The States of Guernsey recently released a draft Limited Liability Partnerships Law for consultation:
As expected Guernsey LLPs will not be restricted as to profession or trade, however, it is expected that it will be a popular business structure for professional persons, i.e. Accountants and Solicitors. They may also offer an alternate structure for use by the investment community.
It was originally proposed that as with Guernsey limited partnerships, Guernsey LLPs should have the option to select whether or not to have separate legal personality. As a result of the drafting process however this option was not included in the draft law which will result in all LLPs having separate legal personality.
As is typical with LLPs worldwide, each partner of a Guernsey LLP will have limited liability for the acts and omissions of the other members. However, the member does not have limited liability in respect their own acts or omissions. The result of this is that a member can have unlimited liability where a duty of care or fiduciary duty arises and the member either:
- informs a third party that it assumes personal responsibility for work performed under that contract; or
- performs work under that contract in its capacity as a member of a profession whose members owe a fiduciary duty to their clients in the normal course of business.
Another notable feature of the draft law is the insertion of statutory actions and remedies for unfair prejudice.
The LLP consultation period closed on Friday 4 May 2012. Depending upon the volume of comments received it is hoped legislation will be put to the states for its September sitting.
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.