Legislative Assembly for the ACT: 2004 Week 05 Hansard (Friday, 14 May 2004) . . Page.. 1927 ..
The incorporated document appears at attachment 3 on page 2108.
Debate (on motion by Mr Stefaniak) adjourned to the next sitting.
Partnership (Venture Capital Funds) Amendment Bill 2004
Mr Stanhope, pursuant to notice, presented the bill and its explanatory statement.
Title read by Clerk.
MR STANHOPE (Chief Minister, Attorney-General, Minister for Environment and Minister for Community Affairs) (11.00): I move:
That this bill be agreed to in principle.
The government is pleased to introduce the Partnership (Venture Capital Funds) Amendment Bill 2004. This bill amends the Partnership Act 1963 and provides a regulatory framework for the formation and operation of incorporated limited partnerships in the ACT. Incorporated limited partnerships are vehicles for venture capital investments. They are new to the ACT; however, they are dominant structures for venture capital funds internationally. The Australian venture capital industry has been lobbying state and territory governments to enact legislation for a scheme for incorporated limited partnerships. The novel feature of this entity is that it will be incorporated but will also be a partnership.
Victoria was the first jurisdiction to provide for incorporated limited partnerships. Recently New South Wales has also enacted legislation on incorporated limited partnerships. The ACT is quick enough to follow the larger jurisdictions in preparing its legislation for these venture capital entities. The government is keen to encourage venture capital flow into the territory to enrich its economy. This legislation is a progressive step towards achieving this objective.
Venture capital investment involves high risk and is essential for start-up companies and businesses which undertake activities which require years of research and development such as medical technology and biotechnology. A number of successful Australian companies may not have succeeded if they had not received venture capital funding. The Venture Capital Act 2002 of the Commonwealth provides for registration of bodies engaged in venture capital investments. I will just briefly explain some of the features of these Commonwealth registered bodies. These bodies are Venture Capital Limited Partnerships, or VCLP; or Australian Funds of Funds, or AFOF. An AFOP pools investment and may invest in other funds or use VCLPs to invest in companies.
An investor in a VCLP or an AFOF will have flow-through taxation benefits under the taxation laws of the Commonwealth. Another entity called venture capital management partnerships will be a general partner in a VCLP or an AFOF. As the general partner it will be a manager of these bodies. The Commonwealth has introduced legislation into federal parliament to enable an incorporated limited partnership to become a VCLP, AFOF or venture capital management partnership.