Limited Liability Partnerships
A Limited Liability Partnership (LLP) is distinctly different from a Limited Partnership (LP) and it is not expected that LLPs will replace them.
In a LP, the general partners are responsible for the day to day management and operation of the partnership, and remain jointly and severally liable for all of its liabilities. The limited partners enjoy limited liability, provided that they play no part in the management of the LP. The limited partners are thus 'passive' investors. This structure is particularly suited to collective investment funds where investors can invest as limited partners and enjoy a degree of limited liability, while the fund's manager acts as general partner and makes the various investment decisions and remains liable for those decisions.
In a LLP all the partners are entitled to participate in the management of the LLP. Each partner remains personally liable for his own actions. LLPs are more likely to be used for professional activities rather than as investment vehicles. The LLP does not provide the same level of protection to an investor as the LP.
The States of Guernsey resolved to approve the introduction of LLPs in Guernsey and directed the preparation of such legislation as was necessary.
Project update: legislation is currently being drafted by the Law Officers.
