Partnership Regulations 2021

These regulations may be cited as the

Partnership

Regulations 2021.

These regulations come into operation on

1 August 2021.

In these regulations, unless the contrary intention appears—

Act means the Partnership Act 1891;

assets, in relation to an incorporated limited partnership, means the assets remaining after satisfaction of the liabilities of the partnership and the costs, charges and expenses of the winding up of the incorporated limited partnership;

Corporations Act means the

Corporations

Act 2001 of the

Commonwealth.

Subject to subregulation (2), an incorporated limited partnership may be wound up voluntarily—

if the partnership agreement sets out the terms on which the partnership may be voluntarily wound up—in accordance with the agreement; or

subject to the partnership agreement—if the limited partners so resolve by special resolution.

An incorporated limited partnership may not be wound up voluntarily if—

an application for the partnership to be wound up in insolvency has been filed in the Court; or

the Court has ordered that the partnership be wound up in insolvency (whether or not the order was made on such an application).

On a voluntary winding up of an incorporated limited partnership—

if the partnership agreement sets out how the assets are to be dealt with on a voluntary winding up—the assets must be dealt with accordingly;

in any other case—the assets must be distributed among the partners in shares that are proportionate to their respective contributions of capital or property to the partnership.

A person aggrieved by the operation of this regulation in relation to the assets of an incorporated limited partnership may apply to the

Court.

On an application under subregulation (4), the Court may make such orders as it considers necessary or appropriate in the circumstances.

The Commission may, by written notice given to an incorporated limited partnership, require the partnership to show good cause as to why it should not be required to be wound up if the Commission considers that—

the partnership has ceased to carry on business; or

having been registered under Part 3 of the Act on the basis that the partnership is or is intended to be registered as a VCLP, AFOF or

ESVCLP under Part 2 of the Venture

Capital Act 2002 of the Commonwealth—

the partnership has not, within 2 years after its incorporation, registered under Part 2 of that Act as a VCLP, AFOF or

ESVCLP; or

the partnership's registration under Part 2 of that Act has been revoked; or

having been registered under Part 3 of the Act on the basis that the partnership is or is intended to be a venture capital management partnership (VCMP) within the meaning of section 94D(3) of the Income Tax

Assessment Act 1936 of the Commonwealth—it has ceased to meet, or has not within the period of 2 years after its incorporation met, the requirements set out in that section of that Act for recognition as a VCMP; or

none of the partners is a limited partner; or

incorporation of the partnership has been obtained by mistake or fraud; or

the partnership exists for an illegal purpose.

If, at the end of 28 days after notice is given under subregulation (1), the Commission is satisfied that—

the incorporated limited partnership should be required to be wound up; and

good cause has not be shown why the incorporated limited partnership should not be required to be wound up, the Commission may publish in the Gazette a certificate as to the requirement that the incorporated limited partnership be wound up.

The Commission must—

as soon as possible after the publication of the certificate—give notice of the publication to the incorporated limited partnership; and

as soon as practicable after giving notice of the publication under paragraph (a)—record the giving of the notice in the register.

A person whose interests are affected by a decision of the

Commission to publish a certificate as to the requirement that an incorporated limited partnership be wound up may, within 28 days after the certificate is published, apply to the Court for review of the decision.

The operation of the certificate is suspended on the making of an application for review until the application is withdrawn or the review is decided.

The Court may, on a review—

affirm the decision under review; or

set aside the decision under review and cancel the certificate.

Nothing in this regulation prevents the Commission cancelling a certificate at any time after an application is made under subregulation (1).

The winding up of an incorporated limited partnership required on a certificate of the Commission—

must commence—

if no application for review is made under regulation 6—within 28 days after the day on which the certificate is published;

if an application for review is made under regulation 6 and the Court affirms the decision to publish the certificate—within 28 days after the decision is affirmed by the Court; and

must end by the day stated by the Commission in a notice given to the partnership, being a day not earlier than 60 days after the day on which the winding up must be so commenced.

On the commencement of the winding up of an incorporated limited partnership, the Commission may appoint a person, subject to conditions specified in the instrument of appointment, to be the liquidator of the partnership.

The liquidator of an incorporated limited partnership—

need not be a registered liquidator under the Corporations Act;

and

has, subject to the conditions of appointment, all the powers and duties of a liquidator appointed to wind up a company under the Corporations

Act; and

may be a general partner in the partnership; and

must, within 10 days after being appointed, publish a notice of the appointment in a newspaper circulating generally throughout the State;

and

must give the security (if any) for the exercise of the liquidator's functions that the Commission directs; and

is entitled to receive the fees decided by the Commission;

and

may resign or, on cause shown, be removed by the

Commission.

A vacancy occurring in the office of liquidator is to be filled by a person appointed by the Commission.

A liquidator who contravenes or fails to comply with a condition of appointment is guilty of an offence. Maximum penalty: Maximum penalty: $5 000.

The reasonable costs of the winding up of an incorporated limited partnership required on a certificate of the Commission are payable out of the property of the partnership.

The liquidator of an incorporated limited partnership required to be wound up on a certificate of the Commission may apply to the Court for directions about the winding up.

On an application under subregulation (1), the Court may give directions and guidance, and make such orders, as it considers necessary or appropriate in the circumstances.

On a winding up of an incorporated limited partnership required on a certificate of the Commission—

if the partnership agreement sets out how the assets are to be dealt with on such a winding up—the assets must be dealt with accordingly;

in any other case—the assets are to be distributed among the partners in shares that are proportionate to their respective contributions of capital or property to the partnership.

A person aggrieved by the operation of this regulation in relation to the assets of an incorporated limited partnership may apply to the

Court.

On an application under subregulation (2), the Court may make such orders as it considers necessary or appropriate in the circumstances.

The winding up of an incorporated limited partnership is declared to be an excluded matter for the purposes of section 5F of the

Corporations Act in relation to Part 5.7 (Winding up bodies other than companies) of that Act.

Part 5.7 of the Corporations Act applies, subject to the following changes, to the winding up of an incorporated limited partnership (other than a voluntary winding up or a winding up required on a certificate of the Commission):

as if the incorporated limited partnership were a Part 5.7 body within the meaning of that Act;

as if "or in the public interest" were inserted after "just and equitable" in section 583(c)(ii);

as if paragraph (d) were deleted from section 583.

The Australian Securities and Investments Commission (ASIC) may exercise a function given to it under

Part 5.7 of the Corporations Act as amended by subregulation (2) if—

the function is exercised under an agreement or arrangement of the kind mentioned in section 11(8) or (9A)(b) of the

Australian Securities and Investments

Commission Act 2001 of the Commonwealth;

and

ASIC is authorised to exercise that function under section 11 of that Act.

Except where a function under Part 5.7 of the Corporations

Act as amended by subregulation (2) has been given to ASIC (see subregulation (3)), that Part applies as if a reference in it to ASIC were a reference to the Commission.

An incorporated limited partnership must give the Commission written notice of the commencement of the winding up of the partnership within 7 days after—

the passing of a special resolution under regulation 4(1); or

if paragraph (a) does not apply—the commencement of the winding up.

An incorporated limited partnership must give to the Commission written notice of the completion of the winding up of the partnership within 28 days after the completion stating the date on which the winding up was completed.

The Commission must, as soon as practicable after receiving a notice under this regulation, record the receipt of the notice in the register.

If subregulation (1) or (2) is not complied with, each general partner is guilty of an offence. Maximum penalty: Maximum penalty: $2 500.

The Commission must—

by notice in the Gazette—cancel the registration of an incorporated limited partnership as soon as practicable after the partnership is wound up; and

as soon as practicable after publication of the notice of cancellation—record the cancellation of the registration in the register.

An incorporated limited partnership ceases to exist on the cancellation of its registration.