On 23 July 2015, HM Treasury published a consultation paper inviting comments on proposed amendments to the Limited Partnership Act 1907. The amendments focus on maintaining the use of UK LPs as the market standard structure for European private equity and venture capital funds. This paper addresses the government's commitment to revise the act with a view to eliminate redundant legal complexity and administrative burden.
HM Treasury has also published the Legislative Reform (Limited Partnerships) Order 2015 for consultation. This paper contains several amendments that will be applicable to a UK LP that is a collective investment scheme that is not regulated by the Financial Conduct Authority but falls under the definition of section 235 of the Financial Services and Markets Act 2000. The proposed amendments include:
- granting the Registrar of Companies power to strike off entries for inactive private fund LPs;
- removing the requirement for limited partners in private funds to make a capital contribution and removing the liability of limited partners in private funds for capital contributions that have been withdrawn;
- eliminating the requirement for a court order if partners in a private funds agree among themselves who should wind up the partnership; and
- eliminating the duties of limited partners in private funds to render accounts and information to other partners and to account for profits made in competing businesses.
While the government has affirmed that it will continue to explore the possibility of allowing funds to elect to have a separate legal personality, it will not be possible to do this in the legislative reform order.
Copies of the consultation papers are available here:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/
file/447458/Proposal_on_using_LRO_for_LimPart_condoc.pdf ; and
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447428/Draft_LRO_Stat_Instr..pdf
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