144(Ι)/2015 – Law amending The Partnerships and Business Names Law, Cap. 116
The House of Representatives of the Republic of Cyprus voted into law the introduction of the partnership limited by shares (“Limited Liability Partnership” or “LLP”).
The use of partnerships in commercial transactions and investments is expected to increase through this implementation. The new Law adopts the partnership by shares, giving the opportunity of forming more flexible and practical structures.
The partners who hold shares in an LLP (“Limited Liability Partners”) can be natural or legal persons and shall enjoy limited liability in the same way as shareholders enjoy limited liability in a limited liability company.
However, a Limited Liability Partner cannot manage or participate in the operations of an LLP, nor can they be authorised to bind the LLP.
As per the above, an LLP shall consist of:
- one or more general partners, who are liable for all debts and obligations of the LLP and are authorized to manage, operate and bind the LLP; and
- one or more Limited Liability Partners, who contribute a sums of money as capital towards shares in the LLP, but who are not authorized to manage, operate and bind the LLP.
Another change introduced is that the maximum number of persons that may become partners in any type of partnership is now increased to one hundred.
An important point arising from this amendment is that Alternative Investment Funds may now take the form of an LLP.
The LLP, like General and Limited Partnerships, has no legal personality and as such, is tax transparent. Taxation, if any, is imposed on the Limited Liability Partners personally.