The Department of Enterprise, Trade and Employment has published the General Scheme of the Registration of Limited Partnerships and Business Names Bill 2024, containing proposals to reform the Limited Partnerships Act 1907.  It consulted on possible reforms in January 2019.

Below are the key proposals from the General Scheme (which may be amended before the Bill itself is formally published).

REGISTRATION

• At the moment, when a limited partnership (LP) is registered, it can then move its principal place of business (PPOB) outside Ireland.  The General Scheme proposes that LPs be required to maintain an ongoing connection with Ireland via an Irish registered office or PPOB. The General Scheme refers in different places to an LP having an office and PPOB, or an office or PPOB – the exact requirement should be clarified when the Bill itself is published.
• Applicants will need to demonstrate that the LP will carry on an economic activity in Ireland and that at least one general partner (GP) will be EEA-resident or have an EEA PPOB for the life of the LP. Information must be provided on the principal activity of the LP (rather than the general nature of its business, as is currently the case).
• There is formal confirmation that a body corporate can be a GP in an LP (reflecting the view in practice).
• An LPs name must end with ‘limited partnership’ / ‘lp’ / ‘l.p.’ (or Irish equivalent).
• LP certificates issued by the Registrar would clarify that an LP is a business agreement, not a separate legal entity. Registration as an LP would take effect from the date on the certificate of registration, and not earlier (a number of respondents to the 2019 consultation had suggested that, rather than failure to register rendering an LP a general partnership, the consequences should instead be dealt with by way of (for example) penalties against the GP, but this suggestion is not reflected in the General Scheme).
• LPs must notify the Registrar of changes to registered information within 14 days. Failure to do so could lead to the removal of the LP from the register (rendering it a general partnership with the consequent loss of limited liability protection for the limited partners).

TRANSITION PERIOD

When the new legislation is commenced, existing LP registrations will be protected.  The Registrar will then have 30 months to:

• Identify and remove 1907 LPs that have ceased to operate from the register.
• Notify existing 1907 LPs of the steps required to re-register or remove themselves from the register. An LP will then have 12 months to re-register once it receives a notice, or the Registrar may remove it from the register.

REPORTING

The General Scheme proposes that each LP file an Annual Confirmation Statement by 1 July each year confirming its registered details.  This would not replace the requirement to file notices of changes as they occur, or the requirement for qualifying LPs to file annual financial accounts.

STRIKE-OFF

• An LP would be able to apply to be removed from the register.
• The Registrar would also be able to strike an LP from the register via a staged removal process which would give an LP several opportunities to rectify any issues.  Key compliance points for LPs will be the requirement to have a registered office / PPOB in the State; the Annual Confirmation Statement requirement; and the requirement to disclose beneficial ownership information (see below).  If an LP is struck-off, there would be a process for restoring it if it regularises its affairs.

BENEFICIAL OWNERSHIP

The General Scheme proposes a Register of Beneficial Ownership of partners who are incorporated or administered outside the EEA.  That information must be provided within 6 months of registration of a new LP under the new legislation, or within 12 months of a 1907 Act partnership receiving a re-registration notice from the Registrar (see above).

OTHER POINTS TO NOTE

Some key suggestions made to the Department in response to its 2019 consultation, which have not been reflected in the General Scheme, include:

• In line with the approach taken in the UK under the Legislative Reform (Private Fund Limited Partnerships) Order 2017), introducing a specific category of limited partnerships in which limited partners can avail of a ‘white-list’ of permitted actions that they can take without risking loss of their limited liability.
• Removing the requirement for limited partners’ capital contributions to be specified in documents filed with the Registrar, and / or completely removing the requirement for limited partners to make capital contributions.
• Removing the requirement for a limited partner to return any capital contribution withdrawn from the LP before the end of its term.
• Removing the limit on the number of limited partners (20) (notwithstanding that it was removed some time ago in the UK and in Northern Ireland).