Investment limited partnership (ILP) is established once a partnership agreement is executed.
ILP becomes legal entity from the date of CR registration. ILP, is subject to the supervision of the Central Bank of Bahrain (CBB).
ILP, consists of general partner(s) who contributes to the capital, and jointly and severally liable in their personal assets.
Moreover, limited partner(s) are who contribute to the capital. A limited partner is not liable for ILP obligations and debts beyond his own contribution.
At least one of the general partners must be a corporate body domiciled in Bahrain or another country acceptable to the CBB.
General partners and all limited partners may be a natural person or a corporate body and none of them need to be a national of, domiciled, incorporated or have a principal place of business in Bahrain.
A general partner is deemed a merchant and carrying out business as a merchant in the name of the partnership. Bankruptcy of the ILP results in the bankruptcy of general partners.
Partners will have to execute a “partnership agreement” among themselves including provisions relating to the regulation of ILP, conduct of business and the rights and obligations of the partners.
This agreement will be binding on the partners upon its execution and notarisation. The “partnership agreement” may be amended in the manner set out in its provisions or, if the agreement is silent in this regard, by unanimous consent.
The “partnership agreement” includes provisions covering particulars of the law, names and addresses of limited partners, names of persons authorised to sign on behalf of and manage the ILP together with their competence and extent of their powers, whether there are restrictions on the partner’s ability to assign his partnership interest or dispose of it in any manner, particulars of the restrictions where the “partnership agreement” provides for restrictions, whether there are restrictions on the business of ILP, particulars of the restrictions where the partnership agreement provides for restrictions, the distribution of profits and losses, general partner’s rights and situations in which he may compete with ILP, where the partnership agreement provides for such right, events to be held, meetings, date and procedure for such meetings, events in which a partner may withdraw or be removed, how a new partner may be admitted, start and end date of the financial year, policies for avoidance of conflict of interest and other matters specified in CBB regulations.