ACRA proposes changes to Limited Partnerships Act to introduce specific provisions for fund limited partnerships and update other provisions for all limited partnerships

27 October 2021

On 4 October 2021, the Accounting and Corporate Regulatory Authority (“ACRA”) issued a consultation paper seeking feedback on proposed amendments to the Limited Partnerships Act (“LP Act”) to make the Singapore limited partnership (“LP”) vehicle more attractive to funds structured as limited partnerships (“Fund LPs”), and to update existing provisions in the LP Act for all types of LPs. The consultation ends on 1 November 2021. 

Amendments specific to Fund LPs

ACRA proposes to introduce a specific definition of “fund limited partnership” and to apply certain provisions of the LP Act only to Fund LPs, including:

  • giving greater certainty and flexibility to general partners in respect of the transfer of a limited partner’s interest by providing that the transfer of a limited partner’s interest, with the general partner’s consent, results in the admission of a replacement limited partner and not a dissolution of the LP;
  • providing that the restrictions on partners in the Partnership Act relating to competing businesses do not apply to limited partners of Fund LPs; and
  • providing that limited partners of Fund LPs do not owe fiduciary duties to other partners or the Fund LP.

The above proposals are subject to the LP agreement which may set out alternative positions.

Amendments applicable to all LPs

ACRA proposes to update and clarify provisions in the LP Act applicable to all LPs, including:

  • expanding the types of legal forms that a general or limited partner can take to include Singapore registered LPs, and foreign LPs with or without a legal personality;
  • expressly providing that a general or limited partner can be acting in the capacity of a trustee or in a representative capacity;
  • providing certainty as to when an assignment of a partnership interest can be made; and
  • allowing limited partners to appoint a third party to wind up the LP if the general partner is unable to do so, subject to the agreement of all partners.

The above proposals are subject to the LP agreement which may set out alternative positions.

Amendments to First Schedule to LP Act

The First Schedule to the LP Act 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 LP which would cause it to lose its limited liability status. ACRA proposes to amend the First Schedule to the LP Act by expanding and clarifying the list of activities limited partners of Fund LPs can engage in without losing their limited liability status.

Re-domiciliation framework for Fund LPs

Finally, ACRA seeks 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.

Reference materials

The following materials are available on the ACRA website www.acra.gov.sg: