Following ILP Reboot, Irish attention turns to reform of the 1907 LPA

On 7 July 2026, the Irish Government Department of Enterprise, Tourism and Employment (the Irish Government) launched a public consultation (the “Consultation”) on proposed reforms to the Limited Partnerships Act 1907 (the “1907 Act”). The Consultation addresses three areas that have long been identified as barriers to the competitiveness of Irish limited partnerships: (i) the cap on partner numbers, (ii) the uncertainty around what activities a limited partner may undertake without losing limited liability, and (iii) restrictions on withdrawals of capital contributions.

The Consultation closes on 14 August 2026. Submissions should be sent to fiachra.quinlan@enterprise.gov.ie.

Background

While much focus in recent years has been on updating Ireland’s regulated partnership fund structure principally through the Investment Limited Partnerships Act 2020 (the “ILP Act”), the 1907 Act continued to provide a flexible, tax-transparent and cost-effective structuring option within an AIFMD framework where a regulated entity was not required.

The ILP Act has succeeded in its objective of offering a competitive regulated partnership structure that is attractive to private capital managers leading to a significantly increased use of partnership structures in Ireland.

The 1907 Act, which predates Irish independence, shares its legislative origins with the English and Scottish limited partnership regimes. However, while the UK modernised its private fund partnership framework through the introduction of the Private Fund Limited Partnership regime in 2017, the Irish 1907 Act has remained largely unchanged. The current Consultation appears intended to ensure that the Irish regime remains competitive with modern partnership frameworks available in jurisdictions such as the UK, Delaware and Luxembourg

What are the key areas of focus for the Consultation?

1. The maximum number of partners

For historical reasons, the 1907 Act limited (with some exceptions) the number of limited partners to 20.

When used to structure investments, this limited the pool of investors significantly and while parallel or aggregator structures could be used, it has been a significant impediment to the attractiveness of the structure and, often, meant that 1907 LP failed at the first hurdle of a jurisdiction comparison.

The proposal is to increase this number to 149 in common with the number of members for private companies. Politically, this gives the Irish Government a justification for increasing the maximum number 1907 LP. However, for competitiveness, the better solution would be to remove the cap altogether in common with competitor jurisdictions which have no cap. While very few LPs will exceed this cap, most sponsors would prefer not to have to worry about it.

2. A whitelist of permitted activities

The 1907 Act provides that when a limited partner is deemed to take part in the management of the partnership, that limited partner loses their limited liability.

In private market structures, investors typically play a more active governance and it is increasingly common for limited partners to participate in advisory committees, vote on key partnership matters and exercise oversight rights in relation to conflicts, valuations, key person events and other significant matters. While these activities are generally distinguishable from the management of the partnership, the boundary is not always clear under traditional limited partnership legislation.

The Consultation proposes a whitelist of activities that would not constitute management but rather legitimate oversight.

Comparable jurisdictions, such as the UK, Luxembourg and Delaware have introduced statutory "whitelists" of permitted activities or safe harbours, and, significantly, a comparable whitelist was also introduced in Ireland for Investment Limited Partnerships under the ILP Act.

The Consultation is relatively light on the detail of what the whitelist should contain but specifically seeks views on its application to investment structures.

Given that Ireland has already adopted an enhanced safe-harbour regime for Investment Limited Partnerships, there is a strong argument that the 1907 LP whitelist should, at a minimum, reflect the principles already incorporated into Irish partnership legislation. The policy rationale underpinning those provisions—namely facilitating legitimate investor governance and oversight activities without jeopardising limited liability—appears equally relevant in the context of investment structures under 1907 Act.

3. Access to capital

Limited partners have to make a capital contribution and cannot withdraw this during the lifetime of the LP without losing their limited liability.

While that approach may have suited a traditional partnership model, it sits uncomfortably with modern private market fund structures. Private equity, venture capital, infrastructure and private credit funds are typically organised around investor commitments, drawdowns, distributions, recycling mechanisms and capital account adjustments rather than fixed capital contributions.

The current rules can therefore create unnecessary complexity and distinguish the Irish regime from competing partnership jurisdictions where commitment-and-drawdown structures are commonplace. These features are permitted under the ILP Act.

While not explicitly a vehicle for investment structures, this area has been an area of recent focus by sponsors and the Consultation provides an opportunity to modernise the 1907 Act so that it better reflects contemporary private capital fund structuring while maintaining appropriate protections for creditors and third parties.

The Department is seeking views on whether withdrawals or adjustments of capital contributions should be permitted, subject to appropriate safeguards such as:

• solvency requirements;
• creditor protection measures; and
• appropriate disclosure and filings

Significance of the proposed reforms

The proposed reforms, if enacted, would represent the most significant modernisation of Ireland's LP framework in over a century. While relatively modest and targeted in scope, they are designed to make Irish LPs a more competitive and flexible vehicle for investment and business structuring.

The Consultation does not seek to create a new investment product or replicate the ILP regime. Rather, it focuses on removing historical constraints that have their origins in a partnership framework enacted more than a century ago and which are not generally found in competing partnership jurisdictions.

If implemented, the reforms would make the 1907 LP a more practical vehicle for private equity, venture capital, infrastructure, real estate and private credit structures. Larger investor bases could be accommodated without parallel structures, investors would obtain greater certainty regarding legitimate governance activities, and partnership capital could be structured in a manner more consistent with modern commitment-and-drawdown fund models.

Taken together with the transparency measures proposed in the 2024 General Scheme, these reforms signal Ireland's intention to position itself as a modern, well-regulated jurisdiction for LP structures, while maintaining appropriate investor and creditor protections.

Next steps

Interested parties should consider whether to respond to the Consultation, which closes on 14 August 2026. Submissions should be sent to fiachra.quinlan@enterprise.gov.ie.

Simmons and Simmons will be making a submission and would welcome comments or suggestions for inclusion in such a submission.

We will continue to monitor developments arising from this Consultation and the progress of the broader LP reform programme and will provide further updates as they become available.

If you would like to discuss any aspect of the Consultation or reform of the 1907 limited partnership more generally, please reach out to the authors for more information.