UK Law and Practice Contributed by: Sam Kay, Philippa List, Mark Stapleton and Nicolas Kokkinos, Dechert LLP
usually delegated to a fund management com - pany, a depositary/custodian will be appointed to be responsible for the safekeeping of the company’s assets, a registrar will be responsi - ble for the share register, and a broker will advise on the listing of the company’s shares. The fund manager, depositary/custodian and broker will usually be authorised and regulated by the Financial Conduct Authority (FCA). 2.1.2 Common Process for Setting Up Investment Funds Private Funds The statutory framework in the UK requires an English limited partnership to be registered as such. This entails providing an application for registration to the (public) Registrar for Lim - ited Partnerships (held at Companies House), providing certain details including the name of each limited partner and the amount of capital contributed by each limited partner. This will be conclusive evidence that an English limited part - nership came into existence on the date of regis - tration. Any changes to these details during the continuance of the English limited partnership must be similarly registered within seven days of the relevant change. The key document for private closed-ended funds is the limited partnership agreement, which is a freely negotiated contract, with very few provisions prescribed by law, and is not available publicly. All parties will heavily negoti - ate the agreement prior to its execution. Other frequently used key fund documentation includes side letters (providing certain investors with specific terms required for their specific circumstances), the subscription agreement for investors to subscribe for a commitment and be admitted as a partner in the limited partnership,
and the investment management agreement for the fund to appoint the manager. Listed Funds An ITC is typically a UK public limited company that has been approved by His Majesty’s Rev - enue & Customs (HMRC) as an ITC for the pur - poses of the relevant tax legislation. ITCs are subject to special tax rules (discussed below). Similarly, a REIT is typically a UK public limited company that has been approved by HMRC as a REIT for the purposes of the relevant tax legisla - tion. REITs are also subject to special tax rules (discussed below). Since April 2022, it has been possible to have an unlisted REIT where, broad - ly, it is at least 70% owned by institutional inves - tors. This makes the REIT a potentially attractive private fund vehicle for the right investor base. A key consideration when setting up an ITC or REIT is that the eligibility conditions (and, post- launch, the ongoing requirements) set out in the relevant tax legislation need to be met in order to gain the tax advantages enjoyed by such vehicles. Tax lawyers should be engaged early in the process to advise on the steps a com - pany needs to take to meet these requirements. Offers in respect of ITCs and REITs are subject to the obligation to publish a prospectus under the domestic legislation deriving from the EU Prospectus Regulation. Where a prospectus is required, this will need to be approved in an EEA member state for use in the EEA, in addition to being approved by the FCA for use in the UK. The other key document produced will be the investment management agreement for the fund
to appoint the manager. 2.1.3 Limited Liability Private Funds
The liability of a general partner for the debts and obligations of a partnership is unlimited,
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