Limited partnership structure
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Rescope limited-partnership-structure.md: 'each named direct-hold solution' incorrectly implied all 4 vehicles are limited partnerships; only Canada (established) and the US (planned) are -- Spain SOCIMI and Mexico FIBRA are explicitly excluded from this article's scope now
@@ -16,19 +16,21 @@ editor: woodfine-editorial paired_with: limited-partnership-structure.es.md --- The limited partnership (LP) is the legal vehicle through which direct-hold investments are structured in Canada. Each named direct-hold solution is constituted as a limited partnership governed by the applicable provincial partnership legislation and a limited partnership agreement that defines the rights and obligations of all parties. The LP form achieves the structural The limited partnership (LP) is the legal vehicle through which the Canada and United States Direct-Hold Solutions are structured; the established Canada vehicle is governed by provincial partnership legislation and a limited partnership agreement that defines the rights and obligations of all parties, and the planned United States vehicle is intended to follow an equivalent structure once established. The Spain SOCIMI and Mexico FIBRA are not limited partnerships and are not covered by this article. The LP form achieves the structural goals of the direct-hold framework — legal isolation of each asset, direct beneficial ownership by unitholders, pass-through income treatment — without the governance overhead of a corporate subsidiary structure. ## Key takeaways - Each direct-hold solution is a separate limited partnership; unitholders participate as limited partners and their liability is limited to the capital contributed — they do not bear personal liability for the debts and obligations of the partnership. - Each LP-form direct-hold solution is a separate limited partnership; unitholders participate as limited partners and their liability is limited to the capital contributed — they do not bear personal liability for the debts and obligations of the partnership. - The general partner manages the business of the partnership and owes fiduciary duties to the limited partners; the limited partners are passive investors with economic rights but no management authority. @@ -52,7 +54,7 @@ capped liability protects them from loss beyond their investment. ## The limited partnership agreement The partnership agreement is the governing instrument of each direct-hold solution. It The partnership agreement is the governing instrument of each LP-form direct-hold solution. It specifies the rights and obligations of all partners: the capital account structure, the allocation of income and loss among partners, the conditions for distributions, the transfer provisions that allow limited partners to transfer their units to any eligible counterparty @@ -78,7 +80,7 @@ covenants — including the interest coverage ratio floor that gates new debt issuance — increase the fund-raising cap, or approve other fundamental changes to the partnership's governing documents. A Special Resolution requires a defined supermajority of votes cast, or an equivalent written resolution; the specific vote threshold is set out in each direct-hold solution's partnership agreement. Because that supermajority sits with the limited LP-form direct-hold solution's partnership agreement. Because that supermajority sits with the limited partners rather than the general partner, the covenant floor cannot be relaxed unilaterally by management — any waiver carries the same investor-consent standard as any other fundamental amendment to the partnership's governing documents.