The Future of Limited Partnerships: Understanding the Proposed Reforms
In 2019, the Irish Department of Enterprise, Trade and Employment launched a consultation process requesting feedback on the potential for reform of the limited partnership structure that can be established in Ireland under the Limited Partnerships Act 1907 (Act). Following the conclusion of the consultation process, the Department has recently published the General Scheme of Registration of Limited Partnerships and Business Names Bill 2024 (Bill). Many of the responses to the consultation had suggested reforms and modernisation of areas to facilitate greater use as a private fund structure, these do not feature in the Bill.
This Bill is yet to be subject to parliamentary scrutiny and is very likely to be amended before it gets passed into legislation by the Irish parliament.
The Bill, in its current form, imposes additional obligations on a limited partnership and its general partner (GP) including the following.
1. The maintenance by the GP of a Register of Beneficial Ownership of all partners who are incorporated or administered outside of the European Economic Area (EEA) and of the beneficial owners of these non-EEA partners.
Limited partnerships have previously fallen outside the scope of beneficial ownership register rules, so this is a new obligation for GPs. The register will incorporate information on each non-EEA partner, including their name, legal form, registered office address and registration number, as well as information on each beneficial owner, including their name, date of birth, nationality and residential address. The information will not be publicly available but may be shared with relevant authorities such as Revenue, An Garda Síochána and the Corporate Enforcement Authority when requested.
2. The filing of an Annual Confirmation Statement Requirement with the Companies Registration Office (CRO) confirming that the following registered information remains consistent and true:
a. the membership of the limited partnership;
b. the activity of the limited partnership;
c. the amounts invested by the partners in the limited partnership;
d. the registered business address;
e. the email address of the limited partnership;
f. the term or duration (if any) of the limited partnership.
This would not replace the requirement to file notices of changes as they occur, or the requirement for qualifying partnerships to file annual financial accounts.
3. A limited partnership must maintain an ongoing connection with Ireland via an Irish registered office or principal place of business (PPOB).
4. The application to the CRO for registration of a limited partnership will need to demonstrate that the limited partnership will carry on activity in Ireland (there is a similar requirement for companies incorporated in Ireland). Information must also be provided on the principal activity of the limited partnership (rather than the general nature of its business, as is currently the case). In identifying the principal activity of a limited partnership, limited partnerships will be required to use the relevant classification system currently used by companies called “NACE”, the common basis for statistical classifications of economic activities within the European Union.
5. At least one GP of a limited partnership must be an EEA resident or have an EEA PPOB for the life of the limited partnership.
6. Limited partnerships must notify the CRO of changes to registered information within 14 days (in contrast to the current obligation to notify the CRO of changes within 7 days under the Act). Failure to do so could result in the limited partnership’s removal from the register.
The CRO will provide notice to all GPs of a limited partnership of their obligation to re-register their limited partnership within 12 months of receipt of the relevant notice. Existing limited partnerships will be expected to comply with the new registration requirements and additional obligations outlined above. Failure to comply within twelve months of the CRO’s notice will result in the initiation of the removal of the limited partnership from the register.
Next Steps
The Bill will now pass through the Irish legislative process. We will keep you advised of changes to the Bill’s provisions during this process.
If you have any queries on the above or would like to discuss any of the issues raised, please contact John Aherne, Niall Crowley, any of the Asset Management & Investment Funds team or your usual William Fry contact.
Contributed by John Aherne and Niall Crowley