A Jersey limited partnership (LP) does not have its own legal personality separate from its partners, however a general or limited partner may be a body corporate. It must have at least one limited partner and one general partner who are separate persons, however there are no limits on numbers of partners and there is no need for the general partner to be resident in Jersey. The responsibility for managing the partnership rests with the general partner and a limited partner has no authority or power to bind the partnership. There is no obligation for the partnership to file an annual return and no audit requirements. Partnership contributions can be made in the form of money, property or services and there is no requirement on the general partner to make any capital contribution to the partnership.
Key advantages of using limited partnership
- LPs can be used as part of international tax planning arrangements utilizing the fiscal transparency of the limited partnership concept
- Statutory records of the LP are private and may only be inspected and copied by partners
- There is no requirement for the partnership’s accounts to be audited (unless required in the partnership agreement)
- Contributions from limited partners can be increased or returned to limited partners during the continuance of the partnership in accordance with the terms of the partnership agreement.
- Capital and profit distributions may be made freely in accordance with the terms of the partnership agreement
- A limited partner can carry out certain activities which are deemed by statute not to constitute taking part in the management of the partnership (e.g. consulting with and advising the general partner on the activities of the partnership; approving the purchase or sale by the partnership of any asset etc.)
- Flexible property holding vehicle
- Potential UK tax advantages
- Partnership not liable to Jersey income tax
- No obligation to file annual returns with the Registrar of Limited Partnerships
- May be established with unlimited duration or for a specific term