On April 6, the Legislative Reform (Private Fund Limited Partnerships) Order 2017 (LRO), implementing changes to the Limited Partnerships Act 1907, introduced a new subcategory of limited partnership known as the private fund limited partnership (PFLP).
As previously reported in the Corporate & Financial Weekly Digest editions of February 24, 2017, and August 7, 2015, the introduction of the PFLP has been designed to reduce the administrative and financial burdens that impact funds established in the United Kingdom under the current limited partnership (LP) structure, thereby seeking to make the United Kingdom a more attractive jurisdiction for funds.
The LRO has not been substantively amended since the draft form was released in January, meaning that the key provisions relating to the non-exhaustive “white-list” of activities a limited partner is permitted to undertake without being deemed to be involved in the management of the LP—more relaxed rules on winding up; the removal of requirements to register certain changes to a PFLP, which would otherwise apply to an LP; and the removal of any prohibition on the withdrawal of capital contributions from PFLPs—remain intact.
New and existing English LPs that qualify as collective investment schemes, as defined in the Financial Services and Markets Act 2000, will be able to elect to become PFLPs using the new forms LP7 and LP8 contained in the LRO. Partnership agreements of existing English LPs are likely to require some consequent amendments to be made to correspond with the registration of the relevant partnership as a PFLP.
The text of the LRO is available here.