Guide 5 of 5Partnership Acts; Venture Capital Act 2002
Incorporated limited partnerships: the partnership built for venture capital
An incorporated limited partnership is a partnership that is a body corporate, formed on registration under a state Partnership Act, with at least one general partner and at least one limited partner. In New South Wales and Queensland it can be registered only where the partnership is registered, or a general partner intends to apply to register it, as a VCLP, ESVCLP or AFOF under the Venture Capital Act 2002, or is, or is meant to be, a venture capital management partnership; NSW also allows other circumstances its regulations prescribe.
General information about two states’ Acts and the Commonwealth Acts they connect to, not legal or tax advice. Dotto is not a financial adviser, and this guide is not legal or financial advice. This page covers New South Wales and Queensland only, as a selection.
What the law makes of it
In NSW, section 53(1) of the Partnership Act 1892 (version of 13 January 2023) says an incorporated limited partnership is a body corporate with legal personality separate from its partners and with perpetual succession, may have a common seal, and may sue and be sued in its firm-name. Section 53A gives it the legal capacity and powers of an individual and all the powers of a body corporate, which the partnership agreement may limit.
Queensland’s Partnership Act 1891 (current as at 1 July 2025) says the same in section 72(1). Its section 71 says: “An incorporated limited partnership is formed on registration under this chapter.” The chapter is Chapter 4, “Incorporated limited partnerships”. In NSW the provisions sit in Part 3, “Limited partnerships and incorporated limited partnerships”.
Who may register one
Neither state opens this form to every firm. The circumstances each Act allows are these.
| Circumstance | NSW, s 53D(3) | Qld, s 75(2) |
|---|---|---|
| Registered, or a general partner intends to apply to register it, under Part 2 of the Venture Capital Act 2002 as a VCLP, AFOF or ESVCLP | Yes, para (a) | Yes, para (a) |
| A venture capital management partnership under section 94D of the Income Tax Assessment Act 1936, or intended to meet its requirements | Yes, para (b) | Yes, para (b) |
| Other circumstances prescribed by regulation | Yes, para (c) | No such paragraph |
This guide did not read the NSW regulations, so it cannot say whether any circumstance has been prescribed under paragraph (c).
Partners and the agreement
An incorporated limited partnership must have at least one general partner and at least one limited partner, and no more than 20 general partners; the number of limited partners is not limited (NSW sections 51 and 52; Queensland section 73). Individuals, partnerships and bodies corporate may each be a general or a limited partner.
There must always be a written partnership agreement (NSW section 53B(1); Queensland section 74(1)). In Queensland the firm-name must end with “An incorporated limited partnership”, “L.P.” or “LP”. In both states a change in the registered particulars must be lodged within 7 days after it happens; in NSW the Register is kept by the Registrar, the Commissioner for Fair Trading, and in Queensland by the chief executive.
Who carries the debts
A general partner
NSW s 9(2)–(3); Qld s 12(2)–(3)
Liable jointly with the incorporated limited partnership for its debts and obligations incurred while a general partner, but only to the extent the partnership is unable to satisfy them, or to a greater extent the partnership agreement provides. The same limit applies to liability for wrongs (NSW s 12(3); Qld s 15(3)).
A limited partner
NSW s 66A; Qld s 86
“A limited partner has no liability for the liabilities of the incorporated limited partnership or of a general partner.” Capital or property the limited partner has contributed, or is obliged to contribute, can still be used or enforced to meet those liabilities.
That limited partner rule is subject to one more. In the words of both Acts, a limited partner “must not take part in the management” of its business (NSW section 67A(1); Queensland section 87(1)). If, as a direct result of a wrongful act or omission in taking part in management, a limited partner causes loss or injury to a third party who had reasonable grounds to believe the limited partner was a general partner, the limited partner is liable as if they were one.
An ordinary limited partnership works differently. In NSW, section 60 caps a limited partner’s liability to contribute at the amount shown for that partner in the Register. That cap belongs to limited partnerships, and the no-liability rule above to incorporated ones.
The Venture Capital Act registrations
Part 2 of the Venture Capital Act 2002 (compilation 10, 14 October 2024) lets Industry Innovation and Science Australia register limited partnerships as venture capital limited partnerships (VCLPs), early stage venture capital limited partnerships (ESVCLPs) or Australian venture capital funds of funds (AFOFs). Among the registration requirements, a VCLP is to exist for not less than 5 years and not more than 15, with committed capital of at least $10 million (section 9-1). An ESVCLP has the same life and committed capital of at least $10 million that does not exceed $200 million, and no partner’s committed capital, with its associates’, may exceed 30% of the total unless an exception applies (section 9-3). An AFOF is to exist for 5 to 20 years (section 9-5). Those are a selection of each section’s requirements; the Act lists the rest.
Taxed as a company, or not
Division 5A of the Income Tax Assessment Act 1936 exists “to provide for certain limited partnerships to be treated as companies for tax purposes”. But under section 94D(2), “a partnership that is a VCLP, an ESVCLP, an AFOF or a venture capital management partnership cannot be a corporate limited partnership”, and Note 2 to that section says these “are taxed as ordinary partnerships under Division 5”. The ATO is the place to check how this applies to a particular partnership.