The previous provisions of the Law regarding the termination of limited partnerships raised practical issues for LPs in Jersey.
The proposals have amended the Law to create a clearer order of events for the termination process, with the dissolution being the final act of the limited partnership (similar for example, to the winding-up of a company under Jersey law). The changes also provide a mechanism for the removal of a limited partnership from the Register for
non-compliance with its statutory reporting and annual fee payments. This allows historic limited partnerships that failed to follow a correct de-registration process to be removed from the Register.
The new termination process is:
- For a voluntary termination: the winding-up of the limited partnership will be triggered in accordance with the terms of the partnership agreement, upon which the limited partnership is obliged to be wound-up. Upon the winding-up being completed, a request for cancellation of its registration must be delivered to the Registrar. Dissolution will occur once the limited partnership is de-registered, reversing the current statutory position, which is based upon customary law.
- For an involuntary termination: the variety of methods to bring the LP to an end whilst recognising rights and protections of limited partners and creditors has been expanded.
In addition to the above new process, the amendments to the Law also introduce the power to reinstate a limited partnership, to address the possible adverse consequences of a limited partnership having its registration cancelled by the Registrar for the continued default of the general partner, or for being mistakenly de-registered whilst it still has assets. Any application to reinstate the limited partnership can be brought by a partner, creditors or any other interested party at any time before the tenth anniversary of it being de-registered (a provision similar to equivalent legislation for reinstating companies under