In July 2020, Jersey introduced a straightforward and highly sought after statutory migration scheme for the continuance of non-Jersey limited partnerships to and from Jersey. The new regime is expected to be popular in both the private wealth and investment funds industries in the island.
Under the Limited Partnerships (Continuance) (Jersey) Regulations 2020 (the Continuance Regulations), an application for the continuance of a non-Jersey limited partnership would be made to the Jersey Financial Services Commission (the JFSC), supported by a declaration (the Declaration) from the general partner(s) that the migrating limited partnership is solvent and wishes to be registered as a limited partnership under the Limited Partnerships (Jersey) Law 1991 (the LP Law).
Under the Continuance Regulations, a foreign limited partnership may continue as a limited partnership within Jersey if it is not prohibited from doing so by the laws of the jurisdiction in which it was formed and does not have legal personality under the laws in which it was formed.
Upon continuance, the limited partnership would no longer be treated as a limited partnership under the laws of the other jurisdiction but, importantly, the continuation would not create a new limited partnership in Jersey or affect any existing partnership interests or assets. Similarly, the continuance would not affect any act done to, or powers, rights or obligations of the limited partnership exercised by, any partner or other person before its continuation.
Whilst not a statutory obligation, it is likely that certain changes will need to be made to the limited partnership agreement to reflect, for example, the change in governing law and to align the provisions with those of the LP Law. Any non-Jersey limited partnerships carrying out regulated activities (e.g. as a non-Jersey fund or fund services business) could apply simultaneously for an application for regulatory approval in Jersey (where no regulatory exemptions apply) in tandem with the application for the continuance of the limited partnership.
The application to the JFSC is to be accompanied by a certified copy of the foreign partnership's certificate of formation together with the Declaration and evidence that the limited partnership is, inter alia, solvent, and that the application has been approved by the general partner(s). Where the laws of the jurisdiction in which the non-Jersey limited partnership was formed require an authorisation to continue into Jersey, evidence that such authorisation has been obtained may also be required.
The Continuance Regulations do not expressly require limited partners to consent to a continuance into Jersey, but the limited partnership agreement may require such consent to be obtained.
The continued limited partnership would not have separate legal personality under Jersey law but would be registered under the LP Law and issued with a certificate of continuance which is conclusive evidence that the migrating partnership has continued as a limited partnership within Jersey from the date specified in the certificate of continuance.
A foreign general partner company may already continue into Jersey under the statutory continuance procedure set out in the Companies (Jersey) Law 1991.
Originally published 18 July, 2020
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