600N. Qualifying partnership

(1) For the purposes of this Chapter, a ‘qualifying partnership’ is a partnership—

(a) in which an individual is a partner and has contributed a minimum of €20,000 to the partnership prior to the date of investment by the partnership in a qualifying company, and

(b) that complies with subsection (2).

(2) A partnership shall be a qualifying partnership for the purposes of this Chapter if—

(a) it is established under a partnership agreement and has as its principal business, to be expressed in the partnership agreement establishing the qualifying partnership, the investment of its funds in accordance with a defined investment policy for the benefit of its investors, and

(b) under the terms of the partnership agreement it is provided that—

(i) the funds to be invested in eligible shares are to be invested without undue delay,

(ii) pending investment in eligible shares, any moneys subscribed for the purchase of shares are to be placed on deposit in a separate account with a bank licensed to transact business in the State,

(iii) any amounts received by means of dividends or interest are, subject to a commission in respect of management expenses at a rate not exceeding a rate which shall be specified in the partnership agreement, to be paid without undue delay to the partners,

(iv) any charges to be made by means of management or other expenses in connection with the establishment, running, winding down or termination of the partnership shall be at a rate not exceeding a rate which shall be specified in the partnership agreement, and

(v) audited accounts of the partnership are prepared annually and submitted to the Revenue Commissioners when requested.

(3) (a) Where a qualifying partnership makes an investment of at least €20,000 in eligible shares in a qualifying company that would be, if it were made directly by an individual, a qualifying investment subject to the modifications set out in paragraph (b), then, section 600M shall apply to the disposal of those eligible shares apportionable to a partner referred to in subsection (1)(a) subject to the modifications set out in subsection (4).

(b) The modifications set out in this paragraph are that section 600J applies to an investment by a qualifying partnership as if—

(i) subparagraph (ii) of subsection (2)(b) of that section were deleted, and

(ii) references to ‘the individual’ in paragraph (c) of subsection (2) of that section were references to ‘the qualifying partnership’.

(4) In applying section 600M to the disposal of an investment in eligible shares which was made by an individual through a qualifying partnership, subsection (3) of that section shall apply as if references to ‘17 per cent’ were references to ‘15 per cent’.