The States of Guernsey has responded to demands for limited liability partnership structures (LLPs) and has approved draft legislation which is expected to receive Royal Assent and come into force before July 2014.
Carey Olsen corporate partners, advocate David Crosland and advocate Tom Carey, hosted a recent seminar outlining the legislation.
The key details are:
• A body corporate with separate legal personality and unlimited capacity
• Each LLP needs a written agreement which sets out the relationship between the members
• Significant flexibility to organise the LLP to suit business requirements
• In the absence of express provisions the Law will impose certain standard terms
• LLPs are suited to professional service firms, special purpose vehicles, management companies and general partner vehicles
• An existing Guernsey partnership will be able to convert to LLP status and LLPs will also be capable of migration into and out of Guernsey
Crosland says: “LLPs should also prove popular for real estate joint ventures and other investment ‘clubs’ where participants will be attracted by the ability to take an active part in the management of the LLP and its investments without giving up their limited liability."
Carey says: “The ability to tailor the economics of LLPs will also make them attractive as simple asset-holding vehicles even in the absence of any active investment management. It is this flexibility that makes LLPs such an exciting new part of Guernsey’s legal landscape.”