Key Features of LPF

Setting up a LPF which involves in lots of different parties which illustrate as below

01 Limited Partner(s) ("LP")

LPs have no day-to-day management rights or control over the assets of the fund, but they have the right to share in the income and profits arising from the fund. The liability of LPs for the debts and obligations of the fund is limited to the extent of their agreed contributions. However, if a LP engages in an activity that amounts to managing the fund, both the LP and the GP may be jointly and severally liable for debts and obligations incurred whilst the LP takes part in such activities.

02 Bank / 05 Auditor / 08 Accountant

Normal functions that existed in every company.

03 Solicitor

It is necessary to have a Hong Kong law firm or solicitor submit the application to register the fund to the Registrar of Companies (Section 11(2)(d)).

04 Anti-Money Laundering Officer

General Partner ("GP") to appoint either an authorized institution, licensed corporation, legal or accounting professional to conduct required anti-money laundering measures (Sections 33(1) and (2))

06 Investment Manager ("IM")

The LPF should is required to appoint a person (who may be the GP or another person) as an investment manager to carry out the day-to-day investment management functions of the partnership.

The investment manager must be either a:

(a) Hong Kong resident;

(b) Hong Kong company; or

Please note that where the investment manager undertakes any regulated activities in Hong Kong, it will be subject to Hong Kong licensing regime.

07 General Partner(s)

The GP is responsible for the management and control of the fund, and will assume unlimited liability for the debts and obligations of the fund. The GP can be a natural person of at least 18 years old, a private company, a registered non-Hong Kong company, a limited partnership, a LPF, or a non-Hong Kong limited partnership with or without a legal personality. The GP can also simultaneously act as an IM and assume the responsibility for carrying out the day-to-day management of the fund. Otherwise, the GP must appoint a separate person or company to act as the IM (see Section 20(1)). If the IM is not engaged in regulated activity or function in Hong Kong (or hold itself out as such), it is not required to hold the appropriate licence from the Securities and Futures Commission of Hong Kong.

09 Limited Partnership Fund Agreement

The LPF is constituted by a written limited partnership agreement and the arrangements in the agreement do not contravene the LPFO or any other applicable law :-

The agreement normally consists of the following terms :-

(a) admission and withdrawal of partners;

(b) transfer of interests by LPs;

(d) investment scope and strategy of the LPF;

(e) powers, rights and obligations of the partners;

(f) scope of the GP’s fiduciary duties and the remedies for breach or default thereof;

(g) capital contributions, withdrawals of capital contributions, distribution of proceeds and clawback obligations; and

(h) voluntary dissolution procedures of the LPF (as a convenient alternative to the right of any partner or creditor to petition the Court to dissolve the fund on just and equitable grounds, or to wind up the fund as an unregistered company pursuant to the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32)).

Other Features

The LPF must have one general partner and at least one limited partner;
The LPF's name complies with the requirements relating to an LPF’s name under the LPFO;
Registration of the fund by its name will not contravene the restrictions on LPF’s name under the LPFO;
The fund is not set up for an unlawful purpose;
Not all the partners in the LPF are corporations in the same group of companies
To end the name of the fund with “Limited Partnership Fund”, “LPF” and/or “有限合夥基金” (Sections 8(2) and (3));
To maintain a registered office in Hong Kong (Section 18(1));
GP to ensure proper custody of the fund’s assets (whether through the appointment of a custodian or otherwise) (Section 22);

Pursuant to Section 25(1), all funds must continuously update the Registrar with basic information that will be made publicly available for a prescribed fee. Such information includes the name of the fund, its registered office address and principal place of business, its investment scope and the name and contact details of the GP, investment manager and/or authorized representative of the fund.