Update to the Partnerships and Business Names Law, Cap. 116 – The introduction into Cyprus Law of the “Partnership Limited by Shares”
The recent amendment to the aforementioned law, by the adoption and enactment of the amending Law 144(I)/2015, introduces to Cyprus Law the notion of the Partnership Limited by Shares (“PLS”).
The new provisions which have been introduced bring the Cyprus Partnerships Law to be in line with provisions existing for many years in the major EU countries such as Germany (Kommanditgesellschaft auf Aktien (KGaA) ), Luxembourg (with the SCSp partnership) and Poland (Spółka Komandytowo-Akcyjna (S.K.A.).
A further amendment introduced raised the maximum number of partners in all types of partnerships registered under Cyprus Law to one hundred (100), whether legal persons or physical persons.
The PLS affords the partners the “protection” of limited liability, much in the same manner as a shareholder in a regular company limited by shares. The limited liability partner will, however, be precluded from participation in the management of the PLS and may not bind the PLS in any way by its signature and actions; as such, it is imperative that there is at least one General Partner in the PLS, whether a legal or physical person, who will have such management powers.
An important item to be noted is that, after the amendment to the Cyprus Partnerships and Business Names Law, an Alternative Investment Fund which is to be established and operated in Cyprus can be formed as a PLS.