Tax Matters Side Letter Clause
(Private Equity Fund)

Summary

This tax matters side letter clause for a private equity fund (PEF) is to be used when the PEF agrees to give the investor assurances related to certain tax risks. This clause includes practical guidance and drafting notes. This tax matters side letter clause is drafted assuming that the PEF is a domestic limited partnership. Note that the legal form and jurisdiction of a PEF can vary, and accordingly, the terms utilized in the tax matters side letter clause can also take on several formulations, depending on structure. For example, if a PEF is a corporation or company, rather than a partnership, the clause will reference the Fund and shareholders instead of the General Partner and partners, respectively. See Onshore/Offshore Structuring Issues for Private Equity Funds for a discussion of PEF structuring variations. This clause should be read in conjunction with the practice notes Private Equity Fund Documents: Drafting and Review and Side Letter Drafting for a Private Equity Fund. This clause assumes that it will be included in a side letter with a PEF. See Side Letter for a Private Equity Fund for an example.