Cayman Islands: Cayman Islands – Limited Partnerships

Last Updated: 14 May 2004

Ordinary Limited Partnerships
The Limited Partnerships Law of the Cayman Islands allows the creation of a limited partnership which is very similar to limited partnerships created in the United States of America and the United Kingdom.

Formation of a Limited Partnership
The following information is required for the formation of a limited partnership:-

(a) The name of the partnership;

(b) The principal place of business;

(c) The general nature of the business to be transacted;

(d) The names of all the general and limited partners and their respective places of residence;

(e) The amount of capital which each limited partner is contributing to the partnership;

(f) The date on which the partnership is to commence and its term;

(g) A statement that the sum specified as contributed by each limited partner to the partnership has been actually, and in good faith, paid in cash.

The information in (a) to (g) above must be set out in a Voluntary Declaration in accordance with the provisions of the Law.

The declaration is sent to the Registrar of Limited Partnerships who causes the information to be published in the Gazette.Until this has been done, the partnership is deemed not to have been formed.

Renewal of Partnership
If alteration is made in the names of the partners or in the nature of the business or the capital of the partnership or in any of the information supplied to the Registrar on formation, a new declaration must be filed within seven days, and if this is not done the partnership is deemed to become a general partnership.

Liability of General Partners
The general partners are responsible for the management of the partnership and are liable to account to each other and to the limited partners for the management of the partnership. They have unlimited liability to creditors. A limited liability company may, however, be a general partner.

Liability of Limited Partners
Limited partners are liable to the extent of their capital contributions and no further and do not have authority to transact the business of the partnership. If a limited partner attempts to transact business on behalf of the partnership or if his name is used with his consent in the firm name, he is deemed to be a general partner.

The partnership cannot be dissolved by act of the parties before the time stated in the declaration on formation
and in any event, until notice of the dissolution has been filed with the Registrar and published in the Gazette.


Fees are payable to the Registrar on formation and annually.

Exempted Limited Partnerships

Fifty-year tax exemption

In 1991 the Cayman Islands passed the Exempted Limited Partnership Law which allows a partnership formed under that Law to obtain from the Governor an undertaking that the partnership and its partners will not be subject to any form of taxation for a period of fifty years from the date that the undertaking is granted.

Purpose and Formation
An exempted limited partnership may be formed for any lawful purpose to be carried out either in or from the Islands or in any other place or jurisdiction. It must consist of one or more persons called general partners who are liable for all the debts and obligations of the partnership and one or more persons known as limited partners who are, except in certain specified circumstances, not liable for the various debts and obligations of the partnership. A general partner may also take an interest as a limited partner.


A body corporate may be a general or limited partner. There are no restrictions on the number of partners,
their residence or domicile save that at least one general partner must

(a)if an individual be resident in the Cayman Islands or

(b) if a company be registered pursuant to the Cayman Islands Companies Law or

(c) if a partnership be registered pursuant to the Exempted Partnership Law.


(1) The partnership must have included in its name the words "Limited Partnership" or the letters "LP";

(2) The name must be approved by the Registrar of Exempted Limited Partnerships and such approval is subject to certain limitations;

(3) The partnership may not carry on business with the public in the Cayman Islands other than as far as may be necessary for the carrying on of the business of the partnership outside the Islands;

(4) The partnership must have a registered office in the Islands and maintain a Register with the names, addresses and amount of any contribution made by the partners;

(5) The partnership must register and obtain a certificate from the Registrar of Exempted Limited Partnerships prior to having the benefit of limited liability.

Registration of the Partnership
The general partners must pay the Registrar of Exempted Limited Partnerships a prescribed fee and file a statement signed on behalf of the general partners which contains the following:-

(a) the name of the exempted limited partnership;

(b) the general nature of the business of the exempted limited partnership;

(c) he address in the Cayman Islands of the registered office of the exempted limited partnership;

(d) the term, if any, for which the exempted limited partnership is entered into or if for unlimited duration a statement to that effect and the date of its commencement;

(e) the full name and address of the general partner and if more than one of each of them, specifying him as a general partner. In the case of a corporate general partner there must be filed with the statement a Certificate of Incorporation and a Certificate of Good Standing (or similar documents under the laws of the jurisdiction of incorporation) or a Certificate of Registration as a foreign company under Part VIII of the Companies Law and a Certificate of Good Standing, and in the case of a general partner which is itself an exempted limited partnership, there must be filed with the statement a certificate of registration and a certificate of good standing or certified copies of them;

f) a declaration that the exempted limited partnership will not undertake business with the public in the Cayman Islands other than so far as may be necessary for the carrying on of the business of that exempted limited partnership exterior to the Islands.

Changes of Partners and Partnership Objectives
The law allows changes to be made in the registration statement by the filing of amendments. These changes have no effect if they seek to relieve the general partner of any obligation of the partnership without the written consent of any person so affected. The name of the partnership may also be changed with the Registrar's consent.

The partnership may sue and be sued in the name of its general partner or partners and only in certain specified circumstances may limited partners be named in the suit.

The partnership may be dissolved in accordance with its terms, i.e. where it is established for a specified time and may be dissolved (a) on the filing of a notice by the general partner or on application of a partner or creditor to the Court, (b) on the death, insanity, retirement, insolvency or dissolution of the last general partner unless the limited partners unanimously, within 90 days of any of the above occurrences, elect one or more new general partners.

Protection of Creditors
A limited partner is prohibited on dissolution or in any other manner from receiving out of capital of the partnership any payment representing a return of any part of its contribution to the partnership unless the partnership is solvent.

If a return is made and the partnership proves to be insolvent within six months of such payment the limited partner is liable to repay it with interest at the rate of ten percent (10%) per annum should any such contribution be required to meet the obligations of the partnership incurred at a time when the contribution of that limited partner was part of the capital of the partnership.

Any person, on payment of a fee to the Registrar may obtain a certified copy of the Certificate of Registration, a Certificate of Good Standing, or a copy or extract of any registered statement filed with the Registrar.

Annual Return
On or before the 31st of January in each year, the general partners must file a return with the Registrar certifying that the partnership has complied with the law and pay the prescribed annual fee which is very reasonable and is not based upon the assets of the partnership.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances

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