Company Formation in Ireland Ireland Limited Partnership

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Why register a Limited Partnership in Ireland when starting a business?

Many investors who deal with private equity, as well as those with international investment platforms, favour Irish Limited Partnerships as their business vehicle. There are benefits in this partnership model, and much of them owe to the Irish tax system's flexibility.

The Limited Partnerships Act 1907 regulates partnerships in which some members have limited liability for the debts of the partnership as their liability is limited to the extent of the amount of capital contributed by them to the partnership.

A partnership may be made up of natural persons and bodies corporate.

It is not a separate legal entity and accordingly has no legal personality separate and distinct from the partners who form the partnership. Therefore the partners can be sued in their own names.

To form a limited partnership in Ireland, the partnership must have at least one general partner (who is liable for all the debts and obligations of the firm) and one limited partner. The maximum number of partners is 20, unless it is a banking or loan/finance partnership. In the case of a banking partnership the maximum number of partners is 10 and for a loan/finance partnership the maximum number is 50.

Incorporate an Ireland Limited Partnership

Tax Advantages

In general, Ireland is a jurisdiction with a standard level of taxation. However, Irish legislation provides the opportunity for registration and operating of companies with a zero rate of tax - the Limited Partnerships (LP).

An Irish LP with foreign members, which does not carry on a business in Ireland and derives no income on territory of Ireland, is not liable to tax in Ireland. According to the tax laws of Ireland, a LP is not considered as a separate subject of taxation. The founders should pay taxes from the profits received by the LP in their place of residence in proportions according to their share of interests belonging to them in the LP.

Taxes will be paid by the members in the country of their residence if it is stipulated by the legislation of that particular country.

Taxes will be paid by the members in the country of their residence if it is stipulated by the legislation of that particular country.

The favourable tax regime of LP companies does not eliminate the requirements for preparation of financial statements. Every LP is obliged to prepare financial statements, and the relevant Partnership Tax return must be filed annually with Irish Tax Revenue.

In Ireland there are certain obligations, including preparation of financial statements, which must be fulfilled by every type of company, including a LP.

The favourable tax regime of an LP is based on its “pass-through” status in that all profit received by the LP is considered to be transferred to its partners. Accordingly, if the partners are resident in a taxpaying jurisdiction, they will be obliged to pay tax in their country of residence proportionally to their share of participation in the Limited Partnership.

Irish Limited Partnership

Benefits

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An Irish LP is the ideal solution for those who prefer to operate with an EU-registered entity but to have at their disposal a fully tax-exempt vehicle at the same time.

With an Irish Limited partnership, the tax planning opportunities are in your favor. Irish limited partnership is a convenient and effective business tool. Its popularity has only increased in the past few years.

The advantages of registering a Limited Partnership in Ireland, include:

- No residency requirement for partners

- Corporate entities can act as partners

- Minimal contribution by each partner can be as low as 1 euro

- No requirement for the contributions to be paid up

- Partnership does not pay corporate tax in Ireland if its partners are not Irish residents and

the partnership’s activity is outside of the jurisdiction

Given the above-stated advantages, Irish LP companies are very popular tools for conducting international business.

Setting up a Limited Partnership (LP) in Ireland

Procedures to incorporate

In Ireland, a Limited Partnership (LP) is a form of business structure that consists of at least one general partner and one limited partner. The general partner has unlimited liability for the partnership's debts and obligations, while the limited partner's liability is limited to the amount of capital they contribute. If you're interested in incorporating a Limited Partnership in Ireland, here are the general procedures you would need to follow:

Choose a Name:

Select a name for your limited partnership. The name must be unique and not already in use by another business entity in Ireland. You can check name availability on the Companies Registration Office (CRO) website.

Registered Office:

You must have a registered office in Ireland where official documents and correspondence can be sent. This address will be publicly available.

Partnership Agreement:

Prepare a partnership agreement that outlines the rights, responsibilities, and liabilities of the general and limited partners. This document is not filed with the CRO but is a critical internal document.

Appoint Partners:

Identify and appoint at least one general partner and one limited partner. General partners have unlimited liability, while limited partners' liability is limited to their contributions.

Registration with CRO:

To incorporate a Limited Partnership in Ireland, you must complete Form LP1, which is available on the CRO website. This form includes details about the partners, registered office, and partnership agreement. You will need to provide:

Name and address of the partnership.

Full names and addresses of the general and limited partners.

Details of capital contributions by each partner.

Duration of the partnership (if applicable).

Registered office address.

Filing Fees:

Pay the appropriate filing fees for the registration of the Limited Partnership. The fees can vary, so it's best to check the CRO website for the most up-to-date fee information.

Submission:

Submit the completed Form LP1 and the filing fees to the Companies Registration Office either by post or electronically through the CORE (CRO Online Registration) system.

Certificate of Registration:

Once the CRO processes your application and verifies the information, you will receive a Certificate of Registration. This document confirms that the Limited Partnership has been registered.

Taxation and Compliance:

Ensure that you understand the tax obligations and other legal requirements for maintaining a Limited Partnership in Ireland. Consult with a legal or financial professional to ensure compliance with relevant laws and regulations.

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