Guernsey has expanded the range of structures available from the jurisdiction by introducing Limited Liability Partnerships (LLPs).
The Limited Liability Partnerships (Guernsey) Law, 2013 was approved by the States of Guernsey in December last year. It was given Royal Assent by the Privy Council in April and registered in the Royal Court of Guernsey on 12 May.
The law came into force with effect from 13 May with the Guernsey Registry accepting registrations to form Guernsey LLPs.
Fiona Le Poidevin, Chief Executive of Guernsey Finance - the promotional agency for the Island's finance industry, said: "The introduction of Guernsey LLPs means that our financial services practitioners have another vehicle to use in providing solutions for their client base.
"We see them being used particularly by professional businesses as vehicles for investing globally and as asset holding structures. In addition, it should be noted that the law includes specific provisions for existing Guernsey partnerships to convert to LLP status and that LLPs are able to migrate into and out of Guernsey.
"Practitioners are reporting significant interest in Guernsey LLPs for a wide variety of purposes and we look forward to seeing applications coming into the Guernsey Registry, including from those structures currently domiciled in other jurisdictions but wishing to avail themselves of this new, modern and flexible legislation."
The most traditional form of partnership is the general partnership and it provides the basis for many unincorporated businesses. Here, partners share in the profits and liabilities of the partnership on a joint and several basis.
However, in 1995, Guernsey introduced the concept of limited partnerships, which drew a distinction between two types of partners: the general partner with unlimited liability and limited partners who are able to limit their liability provided that certain conditions are met. Limited partnerships rapidly became a popular structure for collective investment and private investment vehicles as an alternative to companies and unit trusts.
Now Guernsey has introduced the LLP, which is a body corporate with separate legal personality (from its members) and unlimited capacity. Partners in an LLP are referred to as members and there is no limit to the number of members, although there must be a minimum of two. Subject to any agreement among the members, a member of an LLP is not liable for the debts of the LLP or any other member of the LLP.
Registrations of LLPs must be made through a Guernsey corporate service provider at the Guernsey Registry.
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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