The ADGM Limited Partnership

The limited partnership is the default private capital structure across common-law jurisdictions, and the reasons are practical rather than legal fashion.

The split of roles is clean. The general partner manages and takes the liability; limited partners commit capital and stay passive. Investors understand it without explanation, which matters when you are raising.

Economics are flexible. Capital commitments, drawdowns, distribution waterfalls and carried interest are matters for the partnership agreement rather than being constrained by a companies statute.

It is what everyone's documents assume. Side letters, subscription agreements and LP-side counsel all expect this shape. Choosing something else means explaining it to every investor.

ADGM also offers cell structures — Protected Cell Companies and Incorporated Cell Companies — and Investment Companies, open or closed ended[ADGM RA — Schedule of Fees], where a corporate fund vehicle suits better.

ADGM's schedule applies specialised fees to a defined list that includes Investment Partnerships and General Partners of Investment Partnerships, alongside Open Ended and Closed Ended Investment Companies and SPVs[ADGM RA — Schedule of Fees].

That means USD 1,900 to register and USD 1,400 a year, against USD 5,800 and USD 5,300 for a standard non-financial entity — and it applies to the general partner vehicle as well as the partnership, which is where a fund structure would otherwise pay twice at the higher rate.

There is also an incentivised Carried Interest Vehicle fee of USD 1,900 initial and USD 1,000 renewal[ADGM RA — Schedule of Fees], and Venture Capital Fund Managers at USD 1,500 for three years for FSRA-approved applicants.

Taken together, ADGM has priced the components of a fund structure deliberately rather than incidentally.

ADGM's definition is worth reading literally. A limited partnership exists when two or more partners unite to jointly conduct a business in which one or more of the partners is liable only to the extent of the amount of money that partner has invested[ADGM RA — Legal Entity Types].

The whole form is in that clause. Some partners' exposure is capped at what they put in; the rest is not capped. That asymmetry is the point, and it is why funds use the shape — investors take capped exposure, the manager takes the rest.

Authorised signatory — minimum one, and it must be an individual[ADGM RA — Legal Entity Types].

How it differs from a general partnership

The contrast is stark, and worth knowing so you do not end up in the wrong one. A general partnership is an arrangement by which partners conducting a business jointly have unlimited liability, which means their personal assets are liable to the partnership's obligations[ADGM RA — Legal Entity Types].

Minimum two members, individual or body corporate, each a general partner[ADGM RA — Legal Entity Types]. No cap, no shield — every partner's personal assets stand behind the business. It is the oldest form and the most dangerous one to drift into by accident.

And from an LLP

An LLP takes a third position: ADGM describes it as protecting each partner's personal assets, and each partner from debts or liability incurred by the other partners[ADGM RA — Legal Entity Types]. Minimum two members, one of whom must be a designated member[ADGM RA — Legal Entity Types].

So across the three ADGM partnership forms:

• General partnership — everyone unlimited.
• Limited partnership — some capped at capital contributed, at least one not.
• LLP — all partners protected, including from each other's liabilities.

ADGM notes the LLP is most commonly used by professionals such as accountants, auditors and lawyers[ADGM RA — Legal Entity Types] — professions where one partner's negligence should not reach another partner's house. A fund is the opposite problem, which is why funds land on the limited partnership.

ADGM's entity types guidance is version 1.1, dated September 2017[ADGM RA — Legal Entity Types]; confirm the current position against the ADGM Partnership Regulations before relying on it.

Registering the partnership is a Registration Authority matter. Managing a fund is a financial service, and that belongs to the FSRA[FSRA].

The distinction people get wrong: the structure and the licence are separate exercises. You can register a limited partnership without the FSRA; you cannot manage third-party capital through it without addressing whether the manager needs authorisation.

And the sequencing rule applies — a Category A applicant must apply to the FSRA before the Registration Authority will consider incorporation[ADGM RA — Schedule of Fees]. For a fund structure with several entities, work out which of them is inside the perimeter before filing any of them.

The detailed fund rules — categories, offering restrictions, professional-client thresholds — sit in the FSRA rulebook[ADGM Legislation]. We have not summarised them here because we have not read that rulebook in full, and a fund page built on a secondary summary would be exactly the kind of confident, unsourced content this site exists to be an alternative to.

Standard registration through the Online Registry Solution[ADGM RA — Registration & Incorporation], with a registered office in ADGM[ADGM RA — Schedule of Fees].

The substance is in the limited partnership agreement: commitments, drawdown mechanics, the distribution waterfall, carry, governance, transfer restrictions and wind-down. The statutory framework is in ADGM's partnership regulations in the official rulebook[ADGM Legislation]; everything commercially interesting is in the agreement.

ADGM also registers branches of foreign limited partnerships[ADGM RA — Schedule of Fees], which is worth knowing where an existing fund wants an ADGM presence without redomiciling.