Factores determinantes de la informalidad de las MYPE a Falta de información :

It is submitted that there are no major advantages or disadvantages of the bewind trust structure over the en commandite partnership structure for private equity funds, where the investors and investments are all South Africans. The preferred private equity fund structure will depend more on the commercial and other legal considerations. As for bewind trusts, it appears that the critical factor separating a trust from a partnership is the degree of independence that the trustees enjoy. The analysis of bewind trusts identifies certain matters which a court would take into account in any such analysis. Among them are (a) do the beneficiaries have the right to elect the trustees?; (b) may the beneficiaries remove the trustees from office at any time without cause, and fill the vacancies caused by such removal?; (c) do the beneficiaries have the right to amend or terminate the trust?; and (d) do the beneficiaries have the right to direct the actions of the trustees?1209 _{While an affirmative} answer to any one of these questions would not necessarily undo a trust, it is important that the principle of trustee independence not be eroded, whether directly or indirectly (for example, through an investment committee). Both the internal and external conduct of the trust should be carefully regulated to avoid the erosion of trustee independence. In this regard, the presence of at least one experienced independent trustee who has the respect and trust of the investors is critical. As mentioned earlier, paragraphs 3.2 to 3.5 of this chapter will provide a comparison of the private equity fund structures used in the US, UK, Australia, and Canada.

3.2. Organisational Form in the US

In chapter one it was mentioned that private equity funds in the US are structured as closed-end investment vehicles, which are typically organised as limited partnerships or limited liability companies.1210 _{According to Black, Delaware law is preferred amongst the private equity industry} participants in the US to organise private equity funds because limited partnerships and limited liability companies for large, complex transactions are often formed in Delaware and fund investors

1208_{Crookes NO v Watson 1956 1 SA 277 (A). See also Hofer v Kevitt NO 1998 1 SA 382 (SCA).}

1209_{See Coetzee v Peet Smith Trust and Other 2003 (5) SA 674 (T); and SARS v Dyefin Textiles(Pty) Ltd 2002} (4) SA 606 (N) at 611; See also Cameron, E., De Waal, M., Wunsh, B., Solomon, P and Kahn, E. (2002), ‘Honoré’s South African Law of Trusts,’ 5th _{edition, Juta and Co. Ltd, at paragraph 3.3.2.}

1210_{Naidech, S.W. (2011), ‘Private Equity Fund Formation’, Practice Note: Chadbourne and Parke LLP,} published by Practical Law Company, at pages 1-5.

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are familiar with the jurisdiction.1211 _{A further reason why private equity industry participants prefer} Delaware is because it has specialized courts for business entities, which have the relevant expertise in economic and governance issues.1212 _{In addition, Delaware has a well developed common-law} regime governing limited partnerships and limited liability companies, which is generally considered the more sophisticated of the US States.1213 _{More importantly though, is that Delaware has an} efficient administrative process; and Delaware statutory and common law provides for extensive freedom of contract.1214 _{This contractual flexibility will be discussed below as one of the key features} of limited partnerships and limited liability companies.

The nature and structure of each individual limited partnership and limited liability company are largely dependent on the contents of the operating agreement which affords the parties to such an agreement a wide discretion in drafting such an agreements.1215 _{It must be noted that this discussion} will not consider all US state and federal regulations, including securities law issues, tax, liability, and other issues required for the structuring of a private equity fund in the US. Such a discussion is beyond the scope of this thesis. However, this discussion will in addition include a brief analysis of the application of fiduciary duties in limited partnerships and limited liability companies in the US. The legal principle of fiduciary duties will be discussed more fully in chapter three as part of the importance of corporate governance in relation to the private equity participants. The purpose of introducing such an analysis in this paragraph is to highlight that statutes, for example the Delaware Revised Uniform Limited Partnership Act, imposes duties on the private equity firm to act efficiently, honestly and fairly, effectively extending duties of a fiduciary nature from the private equity firm to investors. However, while the legal fiduciary duties cannot be contracted out of, the terms of the relevant trust deed or partnership deed may amend or modify such duties to provide for terms agreed between the investors and the private equity firm. Nevertheless, this paragraph will primarily provide a broad analysis of the salient features of the limited partnership and limited liability company as the preferred legal forms that house private equity funds in the US.

Limited Partnership

1211_{Black, L.S. (2007), ‘Why Corporations Choose Delaware’, Delaware Department of State Division of} Corporations, at pages 1-10.

1212_{Black, L.S. (2007), ‘Why Corporations Choose Delaware’, Delaware Department of State Division of} Corporations, at pages 1-10. See also Spangler, T. (2012), ‘The Law of Private Investment Funds’, Second Edition, OUP Oxford, at chapter 3, paragraph D and chapter 6, paragraph D.

1213_{Black, L.S. (2007), ‘Why Corporations Choose Delaware’, Delaware Department of State Division of} Corporations, at pages 1-10.

1214_{Black, L.S. (2007), ‘Why Corporations Choose Delaware’, Delaware Department of State Division of} Corporations, at pages 1-10. See also Naidech, S.W. (2011), ‘Private Equity Fund Formation’, Practice Note: Chadbourne and Parke LLP, published by Practical Law Company, at pages 1-5.

1215_{Lewis, W.A. (2013), ‘Waiving Fiduciary Duties in Delaware Limited Partnerships and Limited Liability} Companies’, Fordham Law Review, Volume 82, Issue 2, Article 20, 1017, at pages 1027-1028.

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Limited partnerships in the US are governed by the Uniform Limited Partnership Act of 1976.1216 _The federal government of the US does not have specific statutory law governing the establishment of partnerships.1217 _{Instead, each of the fifty states as well as the District of Columbia has its own} statutes and common law that govern partnerships.1218 _{These states largely follow common-law} principles of partnerships whether a general partnership or a limited partnership.1219 _{In the absence} of applicable federal law, the National Conference of Commissioners on Uniform State Laws issues non-binding model laws, referred to as the Uniform Act, in which to encourage the adoption of uniformity of partnership law into the states by their respective legislatures.1220 _{This includes the} Uniform Partnership Act of 1976 and the Uniform Limited Partnership Act.1221 _{Despite the US Federal} Government not having a specific statutory law for establishing partnerships, it has an extensive statutory scheme for the taxation of partnerships in terms of the Internal Revenue Code.1222 _The Delaware statute governing limited partnerships is Delaware Revised Uniform Limited Partnership Act which the can be found in Chapter 17 of Title 6 of the Delaware Code.1223 _{In terms of section 15-} 101(11) of the Delaware Revised Uniform Limited Partnership Act, a limited partnership is a partnership having two or more persons, including one or more general partners and one or more limited partners. The Delaware Revised Uniform Limited Partnership Act covers, inter alia laws relating to the formation, and relationship among the partners of a limited partnership and distributions and withdrawal.1224

As stated previously in chapter one, a large proportion of private equity funds in the US are organised as partnerships because of the tax benefits associated with pass-through entities.1225 _{According to} Altman and Raju, the only significant benefit of the corporate form as a private equity vehicle is the

1216_{The Uniform Limited Partnership Act, which includes its 1976 revision called the Revised Uniform Limited} Partnership Act, is a uniform act that regulates business partnerships in US States. The Uniform Limited Partnership Act was promulgated in 1916 and the most recent revision in 2001.

1217See Manesh, M. (2012), ‘Contractual Freedom Under Delaware Alternative Entity Law: Evidence from Publicly Traded LPs and LLCs’, Journal of Corporation Law, 37(3), at pages 555-619. See also Altman, P.M. and Raju, S.M. (2005), ‘Delaware Alternative Entities and the Implied Contractual Covenant of Good Faith and Fair Dealing Under Delaware Law’, The Business Lawyer, at pages 1469-1485.

1218_{Lewis, W.A. (2013),} ‘Waiving Fiduciary Duties in Delaware Limited Partnerships and Limited Liability Companies’, Fordham Law Review, Volume 82, Issue 2, Article 20, 1017, at pages 1025-1028.

1219_{Lewis, W.A. (2013), ‘Waiving Fiduciary Duties in Delaware Limited Partnerships and Limited Liability} Companies’, Fordham Law Review, Volume 82, Issue 2, Article 20, 1017, at pages 1025-1028.

1220_{Lewis, W.A. (2013), ‘Waiving Fiduciary Duties in Delaware Limited Partnerships and Limited Liability} Companies’, Fordham Law Review, Volume 82, Issue 2, Article 20, 1017, at pages 1025-1028.

1221_{Lewis, W.A. (2013), ‘Waiving Fiduciary Duties in Delaware Limited Partnerships and Limited Liability} Companies’, Fordham Law Review, Volume 82, Issue 2, Article 20, 1017, at pages 1025-1028.

1222_{The Internal Revenue Code is Title 26 of the United States Code wherein Subchapter K of Chapter 1} creates tax consequences for partnerships.

1223_{The Delaware Administrative Code is the official version of the regulations for the State of Delaware.} 1224_{Available at http://delcode.delaware.gov/title6/c015/, accessed in June 2015.}

1225Callison, J.W. and Sullivan, M.A. (2012), ‘Partnership Law and Practice: General and Limited Partnerships’, Clark Boardman Callaghan, at 1:2. See also Steele, M.T. (2009), ‘Freedom of Contract and Default Contractual Duties in Delaware Limited Partnerships and Limited Liability Companies’, American Business Law Journal, 46(2), at pages 221-242.

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limited liability it provides the private equity fund’s investors.1226 _{Limited liability is also achieved} through the use of a limited partnership with a general partner (private equity firm) that is also organised as a limited partnership or a limited liability entity.1227 _{The primary benefit of the partnership} form is that there is no federal income tax at the entity level; that is, the fund as an entity pays no federal income taxes on capital gains or other income.1228 _{A partnership generally is treated for tax} purposes as a pass-through entity, which means that the general partner and the limited partners will be allocated their proportionate share of the fund’s income, gains, losses and expenses for reporting on their own income tax returns based upon the characterisation of the items at the fund level, for example, ordinary income or capital gain.1229 _{If the private equity fund is organized as a} limited partnership, gains from the sale of the fund’s portfolio investments are taxed only once and, if the fund’s partners are individuals and the portfolio investment has been held for more than one year, at preferential long-term capital gain tax rates.1230 _{On the other hand, the fund had been} organised as a corporation rather than as a partnership or treated as a corporation for tax purposes, the gains would be taxed twice.1231 _{For example, upon the realisation of a portfolio investment, the} fund, if organized as a corporation, would pay federal income taxes on capital gains at the applicable corporate tax rate, followed by taxation at the shareholder level upon the distribution of the net gains as a dividend.1232

In the US the limited liability of the limited partners in a limited partnership is predominantly based on the premise that such limited partners should not be in the control of the business. The control of the business is the function of the general partner and should the limited partners be engaged in the control of the business then the limited partners could be subject to the general liability of a general

1226_{Altman, P.M. and Raju, S.M. (2005), ‘Delaware Alternative Entities and the Implied Contractual Covenant} of Good Faith and Fair Dealing Under Delaware Law’, The Business Lawyer, at pages 1469-1485.

1227_{Smith, C.B. and Anderson, R.D. (2006), ‘Limited partnerships: legal aspects of organization, operation, and} dissolution’, Arlington, VA: Bureau of National Affairs, Corporate practice series, No 24-4th_.

1228_{Section 7704(b) of the US Internal Revenue Code of 1986. The Internal Revenue Code of 1986 is the} domestic portion of federal statutory tax law in the United States, published in various volumes of the United States Statutes at large, and separately as Title 26 of the United States Code (‘USC’). Other federal tax law is contained in other titles of the United States Code, such as Title 11 (relating to bankruptcy) and Title 19 (Customs Duties). It is organized topically, into subtitles and sections, covering income tax, payroll taxes, estate taxes, gift taxes, and excise taxes; as well as procedure and administration. Its implementing agency is the Internal Revenue Service.

1229_{Persuad, A.N. and Atkinson, A. (2012), ‘Private Equity Funds: Legal Analysis of Structural, ERISA,} Securities and Other Regulatory Issues’, chapter 47 in Investment Adviser Regulation, 3rd _{Edition, by Kirsch,} C.E., at page 47-10.

1230_{Persuad, A.N. and Atkinson, A. (2012), ‘Private Equity Funds: Legal Analysis of Structural, ERISA,} Securities and Other Regulatory Issues’, chapter 47 in Investment Adviser Regulation, 3rd _{Edition, by Kirsch,} C.E., at page 47-10.

1231_{Persuad, A.N. and Atkinson, A. (2012), ‘Private Equity Funds: Legal Analysis of Structural, ERISA,} Securities and Other Regulatory Issues’, chapter 47 in Investment Adviser Regulation, 3rd _{Edition, by Kirsch,} C.E., at page 47-11.

1232_{Lewis, W.A. (2013), ‘Waiving Fiduciary Duties in Delaware Limited Partnerships and Limited Liability} Companies’, Fordham Law Review, 82(2), Article 20, 1017, at pages 1025-1028. See also Ribstein, L.E. (2004), ‘Fiduciary duties and limited partnership agreements’, Suffolk University Law Review, 37, at 927.

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partner.1233 _{Steele states that what constituted control for this purpose was largely interpreted by the} courts based on very specific facts.1234 _{Specific provisions were included in state statutes specifying} activities in which limited partners could engage without being deemed to participate in the control of the business.1235 _{For example, section 17-303(b)(1) and (2) of the Delaware Revised Uniform} Limited Partnership Act, Chapter 17 of Title 6 of the Delaware Code includes specific provisions for activities by a limited partner which do not constitute control.1236 _{It reads as follows:}

‘(b) A limited partner does not participate in the control of the business within the meaning of subsection (a) of this section by virtue of possessing or, regardless of whether or not the limited partner has the rights or powers, exercising or attempting to exercise 1 or more of the following rights or powers or having or, regardless of whether or not the limited partner has the rights or powers, acting or attempting to act in 1 or more of the following capacities: (1) To be an independent contractor for or to transact business with, including being a

contractor for, or to be an agent or employee of, the limited partnership or a general partner, or to be an officer, director or stockholder of a corporate general partner, or to be a partner of a partnership that is a general partner of the limited partnership, or to be a trustee, administrator, executor, custodian or other fiduciary or beneficiary of an estate or trust which is a general partner, or to be a trustee, officer, advisor, stockholder or beneficiary of a business trust or a statutory trust which is a general partner or to be a member, manager, agent or employee of a limited liability company which is a general partner;

(2) To consult with or advise a general partner or any other person with respect to any matter, including the business of the limited partnership, or to act or cause a general partner or any other person to take or refrain from taking any action, including by proposing, approving, consenting or disapproving, by voting or otherwise, with respect to any matter, including the business of the limited partnership.’

The Delaware statute contains provisions specifically designed to protect the limited liability of the limited partner interests held by persons having interests in or operating the general partner.1237 _In effect, the Delaware statute reduces the liability of limited partners to an extent approaching the

1233_{Steele, M.T. (2009), ‘Freedom of Contract and Default Contractual Duties in Delaware Limited Partnerships} and Limited Liability Companies’, American Business Law Journal, 46(2), at pages 221-242.

1234_{Steele, M.T. (2007), ‘Judicial Scrutiny of Fiduciary Duties in Delaware Limited Partnerships and Limited} Liability Companies’, Delaware Journal of Corporate Law, 32(1), at pages 1-32.

1235_{Steele, M.T. (2009), ‘Freedom of Contract and Default Contractual Duties in Delaware Limited Partnerships} and Limited Liability Companies’, American Business Law Journal, 46(2), at pages 221-242.

1236_{Steele, M.T. (2009), ‘Freedom of Contract and Default Contractual Duties in Delaware Limited Partnerships} and Limited Liability Companies’, American Business Law Journal, 46(2), at pages 221-242.

1237_{See section 17-303(b)(1) and (2) of the Delaware Revised Uniform Limited Partnership Act, Chapter 17 of} Title 6 of the Delaware Code. See also Manesh, M. (2012), ‘Contractual Freedom Under Delaware Alternative Entity Law: Evidence from Publicly Traded LPs and LLCs’, Journal of Corporation Law, 37(3), at pages 555- 619.

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limited liability of shareholders in the corporate form.1238 _{According to Persuad, in a limited} partnership the general partner, as a rule, remains personally liable to third parties for the debts and obligations of the limited partnership.1239 _{However, private equity fund partnership agreements} typically provide for indemnification of the general partner by the partnership. Accordingly, the value of the indemnity is limited to partnership assets, although generally fund agreements permit commitments to be drawn down, and often obligate limited partners to return some or all distributions received from the fund to fund the indemnity or other claims against the partnership.1240 _The partnership agreement may also limit the general partner’s liability to claims by the limited partners or the partnership through exculpation provisions.1241 _{Typically, these provisions provide that the} general partner will not be liable to the partnership or the other partners, except for fairly serious actions or omissions such as fraud, gross negligence, bad faith or intentional misconduct.1242 _Such conduct will also, typically, prevent the general partner from obtaining indemnification under the terms of the partnership agreement.1243 _{The Delaware statute affords the parties broad authority by} contract to define the liabilities of the general partner to the partnership and the other partners, to provide for indemnification, and to expand, restrict or eliminate the fiduciary duties of the general partner, the limited partners and other persons, except that the implied contractual covenant of good faith and fair dealing may not be eliminated. 1244 _{The general partner will also typically be organized} using a limited liability entity, or a series of limited liability entities.1245 _{To further limit liability, the} general partner will typically invest only a small portion of its funds as the general partner and will contribute the majority through a limited partner interest.1246 _{Liability may be further reduced where}

1238_{Manesh, M. (2012), ‘Contractual Freedom Under Delaware Alternative Entity Law: Evidence from Publicly} Traded LPs and LLCs’, Journal of Corporation Law, 37(3), at pages 555-619.

1239_{Persuad, A.N. and Atkinson, A. (2012), ‘Private Equity Funds: Legal Analysis of Structural, ERISA,} Securities and Other Regulatory Issues’, chapter 47 in Investment Adviser Regulation, 3rd _{Edition, by Kirsch,} C.E., at page 47-16.

1240_{Persuad, A.N. and Atkinson, A. (2012), ‘Private Equity Funds: Legal Analysis of Structural, ERISA,} Securities and Other Regulatory Issues’, chapter 47 in Investment Adviser Regulation, 3rd _{Edition, by Kirsch,}