Ireland company formation
Limited Partnership (LP)

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Ireland LP company formation key features

The Ireland Limited Partnership Act 1907 facilitates the creation of a partnership in which some members have limited liability for the debts of the firm. Their liability is limited to the extent of their contribution. As with a general partnership, a limited partnership is not a separate legal entity.

Ireland’s company formation limited partnership is a special type of business entity that is commonly used for investment purposes. The key feature of an Irish limited partnership is that it has both general and limited partner. It needs to have at least one of each type of partner.

The general partners are responsible for managing the business and are liable for all debts and obligations of the partnership. The partners, on the other hand, are only liable for up to the amount of their investment.

This structure makes Irish limited partnerships well suited for joint ventures and other high-risk ventures. When forming an Irish limited partnership, it is important to choose the right legal structure for your business. The Republic of Ireland offers a variety of business structures, each with its advantages and disadvantages.

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Once you have selected the right legal structure, you can then focus on registering your business and obtaining all the necessary licenses and permits.

Please note that when we refer to Ireland, this is the Republic of Ireland.

Ireland Limited Partnerships top benefits

ireland company formation limited partnership faqs 6

Ireland Limited Partnerships top benefits

In general, Ireland is a jurisdiction with a standard level of taxation. However, Irish legislation provides the opportunity for registration and operating of companies with a zero rate of tax – the Limited Partnerships (L.P.).

An Irish L.P. with foreign members, which does not carry on a business in Ireland and derives no income on territory of Ireland, is not liable to tax in Ireland. According to the tax laws of Ireland, a L.P. is not considered as a separate subject of taxation. The founders should pay taxes from the profits received by the L.P. in their place of residence in proportions according to their share of interests belonging to them in the L.P.

As an example, an Irish L.P. with a General Partner resident in offshore, such as in the Seychelles, and which receives the income only outside of Ireland, will not be assessed for tax. Taxes will be paid by the members in the country of their residence if it is stipulated by the legislation of that specific country.

The favourable tax regime of L.P. companies does not eliminate the requirements for preparation of financial statements. Every L.P. is obliged to prepare financial statements, and the relevant Partnership Tax return must be filed annually with Irish Tax Revenue.

Offshore bank account Ireland

It is rather straightforward to open a bank account in Ireland, whether you’re a resident, a non-resident, or a citizen.

With the support and full assistance of our Business Development Team, in charge of your Irish company registration and management, this is an extremely fast process, since you will provide us with all documents as requested by the bank we will be opening your business bank account with.

We have developed a banking network and expertise which enables us to open accounts for all companies we register.

Obviously, the final decision to open an account depends on the bank, but our account opening success rate is close to 95%.

Ireland LP Company Formation FAQs

How must the formation of a limited partnership in Ireland be registered with the Companies Registration Office?
A limited partnership in Ireland must be registered with the Companies Registration Office. The registration fee is €100. The limited partnership must have a registered office address in Ireland. The limited partnership must also have at least two partners, one of whom is a limited partner and one of whom is a general partner.

A limited partner is someone who does not take part in the management of the partnership and whose liability is limited to the amount of money that they have invested in the partnership. A general partner is someone who takes part in the management of the partnership and whose liability is unlimited. If you want to register a limited partnership, you can do so online or by post.

What are the formal requirements for an Irish limited partnership?

There are a few formal requirements for an Irish limited partnership.

  • First, the partnership must be registered with the Irish Companies Registration Office.
  • Second, the partnership must have two or more partners, each of whom is liable for the debts of the partnership up to the amount of their investment.
  • Third, the partnership must have a designated representative who is authorized to make financial or tax decisions on behalf of the partnership.
  • Finally, the partnership must comply with Irish legislation governing partnerships, specifically the Partnership Act 1990.

These requirements ensure that partnerships conducting international business are properly organized and regulated.

What is a limited partner in a company limited partnership?
A limited partner is an individual or entity that has invested in a limited partnership. Limited partnerships are common in the investment world, and usually involve two types of partners: general partners and limited partners.

General partners are responsible for managing the partnership and have unlimited liability for the debts and obligations of the partnership. Ltd partners, on the other hand, have limited liability and are only responsible for the amount they have invested in the partnership. Limited partners also have limited input in terms of management and decision-making.

Most limited partnerships are structured so that the ltd partners are only liable for the amount they have invested and are not responsible for any debts or obligations incurred by the partnership.

What are the advantages of the Irish Limited Partnership?

What are the advantages of the Irish Limited Partnership

An Irish Limited Partnership is a separate legal entity, which has certain advantages over other types of investment vehicles.

  • Firstly, it is not subject to the same level of taxation as a company.
  • Secondly, an Irish Limited Partnership can be transferred or sold without incurring Capital Gains Tax.
  • Thirdly, an Irish Limited Partnership is not required to file annual accounts with the CRO.
  • Fourthly, an Irish Limited Partnership can avail of certain benefits under the Double Taxation Agreement between Ireland and the United Kingdom.

As a result of the above-stated advantages, Irish Ltd Partnerships have become increasingly popular as structures for holding investments, particularly private equity and venture capital funds.

What are the requirements to form a limited partnership?

What are the requirements to form a limited partnership

A limited partnership is a partnership between two or more people in which some partners manage the business and are liable for its debts, and other partners invest money in the business but are not liable for its debts beyond their investment. Limited partnerships are often used to raise capital for businesses, such as real estate ventures.

To form a limited partnership, there are a few requirements that must be met.

  • First, the partnership must have at least one general partner and one limited partner.
  • Second, the partnership must be created through a written agreement that sets forth the rights and responsibilities of each partner.
  • Finally, the partnership must file a certificate of limited partnership with the state in which it is formed.

While forming a limited partnership may seem like a complex process, working with tax and legal advisors can help to simplify the process and ensure that all requirements are met.

What are the disadvantages of a limited partnership?

One potential disadvantage of a limited partnership is that the republic of Ireland may not legally recognize the partnership. This can cause problems if the partners try to dissolve the partnership or if one partner dies.

Additionally, limited partnerships can be expensive to set up and maintain, and they may require more paperwork than other business structures.

Finally, limited partnerships can be less flexible than other business structures, making it difficult to add or remove partners or make changes to the business.

Overall, limited partnerships have several potential disadvantages that should be considered before choosing this business structure.

How many partners does a limited partnership need?
A limited partnership must have at least one general partner and one limited partner. A general partner is an individual who manages the business and is liable for its debts.

A limited partner is an individual who provides capital to the business but does not take an active role in its management. In some cases, a limited partnership may also have a special purpose partner, such as a banking partnership.

The Partnership Agreement will specify the number and roles of the partners. Limited partnerships are popular because they provide limited liability to the partners while still allowing them to actively participate in the business. This structure is especially advantageous for businesses that require a large amount of capital.

What are the tax benefits of a limited partnership?
There are many tax benefits to setting up a limited partnership. For one, it can help to shield your personal assets from liability.

In addition, a limited partnership can help to reduce your tax burden by allowing you to pay corporate tax rates on your business income.

However, it’s important to consult with tax and legal advisors before setting up a limited partnership, as there are also some potential drawbacks. For example, you may be required to pay tax on your share of the partnership’s income, even if you don’t receive any money from the partnership itself. You should also be aware that limited partnerships are subject to more stringent regulations than other business structures.

As such, they may not be the best choice for everyone. However, if you’re looking for a way to minimize your tax liability and protect your personal assets, a limited partnership may be right for you.

How do limited partners make money?
Limited partners usually make money through a management fee that the general partner charges as well as a percentage of the profits (carry). The management fee is used to offset the ldt partners’ investment and is generally a set percentage of the total amount committed by the LP’s.

For example, if an LP has committed $100 million to a fund and the management fee is 2%, the GP would receive $2 million per year regardless of the fund’s performance.

The carry, or carried interest, is the portion of profits that the GP receives after returning the initial investment to the LP’s.

For example, if a fund generates $10 million in profit and the carried interest is 20%, the GP would receive $2 million while the LP’s would receive $8 million.

As you can see, ltd partners can make a lot of money if the fund is successful. However, they also bear a great deal of risk if the fund fails to perform.

How long can a limited partnership last?
A limited partnership is a business arrangement in which two or more individuals agree to share the profits and losses of a company. The partnership is typically structured so that one partner, known as the general partner, assumed the majority of the risk while the other partners, known as ldt partners, provide financial support.

The general partner is usually responsible for managing the day-to-day operations of the business, while the ltd partners typically have a more passive role. Limited partnerships can last indefinitely, provided that the terms of the partnership agreement are met.

However, if any of the partners die or become incapacitated, the partnership will typically dissolve. In addition, most limited partnerships have a fixed term, after which the business will be wound down and dissolved.

Why might a company choose a limited partnership?

A company might choose a limited partnership in the Republic of Ireland for a number of reasons.

  • One is the country’s low corporate tax rate, which is just 12.5%. This makes it an attractive destination for businesses looking to minimise their tax liability.
  • Additionally, the Republic of Ireland has a well-developed infrastructure and a skilled workforce, which can make setting up and running a business easier than in many other countries.
  • Finally, limited partnerships in the Republic of Ireland are subject to Irish law, which is generally seen as being more favourable to businesses than the laws of other countries.

Consequently, there are a number of compelling reasons why a company might choose to establish a limited partnership in the Republic of Ireland.

What types of businesses are most suited for Ireland LP company formation?

LPs in funding structures

Nowadays, LPs are commonly found sitting under regulated fund structures. LPs are often used by promoters of Irish regulated funds as they are treated as “look through” entities from a direct tax perspective. The partners of LPs are instead subject to tax on their profit share, as provided for in the LP deed.

Another reason LPs are used in these structures is that they help create a separate security package in a sub-fund structure where limited recourse financing is being provided. Multiple limited partnerships can be used under one sub-fund, thus creating a separate security package for lenders and reducing the set-up and on-going costs of multiple sub-funds.

The Investment Limited Partnership

Long-overdue reforms to the Irish investment limited partnership could help Ireland remain at the forefront of the continuously evolving international funds sector.

There has been a renewed focus in recent months on the importance to Ireland of a suitable regulated fund platform through which private equity investors can invest. The lack of a suitable investment limited partnership structure is possibly the biggest gap in Ireland’s financial services offering and getting it right is critical. There is a feeling that we are close to that point now.

Under current rules, Irish investment funds can be established as an investment company, a unit trust, an investment limited partnership, a common contractual fund or an Irish collective asset-management vehicle. However, the private equity sector has traditionally utilised investment limited partnership structures for their investments.

Uses of a Limited Partnership

Due to the advantages noted above, limited partnerships are widely used in the alternative investments sector and are particularly attractive to the private equity sector. The US private equity market has a long-established history of investing through Delaware and Cayman limited partnership structures and in more recent times, it has moved to set up regulated structures in the European Union to secure access to the European market.

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