Western Australia has joined moves by other States to rewrite its limited partnership laws, paving the way for new opportunities to develop industries and encourage investment.
Attorney General Joe Berinson said legislation now before State Parliament, foreshadowed last month in `The WA Advantage', would greatly enhance existing provisions for raising venture capital.
He said the legislation was a positive step forward in making WA more attractive for new venture capital projects.
"WA has already had the benefits of new agricultural ventures such as floraculture, fish-farming, and deer-farming under existing limited partnership legislation, and the new laws will build on these achievements by making limited partnerships more attractive," he said.
Limited partnerships provide a relatively simple and inexpensive commercial vehicle to establish legal entities to raise venture capital for speculative or higher risk projects.
The legislation has particular relevance to the Pilbara-based mining industry as it would expand opportunities for small business and investors to enter into oil, gas, and mineral exploration.
Investors who contribute as limited partners have the knowledge that their level of liability is limited to the level of their capital contribution, while they also receive tax benefits on some ventures for initial establishment costs and can claim losses as a tax deduction against other income.
Mr Berinson said the existing legislation, dating back to 1909, was outdated and restrictive, and the new Act would provide a practical incentive for economic development.
Changes proposed by the Government include:
· removing the current requirement that no more than 20 limited partners participate in a venture, making the number open-ended;
· improving controls to protect consumers by requiring the inclusion of the words `limited partnership' on all business documents and in the business name of the partnership;
· enabling the Government to inspect records and investigate complaints;
· providing provisions for maintaining and auditing accounts;
· improving registration procedures, establishing clear rights and obligations of limited partners, and providing for public disclosure and inspection of terms and arrangements, and
· providing restrictions on certain persons becoming general partners - ie undischarged bankrupts and persons convicted of fraud or dishonesty.
The legislation has been laid on the table at Parliament for two months to allow opportunity for public comment.
