The legislature’s Economics Committee yesterday passed a preliminary reading of the draft limited partnerships act (有限合夥法), which is part of the government’s efforts to encourage investment in innovation and creation.
The draft aims to relax regulations for investors to fund filmmakers and other artists.
The Ministry of Economic Affairs said the draft act creates a new type of company, a limited partnership company, which is to be a hybrid between a partnership and a limited company.
“The biggest difference in a limited partnership company is that limited partners do not need to bear several unlimited joint liabilities for the discharge of the company’s obligations, which will reduce the risks for investors investing in film projects,” Department of Commerce Director-General Cynthia Kiang (江文若) told reporters on the sidelines of the committee meeting.
The draft act could draw more investors to fund talented Taiwanese filmmakers, television show makers and playwrights without bearing too much risk, Minister of Economic Affairs John Deng (鄧振中) said, adding that company partners can sign up for more relaxed terms and conditions for projects.
A limited partnership company is qualified as a legal entity like a limited company, but it does not need to hold shareholder or board meetings regularly, Kiang said.
“For example, the investors and filmmakers can reach a contractual consensus to share profits immediately after a five-year filmmaking project terminates and without requiring a shareholder meeting,” Kiang said.
Given that limited partnerships are legal entities, if a film project needs to rent a property to produce a segment, it can do so under the company’s name and does not need to gather signatures from every partner, which would simplify the process for a project, Kiang said.
Kiang said the project-oriented limited partnerships also stipulate that limited partners cannot interject themselves in a project’s decisionmaking, ensuring filmmakers have the right to make important decisions.
Given that the committee said the draft of the act does not need to go through cross-caucus negotiations, Deng said he hopes the draft will pass its third reading at the legislature before this legislative session ends on June 18.
The department said it expects the draft to take effect three to six months after it passes the third reading at the legislature.
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