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New Zealand: Types of Company

General and Limited Partnerships

General Partnerships do not have a legal “personality” in their own right. A general partnership is, however, required to file tax returns, with each partner taking his or her share of partnership profits within his or her taxable income.

Under a General Partnership, two or more parties, with unlimited liability, enter into a contract (normally under a partnership agreement) to carry on business together in order to make a profit. In New Zealand, the Partnership Act 1908 sets out much of the law about general partnerships, although it may be overridden on particular matters by a partnership agreement.

Limited Partnerships are formed of general partners, with unlimited liability, together with limited partners, who are liable to the extent of their capital contribution to the partnership.

A General Partnership does not have to be registered but, since the Limited Partnerships Act 2008, Limited Partnerships and Overseas Limited Partnerships are separate legal entities and must be registered with the Companies Office, which maintains a Limited Partnerships Register.

Registration, maintenance and annual return filing for Limited Partnerships and Overseas Limited Partnerships is conducted through manual forms, for a cost of NZD270.

A Limited Partnership is formed by registration in New Zealand. An Overseas Limited Partnership is a partnership that has been formed in a country other than New Zealand but, because it is engaged in business activities in New Zealand, must register as an Overseas Limited Partnership.

The primary objective of the introduction of the Limited Partnerships regime was to facilitate growth in New Zealand's venture capital and private equity industries.

A limited partner is prevented from being involved in the day-to-day management of the Limited Partnership. However, to enable limited partners to become involved in key decision-making activities, the legislation includes a “safe harbour” mechanism, such that limited partners can be involved in, for example, the decision about whether to approve or veto an investment proposal.



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