BVI passes a new Limited Partnership Act

Harneys is pleased to welcome passage of the BVI’s innovative new Limited Partnership Act, which will come into force in early 2018.

Philip Graham, Head of Funds and Corporate for Harneys BVI, stated:  “Harneys is eagerly anticipating the start of 2018 when the new limited partnership structures will become available to our clients.”

“The new regime draws on the popular and very successful BVI Business Companies Act, as well as best limited partnership practice from leading jurisdictions around the world, to provide a highly innovative new limited partnership structure which is keenly focused on the needs of our clients,” Graham continued.

 Whilst retaining significant flexibility to cater for a wide number of demands, Harneys expect the new limited partnerships to be particularly attractive for funds and, in particular, private equity funds and joint venture vehicles where onshore tax transparency is required.

What are the key features of new BVI limited partnerships?

  • Simple, quick, cost effective registration of limited partnerships
  • Ability to have a limited partnership with or without legal personality
  • No requirement for a BVI based general partner
  • Flexibility on the terms of the partnership agreement, including specifically tailoring to cater for a default by limited partners
  • Ability to register a charge against a limited partnership with legal personality on the public register in the BVI and obtain priority under BVI law over subsequent charges
  • Extensive list of safe harbour provisions for limited partners in their dealings with the partnership, which are not considered to be taking part in the management of the limited partnership and so maintain and preserve limited partners’ limited liability
  • Inclusion of various corporate law concepts for limited partnerships, including merger (with rights for dissenting limited partners), consolidation, plans and schemes of arrangements, redemption of minority partnership interests and continuations
  • Detailed and specific provisions for the termination, deregistration, winding up and striking off of solvent limited partnerships, and also for winding up insolvent limited partnerships to maximise efficiency

The legislation is the result of a collaborative effort by leading legal practitioners in the BVI, including Harneys, together with the government and experienced legislative draftsmen.

Harneys sees this development as an opportunity for many of our clients, and we will issue a further update once the Registry is open for the registration of new limited partnerships.