Home / CY AIF Law of 2018 / PART ΙΙ: PROVISIONS REGARDING THE ALTERNATIVE INVESTMENT FUNDS / Chapter 8: Special provisions / Part 3 - Limited Partnerships / [74] Dissolution and liquidation of a limited partnership.
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74. Dissolution and liquidation of a limited partnership.
(1) The limited partnership is dissolved and put into liquidation-
(a) in case the Securities and Exchange Commission withdraws its authorisation in accordance with article 75, or
(b) when the period of its operation provided in its partnership agreement lapses, unless the partnership agreement is amended before the end of the period of operation of the limited partnership, so that the period of its operation is extended or becomes indefinite, or
(c) with the occurrence of an event which, according to the partnership agreement of the limited partnership, constitutes a reason for its dissolution and liquidation, or
(d) in case of full redemption of its units;
(e) without prejudice to the case of an internally managed AIF which operates in the form of a limited partnership, when its external manager is dissolved, resigns, put into liquidation or the authorisation granted to the external manager is revoked, and a replacement is not appointed
(f) when its depositary is dissolved, resigns, put into liquidation or the authorisation granted to the depositary is revoked, and a replacement is not appointed
(g) following a relevant decision by its partners, which is taken by a majority of two thirds (2/3) of the issued units of the limited partnership, and under the condition that the general partner votes in favour of such decision,
(h) following a relevant decision by its external manager, which is taken when the assets of the limited partnership are reduced and fall below the one fourth (1/4) of the minimum assets requirement, as specified by article 14(1),
(i) following a relevant decision by the external manager, which is taken when the initial capital of the limited partnership are reduced and fall below the two thirds (2/3) of the minimum initial capital requirement, as specified by article 66(4),
It is provided that, the general partner shall disclose, without undue delay, the fact that the assets or initial capital of the limited partnership were reduced by two thirds (2/3) or one fourth (1/4) as applicable, to the Securities and Exchange Commission, which may demand the dissolution of the limited partnership.
(2) Where a limited partnership is dissolved in accordance with paragraph (b) of section (1), the general partner shall ensure that a relevant notification is published in the Official Gazette of the Republic.
(3) The following shall apply in case of dissolution and liquidation of a limited partnership:
(a) the dissolution of the limited partnership is followed by its liquidation, which is carried out in accordance with the terms of its partnership agreement and the provisions of the General and Limited Partnerships and Business Names Law∙
(b) the liquidation shall result to the distribution of its assets of the limited partnership, under the responsibility of its liquidator.
(c) the external manager of the limited partnership is appointed as liquidator, unless the dissolution is due to a fact provided in paragraph (e) of section (1) and is related to the external manager; in this case the liquidator of the limited partnership is appointed by the depositary. Where the fact provided in paragraph (e) of section (1) is related to the depositary, the liquidator is appointed by the Securities and Exchange Commission by its decision, and article 25 shall apply proportionately.
(d) the liquidator may not delegate its duties regarding the liquidation to a third party.
(e) in case the liquidator does not exercise its duties diligently, the Securities and Exchange Commission may appoint a replacement of the liquidator following the request of any person who has a legitimate interest therein.
(4) Where the limited partnership is under liquidation-
(a) the issue of new units is not possible, unless it serves the purpose of liquidation.
(b) the redemption of units is still possible provided that the equal treatment of the unitholders is ensured.
(5) The depositary of the limited partnership shall exercise its duties until the process of distribution of its assets finishes. The unitholders shall be satisfied from the liquidation proceeds when any kind of claim against the limited partnership is settled.
(6) The result of the distribution of the limited partnership’s assets shall be showed in a special report of an independent auditor, which is communicated to the Securities and Exchange Commission and to the competent authorities of the countries where the units of the limited partnership are marketed, while the relevant report shall be at the disposal of its unitholders at the points of marketing of its units:
It is provided that, the auditor of the limited partnership shall be considered independent for the purpose of application of this section.
(7) The dissolution of the limited partnership and the reasons for its dissolution are communicated, immediately, by the general partner to the depositary of the limited partnership, its unitholders and the Securities and Exchange Commission. The general partner shall submit to the Securities and Exchange Commission, without undue delay, a copy of the above mentioned communication to the unitholders and the depositary of the limited partnership.
(8) In case the limited partnership is an umbrella fund, its dissolution takes place when its last remaining investment compartment is dissolved.
(9) The Securities and Exchange Commission may, by means of a directive, specify any technical matter or detail regarding the application of this article.
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