Proposals that revamp the existing Exempted Limited Partnerships Law have been published by the Cayman Islands Government and could be passed into law by mid-March 2014.
The Exempted Limited Partnership Bill, 2014, was published on February 21. According to law firm Walkers, which issued an advisory note on the bill, it is designed to revise the existing law around three broad principles: to confer even greater contractual flexibility on the partners, to reflect developing trends in the formation, regulation and operation of private funds and to ensure consistency of advice on matters of Cayman Islands law.
The new bill makes some interesting specific changes that will affect the way in which partnerships operate and the rules surrounding them. For instance, the current inviolable statutory duty of the general partner to act in the interests of the partnership will be capable of contractual variation because that duty will be subject to any express provisions of the partnership agreement.
Limited Partners Advisory Committees will also be given statutory status and foreign limited partnerships will be permitted, by registration in the Cayman Islands, to act as general partners of Cayman exempted limited partnership. At present, only foreign companies may so act.
Walkers advised that parties that work with Cayman Islands exempted limited partnerships should familiarise themselves with the new law. “In particular, parties currently negotiating partnership agreements should be future proofing such agreements in light of the introduction of the new law,” the firm said.
Limited Partnerships, law, government, partnerships, Walkers