Bermuda: Types of Company
Limited partnerships are governed by the Limited Partnership Act 1883 as amended. As is usual, a limited partnership must have at least one general partner with full liability and one or more limited partners whose liability is limited to their contributions and who do not take part in the management of the partnership.
A limited partnership can become exempt under the Exempted Partnerships Act 1992 in the same way as a general partnership, and is subject to the same terms.
The Limited Partnership Act provides for limited partnership interests to be traded on overseas stock exchanges by permitting branch registers of limited partners to be maintained outside Bermuda.
An exempt limited partnership pays an annual fee of USD2,235.
In 2005, partnership law was amended to simplify the regime for Exempted and Overseas Partnerships. The Exempted Partnerships Amendment Act 2005 and the Overseas Partnerships Amendment Act 2005 are designed to bring administrative rules for partnerships into line with those for companies and to permit more sophisticated uses for a Bermuda partnership.
Key changes include the following:
- The Register of limited members in a partnership will no longer be on the public file;
- The distinction between contributions in capital and kind is being abolished;
- The requirement for minimum capital of USD12,000 has been removed;
- The notification requirement for changes in limited partners' capital has been removed;
- Individual non-Bermudian partners will no longer require authorization to act in Bermuda on behalf of their partnership.
It is expected that the changes will make it easier for investment funds to make use of a Bermudian partnership structure, in which the general partner is often a local firm and the limited partners are high-net-worth, sophisticated investors.