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24 1994

INVESTMENT LIMITED PARTNERSHIPS ACT, 1994

PART IV

Administration

Variation of partnership agreement and change in general partner or custodian.

11. —(1) Notwithstanding any provision therein to the contrary, a partnership agreement may only be varied by instrument in writing signed by or on behalf of each of the partners to the partnership agreement.

(2) No alteration in the partnership agreement or change in the name of the investment limited partnership shall be made or take effect without the prior approval of the Bank.

(3) A general partner or custodian of an investment limited partnership may not be replaced by another general partner or custodian, nor may additional general partners be admitted to such partnership or additional custodians be appointed, without the prior approval of the Bank.

(4) Where a person is admitted to partnership as a general partner or causes or permits a general partner to be admitted to partnership of an investment limited partnership without the prior approval of the Bank, he shall be guilty of an offence.

Registered office and name.

12. —(1) An investment limited partnership shall at all times maintain a registered office in the State and a principal place of business in the State which may be at the same address, to which all communications and notices may be addressed.

(2) Every investment limited partnership shall use the words “investment limited partnership” or the abbreviation “ilp” or in the Irish language “comhpháirtíocht theoranta infheistíochta” or the abbreviation “cti” at the end of its name, and those words and that abbreviation may be used interchangeably.

(3) The name or a distinctive part of the name of a limited partner shall not form or be used as part of the name of an investment limited partnership.

(4) A limited partner who knowingly permits his name or any distinctive part thereof to be used in the name of an investment limited partnership will be liable as if a general partner to any person who extends credit to that investment limited partnership without actual knowledge that the limited partner is not a general partner.

(5) If default is made in compliance with the requirements of subsection (1) or (2) any partner who is in default shall be guilty of an offence.

Register.

13. —(1) The general partner shall maintain or cause to be maintained at the registered office of the investment limited partnership a register of the names and addresses, amounts and dates of the contribution or contributions of each partner or the amounts undertaken to be contributed and the amounts and dates of any payments representing a return of any part of the contribution of any partner which register shall be updated within five days of the change in the particulars therein.

(2) The register described in subsection (1) shall be open to inspection by any partner or custodian of the investment limited partnership during business hours.

(3) The register described in subsection (1) shall be prima facie evidence of the matters which are by subsection (1) directed to be inserted therein.

(4) If default is made in compliance with the requirements of this section each general partner shall upon summary conviction incur a penalty of £1,000 for each day that such default continues and shall indemnify any person who thereby suffers any loss.

Prospectus.

14. —(1) Where the Bank, in exercise of the powers conferred upon it by section 7 (4) (b) requires the issuing by an investment limited partnership of a prospectus and an investment limited partnership fails to comply with that requirement or a prospectus so issued fails to comply with the contents so required of that prospectus, if any, the general partner shall be guilty of an offence.

(2) The Companies Acts, 1963 to 1990 shall not apply in relation to a prospectus published by an investment limited partnership.

(3) The general partner shall be liable to any person suffering loss in reliance upon a prospectus which is in any material respect inaccurate or which omits material information required by the Bank under section 7 (4) (b).

Accounts.

15. —(1) The Bank may exempt an investment limited partnership from the provisions of S.I. No. 396 of 1993, where its sole business is the investment of its funds in property with the aim of spreading investment risk and giving its partners the benefit of the management of its assets.

(2) The Bank may impose such conditions as to form, content and periodicity of accounts of an investment limited partnership as it deems appropriate.

Annual report and duty of auditor.

16. —(1) An investment limited partnership shall cause to be published and filed with the Bank an annual report the contents of which shall be prescribed by the Bank.

(2) The accounts of an investment limited partnership and the accounting information given in the annual report must be audited by one or more persons empowered to audit accounts in accordance with the Companies Acts and the auditor's report, including any qualifications, shall be produced in full in the annual report.

(3) If the auditor of an investment limited partnership—

(a) has reason to believe that the information provided to investors or to the Bank in the reports or other documents of the investment limited partnership does not truly describe the financial situation and the assets and liabilities thereof, or

(b) has reason to believe that the assets of the investment limited partnership are not or have not been invested in accordance with this Act or the partnership agreement, or

(c) has reason to believe that there exist circumstances which are likely to affect materially the ability of the investment limited partnership to fulfil its obligations to limited partners or meet any of its financial obligations, or

(d) has reason to believe that there are material defects in the financial systems and controls or returns of an investment limited partnership under this Act or conditions imposed thereunder, or its accounting records, or

(e) has reason to believe that there are material inaccuracies in or omissions from any returns of a financial nature made by the investment limited partnership to the Bank, or

(f) proposes to qualify any certificate which he is to provide in relation to financial statements under this Act or regulations made thereunder,

he shall report the matter to the Bank in writing without delay.

(4) The auditor of an investment limited partnership shall, if requested by the Bank, furnish to the Bank a report stating whether in his opinion and to the best of his knowledge the investment limited partnership has or has not complied with a specified obligation of a financial nature under this Act or conditions imposed thereunder.

(5) Where the auditor of an investment limited partnership so requests, the Bank shall provide to the auditor in writing details of such returns of a financial nature to the Bank by the investment limited partnership as the auditor requests for the purpose of enabling him to exercise his functions under this Act.

(6) The auditor of an investment limited partnership shall send to the investment limited partnership a copy of any report made by him to the Bank under subsections (3) and (4).

(7) (a) Whenever the Bank is of the opinion that the exercise of its functions under this Act or the protection of the interests of limited partners so requires, it may require the auditor of an investment limited partnership to supply it with such information as it may specify in relation to the audit of the business of the investment limited partnership and the auditor shall comply with the requirement.

(b) The Bank may require that in supplying information for the purposes of this subsection, the auditor shall act independently of the investment limited partnership.

(8) No duty to which the auditor to an investment limited partnership may be subject shall be regarded as contravened, and no liability to the investment limited partnership or its partners, creditors or other interested parties, shall attach to the auditor by reason of his compliance with any obligation imposed on him by or under this section.

(9) Where non-performance of the publication of an annual report in approved form in accordance with subsections (1) and (2) occurs, each general partner shall be guilty of an offence and shall indemnify any person who thereby suffers any loss.

(10) An auditor who does not act in accordance with subsection (3), (4) or (6), shall be guilty of an offence, and shall indemnify any person who thereby suffers any loss.

(11) A general partner or custodian who supplies information which he knows to be false to an auditor under this section shall be guilty of an offence and shall indemnify any person who thereby suffers loss.

Debts and obligations incurred by general partner.

17. —Any debt or obligation incurred by a general partner in the conduct of the business of an investment limited partnership shall be a debt or obligation of the investment limited partnership.

Admission of limited partners and assignment of interest.

18. —(1) Notwithstanding anything provided in the partnership agreement, a person may be admitted to an investment limited partnership as a limited partner with the consent of the general partner, or if more than one general partner, of all of them, and if by assignment, subject to subsection (2) without any requirement to obtain the consent of the existing limited partners.

(2) Subject to subsection (1) a limited partner may assign absolutely the whole or any part of his partnership interest and an assignee shall as of the date of such assignment become a limited partner with all of the rights and obligations of the assignor relating to the investment limited partnership, including the obligation of the assignor to make contributions in respect of the partnership interest or the part thereof assigned but excluding any liability of the assignor arising pursuant to section 6 , 12 or 20 .

(3) A limited partner may assign the whole or any part of his partnership interest by way of mortgage or charge provided that no such assignment shall operate to constitute the assignee a partner in the investment limited partnership or relieve the assignor of any of its partnership obligations and section 31 of the Act of 1890 shall apply to any such assignment.

Differences as to business of investment limited partnership, inspection of books and contracts with partners.

19. —(1) Subject to any express or implied term of the partnership agreement—

(a) any difference arising as to matters connected with the business of an investment limited partnership shall be decided by the general partner and if more than one by a majority of the general partners;

(b) a limited partner may by himself or his agents at any reasonable time inspect the books of the investment limited partnership and inquire into the state and prospects of the partnership business with such assistance as may reasonably be required of the general partner, and may advise the partners thereon.

(2) Notwithstanding any rules of equity or common law applicable to partnerships, but subject to conditions imposed by the Bank, a partner may enter into any contract, including for the lending of money, or transact any business with an investment limited partnership, and such partner shall have the same rights and obligations with respect thereto as a person who is not a partner.

Return of capital.

20. —(1) A limited partner shall not whether during his term as a limited partner of an investment limited partnership or on ceasing to be a limited partner at any time thereafter or otherwise on a dissolution of the investment limited partnership, receive out of the capital of the investment limited partnership a payment representing the return of any part of his contribution to the partnership unless at the time of and immediately following such payment the investment limited partnership is certified by the general partner, or if more than one, by a majority of the general partners, to be able to pay its debts in full as they fall due after the proposed return of contribution is made.

(2) For a period of four months from the date of receipt by a limited partner of any payment representing the return of a contribution by the limited partner or part thereof in circumstances where the certificate referred to in subsection (1) has not been secured, such payment shall in the event of insolvency of the investment limited partnership within such period be repayable by the limited partner with simple interest at the rate of 5 per cent. per annum, or such further sum as may be fixed by regulation made by the Minister, calculated on a daily basis to the extent that such contribution or part thereof is necessary to discharge a debt or obligation of the investment limited partnership incurred during the period in which the contribution represented an asset of the investment limited partnership.

(3) In this section “receive” and “receipt” shall include the release of any undertaking forming part of a contribution and in this context a liability to make a repayment pursuant to subsection (2) shall be read to refer to due performance of such undertaking.

(4) A distribution of any assets of an investment limited partnership to a limited partner shall be deemed to be a return of contribution for the purposes of subsection (1) to the extent that a distribution to him reduces the value of his share of the investment limited partnerships calculated on the basis of the value of the net assets of the investment limited partnership, below the value shown in the register maintained in accordance with section 13 as the amount contributed or undertaken to be contributed by him.

Assignment.

21. —A limited partner shall cease to be a limited partner of an investment limited partnership on the absolute assignment of all of his partnership interest or on the return of the whole of his contribution including the release of any undertaking to contribute to the partnership provided that, notwithstanding any term of the partnership agreement or of any other agreement to the contrary no such assignment shall relieve the assignor of any liability arising under section 6 , 12 or 20 .

Cessation of limited partner on assignment.

22. —(1) Subject to subsections (2) and (3), legal proceedings in respect of any liability of or to an investment limited partnership including proceedings to enforce a foreign judgment by or against the investment limited partnership may be instituted by or against any one or more of the general partners only and no limited partner shall be a party to or named in such proceedings.

(2) Subsection (1) shall be without prejudice to the right of a general partner or a creditor of an investment limited partnership or other person to join in or otherwise institute proceedings against any one or more of the limited partners who may be liable for the debts of the investment limited partnership pursuant to section 6 or 20 or to enforce the repayment of a return of contribution required by section 20 .

(3) A limited partner may with the leave of the court, bring an action on behalf of an investment limited partnership if the general partners with authority to bring such proceedings refuse to do so, and the court determines that that refusal is oppressive to the limited partner or in disregard of his interests as a limited partner.

Bankruptcy Act, 1988 .

23. —For the purposes of the application of sections 30 , 31 , 32 and 36 of the Bankruptcy Act, 1988 , a limited partner shall not be regarded as a partner of an investment limited partnership.

Obligations of custodian.

24. —(1) The custodian must—

(a) carry out the instructions of the general partner unless they conflict with this Act or regulations made hereunder, directions of the Bank or the partnership agreement;

(b) ensure that in transactions involving investment limited partnership's assets any consideration is remitted to it within the usual time limits;

(c) ensure that an investment limited partnership's income is applied in accordance with this Act or regulations made hereunder, directions of the Bank or the partnership agreement;

(d) enquire into the conduct of the general partners in the management of the investment limited partnership in each annual accounting period and report thereon to the limited partners. The custodian's report shall be delivered to the general partner in good time to enable it to include a copy of the report in the Annual Report required under section 16 . The Report shall state whether in the custodian's opinion the general partner has managed the investment limited partnership in that period—

(i) in accordance with this Act or regulations made hereunder, directions of the Bank or the partnership agreement the limitations imposed on the investment and borrowing powers of the general partner and custodian by the partnership agreement or directions of the Bank, and

(ii) otherwise in accordance with the provisions of the partnership agreement and this Act, and

if it has not done so, in what respect in which it has not done so and the steps which the custodian has taken in respect thereof;

(e) ensure that the value of the interests of the partners in the investment limited partnership is calculated in accordance with this Act and the partnership agreement;

(f) ensure that contributions and withdrawals of contributions of partners’ capital are effected in accordance with the partnership agreement and the Act;

(g) carry out such additional duties as may be specified by the Bank by means of conditions imposed under section 7 (2) (b).

(2) Any provision whether contained in the partnership agreement or in any contract with an investment limited partnership for exempting a custodian, general partner or auditor of an investment limited partnership from, or indemnifying him against any liability which would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to an investment limited partnership shall be void, so, however, that an investment limited partnership may indemnify any such custodian, general partner or auditor against any liability incurred by him in defending proceedings in which judgement is given in his favour or in which he is acquitted.

(3) A custodian who fails to comply with subsection (1) shall be guilty of an offence and shall indemnify any person who thereby suffers loss.