Does a limited partnership need a LP agreement?
Limited partnerships are governed by the Limited Partnership Act 1907 (LPA 1907), the Partnership Act 1890 and the rules of equity and common law applicable to ordinary partnerships, unless those provisions are specifically overridden by the LPA 1907. Rather than rely on the default provisions under these acts and common law, it is common to have a formal LP agreement setting out in detail the workings of the LP. An LP agreement is a private document that does not need to be filed at Companies House. As most LPs are used for specialist investment purposes, it is sensible to put in place an agreement to deal with the partners' rights and obligations towards each other as well as the duration and dissolution of the LP. It is common for a LP to also have a limited life (particularly if it is restricted to a particular investment objective etc.), and this should therefore be included in the agreement. (Note that if a LP does have a limited duration, the duration must be included in the initial registration statement and any subsequent changes to the term notified to Companies House).
The British Venture Capital Association’s website (www.bvca.co.uk) has published explanatory notes on the provisions that are often included in a formal LP agreement for private equity funds formed as LPs.