What is a Limited Partnership?
These guidance notes do not constitute legal advice and should not be relied upon as such. The interpretation of legislation is a matter on which the Guernsey Registry cannot advise and entities/individuals need to form their own independent view on compliance with the legislation. Legal advice should be obtained where there is any uncertainty.
Limited Partnerships ("LPs") combine elements of traditional partnerships with the benefit of limited liability for limited partners. An LP may be formed in Guernsey for the carrying on of any lawful business and will have a continuous and successive existence in the persons of its partners, present and future, until dissolution.
An LP only has legal personality if the partners so elect at registration.
LPs consist of one or more:
- general partners, who have joint and several unlimited liability for the debts and obligations of the LP, similar to the position of partners of a traditional
partnership, and
- limited partners, whose liability for any debts of the LP is limited to the amount contributed, or agreed to be contributed.
LPs are different to Limited Liability Partnerships, where all partners have limited liability.
The duties and obligations of general partners are broadly equivalent to those of a partner in a traditional partnership.
Limited partners are not entitled to participate in the conduct or management of the business of an LP, save as to the extent permitted in the Limited Partnerships (Guernsey) Law, 1995 ("the LP Law"), and risk becoming liable as a general partner if they do.
A Guernsey LP is required to have a written partnership agreement setting out the affairs of the LP and the conduct of its business.
Unless exempt from the requirement, Guernsey LPs with legal personality must have a resident agent who must be either a Guernsey resident individual general partner, or a corporate services provider.
The legal framework for the creation and operation of LPs is set out in the LP Law.
