In early 2018 the new BVI Limited Partnership Act, 2017 (the “LPA”) was brought in to force with the Registry of Corporate Affairs in the British Virgin Islands accepting the registration of limited partnerships under the LPA.
The LPA was intended to provide a platform for subscription finance transactions and largely aimed at private equity funds to offer an alternative solution to the BVI business company through corporate transactions where additional flexibility and confidentiality are likely to be attractive.
As well as the efficient and cost-effective registration of limited partnerships, which offer same-day registration while commercial terms are finalised, the election for a legal personality is not necessary. Added to the cost-effectiveness is the removal of the requirement for a BVI general partner and the removal of a capital contribution from a general partner.
The LPA also allows extensive flexibility to limited partnerships in relation to the commercial terms of a partnership agreement whilst adding provisions for safe harbour in favour of limited partners who are dealing with limited partnerships.
Adding to the set-up and ongoing business benefits of the LPA are favorable provisions for the termination, deregistration, winding up and striking off of limited partnerships, particularly those that are solvent, but also for those that are insolvent.