Proposed Reform Of Ireland’s Limited Partnership Regime

The Department of Enterprise, Tourism and Employment (DETE) launched a public consultation on 7 July 2026 on proposals for targeted reforms to the Limited Partnerships Act 1907 (the Act).

The consultation can be accessed here. The proposed reforms will form part of the broader set of reforms being advanced through the Miscellaneous Provisions (Registration of Limited Partnerships and Business Names) Bill 2024 (see our previous briefing: The Future of Limited Partnerships).

The consultation ties in with the Irish government’s Fund Sector Review 2030 and the increasingly important role which alternative and private markets structures play in the market and the government’s policy emphasis on enhancing Ireland’s offering as a private funds domicile.

For private markets sponsors, AIFs registered as limited partnerships under the Act (1907 LPs) are a popular and versatile structure.  For many years, 1907 LPs have been a preferred structure for both domestic and international VC/PE managers in particular, and have also been used across other alternative strategies such as funds investing in property, infrastructure and other real assets.  It is a neat and usually efficient structuring option relative to and alongside Ireland’s Central Bank authorised AIF structures (i.e. the ICAV and the Investment Limited Partnership (ILP)).  While the 1907 LP is subject to AIFMD like any other AIF, it is not subject to Central Bank authorisation or the additional product rules of the Central Bank’s AIF Rulebook.

The DETE is seeking stakeholder views on three specific policy proposals under consideration, namely: increasing the maximum number of partners; introducing a statutory “whitelist” of permitted activities for limited partners; and allowing greater flexibility regarding capital contributions.

Increase to maximum partner limit

It is proposed to increase the current statutory maximum partner cap from 20 partners (or 50 for VC/PE related financing) to 149 partners.

The current limits are acknowledged as outdated and as a constraint on scaling up investment structures.  In practice, when accommodating larger numbers of investors above these limits, there is added cost and complexity such as solutions involving parallel limited partnerships or aggregator vehicles.

Statutory Whitelist

Currently under the Act, a limited partner is at risk of losing its limited liability protection if it participates in management of the partnership.  The Act is silent on what constitutes management and so it can be an area for caution in some circumstances. The proposal to introduce a statutory whitelist of permitted limited partner activities is welcome from the perspective of legal certainty and assurance for limited partners.

The DETE has suggested that whitelisted activities could include limited partner involvement in approving major partnership decisions, advising or consulting with the general partner, voting on specified matters and holding certain governance or oversight roles (e.g. advisory committee participation). The DETE notes that comparable funds jurisdictions, such as the UK,

Luxembourg and Delaware, already provide statutory “whitelists” of permitted activities and a similar statutory whitelist already exists in Irish law for Central Bank regulated ILPs.

• Withdrawal of capital

Under the current Act, capital contributed by limited partners is effectively locked into the partnership for its duration.  If any of that capital is subsequently withdrawn by the limited partner, it remains liable for the debts of the limited partnership up to the amount withdrawn. Typically, in practice this is addressed using a loan/equity split model (i.e. by structuring contributions to a limited partnership by way of a nominal (e.g. 0.01%) contribution to capital and the remainder being committed by way of loan).

The current position is seen as negatively impacting investment structuring for both sponsors and investors and contrasts with comparable jurisdictions where capital withdrawal is permitted subject to certain contractual and solvency-based safeguards.  The consultation seeks views on permitting withdrawals or adjustment of capital contributions, subject to appropriate safeguards, including creditor protection, solvency requirements and appropriate disclosure and filings.

Conclusion

The consultation is a positive step in achieving targeted modernisation of key elements of the 1907 LP regime.

The UK’s reform of its 1907 legislation for private fund limited partnerships offers a useful benchmark for the DETE which it should consider in making enhancements to the Act.  The reforms proposed by the DETE are not as far reaching but are welcome nonetheless in modernising features of the 1907 LP. It should serve to support the continued appeal of this vehicle and further support Ireland’s competitiveness and attractiveness as a private funds domicile.

Next Steps

The closing date for submissions on the consultation is Friday, 14 August 2026.