South Australian Current Acts South Australian Current Acts65A—Limited partner not to take part in management of
incorporated limited partnership
(1) A limited partner
in an incorporated limited partnership must not take part in the management of
the business of the partnership.
(a) as a
direct result of any wrongful act or omission of a limited partner in taking
part in the management of the business of an incorporated limited partnership,
the limited partner causes any loss or injury to any person
other than a partner in the partnership (a "third party"); and
(b) at
the time of the act or omission, the third party had reasonable grounds to
believe that the limited partner was a general partner in the partnership,
the limited partner is liable for the loss or injury to the same extent that
the limited partner would have been liable if the limited partner were in fact
a general partner in the partnership.
(3) A limited partner
in an incorporated limited partnership is not to be regarded as taking part in
the management of the business of the incorporated limited partnership merely
because the limited partner or a person acting on behalf of the limited
partner—
(a) is
an employee or an independent contractor of the partnership or of a
general partner in the partnership or of an associate of the general partner,
or is an officer of a general partner that is a body corporate or of an
associate of a general partner that is a body corporate; or
(b)
gives advice to, or on behalf of, the partnership or a general partner in the
partnership or an associate of the general partner in the proper exercise of
functions arising from the engagement of the limited partner, or a person
acting on behalf of the limited partner, in a professional capacity or arising
from business dealings between the limited partner, or a person acting on
behalf of the limited partner, and the partnership or a general partner or an
associate of the general partner; or
(c)
gives a guarantee or indemnity in respect of any liability of the partnership
or of a general partner or an associate of the general partner; or
(d)
takes any action, or participates in any action taken by any other
limited partner in the partnership, for the purpose of enforcing the rights,
or safeguarding the interests, of the limited partner as a limited partner; or
(e) if
permitted by the partnership agreement—
(i)
calls, requisitions, convenes, chairs, participates in,
postpones, adjourns or makes a record of a meeting of the partners or of the
limited partners or of any of them; or
(ii)
requisitions, signs or otherwise passes, approves,
disapproves or amends any resolution (whether at a meeting, in writing or
otherwise) of the partners or of the limited partners or of any of them,
including without limitation by formulating, moving, proposing, supporting,
opposing, speaking to or voting on any such resolution; or
(f)
exercises a power conferred on the limited partner by subsection (4) or
has, or exercises, any right to—
(i)
have access to and inspect the books or records of the
partnership or copy any of them; or
(ii)
examine the state or prospects of the business of the
partnership or advise, or consult with, other partners in relation to such
matters; or
(g)
gives advice to, or consults with, or is or acts as an officer, director,
security holder, partner, agent, representative, employee of or independent
contractor engaged by, an associate of the partnership; or
(h) is
or acts as a lender to, or fiduciary for, an associate of the partnership; or
(i)
to the extent authorised by the partnership agreement,
participates on, or has or exercises any right to appoint one or more persons
to, or remove one or more persons from, or to nominate one or more persons for
such appointment to or removal from, a committee which considers, approves of,
consents to or disapproves of any one or more of the following proposals from
a general partner:
(i)
a proposal involving a material change in the nature of
the business of the partnership (including a change in, or departure from, any
investment guidelines, policies or conditions relating to the business of the
partnership);
(ii)
a proposal for the adoption of a method for valuing some
or all of the assets of the partnership (including a change to, replacement of
or variation from such a method);
(iii)
a proposal for an extension or reduction in the period in
which, under the partnership agreement, investments (or certain types of
investments) can be made by the partnership, or for any approval or
disapproval of investments that the partnership does not otherwise have a
right to make;
(iv)
a proposal relating to any actual or potential
transaction or other matter involving any actual or potential conflict of
interest;
(v)
a proposal relating to any actual or potential
transaction, contract, arrangement or understanding between one or more of the
partners, or their associates, and the general partner, the partnership or any
associate of the general partner or of the partnership;
(vi)
a proposal for the delegation, waiver, release or
variation of an authority, right, duty or obligation of the general partner;
(vii)
a proposal for the appointment or approval under the
partnership agreement of any person as a senior executive of the
general partner or of an associate of the general partner; or
(j)
nominates, selects, investigates, evaluates or negotiates with any person in
connection with the removal or replacement of a general partner, or
participates on a committee which proposes, considers, approves of, consents
to or disapproves of any nomination, selection, appointment, change in control
or ownership, suspension, replacement or removal of a general partner or an
associate of a general partner; or
(k)
takes any action, or participates in any action taken by any other
limited partner, for the purpose of registering or maintaining the
registration of the partnership or a general partner in the partnership under
Part 2 of the Venture Capital Act 2002 of the Commonwealth as a VCLP, AFOF or
ESVCLP within the meaning of that Act.
(4) A limited partner
in an incorporated partnership or a person authorised by the limited partner
may, if and to the extent the partner or person is so authorised by the
partnership agreement as in force from time to time—
(a) have
access to and inspect the books or records of the partnership or copy any of
them; and
(b)
examine the state or prospects of the business of the partnership and advise,
or consult with, other partners in relation to such matters.
(5) The provisions of
this section (other than subsection (4)) may not be varied by the
partnership agreement or with the consent of the partners, whether given by or
under the partnership agreement or otherwise.
(6) No implication is
to be taken as arising from subsection (3) that a limited partner in an
incorporated limited partnership is to be regarded as taking part in the
management of the business of the partnership merely because the
limited partner or a person acting on behalf of the partner does any thing in
connection with the conduct of that business that is not referred to in that
subsection.
(7) For the purposes
of this section, a limited partner in an incorporated limited partnership that
is a venture capital management partnership (within the meaning of
section 94D(3) of the Income Tax Assessment Act 1936 of the Commonwealth) is
not to be regarded as taking part in the management of the business of the
incorporated limited partnership merely because of any act the limited partner
takes in respect of the incorporated limited partnership in the capacity of a
partner or associate of a partner in the venture capital management
partnership.