Limited Partnership

November 7th, 2023 by James Goudie KC

The question before the Court in FRONTIERS CAPITAL 1 LIMITED PARTNERSHIP v FLOHR (2023) EWHC 2723 (Ch) was whether the general partner of a limited partnership governed by the Limited Partnerships Act 1907 (the 1907 Act) has standing after the dissolution and apparent winding up of the partnership to sue a third party in respect of a cause of action accruing before dissolution. A limited partnership under the 1907 Act is of course different from an ordinary partnership under the Partnership Act 1890 (the 1890 Act) and from a limited liability partnership under the Limited Liability Partnership Act 2000.

One of the ways in which a limited partnership differs from an ordinary partnership is that the limited partners take no part in the management of the business and are not agents for their partners because the general partner acts for all of them as well as for itself.

The provisions of the 1890 Act, and the rules of common law and equity applicable to partnership, apply generally to limited partnerships, unless inconsistent with the 1907 Act: Section 7 of the 1907 Act.

The winding up of a limited partnership is to be carried out by its solvent general partner(s) only, not by any limited partner. The Court will authorise a limited partner to wind up the firm only if every general partner is dead or incapable, or it may appoint a receiver to do so.

The Judge found that the Claimant had a realistic prospect of establishing that its powers under the Limited Partnership Agreement in this case had not lapsed and that it had standing to pursue the claim.

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