The two new partnerships laws going before the States of Jersey next week will be welcomed by Jersey’s Financial Services Industry.
The introduction of the Incorporated Limited Partnerships (ILP) Law and the Separate Limited Partnerships (SLP) Law will extend the range of partnerships available in Jersey for promoters, advisers and investors. The two new laws are based on the existing Limited Partnerships (Jersey) Law 1994 but draw on the popular model already in use in Scotland.
Like the Scottish version, the two laws will create partnerships which have their own legal personality. This means that SLPs and ILPs will be able to hold property and assets, as well as sue or be sued, in their own name. Importantly, confidentiality is maintained in both laws as it remains the case that neither the names and addresses of the limited partners nor the partnership agreement are matters of public record.
A significant difference between the two is that an ILP will be a body corporate (akin to a company) and will not be transparent for gains (not income) in the same way as other types of partnership. The general partner (GP) of an ILP will be an agent; it will have duties comparable to the statutory director duties and it shall only be liable for the debts of the partnership after the partnership has first failed to satisfy such debts.
Carl O’Shea, an Advocate specialising in investment funds at Crill Canavan, commented : “The two new partnerships are to be welcomed and will enhance the range of products available from Jersey by providing promoters, advisers and investors with a greater choice of investment structure. It will be interesting to see which type of partnership proves to be the more popular over the coming years – but let’s hope uptake is a little quicker than the foundation!”
Carl O’Shea does, however, sound one note of caution: “Like all investment structures the two new types of partnerships will only be effective if the costs of regulation and compliance are kept to reasonable levels otherwise, they could become rather expensive to use when compared with similar offerings from other jurisdictions. Considering the difference between an SLP and ILP it is also important that tax advice is sought before deciding which is the most appropriate vehicle.”
If the two new partnership laws are passed by the States of Jersey, they should be available by the end of this year.