This document is a partnership agreement, designed for use by an incorporated limited partnership.
Incorporated limited partnerships
Incorporated limited partnerships are:
· partnerships formed by individuals, corporations and partnerships involved in venture capital projects in Australia; and
· registered and regulated by provisions of applicable state or territory partnership legislation which provides for the creation of such partnerships.
Practitioners should note that, to date, Western Australia has not made provision for this type of partnership.
Incorporated limited partnerships are formed by registration. Unlike other partnerships, once formed, they become legal entities that that exist separately from their partners. This means an incorporated limited partnership has the legal capacity to carry on the partnership business, as well as the power to enter contracts, acquire liabilities, and to hold real and personal property. The fact that the partnership exists separately from its members provides further benefits, including perpetual succession, and the right to sue and be sued in the firm name.
Setting up an incorporated limited partnership
In order to apply for registration as an incorporated limited partnership, a partnership must be registered under Part 2 of the Venture Capital Act 2002 (Cth), or must intend to apply for registration under that Part.
An incorporated limited partnership must be governed by a written partnership agreement which binds all the partners. Membership of incorporated limited partnerships must include at least 1, but not more than 20, general partners, and at least 1 limited partner. The limited partners cannot take part in the management of the partnership.
As an incorporated limited partnership is an incorporated entity, specific procedures must be followed in order to wind up the partnership. An incorporated limited partnership may be wound up voluntarily by the partners in accordance with the partnership agreement, or alternatively, if the partners pass a special resolution resolving to do so.
Using this precedent
This precedent sets out the basic terms that practitioners would expect to find in an incorporated limited partnership agreement.
However, given that this type of partnership has been specifically set up for venture capital projects, it is likely that the customised agreement would be far more complex, and take into account the type of venture capital transactions to be carried out by the partnership.
This document has been authored for Lexis Nexis by Michael Heraghty, Partner, TressCox Lawyers, Rosemarie Ryan, Barrister and Elise Margow, Principal Legally Speaking
This document is prepared with the assistance of Specialist Editor Stephen Newman, Executive Counsel, Ponte Earle.