8th August 2024
Minister for Enterprise, Trade and Employment, Peter Burke TD, has secured government approval to commence drafting of the Miscellaneous Provisions (Registration of Limited Partnerships and Business Names) Bill.
The proposed Bill would repeal and replace the Limited Partnerships Act 1907 and the Registration of Business Names Act 1963. Both Acts require updating to provide for modern business practices for those engaged in business using a business name or the limited partnership model. This will be achieved by additional information and reporting requirements and additional powers for the Registrar, consistent with those that apply to companies. This will ensure the integrity of the Registers are upheld, and there will be enhanced enforcement and compliance provisions within the structure of the limited partnership framework.
The General Scheme introduces transparency provisions, including:
- verification of the identity of partners whether natural or legal persons
- a register of beneficial ownership of partners of a limited partnership incorporated or administered outside the EEA
- a requirement to have at least one EEA-resident general partner for the duration of a limited partnership
- a requirement for an ongoing connection with the State for the duration of a limited partnership, via a registered office or place of business in the State
Limited partnerships and business names registered under the 1907 Act and 1963 Act respectively, will be required to comply with the new registration requirements within twelve months of the notice from the Registrar (to be issued within thirty months of commencement of the new Act).
Minister for Enterprise, Trade and Employment, Peter Burke TD, said:
"This is a very worthwhile and keenly anticipated legislative measure, which I am committed to bringing to fruition at the earliest opportunity. The objective is to ensure that the limited partnership model remains an attractive investment vehicle for legitimate business activity. The proposed legislation also fulfils the commitment made by this government to address concerns raised regarding the transparency of limited partnerships as a result of the 'Pandora Papers' released in 2021.
“The Bill will ensure that Ireland, as a leading investment fund and management company domicile, maintains its competitiveness with other jurisdictions which have already modernised their limited partnership legislation.
“The modern, fit for purpose instrument envisaged will maintain trust in both registers and will be a valuable addition to my department’s ongoing legislative reform initiative, to support Ireland’s reputation as a well-regulated and ‘best-practice’ environment in which to establish and conduct business.”
Minister of State for Trade Promotion, Digital and Company Regulation, Dara Calleary TD,said:
"I am very pleased to welcome this announcement today. I am conscious that the limited partnership model has been a popular investment vehicle here since the early 1900’s, however I am also mindful of the need for an updated legal framework to reflect today’s modern business practices and the public appetite for greater transparency, particularly in light of some concerns raised regarding limited partnerships.
“I welcome that the nature of the limited partnership remains unchanged. This will ensure the capacity of partners to design private contractual agreements to achieve legitimate investment objectives.
"This Bill strikes the right balance between appropriate levels of transparency as to persons and activities behind registered business names and limited partnerships, without creating an undue administrative burden or damaging the legitimate use of either framework.”
Notes for Editors
Background
The Limited Partnership Act 1907 has provided for an attractive investment vehicle in the State for over one hundred years. Limited partnerships are used by a diverse range of domestic and foreign investors for investments ranging from family farms and businesses to private equity, venture capital and unregulated investment funds. A limited partnership is an easily established registered contractual agreement in which at least one general partner has unlimited liability for the debts of the firm and at least one limited partner has liability limited to the extent of their investment and they are restricted from participating in the management of the partnership, or risk losing their limited liability.
The Registration of Business Names Act 1963 requires all individuals, partnerships and companies to register a business name, where they are carrying on business under a name that is not their own name(s). The main objective of the register is to provide public transparency as to the natural or legal person(s) behind a business name.
Public consultations conducted in 2019 by the Department of Enterprise, Trade and Employment found strong support for the retention of both registers and that it is timely to repeal and replace both Acts as they are incompatible with modern business practices, lack transparency and open to potential misuse. The new legislative framework envisaged will ensure that Ireland as one of the world’s leading locations for investment funds and company management service providers will have a limited partnership regime on par with that of other jurisdictions which have modernised their regimes in recent times including the UK, Luxembourg, and New Zealand.
A spike in limited partnership registrations was seen in 2016 and 2017 and was considered to be in reaction to the announcement of Brexit, however since 2018 registrations have reduced to approximately 300 registrations annually. There are over 3,600 limited partnerships and 620,000 business names on the registers, many of which it is suspected may have ceased business but remain on the registers, due to insufficient powers for the Registrar to remove them. The General Scheme provides a suite of powers to the Registrar consistent with those for companies which will ensure that the registers will be reliable and up to date.
In addition to the publication of the General Scheme on 24 July 2024, a Regulatory Impact Analysis (RIA) of the proposed legislation is being published.
ENDS
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