LPS is a partnership contract for investment business.
LPS is based on the Limited Partnership Act for Investment (“LPS Act”).
This agreement is based on a Limited Partnership Agreement for Investment concluded by the General Partner (GP) that executes the business and the Limited Partner (LP) that only invests in the business.
A scheme using LPS is a scheme that is easy for investors to invest in by limiting the liability assumed by a partner (LP) who does not carry out business operations to the amount of investment.
The assets of the association are shared by all members, and the association (LPS) does not incur any corporate tax (pass-through).
Regarding the merits of limited liability partnerships, there has been a rule in the past that banks hold up to 5% or less of a company’s total shares under the Banking Act and the Antimonopoly Act.
However, in principle, if a bank’s investment is a limited partner of an investment business association under the Investment LPS Act, this rule does not apply.
The establishment of LPS requires registration in addition to the conclusion of a partnership agreement among all partners.
* The Limited Partnership for Investment system is based on the Law Concerning Limited Partnerships for Investment for Small and Medium Enterprises, etc. enacted in May 1998 (enforced in November 2010).