This note provides an overview of the consent, consultation and information rights typically provided to investors providing capital as limited partners to an English limited partnership.

1.     Consent and Veto Rights

Consent and veto rights concerning the management of a partnership business should not be given to limited partners under the terms of the limited partnership agreement. Section 6(1) of the Limited Partnerships Act 1907 provides that, subject to certain exceptions (see below), a limited partner must not take part in the management of the partnership business and must not have power to bind the firm. Accordingly, any consent and veto rights concerning the management of the partnership business should be given to a limited partner (or an affiliate) in its capacity as a shareholder (and/or board member) of the general partner. Any such rights may be documented in the shareholders’ agreement or articles of association relating to the general partner rather than the limited partnership agreement relating to the partnership.

2.     Consultation Rights

Consultation rights can be given to limited partners under the terms of a limited partnership agreement. Section 6(1) of the Limited Partnerships Act 1907 explicitly recognises that a limited partner may “advise with” the other partners on the state and prospects of the partnership business. Having said that, consultation rights are generally given not to the limited partners individually but to an “advisory board” made up of representatives of (some of) the limited partners. Alternatively, or in addition, consultation rights may be given to an individual limited partner under the terms of a side letter.

3.     Information Rights

Information rights can also be given to limited partners under the terms of a limited partnership agreement. Section 6(1) of the Limited Partnerships Act 1907 explicitly recognises that a limited partner may “inspect the books of the firm and examine into the state and prospects of the partnership business”. It is customary for information rights to be given to the limited partners individually rather than to the advisory board even though sometimes enhanced information rights are given to the members of the advisory board or individual limited partners under the terms of a side letter.

Disclaimer: This article provides general information only. It is not intended to be comprehensive and does not constitute the provision of legal advice. FS REG is not responsible for any action taken or omitted to be taken on the basis of the information contained in this article.

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