Jersey: Guide To Limited Partnerships In Jersey

Last Updated: 26 February 2013
Article by Mark Lewis, Andrew Weaver and James Gaudin

1. Introduction

Jersey legislation allows limited partnerships to be established pursuant to the Limited Partnerships (Jersey) Law 1994, as amended (the "LP Law"). The LP Law provides a flexible partnership vehicle for sophisticated or institutional investors who wish to participate in a partnership with the benefit of limited liability but without taking part directly in the management of the partnership affairs, such management being undertaken by the general partner. The Family Limited Partnership ("FLP") provides a way to ensure that wealth is both protected and easily passed on to the next generation.

Jersey recently approved legislation to allow incorporated limited partnerships and separate limited partnerships to be established pursuant to the Incorporated Limited Partnerships (Jersey) Law 2011 (the "ILP Law") and the Separate Limited Partnership (Jersey) Law 2011 (the "SLP Law"), respectively.

The ILP Law and the SLP Law are modelled, as closely as possible, on the LP Law, the intention being that the only differences are those necessary to accommodate their respective incorporated status or separate legal personality.

Jersey limited partnerships should not be confused with Jersey limited liability partnerships for which provision is made under the Limited Liability Partnerships (Jersey) Law 1997.

This guide discusses the key features of the Jersey limited partnership and the distinguishing features of the Jersey incorporated limited partnership (an "ILP") and the Jersey separate limited partnership (an "SLP").

2. Limited Partnerships

Jersey limited partnerships are commonly used in the following areas:

  • as part of international tax planning arrangements utilising the fiscal transparency of the limited partnership concept;
  • as vehicles for private equity and venture capital schemes;
  • as components in asset protection arrangements; and
  • as vehicles for collective investment funds in Jersey.

2.1 Formation

Forming a Jersey limited partnership is straightforward. The partnership must comprise at least one general partner (who is liable for all the debts and obligations of the limited partnership) and one limited partner (whose liability is limited to the value of his agreed capital contribution). The name of a limited partnership must end with the words "Limited Partnership" or either of the abbreviations "LP" or "L.P.". As a general rule the partnership name should not include the name, or a significant part of the name, of a limited partner unless it is also the name or a significant part of the name of a general partner.

There is no upper limit on the number of partners. Limited liability companies can participate either as general or limited partners and there is no partnership law requirement that a general partner be resident or incorporated in Jersey. Recent amendment to the LP Law clarifies that the partnership must consist of two separate persons even though a person may be a partner in two capacities.

Depending on the purpose of the limited partnership there may be a regulatory requirement to have a Jersey-based general partner.

A declaration must be filed in Jersey with the Registrar of Limited Partnerships stating the name of the partnership, its registered office address in Jersey and containing details of the general partner and the duration of the partnership.

As a matter of partnership law, there is no requirement to file details of the names of the limited partners or their capital contributions in the partnership declaration. Similarly, the nature of the activities and purpose of the limited partnership do not need to be disclosed in the declaration and there is no requirement to file copies of the partnership agreement. Once again, however, depending upon the nature of the activities of the limited partnership, there may be regulatory requirements to disclose and discuss (on a private basis) with the Jersey Financial Services Commission details about the proposed limited partnership, its activities and the number and status of limited partners.

A registration fee of £500 is payable to the Jersey authorities in respect of each Jersey limited partnership. Only when the Registrar issues the certificate of registration does the association of persons become a limited partnership (i.e. the liability of the partners, other than the general partner, becomes limited).

2.2 Principal Features

A Jersey limited partnership must maintain a number of statutory records at its registered office in Jersey including a register of partnership interests. However, the records are private and may only be inspected and copied by partners.

Partnership accounting records must be maintained but there is no requirement for partnership accounts to be audited unless this is required by the partnership agreement. Partnership accounts may be drawn up in any currency. A limited partner's contribution may be in the form of money, other property or services.

A limited partner may assign his interest in the limited partnership either in whole or in part in accordance with the terms of the partnership agreement or with the unanimous consent of all the partners.

Jersey limited partnerships have the capacity to operate on a variable capital basis allowing contributions from limited partners to be increased or returned to limited partners during the continuance of the partnership in accordance with the terms of the partnership agreement. Capital and profit distributions may be made freely in accordance with the terms of the partnership agreement. They are subject only to a simple solvency test with a claw-back mechanism which applies for a period of six months following distribution where a payment is made at a time when the partnership is insolvent.

A limited partner may lose his limited liability status if he participates in the management of the partnership in its dealings with persons who are not partners. However the LP Law provides a non-exhaustive list of "safe-harbour" activities which a limited partner can carry out and which are deemed by statute not to constitute taking part in the management of the partnership.

These include:

  • consulting with and advising the general partner on the activities of the partnership;
  • approving the purchase or sale by the partnership of any asset; and
  • acting as an agent or employee of the limited partnership or the general partner or acting as a director, officer or shareholder of a corporate general partner.

There is no obligation to file annual returns with the Registrar of Limited Partnerships in Jersey and there are no annual fees payable to the Jersey authorities by the limited partnership pursuant to the LP Law.

Limited partnerships may be established with unlimited duration or for a specific term.

Amendments to the LP Law in 2009 allow the Registrar to deregister a limited partnership at the request of its general partners. This enables a limited partnership to cease being governed by the LP Law (i.e. to become a general partnership or to register under another law or in another jurisdiction), without having to seek dissolution.

2.3 Regulatory Requirements

The creation of partnership interests in a Jersey limited partnership requires consent from the Jersey Financial Services Commission (the "JFSC") under the Control of Borrowing (Jersey) Order 1958 as amended. This consent should be obtained before the partnership agreement is signed, because the partnership interests are created on execution of the agreement.

If a Jersey limited partnership is to be established for private business, investment or family purposes and there will be fewer than 15 limited partners who form an existing identifiable group, the registration formalities for the limited partnership, in conjunction with the Registrar of Limited Partnerships in Jersey, can normally be accomplished within a few working days.

If a Jersey limited partnership is to be used as a vehicle for collective investment (including private equity transactions) and will be subject to public offerings or private placement with interested investors, or if it will engage in financial services activities with third parties who are not connected with the founding partners, the regulatory classification and treatment of the partnership and its general partner is dealt with by the Authorisation Division of the JFSC. Appropriate advice should be sought generally in connection with these regulatory matters and the anticipated timetable for the establishment of the partnership.

The general partner may need to adhere to relevant codes of practice and the controls and exemptions under the Financial Services (Jersey) Law 1988 may also be applicable to a limited partnership and its general partner depending on their activities.

2.4 Taxation

Jersey limited partnerships are not liable to any Jersey income tax burden and the vehicle is tax transparent (i.e. its activities are treated as being carried on by its partners). Distributions paid out to Jersey resident and non-Jersey resident investors are made on a gross basis without deductions in respect of Jersey tax. Investors will be taxed in accordance with the legislation applicable in the country in which they reside.

3. Family Limited Partnerships

Traditionally wealthy families have used trusts to pass assets down through the generations in a tax efficient and controlled manner, but in more recent times, families have been looking for other structures when passing wealth through generations and this has led to use of the Family Limited Partnership ("FLP") as an alternative to trusts for family succession purposes.

So far only a small number of FLPs have been established in the UK and offshore for wealth management and estate planning purposes, but, if structured effectively, FLPs can, in certain cases, not only offer similar levels of flexibility to a trust but also mitigate UK inheritance tax liabilities.

An FLP will generally comprise a general partner (usually a company owned by the first generation), which has a small interest but all the management responsibility for the FLP, and limited partners of both the first and subsequent generations who have an economic interest but no management powers. The first generation can give immediate partnership interests to their children, or can set up the partnership and subsequently transfer interests to their children as and when they think the time is right. The children can be brought in as directors of the general partner so that they can gradually participate in the business. FLPs must be carried on with a view to profit, but provided there is active management of the assets and a commercial element to that management, it can be used to hold a wide variety of assets.

FLPs are relatively flexible, by virtue of management powers being within the control of the general partner (so that the GP can control who receives income and capital payments), but it is important to appreciate that they do not necessarily provide the same degree of flexibility as trust structures when it comes to protection of assets on divorce or bankruptcy of the family members.

FLPs are contractual relationships and are operated in accordance with their specific terms. It is possible to draft FLPs to include pre-emptive provisions for divorcing family members or bankrupt partners to be 'bought out' and enable the assets to be retained within the family.

Establishing an FLP in an offshore centre can offer a number of advantages. These include enhanced levels of confidentiality and avoidance of the collective investment schemes rules imposed by the FSA.

Many offshore centres are also experienced in administering structures of this nature and have the appropriate legal, tax and accounting advice readily available to them.

4. Incorporated Limited Partnerships

The summary description of an LP in section 2. above above applies equally to an ILP, save in respect of the differences described.

4.1 Principal Features

The major differences between an ILP and an LP can be summarised as follows:

  • an ILP is a body corporate with a legal personality separate from those of its partners;
  • the name of an ILP must end with the words "Incorporated Limited Partnership" or any of the abbreviation "I.L.P.", "ILP", "Inc. L.P." or "Inc. LP";
  • an ILP is able to contract in its own name and accordingly hold assets in its own name rather than in the name of its general partner (although, as will often be the case, it will still be possible for the assets of an ILP to be held via a nominee);
  • to incorporate an ILP, its general partner has to supply the Registrar with, amongst other things, a statement that its partnership agreement has been executed by the initial partners. This is not the case for an LP and is driven by the need to establish the precise moment at which an ILP comes into existence;
  • the general partner's liability for the debts and obligations of the ILP will only arise if the ILP itself defaults;
  • as a body corporate, an ILP has perpetual succession in contrast to an LP which, generally, is immediately dissolved on the death, dissolution, bankruptcy or withdrawal from the partnership of the general partner (subject to a statutory power to re-instate). In light of this, the dissolution procedure for an ILP is more formal than that for an LP; and
  • a general partner of an ILP owes fiduciary duties to the partnership analogous to those owed by a director to a company. Breaches of these fiduciary duties can be sanctioned or ratified by all the partners in the partnership subject to the partnership continuing to be able to discharge its liabilities as they fall due.

4.2 Taxation and Fees

ILPs receive the same tax treatment in Jersey as LPs.

Where the ILP conducts business in the UK or has UK investors, it is understood the ILP will be transparent for the purposes of United Kingdom income tax or corporation tax on income so that each partner is liable to tax on their share of the ILP income. However, for UK capital gains tax purposes, the ILP will have a tax liability for any capital gains realized by it on the disposal of partnership assets. This is because the ILP will hold property in its own name for the benefit of the partnership and will therefore been seen as non-transparent for the purposes of UK capital gains rules.

As well as an initial registration fee, ILPs are likely to be liable for an annual registration fee, although the sum has not yet been determined.

5. Separate Limited Partnerships

The summary description of an LP in section 2. above applies equally to an SLP, save in respect of the differences described below.

5.1 Principal Features

Whilst the concept of an unincorporated partnership having a separate identity to that of its partners is already familiar to Scots law, it is a welcome addition to Jersey partnership law.

The key distinguishing features of an SLP are as follows:

  • an SLP has a separate legal personality but is not a body corporate;
  • the name of an SLP must end with the words "Separate Limited Partnership" or the abbreviation "S.L.P." or "SLP".
  • an SLP can own assets either in its own name or in the name of its general partner;
  • as a corollary of the point above, legal proceedings may be commenced against, or brought by, either the SLP in its own name or its general partner; and
  • as it is not a body corporate, the mechanics of an SLP's creation and dissolution are not as formal as for an ILP and the general partner does not owe any statutory fiduciary duties to the partnership (although customary law duties will be owed to the partners of the partnership).

5.2 Taxation

SLPs receive the same tax treatment in Jersey as LPs.

Where the SLP conducts business in the United Kingdom or has UK investors, it is understood that, for the purposes of UK income tax or corporation tax on income and capital gains tax (following the disposal of assets by the SLP), the SLP will be transparent so that each partner is liable to tax on their share of the SLP income or capital gain, not the SLP.

The ILP Law and the SLP Law add considerably to the attractiveness of Jersey's limited partnership regime and thereby help ensure that Jersey retains its competitive edge in this important area.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.