Government responses: Apprenticeship, Skills, Children and Learning Bill and Coroners and Justice Bill - Delegated Powers and Regulatory Reform Committee Contents


Draft Legislative Reform (Limited Partnerships) Order 2009

3.  This draft Legislative Reform Order (LRO) on limited partnerships has been laid under the Legislative and Regulatory Reform Act 2006 ("the 2006 Act"), together with an Explanatory Document (ED)[1] by the then Department for Business, Enterprise and Regulatory Reform (BERR).

4.  Limited partnerships were introduced by the Limited Partnerships Act 1907 ("the 1907 Act"). In this type of partnership, the liability of one or more of the partners is limited, provided the partnership also contains at least one general partner with unlimited liability.

Overview of the proposal

5.  The draft Order makes two main changes, by amending the 1907 Act. These are:

  • making a certificate of registration conclusive evidence that a limited partnership has been formed at the date shown on the certificate. The intention of this change is to end the current uncertainty about the formation of limited partnerships. At present a limited partnership comes into existence when the certificate is issued, but this may not be the case if the partnership does not start doing business straight away. The partnership could therefore be construed as being general and not limited, the effect being that none of the partners would have limited liability. Although people have found ways around the uncertainty, the problem is pertinent at the moment as limited partnerships are frequently used for investment funds where significant amounts of money are involved; and
  • requiring all new limited partnerships to include "Limited Partnership" or "LP" or equivalent at the end of their names. The intention of this change is to reduce the burden on third parties who at present may need to take steps to find out if a partnership is general or limited.

6.  As required, the Department has consulted on the proposals contained in the LRO (ED, pp 4 - 6). In fact, a much larger number of proposals were originally consulted on. Following this original consultation it was decided to bring forward only these two, broadly non-contentious, proposals in the present LRO, and give further consideration to all the other elements.

7.  The Committee is satisfied that this LRO meets the tests set out in the 2006 Act and is not otherwise inappropriate for the LRO procedure. The Committee is also content with the Minister's proposal that the affirmative procedure should apply.



1   http://www.opsi.gov.uk/si/si2009/draft/ukdsi_9780111480014_en_1 Back


 
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