Approval of the draft Limited Partnerships (Amendment) (Jersey) Law 200- ("the Amendment") for lodging.

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A decision made (02/06/2008) regarding: Approval of the draft Limited Partnerships (Amendment) (Jersey) Law 200- ("the Amendment") for lodging.

Decision Reference: MD-E-2008-0115
Decision Summary Title :	Limited Partnerships (Amendment) (Jersey) Law 200-		Date of Decision Summary:	30 May 2008
Decision Summary Author:	James Mews Finance Industry Development Executive		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Limited Partnerships (Amendment) (Jersey) Law 200-		Date of Written Report:	30 May 2008
Written Report Author:	James Mews Finance Industry Development Executive		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Approval of the draft Limited Partnerships (Amendment) (Jersey) Law 200- (“the Amendment”) for lodging.
Decision(s): The Minister approved the Amendment and the attached report and signed the declaration of compatibility with the European Convention on Human Rights, and requested that the documents be lodged au Greffe by 3 June 2008 so as to allow the Amendment to be debated by the States on 15 July 2008.
Reason(s) for Decision: The Limited Partnerships (Jersey) Law 1994 is one of the key pieces of legislation used by the finance industry, especially in the funds sector. Desirable changes have been identified in a review of the vehicle by a steering group chaired by Economic Development in conjunction with the Law Society and Jersey Finance. The Law Officers Department have indicated that the Amendment does not raise any Human Rights issues. There are no new penalty provisions in the Amendment.
Resource Implications: There are no measurable financial or manpower costs for the States.
Action required: Forward a copy of the amendment and departmental report, together with the HR declaration to the Publications Editor, States Greffe, for preparation for lodging.
Signature: Senator P.F.C.Ozouf		Position: Minister
Date Signed:		Date of Decision (If different from Date Signed):

Approval of the draft Limited Partnerships (Amendment) (Jersey) Law 200- ("the Amendment") for lodging.

DRAFT LIMITED PARTNERSHIPS (AMENDMENT) (JERSEY) LAW 200-

1 THE ISSUE AND RECOMMENDATION

It is recommended that the Minister for Economic Development (“the Minister”) should approve the Amendment and the report attached to it, sign the Decision Summary and the statement of human rights compliance and that the documents should be lodged au Greffe by 3 June 2008 so as to be debated by the States on 15 July 2008.

BACKGROUND

The Limited Partnerships (Jersey) Law 1984 (“the Principal Law”) is one of the key pieces of legislation used by the finance industry. Limited partnerships are used particularly frequently in the funds sector of the industry, but are also in widespread use for a variety of other transactions, particularly where tax transparency is important.
A review of the Limited Partnership vehicle has taken place chaired by the Economic Development Department in conjunction with the Law Society and Jersey Finance. This has concluded that changes are desirable. The changes proposed in this amendment are some of the recommended changes with further changes to introduce a limited partnership with legal personality to follow shortly.
Some amendments to the registration provisions have been requested by the Registrar to ensure the smooth functioning of this vehicle, which is in the interests of the finance industry as a whole. Opportunity has also been taken to make a number of other minor improvements in the Principal Law.

THE PROPOSED AMENDMENT

Article 2 of the Amendment amends Article 3 of the Principal Law to make clear that a limited partnership must have at least two partners, i.e. at least one limited and one general partner, who must not be the same person.
Articles 3 and 6 of the Amendment insert provisions into the Principal Law designed to ensure that limited partnerships have permission from the occupier to use premises as their registered office. This has been introduced because registered office facilities are commonly provided on a commercial basis to limited partnerships which have no substantive permanent presence in Jersey. A problem has been created in the past for providers of registered office facilities when the limited partnership fails to pay the relevant fees, or where the provider otherwise wishes to withdraw the service, but there is no way of forcing the limited partnership to change its registered address.
The effect of new Article 8(1A) of the Principal Law is that a limited partnership will not satisfy the requirement to have a registered office in Jersey, and will therefore be committing an offence, unless the occupier of the registered office permits its use for this purpose. There are also provisions for the registrar to refuse to register an office if he or she is not satisfied that permission has been granted and there is a power for the Minister to prescribe information which limited partnerships must provide to the Registrar in this regard.
Article 8 of the Amendment is intended primarily to allow the Registrar to deregister limited partnerships at the request of the general partners. This is because from time to time limited partnerships wish to cease to be governed by the Principal Law, but without dissolving. At the moment there is no provision for this. Article 8 also makes a drafting improvement by gathering together all the cancellation provisions in the Principal Law.
Article 12 of the Amendment inserts a new Article 31A into the Principal Law, bringing it into line with the similar provision at Article 200 of the Companies (Jersey) Law 1961. This is intended primarily to allow documents to be submitted in electronic form.
The remaining Articles of the Amendment are all minor or consequential provisions.
A consultation exercise was carried out covering these and other issues relating to limited partnerships in 2006. Industry has also been consulted, through Jersey Finance, as to the detailed form of the Amendment. No objections to the substance of the Amendment have been received.
The Law Officers’ Department have confirmed that the Minister may properly sign the declaration of human rights compatibility and that there are no issues arising in relation to offences. (The Amendment does not create any offences, but does expand the scope of one offence as noted above and inserts the now standard clause in relation to liability by officers of bodies corporate.)

SUMMARY
1. The Amendment effects a number of changes which are in the interests of the finance industry.
RECOMMENDATION

5.1 It is recommended that the Minister should approve the Amendment and the report attached to it, sign the Decision Summary and the statement of human rights compliance and that the documents should be lodged au Greffe by 3 June 2008 so as to be debated by the States on 15 July 2008.

JAMES MEWS

Finance Industry Development Executive

30 May 2008