The Legislative Reform (Limited Partnerships) Order 2009 was made on the 21st of July, and came into force on the 1st of October. The reforms to limited partnerships that it put in place will apply to all limited partnerships whose registration applications are received after that date.

While limited partnerships were not particularly popular when they were first introduced, they have since become the first choice for many private equity funds and other close-ended institutional investment funds.

They are useful in that they provide limited liability for investors, and are transparent for tax purposes in the same way that general partnerships are. Also, the statutory and regulatory regime which governs them is relatively light, especially when compared to companies and other fund vehicles.

The Order clarifies the registration process for limited partnerships by the Registrar of Companies, and makes two main changes to the legislation surrounding them:

• All limited partnerships are now required to include “Limited Partnership”, “LP” or the equivalent at the end of their names.
• The Registrar of Companies is now required to issue a certificate of registration as conclusive evidence that a limited partnership came into existence on the date of registration.

These changes to partnership law are the first in a series of reforms that the Government plans to implement in a modular fashion in coming years.

They arose from a consultation that took place in August 2008, and, although it is not yet clear which of the ideas proposed in the consultation will eventually be implemented, one of the other proposals included a “whitelist” of permitted activities for limited partners, which would provide much-needed guidance in this often misunderstood area.

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