[ESTABLISHING A BUSINESS ENTITY IN HONG KONG]
243
private equity and venture capital funds) to be registered in the form of limited partnerships in Hong Kong. Eligibility A fund is eligible to be registered as an LPF if, among other requirements: (a) the fund is constituted by a limited partnership agreement which does not contravene the applicable laws; (b) the fund has one general partner and at least one limited partner; (c) the fund has an office in Hong Kong to which communications and notices may be sent; and (d) not all the partners in the fund are corporations in the same group of companies. The general partner can be a natural person, a private Hong Kong company limited by shares, a registered non-Hong Kong company, a limited partnership, an LPF or a non-Hong Kong limited partnership. A limited partner can be a natural person, a corporation, a partnership, an unincorporated body or any other entity. The partners have freedom of contract in respect of the operation of the fund. The matters that may be covered by a limited partnership agreement may include the organization, management structure, governance and decision-making procedures of the fund, the investment scope and strategy of the fund, etc. Liability of Partners A limited partnership fund does not have a legal personality. Similar to a limited partnership, the general partner in an LPF is ultimately responsible for the management and control of the fund and will assume unlimited liability for the debts and
obligations of the fund. The limited partners have no day-to-day management rights or control over the assets held by the fund, but rather they have the right to participate in the income and profits arising from the fund. The liability of the limited partners in an LPF is limited to the extent of their agreed
contributions. Other Officers
The general partner in an LPF must appoint: (a) an investment manager to carry out the day-to-day investment management functions of the fund; (b) an auditor to carry out audits of the financial statements of the fund annually; (c) a responsible person to carry out anti- money laundering and counter-terrorist financing functions; and (d) (if the general partner is another LPF or a non-Hong Kong LP without a legal personality) an authorized representative. The general partner and the authorized representative will be jointly and severally liable for all the debts and obligations of the LPF and ultimately responsible for the management and control of the fund. Registration and Continuing Obligations The general partner should apply to the Companies Registry for registration of the fund as an LPF. In addition, the general partner must: (a) file annual returns with the Companies Registry; (b) notify the Companies Registry of changes in the registered particulars; (c) maintain proper records of the fund; and (d) ensure that there are proper custody arrangements for the assets of the fund as
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator