The Gibraltar Government has announced the publishing of the Limited Partnerships Bill and Protected Cell Limited Partnerships Bill to modernise Gibraltar funds legislation.
The said Bills have also been designed to provide a framework for:
- The partnership interests of limited partnerships being represented by shares, bonds, notes, loans or other debt securities or instruments;
- Limited partners being able to undertake a more active role in the affairs of the limited partnership without forfeiting their limited liability; and
- The general partners of a limited partnership being able to elect whether or not the limited partnership is to have legal personality.
The new limited partnerships legislation will repeal the existing Limited Partnerships Act 1927 and includes the following:
- The composition of a Limited Partnership includes at least 1 General Partner and 1 Limited Partner and a corporate body can be a General or Limited Partner;
- General Partners are jointly and severally liable for debts and obligations of Limited Partners whereas Limited Partners are liable only up to the amount contributed;
- An existing company can register as a Limited Partnership and formation is upon registration with the Registrar;
- A Limited Partnership cannot take part in the management of the business and cannot bind the partnership;and
- Voting rights of each partner shall be in proportion to the partner’s partnership interest or as stated in the Limited Partnership agreement.
The Protected Cell Limited Partnership Bill allows for fund limited partnerships to create one or more cells for the purpose protecting and segregating cellular assets from non-cellular assets and keep each cell separate and distinguishable from other cells. The Bill also enables Protected Cells to be used to create multi-cell funds or “umbrella funds”. Protected Cell Company legislation was introduced in 2001 with Gibraltar being the first EU jurisdiction to offer this.
Gibraltar Finance’s Tim Haynes worked with leading experts Diala Minott from Paul Hastings LLP in London and Jonathan Garcia from Isolas as Head of the Technical Committee at GFIA together with Julian Sacarello at the GFSC over many months to make this legislation a reality.
“In Gibraltar, we have always prided ourselves in our ability to work in partnership with the private sector to create modern, robust legislation that best serves the financial services industry, putting Gibraltar atthe forefront of legal innovation,” said the Minister for Digital and Financial Services, Albert Isola.