Introduced in February and designed to be both simple and flexible, Guernsey's new Limited Partnership Law is already assuming wider uses than were first envisaged: the creation of pooled investment vehicles for North Americans especially in venture capital and management buy-out situations and as an option for some captive insurers.
"We were intrigued to find that instead of a fund the first to take advantage of our new legislation was a leading European legal practice. It is an unforeseen development which we warmly welcome," says Peter Crook, Director General FSC.
The core principle of Guernsey's legislation is that a "general partner" is liable for all the debts and obligations of a firm. However, a "limited partner" at the time of entry contributes, or agrees to contribute, a stated amount of capital and is not liable for the obligations of the partnership beyond that amount.
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