Reviewing the tax aspects of a private equity fund limited partnership agreement
Produced in partnership with Catherine Sear of Proskauer Rose
Reviewing the tax aspects of a private equity fund limited partnership agreement

The following Tax practice note produced in partnership with Catherine Sear of Proskauer Rose provides comprehensive and up to date legal information covering:

  • Reviewing the tax aspects of a private equity fund limited partnership agreement
  • Where to start
  • General provisions
  • Commitments and drawdowns
  • Appointment of the manager
  • Expenses and fees
  • Distribution provisions
  • Allocations provisions
  • Tax payments provisions
  • Tax information—requirements for GP to provide information
  • More...

This Practice Note sets out what to look for when reviewing a private equity fund limited partnership agreement (LPA) from a tax perspective. It is drafted primarily for a fund set up as an English limited partnership, but to a large degree many of the comments can also be applied to the other common fund jurisdictions, such as Scotland, the Cayman Islands, the Channel Islands and Luxembourg.

This Practice Note is aimed at a tax lawyer who has been asked to review an LPA when acting for the general partner (GP) and fund manager. It focuses on the main tax aspects of the agreement. As with any agreement, it should be stressed that clauses with tax implications can crop up anywhere so it is important to read the entire LPA. Although many features of an LPA are highly bespoke there are enough common features that once you have reviewed one LPA the second will feel more familiar.

An LPA will typically include certain specific US tax provisions. This Practice Note does not cover these provisions and US tax review of an LPA is normally advisable.

Where to start

Before you open the LPA, it is worth getting copies of:

  1. the private placement memorandum (the PPM) if there is one (see Practice Note: Understanding the tax disclosure in a fund Private Placement Memorandum (PPM))

  2. the term sheet, if this

Related documents:

Popular documents