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1. The Limited Partnerships Bill ("the Bill") has recently been introduced into Parliament. The Bill creates a new form of legal structure in New Zealand called the limited partnership. Limited partnerships are a special form of partnership that are a preferred means internationally for investing in venture capital and can also be used as a flexible legal form by the broader commercial community.

2. By establishing the legal form of limited partnership in New Zealand the Bill aims to encourage the development of the New Zealand venture capital industry, and encourage domestic and international investment in New Zealand. This makes it particularly important that the New Zealand limited partnership contain the key features needed for it to be recognised and accepted internationally.

3. As a result, the limited partnership structure established by the Bill has certain key features that are common to overseas limited partnership regimes. In particular:

1. Limited Partnerships having separate legal personality;
2. Two classes of partners: 1) general partners who are jointly and severally liable for all of the debts and liabilities of the partnership, and 2) limited partners whose liability is limited to the extent of their contribution to the partnership;
3. Limited partners being able to undertake certain activities (commonly referred to as "safe harbours") that allow them to have a say in how the partnership is run, without being deemed to participate in the management of the partnership and potentially losing their limited liability; and
4. Flow through tax status, meaning that the partnership itself is not taxed, but that each partner is taxed individually at the partner's personal tax rate.

4. The Bill also provides for regulations to be enacted dealing with matters including:

1. Safe harbours;
2. Fees payable to the Registrar of Limited Partnerships; and
3. Forms for filing with the Registrar of Limited Partnerships.

5. These regulations need to be enacted before 1 April 2008, which is the date proposed for the Bill to come into force.

6. This discussion document contains proposals for regulations setting out safe harbours and fees payable to the Registrar of Limited Partnerships and Overseas Limited Partnerships, and aims to obtain the views of key stakeholders on these proposals.