Summary of US partnership and quasi partnership vehicles

There is a useful article on Lexology discussing different types of partnership and quasi-partnership structures - such as LLCs - in the USA. It is another in the Lexology series summarising different types of partnerships in a particular countries 

The article is entitled 'Partnerships in USA' and is authored by lawyers at US law firm ES&A. 

It is at https://www.lexology.com/library/detail.aspx?g=a5a32b2e-b25e-4a36-917f-84676f8d48e6&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2019-11-01&utm_term=

(if you need to subscribe to Lexology to access it, it is free do do so - see further https://www.lexology.com/account/rss)

New short article on partnership property and accounts

A short article commenting on the judgment in the Kingsley case (noted in an earlier post ‘New case on partnership property and accounts’) has been published:
Katie Alsop, ‘Deeds not words’ (2019) 211(Nov) Trusts and Estates Law & Tax Journal 16

New article on quasi-partnerships in the UK by Professor David Milman

Those of you who attended the Partnership Forum Conference earlier this year will recall David's excellent analysis of so-called 'quasi-partnerships'. He has now published an article based on this research:

David Milman,‘Legal characterisation of commercial relationships in the UK: the quasi-partnership example' (2019) 40(10) Company Lawyer 312

Summary of UK partnership vehicles

For anyone not already familiar with basic UK partnership structures, this article - another in the Lexology series summarising different types of partnerships in a particular countries - will be useful.

The article is entitled 'Partnerships in United Kingdom' and is authored by lawyers at one of the UK's leading law firms specialising in partnership law. 

It is at https://www.lexology.com/library/detail.aspx?g=1779a658-7b9e-45c2-ac6d-b8fbee394eb5&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2019-10-25&utm_term=

(if you need to subscribe to Lexology to access it, it is free do do so - see further https://www.lexology.com/account/rss)

Useful summary of French partnership law

There is a useful article on Lexology by the French law firm Philippe Derouin summarising different types of partnerships in France.

The article is creatively entitled 'Partnerships in France'  and is at https://www.lexology.com/library/detail.aspx?g=08668a5f-d0a9-4507-bd8f-63f5f357d89d&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2019-10-18&utm_term=

(if you need to subscribe to Lexology to access it, it is free do do so - see further https://www.lexology.com/account/rss)

Summary of Greek partnership law

There is a useful article on Lexology by Cocalis & Partners summarising different types of partnerships and other business vehicles in Greece.

The article is titled  ‘Commercial corporate entities: a brief outline’ and is at https://www.lexology.com/library/detail.aspx?g=a6e27739-9321-47fa-bfa7-bfcac22f843d&l=8JG74F4

(if you need to subscribe to Lexology to access it, it is free do do so - see further https://www.lexology.com/account/rss)

Recent article on Chinese partnership law

See:

Lin Lin, 'Private Equity Investor Protection: Conceptualizing Duties of General Partners In China' (2018) 15(1) Berkeley Business Law Journal 43-91

Proposed legislative changes to the Irish Investment Limited Partnership

Update on proposed legislative changes to the Irish Investment Limited Partnership by the Investment Limited Partnerships (Amendment) Bill 2019 available at: https://www.williamfry.com/newsandinsights/publications-article/2019/06/26/upgrade-of-irish-investment-limited-partnership-product

The text of the Bill itself, and a summary of its legislative progress, is available at: https://www.oireachtas.ie/en/bills/bill/2019/42/

New UK case on LLP member's duties

Riley v Reddish LLP, 7 June 2019, unreported

The appellant had been a member of an LLP which had acquired shares in a company.  He was sued by the seller of the shares for the purchase price of £1.3 million. The court held that the LLP was liable for the purchase price, but it went into liquidation and was unable to pay.  The LLP then sued and obtained judgment against the appellant for the purchase price. The appellant’s claim to have his judgment set aside on the grounds that he had refused service of the claim form and the particulars of claim was rejected.

On appeal, the court held that although the LLP had alleged that the appellant was a director who had breached his duties under the Companies Act 2006, LLPs did not owe fiduciary duties under that Act, and directors’ duties could not be transposed on to LLP members. Whether an LLP member owed duties depended on his role in the LLP affairs (see further F&C Alternative Investments v Barthelemy [2011] EWHC 1731 (Ch)). Here there was no evidence of any agreement about his role, and it was therefore not possible to establish that he was in breach of duty.  Since there was a reasonable prospect that he would be able to defend the claim, the court exercised its discretion under the Civil Procedure Rules (CPR) r.13.3 to allow the appeal and set aside the judgment against him.  The court noted that refusing the appeal would have meant imposing a substantial liability on the appellant as punishment for refusing to accept service of documents, which would be disproportionate.

The impact of the Italian insolvency law reform (by means of D.LGS. 12 January 2019, N. 14)

The amendments to Article 2257 of the Italian Civil Code

Article 377 of D. Lgs. 12th January 2019, n. 14 (Insolvency Law) has amended article 2257 of the Italian Civil Code regarding the administration of the partnership. The regulation previously in effect assigned the management of the partnerships to the partners. The current formulation instead specifies that the management of the partnership shall be under the exclusive responsibility of the managers, who have to carry out the operations functional to the fulfillment of partnership’s scope.
Such a provision entails significant interpretative problems. Firstly, it is unclear whether it permits the assignment of the management of a partnership to managers who are not also partners. Secondly, the provision causes a considerable confusion with regard to the relationships between partners who are managers, and partners who are not.

Article 377 is already in force.


The impact on the insolvency regulation

The new regulation retains the provision according to which the insolvency of the partnership automatically results in the insolvency of its general partners. The Italian legislator has therefore decided not to adopt the solutions proposed in other legal systems, such as in Germany or Spain, in which the problem concerning the protection of creditor is resolved by means of the partners’ civil liability and not by means of the automatic extension of the insolvency of the partnership to the partners.
Nevertheless, the provisions have been significantly amended.

Firstly, the new regulation (Article 256, paragraph 4) provides for the increase of the number of persons entitled to ask for a declaration of the bankruptcy against the hidden partners (or the hidden partnership): under the new Insolvency law, the public prosecutor and the creditors of the partners can now apply for such a declaration, in addition to the official receiver, the creditors of the partnership and another bankrupt partner.

Secondly, the reform (Article 256, paragraph 5) has confirmed the case law regarding the so-called super-società di fatto. The courts can declare the insolvency of a private company and its shareholders considered as a whole to be a ‘hidden partnership’ between them and the company. However, the lawmaker has not taken into account the criticisms raised by scholars (such as Guerrera, ‘Considerazioni sistematiche sulla c.d. supersocietà di fatto’, in Rivista di diritto societario, 2017, 975 and following), according to whom the proper instrument would have been the civil and criminal liability of the directors and shareholders (and not the insolvency regulation).

These provisions will be applicable from August 2020.


The impact on the over-indebtedness procedures

Article 65 of the new Insolvency Law expressly states where a partnership cannot be declared bankrupt because it does not meet the subjective and objective requirements provided by law, it is subject to another kind of insolvency procedure, the so called over-indebtedness procedure, which also applies to its general partners. These include debt relief and the possibility of a fresh start (i.e. a new start after debt discharging) for the general partners and the partnership itself. The reform has further taken into account the case of a partner of a partnership who also has the status of consumer; for such cases, the reform has provided for the possibility for a partner who is a consumer to apply for a personal debt-restructuring plan in all cases in which the situation of over-indebtedness derives from his personal debts (and not from partnership’s ones), even if the partnership is already subject to another kind of insolvency procedure.

These provisions will be applicable from August 2020.

Resources

Biographies

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Second Annual Conference of the Partnership, LLP and LLC Law Forum 10 January 2019

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