> For the complete documentation index, see [llms.txt](https://rhys-nemo.gitbook.io/tokenomics-bible/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://rhys-nemo.gitbook.io/tokenomics-bible/vcs/esvclp.md).

# ESVCLP

Early Stage Venture Capital Limited Partnerships

This is an Australian business structure.

**Benefits**

* Income/capital gains from the disposal of eligible venture capital investments are exempt from tax in Australia in the hands of domestic and foreign investors
* Allows fund managers to pool capital
* Allows to raise new venture capital funds of between $10 million and $200 million
* To invest in innovative early-stage businesses
* offers [tax benefits](https://business.gov.au/grants-and-programs/early-stage-venture-capital-limited-partnerships#tax-benefits) to fund managers and investors

**Important facts**

* The investments must also meet other criteria and be held for a minimum of 12 months.
* An ESVCLP must be a new partnership rather than a restructured existing partnership.

**Who is the governing body**

Innovation and Science Australia's Innovation Investment Committee

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**Can invest in startups in the following stages of development**

* pre-seed
* seed
* startup
* early expansion

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**Tax benefits**

**For investors**

* Partnership itself is not taxed and the income and gains flow through to investors. (avoids double taxation/franking)
* Exempt from tax on income and gains from eligible early stage venture capital investments
* Exempt from tax on income and gains from disposing of eligible venture capital investments

**For fund managers**

General partners (often also the fund managers) can claim their carried interest in the ESVCLP on the capital account, rather than on the revenue account.

{% hint style="info" %}
**Non-refundable carry forward tax offset**
{% endhint %}

{% hint style="info" %}
**Flow-through tax structure** is where income is passed through a business straight to its shareholders, owners, or investors. As a result, only the individuals, not the business, are taxed on the revenue
{% endhint %}

{% hint style="info" %}
**Revenue account**
{% endhint %}

{% hint style="info" %}
**Carried interest** 
{% endhint %}

{% hint style="info" %}
**Capital account**
{% endhint %}

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