3.—(1) From 4th May 2009, limited partnerships may be formed in accordance with and subject to the conditions of this Act.
(2) A limited partnership must consist of —
(a)
one or more general partners; and
(b)
one or more limited partners.
(3) A general partner shall be liable for all debts and obligations of the limited partnership incurred while he is a general partner in the limited partnership.
(4) Subject to sections 6(2) and 10, a limited partner shall not be liable for the debts or obligations of the limited partnership beyond the amount of his agreed contribution, solely by reason of his being a limited partner of the limited partnership.
(5) An individual or a corporation may be a general partner or a limited partner.
[UK LPA, s. 4(1), (2) and (4); LLPA, s. 8(2); PA, s. 9]
Law as to private partnerships to apply unless excluded by this Act
4.—(1) Subject to the provisions of this Act, the Partnership Act (Cap. 391) and the rules of equity and of common law applicable to partnerships (except so far as they are inconsistent with the express provisions of the Partnership Act) shall apply to limited partnerships.
(2) In subsection (1), the reference to partnerships shall not include limited liability partnerships.
[UK LPA, s. 7]
Default rules on relationship of partners
5. Subject to any agreement, expressed or implied, between the partners —
(a)
any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the general partners; and
(b)
a person may become a partner without the consent of the existing limited partners.
[UK LPA, s. 6(5)]
Limited partner not to take part in management of limited partnership
6.—(1) Subject to subsections (2) to (4), a limited partner shall not take part in the management of the limited partnership, and shall not have power to bind the limited partnership.
(2) If a limited partner takes part in the management of the limited partnership, he shall be liable for all debts and obligations of the limited partnership incurred while he so takes part in the management as though he were a general partner.
(3) A limited partner shall not be regarded as taking part in the management of the limited partnership for the purposes of this section solely by reason of his acting or attempting to act in one or more of the capacities specified in the First Schedule.
(4) For the avoidance of doubt, the enumeration of acts in the First Schedule shall not —
(a)
be taken to be exhaustive; or
(b)
create rights or powers of limited partners.
[Delaware LP, s. 17-303(b); Jersey LP Law, Art. 19(5); UK LPA, s. 6(1)]
Distributions to limited partner
7.—(1) Subject to the partnership agreement, a limited partner may during the continuance of the partnership, with the approval of the general partners —
(a)
increase or reduce the amount of his agreed contribution; and
(b)
draw out or receive back his contributions, or any part thereof.
(2) Notwithstanding subsection (1), the limited partner shall be liable to refund as partnership property of the firm any distribution of capital or profits of the firm made to him if —
(a)
every general partner at the time of the distribution (referred to in this subsection as every partner) was insolvent at the time of the distribution or became insolvent as a result of the distribution;
(b)
the limited partner knew or ought to have known at the time of the distribution that every partner was insolvent or would become insolvent as a result of the distribution; and
(c)
every partner is adjudicated bankrupt or is ordered to be wound up within one year after the date of the distribution.
(3) Notwithstanding subsection (1), an agreement to reduce the amount of the agreed contribution of a limited partner shall be of no effect if —
(a)
every general partner at the time of the agreement (referred to in this subsection as every partner) was insolvent at the time of the agreement or became insolvent as a result of the agreement;
(b)
the limited partner knew or ought to have known at the time of the agreement that every partner was insolvent or would become insolvent as a result of the agreement; and
(c)
every partner is adjudicated bankrupt or is ordered to be wound up within one year after the date of the agreement.
Dissolution of limited partnership
8.—(1) Notwithstanding section 32 of the Partnership Act (Cap. 391), a limited partner shall not be entitled to dissolve the partnership by notice.
(2) Notwithstanding section 33(1) of the Partnership Act, a limited partnership shall not be dissolved by the death, dissolution, bankruptcy or liquidation of a limited partner.
(3) Notwithstanding section 33(2) of the Partnership Act, the other partners shall not be entitled to dissolve the partnership by reason of any limited partner suffering his share of the partnership property to be charged for his separate debt.
(4) Subsections (1), (2) and (3) shall apply subject to any agreement expressed or implied between the partners of a limited partnership.
(5) The mental incapacity of a limited partner shall not be a ground for dissolution of the partnership by the court under section 35 of the Partnership Act unless the mentally incapacitated person’s share cannot be otherwise ascertained and realised.
(6) In the event of the dissolution of a limited partnership, its affairs shall be wound up by the general partners unless the court otherwise orders.
