What must be respected in the “Rights and Obligations of Kompleum Partner” section, which is widely explained, is that family physicians must have a licence and full power in the name of partnership. In addition, LPs must not be involved in the management or control of the transaction. The emphasis is therefore on the authorities and the powers of family doctors. However, clauses relating to the replacement of family doctors, the powers and duties of family doctors, costs and the suspension of investment powers are also taken into account. In addition, family physicians must adhere to certain investment guidelines, which are clearly defined in the chapter. This chapter could contain a number of provisions, the most common being a ban on investing in certain sectors such as gambling or tobacco, a ban on concentrating more than a certain fixed percentage of the total capital linked to a single investment, or even a ban on investing in a collective investment fund. The LLP is formed when the two categories of partners have negotiated and signed the Limited Partnership Agreement (APA), which contains the agreement that contains the terms and conditions governing the relationship between them. These agreements are governed by the law of the jurisdiction in which the partnership is registered (for example. B Delaware State Law in the United States). In Europe, private equity and venture capital funds are regulated as financial activities at EU level (the 2011/61/EU Directive on Alternative Investment Fund Managers is the largest), and the most commonly used for investment is the Closing Fund (CEF), which differs from the LP in terms of nature and structure.
Unlike the APA, the relationship between investors and managers in an CeF is based on the internal code of conduct, which cannot be considered a simple contract between the parties, since it must be submitted and approved to the supervisory company. In the United States, on the other hand, private equity and venture capital are considered entrepreneurial activities and are generally unsupervised. This means that the APA can actually be defined as a contract between the parties and therefore needs to be developed and negotiated with great care (in some legal orders, as in the State of Delaware, the standard rule will govern relations within the APA in the absence of explicit or tacit agreement between LPs and family physicians, but most funds do not wish for such an outcome and, therefore, their internal governance will be regulated in detail). Let`s go into more detail about some of the key areas covered in the APA. As with many things in life, the underlying structures of entities, whether the base of a building or the skeletal apparatus for humans and animals, often go unnoticed, but they are nevertheless an essential part of the existence of what is based on them. The same applies to the legal structures that underpin private equity and venture capital funds. As we hope, the APA plays a fundamental role in defining the rules that partners must comply with, creating a contractual framework governing the duration of the fund itself. Its content may be dense, its clauses are articulate and complex, but a well-written and well-negotiated LPA is undoubtedly the first step towards a successful investment.
Simply put, LDCs are investors who play a purely passive role and have no say in managing the partnership, and family physicians are the managers of the partnership – the decision makers and those who invest. Given their full personal responsibility for the company`s debts, it is very common for family physicians to act as sponsors of an LLP (Limited Liability Partnership) that acts as a consulting firm and thus protects family physicians from personal liability. In this case, LLP is fully responsible for the company`s obligations, i.e. its assets are used as collateral for LP. The LPA model is a Delaware-based document that provides for an “entire fund” or “European” cascade to ensure that LPs receive the restit