Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

This amendment relates to a statutory declaration that a general partner must make on a migration-out stating that it has not been notified of a resolution or other order to wind up the investment limited partnership. It seeks to add a provision that the general partner is not aware of a notification made to a limited partner of a resolution to wind up the investment limited partnership.

The problem with this proposed amendment is that the role of the limited partner must be distinguished from that of the general partner in this legislation. It is essentially one of the key cornerstones of this legislation that the general partner is the person responsible for the running of the partnership and the limited partner's role is limited and it has no role in the management or decision-making roles of the investment limited partnership.

Section 6 of the 1994 Act prohibits a limited partner from taking part in the conduct of the business, as I have said. In contrast, the general partner's role is to conduct the affairs of the investment limited partnership. The role of the limited partner is, therefore, restricted to that of a passive investor. Consequently, a limited partner cannot have a role with regard to winding up the investment limited partnership. Limited partners are passive investors. To take on such a role would mean that a limited partner is taking on a management role acting as a general partner and this would entail the loss of limited liability. That is the essence of it. Limited partners are passive investors, not participants in the management of the investment limited partnership.

Finally, notification to wind up should be served or made to a general partner. If this is not done, the service would not be considered properly made and would arguably be ineffective vis-à-visthe investment limited partnership. A notice of liquidation served on a limited partner would not be valid in any event.