Guidance Note: Limited Liability Partnerships (Jersey) Law 1997

Summary

This is a JFSC guidance note explaining how the Limited Liability Partnerships (Jersey) Law 1997 works in practice. It covers formation, naming, ongoing administration, the partners' legal position, and what happens if an LLP is wound up, whether solvently or insolvently.

• Formation and naming: Prospective LLPs must reserve a name with the Companies Registry, use Limited Liability Partnership or L.L.P. at the end of the name, and arrange registration through a Jersey lawyer, accountant, bank or other financial institution; a certificate of registration is conclusive evidence of registration.
• Consents: Applicants must apply simultaneously for consent under the Control of Borrowing (Jersey) Order 1958, providing details of partners, partnership interests and proposed activities; the JFSC may grant, condition or refuse consent based on protecting the Island's commercial integrity and its economic interests.
• Administration: Every LLP must maintain a registered office in Jersey and keep accounting records sufficient to show its financial position at any time, though no auditor appointment or filing of financial statements is required.
• Partners' liabilities: Partners can face personal liability for LLP debts in cases of wrongful or fraudulent trading, transactions at an undervalue, preferences or extortionate credit bargains, and must cooperate with any insolvency manager; retirement of a partner only takes effect once notice is delivered to the Registrar.
• Financial provision: Every Jersey LLP must maintain a 5 million pound financial provision from a bank or insurance company, used pro rata to settle debts in an insolvent winding up; if unavailable, partners become liable to the full extent of their assets.
• Winding up: An LLP may be wound up under the partnership agreement, by Court order on any of five specified grounds, or insolvently via a creditors meeting and appointment of an insolvency manager; an LLP in winding up must state that fact in all correspondence, and creditors may seek a desastre from the Royal Court.
• Annual declaration: The designated partner must deliver an annual declaration to the Registrar before the end of February each year (after the year of registration), listing the names and addresses of every person who was a partner on 1 January of that year.

The note is general guidance only; professional advice should be sought on specific issues, and applicable fees are set out separately in the Limited Liability Partnerships Fees Notice.

Key obligations

• Reserve the LLP's proposed name with the Companies Registry before registration and include Limited Liability Partnership or L.L.P. at the end of its name
• Apply for consent under the Control of Borrowing (Jersey) Order 1958 simultaneously with submission of registration papers, disclosing partnership interests, partners and proposed activities
• Maintain a registered office in Jersey and keep accounting records sufficient to disclose the LLP's financial position at any time
• Maintain a 5 million pound financial provision from a bank or insurance company at all times
• Deliver notice to the Registrar before a partner's retirement takes effect
• Deliver an annual declaration to the Registrar before the end of February each year, listing every person who was a partner on 1 January of that year
• State the fact that the LLP is being wound up in all correspondence issued during winding up
• Cooperate with the insolvency manager during an insolvent winding up; failure to do so is a criminal offence

Applies to

Limited liability partnerships (LLPs), partners of LLPs, designated partners, insolvency managers

Deadlines

• Before the end of February in each year following the year of registration: Designated partner must deliver an annual declaration to the Registrar stating the names and addresses of every person who was a partner on 1 January of that year