Private Fund Limited Partnerships introduced

The Legislative Reform (Private Fund Limited Partnerships) Order 2017 comes into force on 6 April and amends the Limited Partnerships Act to introduce the “private fund limited partnership”. Treasury has introduced the Order despite industry expectation that it would wait for the outcome of a BEIS consultation on how LPs could be used for criminal activity, so it could assess whether to make any changes. The Order sets out procedural requirements and gives an indication of activities limited partners can be involved in without becoming involved in the management of the fund. It also confirms that limited partners are not required to contribute capital or property to the LPFP. The new structure was designed to help funds structured as limited partnerships and not intended for retail investors by reducing some of the administrative burdens LPs face. When the general partner applies for designation of a PFLP it must confirm, among other things, that the LP meets the private fund conditions.