New limited partnership laws promote innovation start-ups
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New laws covering venture capital limited partnerships are expected to boost business investment in WA for innovation and technology start-ups.
Limited partnerships, where there is at least one general partner in a business with unlimited liability and at least one partner with limited liability, are the common vehicles used to raise investment funds for high-risk ventures.
The new laws, which come into effect on 1 February 2017, will modernise the regulation of limited partnerships and assist innovative technologies to reach the market by providing for companies that develop entrepreneurial ideas into new products and services to become eligible for taxation concessions.
Acting Commissioner for Consumer Protection David Hillyard said, without venture capital, the developers of new and emerging technologies would not be able to market their ideas.
“Limited partnerships are the preferred vehicles for use by venture capital investors and are a commonly used structure especially in the innovative industries such as biotechnology and information technology,” Mr Hillyard said.
“The new laws will allow for a corporate structure that will foster greater industry innovation and diversity and promote economic development in Western Australia in the area of emerging technologies.”
The laws will:
- introduce a contemporary, streamlined and modern best practice regulatory approach to the formation, membership and registration of limited partnerships;
- provide much needed clarification of the nature and extent of the protection from liability offered to limited partners in these enterprises;
- ensure members of the public can identify the partnership and obtain information about its partners in their dealings with them; and
- introduce a new form of statutory partnership, the incorporated limited partnership, for exclusive use by entities eligible for Commonwealth venture capital taxation concessions.
“It’s essential that our laws are keeping pace with the modern economy and the proposed changes are intended to remove any roadblocks and forge a smoother path for venture capital investment to flow into WA,” the acting Commissioner said.
“These changes are needed to open up investment opportunities while protecting investors from liability through a sound corporate structure. The changes will enable WA to compete more effectively with other States as well as internationally when vying for venture capital.”
More information on the new laws can be found on the Consumer Protection website www.commerce.wa.gov.au/limitedpartnerships and enquiries can be made by email firstname.lastname@example.org or by calling 1300 30 40 74.
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