What activities can Limited Partners engage in?
A Limited Partner is prevented from being involved in the day to day management of the Limited Partnership.
To enable Limited Partners to become involved in the key decision making activities of a Limited Partnership, the Limited Partnerships Act 2008 includes a safe harbour mechanism to ensure Limited Partners maintain their limited liability.
Safe harbour activities include but are not limited to:
- Taking part in the decision about the variation or replacement of the partnership agreement
- Taking part in the decision about whether to approve or veto an investment proposal (under certain conditions set out in the Act)
- Taking part in the decision about whether the Limited Partnership should be terminated or not
- Taking part in the decision about whether the general nature of the Limited Partnership should change.
A complete list of safe harbour activities can be found in the Act including the Schedule.
