Limited Partnerships Act 1907

[F1 Application of other laws to limited partnerships] U.K.

Textual Amendments

F1 S. 6 cross-heading inserted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by Economic Crime and Corporate Transparency Act 2023 (c. 56), s. 219(1)(2)(b), Sch. 5 para. 4

6 Modifications of general law in case of limited partnerships. U.K.

(1) A limited partner shall not take part in the management of the partnership business, and shall not have power to bind the firm:

Provided that a limited partner may by himself or his agent at any time inspect the books of the firm and examine into the state and prospects of the partnership business, and may advise with the partners thereon.

If a limited partner takes part in the management of the partnership business he shall be liable for all debts and obligations of the firm [F2 (including debts and obligations incurred in accordance with section 38 of the Partnership Act 1890)] incurred while he so takes part in the management as though he were a general partner.

[F3 [F4 (1A) Section 6A (private fund limited partnerships: actions by limited partners) makes provision, in respect of limited partners in private fund limited partnerships, supplementing subsection (1).]]

[F3 (1A) Section 6A (actions by limited partners) makes provision supplementing subsection (1).]

(2) A limited partnership shall not be dissolved by the death [F5 or bankruptcy] of a limited partner [F6 , and the lunacy of a limited partner shall not be a ground for dissolution of the partnership by the court unless the lunatic’s share cannot be otherwise ascertained and realised].

[F7 (2A) A limited partnership shall not be dissolved under section 33(1) of the Partnership Act 1890 by the bankruptcy of a partner.

(2B) A limited partnership is dissolved if—

(a) it ceases to have any general partners,

(b) it ceases to have any limited partners, or

(c) each general partner is either insolvent or disqualified under the directors disqualification legislation (see section 8J(3)), irrespective of whether they became insolvent or disqualified before or after this subsection comes into force.]

[F8 (3) In the event of the dissolution of a limited partnership [F9 , other than a private fund limited partnership,] its affairs shall be wound up by the general partners unless the court otherwise orders.]

[F10 [F11 (3A) If a private fund limited partnership is dissolved at a time when the partnership has at least one general partner, the affairs of the partnership must be wound up by those who are general partners at that time, subject to any express or implied agreement between the partners as to the winding up of the affairs of the partnership.

(3B) If a private fund limited partnership is dissolved at a time when the partnership does not have a general partner, the affairs of the partnership must be wound up by a person who is not a limited partner, appointed by those who are limited partners at that time, subject to any express or implied agreement between them as to the winding up of the affairs of the limited partnership.]

[F10 (3A) If a limited partnership is dissolved at a time when the partnership has at least one general partner who is—

(a) solvent, and

(b) not disqualified under the directors disqualification legislation,

the general partners at that time who are solvent and are not so disqualified must either wind up the partnership’s affairs or take all reasonable steps to ensure that its affairs are wound up by a person who is not a partner at that time.

(3B) If a limited partnership is dissolved at a time when the partnership does not have a general partner who is—

(a) solvent, and

(b) not disqualified under the directors disqualification legislation,

the limited partners at that time who are solvent must take all reasonable steps to ensure that the partnership’s affairs are wound up by a person who is not a limited partner at that time.

(3BA) For enforcement of the duties under subsections (3A) and (3B) see section 29.]

[F12 (3C) Except in the phrase “a person who is not a limited partner” in subsection (3B), references in subsections (3A) and (3B) to partners do not include a partner who is insolvent.]

[F13 (3D) Subsections (3A) and (3B) have effect subject to any order of the court as to the winding up of the affairs of the partnership.]

[F13 (3D) Subsections (3A) and (3B) have effect subject to any order of a court as to the winding up of the affairs of the partnership and any award of sequestration of the partnership’s estate under the Bankruptcy (Scotland) Act 2016.]]

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F14

(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;

(b) A limited partner may, with the consent of the general partners, assign his share in the partnership, and upon such an assignment the assignee shall become a limited partner with all the rights of the assignor;

(c) The other partners shall not be entitled to dissolve the partnership by reason of any limited partner suffering his share to be charged for his separate debt;

(d) A person may be introduced as a partner without the consent of the existing limited partners;

(e) A limited partner shall not be entitled to dissolve the partnership by notice.

[F15 (f) A limited partner in a private fund limited partnership is not subject to the duties in—

(i) section 28 of the Partnership Act 1890 (duty of partners to render accounts, etc), or

(ii) section 30 of that Act (duty of partner not to compete with firm).]

[F16 (6) Section 36(1) of the Partnership Act 1890 (rights of persons dealing with firm against apparent members of firm) does not apply where a partner in a private fund limited partnership ceases to be a member of the firm.]

Textual Amendments

F2 Words in s. 6(1) inserted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 129(3)(a), 219(1)(2)(b)

F3 S. 6(1A) substituted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 129(3)(b), 219(1)(2)(b)

F4 S. 6(1A) inserted (6.4.2017) by The Legislative Reform (Private Fund Limited Partnerships) Order 2017 (S.I. 2017/514), arts. 1(2), 2(4)(a)

F5 Words in s. 6(2) omitted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by virtue of Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 129(3)(c), 219(1)(2)(b)

F6 Words in s. 6(2) omitted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by virtue of Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 130(2), 219(1)(2)(b)

F7 S. 6(2A)(2B) inserted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 129(3)(d), 219(1)(2)(b)

F8 S. 6(3) omitted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by virtue of Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 129(3)(e), 219(1)(2)(b)

F9 Words in s. 6(3) inserted (6.4.2017) by The Legislative Reform (Private Fund Limited Partnerships) Order 2017 (S.I. 2017/514), arts. 1(2), 2(4)(b)

F10 S. 6(3A)-(3BA) substituted for s. 6(3A)(3B) (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 129(3)(f), 219(1)(2)(b)

F11 S. 6(3A)-(3D) inserted (6.4.2017) by The Legislative Reform (Private Fund Limited Partnerships) Order 2017 (S.I. 2017/514), arts. 1(2), 2(4)(c)

F12 S. 6(3C) omitted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by virtue of Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 129(3)(g), 219(1)(2)(b)

F13 S. 6(3D) substituted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 134(2), 219(1)(2)(b)

F14 S. 6(4) repealed by Companies (Consolidation) Act 1908 (c. 69) , Sch. 6 Pt. I

F15 S. 6(5)(f) inserted (6.4.2017) by The Legislative Reform (Private Fund Limited Partnerships) Order 2017 (S.I. 2017/514), arts. 1(2), 2(4)(d)

F16 S. 6(6) inserted (6.4.2017) by The Legislative Reform (Private Fund Limited Partnerships) Order 2017 (S.I. 2017/514), arts. 1(2), 2(4)(e)

Modifications etc. (not altering text)

C1 S. 6 modified (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), regs. 1, 16(4) (with reg. 24)

C2 Reference to “person of unsound mind” to be substituted for reference to “lunatic” in s. 6(2): Mental Treatment Act 1930 (c. 23) , s. 20(5)

[F17 6A. [F18 Private fund limited partnerships:] actions by limited partners U.K.

[F19 (A1) A limited partner in a limited partnership is not to be regarded as taking part in the management of the partnership business for the purposes of section 6(1) merely because the limited partner appoints a person to wind up the limited partnership pursuant to section 6(3B).]

(1) A limited partner in a private fund limited partnership is not to be regarded as taking part in the management of the partnership business for the purposes of section 6(1) merely because the limited partner takes any action listed in subsection (2).

(2) The actions are—

(a) taking part in a decision about—

(i) the variation of, or waiver of a term of, the partnership agreement or associated documents;

(ii) whether the general nature of the partnership business should change;

(iii) whether a person should become or cease to be a partner;

(iv) whether the partnership should end or the term of the partnership should be extended;

[F20 (b) appointing a person to wind up the partnership pursuant to section 6(3B);]

(c) enforcing an entitlement under the partnership agreement, provided that the entitlement does not involve a limited partner taking part in the management of the partnership business;

(d) entering into, or acting under, a contract with the other partners in the partnership, provided that the contract does not require, or the action under the contract does not involve, a limited partner taking part in the management of the partnership business;

(e) providing surety or acting as guarantor for the partnership;

(f) approving the accounts of the partnership;

(g) reviewing or approving a valuation of the partnership’s assets;

(h) discussing the prospects of the partnership business;

(i) consulting or advising with a general partner or any person appointed to manage or advise the partnership about the affairs of the partnership or about its accounts;

(j) taking part in a decision regarding changes in the persons responsible for the day-to-day management of the partnership;

(k) acting, or authorising a representative to act, as a director, member, employee, officer or agent of, or a shareholder or partner in—

(i) a general partner in the partnership; or

(ii) another person appointed to manage or advise the partnership in relation to the affairs of the partnership,

provided that this does not involve a limited partner taking part in the management of the partnership business or authorising a representative to take any action that would involve taking part in the management of the partnership business if taken by a limited partner;

(l) appointing or nominating a person to represent the limited partner on a committee, authorising such a person to take any action in that capacity that would not involve taking part in the management of the partnership business if taken by the limited partner, or revoking such an appointment or nomination;

(m) taking part in a decision about how the partnership should exercise any right as an investor in another collective investment scheme as defined in section 8D(4) (“master fund”), provided that the partnership’s exercise of the right would not cause the partnership to be liable for the debts or obligations of the master fund beyond the amount contributed, or agreed to be contributed, by the partnership to the master fund;

(n) taking part in a decision approving or authorising an action proposed to be taken by a general partner or another person appointed to manage the partnership, including in particular a proposal in relation to—

(i) the disposal of all or part of the partnership business or the acquisition of another business by the partnership;

(ii) the acquisition or disposal of a type of investment or a particular investment by the partnership;

(iii) the exercise of the partnership’s rights in respect of an investment;

(iv) the participation by a limited partner in a particular investment by the partnership;

(v) the incurring, extension, variation or discharge of debt by the partnership;

(vi) the creation, extension, variation or discharge of any other obligation owed by the partnership.

(3) The fact that a decision that affects or relates to a private fund limited partnership involves an actual or potential conflict of interest is not of itself a reason to regard a limited partner in the partnership who takes part in the decision as taking part in the management of the partnership business for the purposes of section 6(1).

(4) Nothing in this section—

(a) limits the circumstances in which a limited partner in a [F21 private fund] limited partnership is not to be regarded as taking part in the management of the partnership business; [F22 or]

[F22 (b) affects the circumstances in which a limited partner in a limited partnership that is not a private fund limited partnership may, or may not, be regarded as taking part in the management of the partnership business.]]

[F23 (5) Nothing in subsections (1) to (3) affects the circumstances in which a limited partner in a limited partnership that is not a private fund limited partnership may be regarded as taking part in the management of the partnership business.]

Textual Amendments

F17 S. 6A inserted (6.4.2017) by The Legislative Reform (Private Fund Limited Partnerships) Order 2017 (S.I. 2017/514), arts. 1(2), 2(5)

F18 Words in s. 6A heading omitted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by virtue of Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 129(4)(a), 219(1)(2)(b)

F19 S. 6A(A1) inserted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 129(4)(b), 219(1)(2)(b)

F20 S. 6A(2)(b) omitted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by virtue of Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 129(4)(c), 219(1)(2)(b)

F21 Words in s. 6A(4)(a) omitted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by virtue of Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 129(4)(d)(i), 219(1)(2)(b)

F22 S. 6A(4)(b) and word omitted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by virtue of Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 129(4)(d)(ii), 219(1)(2)(b)

F23 S. 6A(5) inserted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 129(4)(e), 219(1)(2)(b)

7 Law as to private partnerships to apply where not excluded by this Act. U.K.

Subject to the provisions of this Act, the M1 Partnership Act 1890, 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 last-mentioned Act, shall apply to limited partnerships.

Modifications etc. (not altering text)

C3 S. 7 modified (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), regs. 1, 16(5) (with reg. 24)

Marginal Citations

M1 1890 c. 39 .

[F24 7A Application of company law U.K.

(1) The Secretary of State may by regulations—

(a) make provision in relation to limited partnerships that corresponds or is similar to any provision relating to companies or other corporations made by or under, or capable of being made under, any Act;

(b) provide for any such provision which would otherwise have effect in relation to limited partnerships not to apply to them or to apply to them with such modifications as appear appropriate.

(2) Regulations under subsection (1) may amend or repeal provision made by this Act, the Partnership Act 1890 or the Companies Act 2006.

(3) The provision which may be made by regulations under subsection (1) by virtue of section 38(1) includes provision amending, repealing or revoking provision made by or under any Act, whenever passed or made.

(4) Regulations under subsection (1) are subject to the negative resolution procedure if they only make provision that corresponds or is similar to provision made or capable of being made by regulations subject to the negative resolution procedure.

(5) Any other regulations under subsection (1) are subject to the affirmative resolution procedure.]

Textual Amendments

F24 S. 7A inserted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 149, 219(1)(2)(b)