Bermuda Enhances Partnership Regime
by Mike Godfrey, Lowtax.net, Washington
06 June, 2016
Bermuda's legislature is considering reforms to its partnership regime that are intended to enhance and modernize the existing law.
The Partnerships and Companies Amendment Bill 2016 introduces changes to the Exempted Partnerships Act 1992 to make the provisions governing relocation of partnerships into Bermuda consistent with those governing relocation of companies into Bermuda; and to provide clarity in relation to the effective date for de-registration of any Bermuda partnership.
The Limited Partnership Act 1883 is being amended to clarify that, subject to the partnership agreement, a partnership which has not elected separate legal personality is not dissolved by a change in any of the partners.
The Bill also expands the "safe harbor" provisions for activities by limited partners. It allows limited partners to investigate, approve, or be advised of the financial or business affairs of the partnership without these actions being viewed as taking part in the managerial functions of the partnership. This change will enable limited partners to be well informed as to the activities of the partnership and engage in certain decisions related to their business interests without losing their limited liability status, the Bermuda Government said.
Other amendments to the Limited Partnership Act include authorization to prescribe new fees or to make changes to existing fees applicable to limited partnerships; enabling partnerships from any jurisdiction to relocate to Bermuda; and providing clarification as to the effective date of de-registration of a Bermuda partnership.
The Bill makes several amendments to the Partnership Act 1902 including enabling partnerships to elect separate legal personality at any time during the term of the partnership, at the partners' discretion.
The proposed amendments are intended to provide greater flexibility with respect to the management and operation of Bermuda partnerships and complement prior legislative reforms relating to partnership governance enacted in 2015.
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