Amended to the Partnership Law in Cyprus

The Cyprus partnership law has finally been amended by Law No.144(I)/2015 introducing the Partnership Limited by Shares ("LPS"). The law is in line with provisions existing for many years in major EU countries. In addition to the new LPS, the new maximum number of persons that can be partners in any type of partnership has been increased to 100.

The amending legislation allows limited partners to contribute by shares on the condition that a limited partner by shares shall not take part in the management and the business of the partnership, neither shall have the power to bind nor operate the LPS.

It is important to note that the LPS continue to acquire no legal personality on formation (unlike an LTD that by law acquires legal personality upon incorporation). The LPS is tax transparent, so that taxation, if any, arises at the level of the partners. The amending law has now made it possible for Alternative Investment Funds to be formed as limited liability partnerships.