Jersey has introduced two new forms of limited partnership. A
separate limited partnership (SLP) is a legal person, similar to a
Scottish limited partnership. An incorporated limited partnership
(ILP) is a legal person and a body corporate. Carey Olsen
registered the first of the structures (an SLP) in 2011 and others
have followed since.
The 'traditional' Jersey limited partnership (JLP) is
treated as transparent for all UK tax purposes and counsel's
advice is that SLPs and ILPs will receive the same treatment. The
SLP and ILP laws have been tailored to reinforce the existence of
separate legal personality and body corporate status before foreign
An SLP is a legal person whose capacity is not limited and
which can sue and be sued in the name of the SLP or its general
An ILP is a body corporate with perpetual succession and
unlimited capacity, which can only be dissolved in accordance with
detailed (company style) winding-up provisions or Jersey's
insolvency legislation. The GP is the agent of the ILP, owes duties
to the ILP (as well as to other partners) and has liability for ILP
debts only after the ILP has defaulted.
The SLP and ILP are ideal as carried interest and other profit
distribution structures, as fund vehicles, and also to act as GP
for UK and other limited partnerships. The UK's qualifying
partnerships regime is expected to be expanded shortly, requiring
many English and Scottish limited partnerships to prepare accounts
audited to UK GAAP (Generally Accepted Accounting Principles). The
use of a Jersey ILP as the GP is expected to take these
partnerships outside the scope of the new regime.
Common features of all types of Jersey limited
Like a JLP, an SLP/ILP consists of one or more GPs who are
jointly and severally liable for all the debts of the partnership,
and one or more limited partners, who are not liable beyond the
amounts they agree to contribute. Other common features of all
Jersey limited partnerships include the following:
'Stackability' – can act as a general or
limited partner to any Jersey or other LP without prejudicing the
limited liability of its limited partners;
Capital and profits can be distributed at any time without
formality, provided partnership is solvent;
No public inspection of limited partner names;
Unless partnership is regulated as a fund or a financial
service business, there is no requirement for Jersey
service-providers; a Jersey GP; Jersey directors; filing any annual
return or accounts; or any audit. Where the LP is regulated, its
accounts must be audited but do not need to comply with any
Partnerships can be listed;
There is full commercial flexibility on the terms of the
There is a non-exhaustive list of 'safe harbours',
allowing limited partners to have greater involvement in management
than in some other jurisdictions. The benefits of Jersey limited
partnerships are now available in structures where Scottish or
other vehicles have conventionally been used. The ability to
establish structures across fewer jurisdictions, combined with the
flexibility of Jersey companies and limited partnerships, offers
new opportunities for cost savings and greater simplicity in
corporate and fund structuring.
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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