Incorporated Limited Partnerships (Jersey) Regulations 201-

Information about the publication of Ministerial Decisions

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A decision made 1 April 2011:

Decision Reference: MD-E-2011-0053

Decision Summary Title :

Incorporated Limited Partnerships (Jersey) Regulations 201-

Date of Decision Summary:

30 March 2011

Decision Summary Author:

Director, Finance Industry Development

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 :

Incorporated Limited Partnerships (Jersey) Regulations 201-

Date of Written Report:

30 March 2011

Written Report Author:

Director, Finance Industry Development

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Subject:

Incorporated Limited Partnerships (Jersey) Regulations 201- (“the draft Regulations”) - Approval of draft for lodging.

Decision(s):

The Minister approved the draft Regulations and directed that they be lodged au Greffe for debate by the States at the earliest opportunity.

Reason(s) for Decision:

The draft Regulations provide for the winding up and dissolution of Incorporated Limited Partnerships (“ILPs”) established under the Incorporated Limited Partnerships (Jersey) Law 201- (“the Law”), which was recently approved by the Privy Council. The draft Regulations will come into force at the same time as the Law.

Resource Implications:

There are no financial or manpower considerations for the States of Jersey.

Action required:

The draft Regulations to be lodged au Greffe for debate by the States at the earliest opportunity.

Signature: Senator A.J.H.Maclean

Position:

Minister for Economic Development

Date Signed:

Date of Decision (If different from Date Signed):

Incorporated Limited Partnerships (Jersey) Regulations 201- - Lodging of Draft

Incorporated Limited Partnerships (Jersey) Regulations 201-

(“the draft Regulations”)

1. THE ISSUE AND RECOMMENDATION

1.1. The draft Regulations provide for the winding up and dissolution of incorporated limited partnerships established under the Incorporated Limited Partnerships (Jersey) Law 201- (“the Law”), which was recently approved by the Privy Council. The draft Regulations will come into force at the same time as the Law.

1.2. There are no financial or manpower implications for the States of Jersey.

1.3. The Law Officers’ Department has confirmed that the draft Regulations are human rights compliant and that penalties for new offences are commensurate with those for similar existing offences.

1.4. It is recommended that the Minister approves the draft Regulations and directs that they be lodged au Greffe for debate by the States at the earliest opportunity.

BACKGROUND

2.1. The Law was approved by the States on 25 May 2010. When it comes into force, the Law will allow for the establishment of a new type of Jersey vehicle, the Incorporated Limited Liability Partnership (“ILP”).

2.2. An ILP will be a body corporate, having perpetual succession. This may be attractive for a number of reasons. Firstly, there may be an attraction to having body corporate status for those engaging in cross-border transactions, since this gives greater certainty as a matter of international law, in particular regarding the limited liability of the limited partners. Secondly, perpetual succession means that those dealing with the ILP can be confident that it will continue to exist and be held accountable for its obligations.

2.3. While the general partner(s) will continue to be liable for the ILP’s debts, this liability will be a secondary one, only arising if the ILP itself defaults. The general partner(s) will act as an agent for the ILP rather than the partners as individuals and in some ways will be similar to a company director. Correspondingly general partners’ duties similar to directors’ duties have been included.

The draft Regulations

2.4. Under Article 21 of the Law, the States may make Regulations providing for the winding up and dissolution of solvent and insolvent incorporated limited partnerships.

2.5. The draft Regulations are based on the Companies (Jersey) Law 1991, which regulates the winding up and dissolution of companies under that Law. In principle, the draft Regulations therefore follow the scheme of the 1991 Law.

2.6. The draft Regulations also provide for the dissolution of incorporated limited partnerships that no longer appear to be in business. These provisions follow those that apply under the 1991 Law to companies.

2.7. The Regulations are arranged in the following way:

Part 1 deals with preliminary matters, relating to the interpretation of the Regulations.
Part 2 provides for a voluntary winding up. As in the case of companies, this is called a summary winding up.
Part 3 provides for the Royal Court to wind up an incorporated limited partnership on just and equitable grounds, or if it considers it in the public interest to do so.
Part 4 provides for the winding up of an incorporated limited partnership by its creditors.
Part 5 contains provisions that apply to more than one kind of winding up.
Part 6 contains other provisions.
1. The Regulations are expressed to come into force on the same day as the Incorporated Limited Partnerships (Jersey) Law 201-, so as to complete the scheme of that Law.

RECOMMENDATION

3.1. It is recommended that the Minister approves the draft Regulations and directs that they be lodged au Greffe for debate by the States at the earliest opportunity.

FINANCE INDUSTRY DEVELOPMENT

30 March 2011