act’).

• • A limited partnership formed under the Limited Partnerships Act 1907 (the ‘1907 Act’) (‘LP’).

• • Limited Liability Partnership (‘LLP’) incorporated under the Limited Liability Partnerships Act 2000 (the ‘2000 Act’) and regulated by the Limited Liability Partnerships Regulations 2001 (SI 2001/1090) (the ‘2001 Regs’).

This chapter is concerned with the general principles applicable to three of these four entities: partnerships, LPs and LLPs. Company law is considered only to the extent that it applies to LLPs. The focus is on Scottish entities.

Both Scottish partnerships and Scottish limited partnerships (SLPs) have proved popular. As a result, the original words of the 1907 Act have been significantly amended, and both the 1890 Act and the 1907 Act must now be read in conjunction with a regulatory framework. Scottish partnerships and SLPs may be particularly attractive because they have legal personality, limited publicity, tax transparency and, in the case of SLPs, limited liability.

HISTORY

Common law companies

Scots law, like a number of other European legal systems, has long treated juristic persons as forming a major part of that fundamental first chapter of private law, the law of persons. Scots law has long recognised many common law corporations – the Faculty of Advocates, the Society of Writers to the Signet, the Royal Faculty of Procurators in Glasgow – are just three examples from the legal profession of bodies whose status as juristic persons is recognised at common law – as well as more short-lived business associations, such as partnerships, as having legal personality.

Arran Fishing Company

Perhaps the most famous case is that of the Arran Fishing Company: Stevenson v Macnair. In that case the Court of Session appeared to hold that Scots law, following the law set down by a number of European writers on commercial law, recognised at common law a sort of limited partnership – akin to the société en commandite recognised in French law – whereby sleeping partners, who contributed only capital but who were otherwise not engaged in the day-to-day business of the firm, had no liability for the firm's debts beyond their capital contribution.