Guernsey is set to introduce limited liability partnership structures this summer, after five years since plans to draft legislation were announced.

Guernsey is set to introduce limited liability partnership structures this summer, after five years since plans to draft legislation were announced.

Expected to come into force before July, subject to Royal Assent, the legislation states aspects that the structures will need to have.

As highlighted in a seminar by offshore law firm Carey Olsen, LLPs on the Channel Island will be body corporates with separate legal personality and unlimited capability. They will need to have written agreements that set out the relationships between the members.

Designed for professional service firms, special purpose vehicles, management companies and general partner vehicles, the legislation should be flexible enough to allow an LLP to be organised in the best way for its business requirements.

The introduction of LLP legislation will not solely benefit new businesses; existing Guernsey partnerships will be able to convert to LLP status. Similarly, LLPs will be capable of migration into and out of Guernsey.

In the absence of express provisions, the law will impose certain standard terms.

The popularity of LLPs lies in the liability to the firm, rather than its owners, for any debts that it may gain, while allowing those involved to actively manage their partnerships.

“The ability to tailor the economics of LLPs will also make them attractive as simple asset-holding vehicles even in the absence of any active investment management. It is this flexibility that makes LLPs such an exciting new part of Guernsey’s legal landscape,” advocate David Crosland said, a corporate partner of Carey Olsen.