ESLVPEarly Stage Venture Capital Limited Partnership
Limited Liability Partnership
Edison Venture Capital Fund is an incorporated limited Liability Partnership. A limited liability partnership (LLP) is a business which limits the liability of some of the partners. It must have at least one general partner and at least one limited partner.
A General Partner is responsible for running the daily business of a partnership and there is no limit on their liability. EVC Management Pty Ltd is the General Partner of the Fund.
The limited partner is only liable for the amount they have invested (similar to a fully paid share in a company) and any unpaid amount of that investment. A limited partner is not responsible or liable for debts of the partnership. A limited partner cannot take part in running the partnership or enter a contract on behalf of the partnership.
A venture capital fund registered as an ESVCLP will have flow-through tax treatment and will not be taxed at the partnership level.
For investors this means:
- All capital gains and profits from the disposal or realisation of an investment by the Fund will be exempt from Australian income tax.
- All income derived from an investment of the Fund (such as dividends) will be exempt from Australian income tax.
- However, losses from the disposal or realisation of investments by the Fund are not deductible for Australian income tax purposes and any interest incurred by an investor on funds borrowed to invest in the Fund will not be deductible for Australian income tax purposes.
- A tax offset (Rebate) is available to each investor for an amount of up to 10% of the investment made into The Fund.
An ESVCLP must be registered with the Department of Industry, Innovation and Science and have both its investment plan and partnership agreement approved before it commences its investment activities.
There are a number of additional requirements which must also be met in order for an ESVCLP to maintain its registration. These additional requirements include:
An ESVCLP must not invest more than 30% of its total committed capital in one company/unit trust and any associate or other member of the same wholly owned group of that company/unit trust.
The size of the ESVCLP fund must be at least $10 million and not greater than $200 million.
Investments made by an ESVCLP are required to be Eligible Venture Capital Investments.
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Bridging the Gap between Concept and Capital
EVC Management Pty. Ltd.
ACN 629 392 472
© Edison Venture Capital 2020
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Level 3, 143 Charlotte Street
Brisbane QLD 4000