There are three types of partnership that can be established under Gibraltar law: general partnerships, limited partnerships and limited liability partnerships. The law governing partnerships is predominantly based on the English statute equivalent.
'General' partnerships, sometimes referred to as 'traditional' partnerships, are the sort of partnerships envisaged by the Partnership Act 1895. Each partner can act on behalf of the partnership in the conduct of its business with binding effect on the other partners, and all partners have unlimited liability for the debts of the partnership. A general partnership is not a legal person.
The concept of a 'limited partnership' was introduced by the Limited Partnerships Act 1927 and it allows a person to be a 'limited partner', whose liability for the partnership's debts is limited to his or her capital contribution to the partnership. A limited partnership must consist of at least one general partner, whose liability is unlimited, and one limited partner; limited partners must not be involved in the management of the partnership's business. In most other respects limited partnerships are subject to the Partnership Act 1895. Unlike general partnerships, limited partnerships have separate legal personality.
Certain changes to Gibraltar law also mean that partnerships do not have a limit on the number of partners that can make up a partnership. Previously a partnership could not consist of more than twenty partners.
ISOLAS is experienced in all aspects of partnership law, practice and regulation, particularly in the financial services sector. This has involved the use of limited partnerships and their uses in fund structures. ISOLAS also have experience in "family partnerships", a way of using partnerships as wealth management and investment planning vehicles.
ISOLAS have experience in:
• Drafting partnership agreements, each of which is bespoke and reflects each client's unique situation.
• Formation and registration of limited partnerships.
• Advising clients in the financial services industry on setting up their collective investment schemes as limited partnerships.
• Advising on the structuring of limited partnerships; for instance on loan arrangements between the limited partnership and the limited partners.
• Advising on corporate governance and insolvency.
• Advising on the use of limited partnerships in securitisation and asset based lending transactions.
The Limited Liability Partnerships Act 2009
The Limited Liability Partnerships Act 2009, commenced in 2016, provides for the creation of a new form of legal entity known as a limited liability partnership. A limited liability partnership is a 'body corporate' with legal personality separate from its members. It enables each member to limit his/its liability for the partnership's debts to an amount (usually the capital they have invested in the limited liability partnership) agreed with the other members of the limited liability partnership. Like general partnerships, a limited liability partnership can be formed by two or more (natural or legal) persons, including other limited liability partnerships, carrying on a business with a view to profit.
A limited liability partnership therefore offers the limited liability benefits of a company combined with the organisational flexibility of general partnerships and it is expected that it will become a very popular way of organising business arrangements and transactions. It is envisaged that regulations will be published in the near future regulating the management and winding-up of limited liability partnerships and necessary for this new form of entity to become available under Gibraltar law. ISOLAS is advising HM Government of Gibraltar on the introduction of limited liability partnerships into Gibraltar law.
ISOLAS LLP is a Limited Liability Partnership since 1 July 2017.
For further information on the commencement of the Limited Liability Partnerships Act, please click the following link:
LLP Legislation Commenced