The Limited Partnerships (Guernsey) Law, 1995, as amended (the Limited Partnerships Law) provides a statutory framework for the establishment and operation of limited partnerships in Guernsey. A briefing, Limited Partnerships in Guernsey, has been prepared and is available on request or online www.ogier.com.
Guernsey takes a pro-active approach to the development of its core commercial and financial services legislation. This includes ongoing communication with interested parties (notably those in the finance industry) and monitoring developments in other jurisdictions. As part of this ongoing review of Guernsey’s commercial laws, the Guernsey Commerce and Employment Department (the Department) has recently proposed a number of amendments to the Limited Partnerships Law with a view to:
- increase the flexibility of Guernsey limited partnerships;
- introduce innovations to maintain Guernsey’s position as a highly regarded and competitive jurisdiction; and
- ensure that the Limited Partnerships Law remains at the forefront of commercial legislation.
Key proposed amendments
Notable proposed amendments include:
- transferring the functions and legal responsibility for administering the Limited Partnerships Law from H M Greffier to the Registrar of Companies;
- introducing mechanisms to enable on-line formation of limited partnerships similar to that which already occurs for the incorporation of Guernsey companies;
- relaxing the current restrictions on names of limited partnerships and permitting the name of any partner to be included in the name of a limited partnership;
- aligning the provisions on names of limited partnerships with the equivalent provisions in the Companies (Guernsey) Law, 2008 (the Companies Law) and, in particular, introducing a name reservation system;
- clarifying the activities which limited partners are able to actively take in the limited partnership without losing the protection of limited liability, such as participating in an oversight committee;
- ensuring that a person may be admitted to a limited partnership as a general partner of the limited partnership and may receive a partnership interest in the limited partnership without making a capital contribution or being obliged to make a capital contribution;
- relaxing the restriction on allowing limited partnerships to only adopt at the time of formation on a “once and for all” basis separate legal personality and providing the ability for a limited partnership to convert between incorporated and unincorporated status during its lifetime. It should be noted that it is not intended that the conversion will change the liability of the general or limited partners;
- introducing innovations such as permitting migrations of limited partnerships into and out of Guernsey in a process that will be similar to the Companies Law, conversions of limited partnerships into other entities and vice versa and protected cell limited partnerships.
The Department has also proposed a number of minor amendments to the Limited Partnerships Law which include:
- clarifying that limited partnerships may carry on any lawful business whether or not for profit;
- permitting limited partnerships to exist in perpetuity should they so choose;
- removing the relevant references to the Control of Borrowing Ordinance which have now been repealed;
- clarifying language with respect to dissolution of the limited partnership to ensure that the partnership is wound up prior to dissolution.
The States of Guernsey has approved the preparation of amending legislation by the Law Officers to give effect to the above proposals. Further consultation of industry will be undertaken once the draft legislation has been prepared.
Although there is no current indication of timing on the likely implementation of the proposed amendments, we expect that the likely timetable for implementation will be towards the end of 2010.
We will provide you with further updates on developments as they occur.