Q&As

Can a private fund limited partnership (PFLP) be put into administration? If so, what is the process?

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Published on LexisPSL on 18/04/2018

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • Can a private fund limited partnership (PFLP) be put into administration? If so, what is the process?
  • Private fund limited partnerships
  • Insolvency of limited partnerships
  • Insolvency of private fund limited partnerships

Can a private fund limited partnership (PFLP) be put into administration? If so, what is the process?

Private fund limited partnerships

From 6 April 2017 with the entry into force of the Legislative Reform (Private Fund Limited Partnerships) Order 2017 (LRO), SI 2017/514, limited partnerships which are collective investment schemes may constitute a private fund limited partnership (PFLP). Like a general partnership, a limited partnership is not a legal entity, but is a relationship that subsists between persons (which includes individuals or corporate entities) carrying on a business (which includes every trade, occupation and profession) in common with a view of profit (see: Limited partnerships—overview and Practice Note: The nature of a limited partnership and its legal framework).

Under the Limited Partnerships Act 1907 (LPA 1907) as subsequently amended by the LRO, SI 2017/514, a limited partnership may only be a PFLP if it satisfies these two conditions:

  1. it is constituted by an agreement in writing—this should be easily satisfied, as a limited partnership agreement is always put in place for private funds, and

  2. it is a collective investment scheme (CIS) for the purpose of section 235 of the Financial Services and Markets Act 2000 (FSMA 2000)—most private funds will be a CIS and even if such a fund has opted to take advantage of an exemption to FSMA 2000, s 235. It is still able to

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