Public Consultation on Proposed Amendments to the Limited Partnerships Act

Accounting and Corporate Regulatory Authority

Consultation Period: 04 Oct 2021 - 01 Nov 2021

Status: Closed

Detailed Description

Public Consultation on Proposed Amendments to the Limited Partnerships Act

Introduction

The Accounting and Corporate Regulatory Authority (ACRA) invites the public to provide feedback on proposed amendments to the Limited Partnerships Act (“LP Act”).  The public consultation exercise will run from 4 October 2021 to 1 November 2021.

2. The proposed amendments to the LP Act seek to make the limited partnership vehicle more attractive to fund limited partnerships, and to update existing provisions in the LP Act for all types of limited partnerships. 

Background

3. To ensure that the regulatory framework for limited partnerships keeps pace with the needs of businesses, and to further strengthen Singapore’s position as a leading fund management and domiciliation hub, ACRA and the Monetary Authority of Singapore (MAS) sought feedback from stakeholders in 2020 on the use of limited partnerships as fund vehicles. From the feedback received, ACRA has reviewed the LP Act and developed a set of proposed amendments to the LP Act. 

Proposed amendments to the LP Act

Fund limited partnerships

4. ACRA is proposing to introduce a specific definition for a “fund limited partnership” and to apply certain provisions of the LP Act only to fund limited partnerships (“fund LPs”). Existing limited partnerships which meet the requisite definition can apply to be re-designated as fund LPs. Some of the proposed provisions and amendments which are being introduced which will apply only to fund LPs are as follows:

     (a) fund LPs will be given greater certainty and flexibility in respect of the transfer of a limited partner’s interest, such that the transfer of a limited partner’s interest, with the consent of the general partner, will result in a replacement of the limited partner and will not amount to a dissolution of the partnership. 

     (b) The restrictions in sections 28 and 30 of the Partnership Act in relation to competing businesses, will not apply to limited partners of fund LPs. 

     (c) Limited partners of fund LPs will not owe fiduciary duties to other partners or the limited partnership.

5. The above proposals are subject to the limited partnership agreement which may set out alternative positions.

Amendments applicable to all limited partnerships

6. ACRA is also proposing amendments to update and clarify the provisions in the LP Act for all limited partnerships. These include the following:

     (a) Expanding the legal forms that a general or limited partner can take to include registered limited partnerships and foreign limited partnerships with or without a legal personality.

     (b) Clarifying that a general or limited partner can be acting in the capacity of a trustee or in a representative capacity.

     (c) Clarifying when an assignment of partnership interest can validly be made.

     (d) Allowing limited partners to appoint third parties to wind up the limited partnership if the general partner is unable to do so, subject to the agreement of all partners.

Amendments to the First Schedule to the LP Act

7. During the previous consultation, ACRA and MAS sought comments on whether any changes should be made to the scope of the activities in the First Schedule to the LP Act.  The First Schedule sets out the activities which if undertaken by a limited partner, would not, in and of itself, result in the limited partner being regarded as taking part in the management of the limited partnerships. A limited partner who takes part in the management of the limited partnership is liable for all debts and obligations of the limited partnership incurred while he so takes part in the management, as though he were a general partner.  

8. ACRA is proposing to amend the First Schedule:

     (a) To broaden the list of activities which limited partners of fund LPs can engage in without losing their limited liability status; and
     (b) To clarify the existing list of activities which limited partners of all limited partnerships can engage in without losing their limited liability status.

Re-domiciliation

9. ACRA would also like to seek views on whether there is a need or demand to introduce a re-domiciliation framework for fund LPs, similar to the re-domiciliation regime for companies and variable capital companies.

10. For more details on the proposed amendments and the outcome of the selective consultation, please refer to the following documents:

     (a) Annex A: List of proposed amendments to the LP Act.
     (b) Annex B: List of proposed amendments to the First Schedule to the LP Act (safe harbour activities).
     (c) Annex C: List of feedback received during the previous consultation and considered, but for which no proposals for amendments to the LP Act have been made.

Public consultation details

11. The public can access the consultation documents on ACRA’s website (www.acra.gov.sg) and the REACH consultation portal (www.reach.gov.sg).  Members of the public can submit their comments via email to “ACRA_Public_Consultation@acra.gov.sg”, by indicating “LP Act Review” in the subject line.

12. ACRA will publish a summary of the comments received. The summary will not disclose the identity of the respondents and will not separately address or acknowledge every comment received. 

Documents for download

•  Annex A: List of proposed amendments to the LP Act.
•  Annex B: List of proposed amendments to the First Schedule to the LP Act (safe harbour activities).
•  Annex C: List of feedback received during the previous consultation and considered, but for which no proposals for amendments to the LP Act have been made.