What is a Venture Capital Limited Partnership?
A venture capital limited partnership (VCLP) raises capital and invests in high-risk start-up and/or expanding Australian companies. These investments are called eligible venture capital investments (EVCI). Registration as a VCLP enables treatment, for taxation purposes, as a partnership and not a corporate limited partnership. Under Australian taxation law a partnership is not a tax paying entity – rather, the partners in the partnership are required to return their proportion of the partnership’s income in their tax returns. On the other hand, corporate limited partnerships are treated as tax paying entities, similar to companies. Registration by Innovation Australia (the Board) (under the Venture Capital Act 2002) is required to be recognised as a VCLP. For the 2006-07 income year and earlier years To achieve registration as a VCLP an entity must meet the following registration requirements under the Venture Capital Act 2002: • the partnership must be a limited partnership establish
A venture capital limited partnership is a form of partnership that is created to provide resources for the launching of a new business endeavor. The limited partnership will include two or more partners who have made specific commitments to the venture. Within the terms of the partnership, each investor is only accountable for the amount of his or her investment in the startup project, rather than liable for the broader debts that the new venture may incur. Raising venture capital is a common approach to funding new startups. Interested groups of investors form the limited partnerships in order to create a bank of resources that will cover the costs of launching the new business effort, and possibly to also sustain production until the business begins to turn a profit. As part of the venture capital limited partnership, the investors normally do not expect to realize a return on the investment until after the company becomes profitable. At that point, the financially stable company be
