Incorporated limited partnership

An incorporated limited partnership (ILP) is a complex agreement between partners. All ILPs consist of at least 1 general partner and at least 1 limited partner.

Features

After you incorporate an ILP, it becomes its own legal entity. A legal entity has a lower financial and managerial risk level for limited partners. This helps to protect their personal assets. As a legal entity, the ILP is responsible for all of its debts and obligations.

Queensland ILPs can legally operate around the country.

You can only apply to be an incorporated limited partnership if you are:

• a venture capital limited partnership (VCLP)
• an early stage venture capital limited partnership (ESVCLP)
• an Australian venture capital fund of funds (AFOF)
• a venture capital management partnership (VCMP)
• intending to be any of the above.

Partners

General and limited partners can all be:

• individuals
• partnerships
• other forms of corporate entity.

General partners

A general partner:

•  runs the daily business of a partnership
•  must meet the shortfall if the ILP can’t meet its debts or obligations.

Limited partners

A limited partner may commit an agreed amount of capital or property to the business. If allowed by the partnership agreement, they may inspect the books and records of the partnership.

They must not take part in running the partnership. If they take an active role in running the ILP, the law will consider them to be a general partner.