ARRANGEMENT OF SECTIONS

SECTION

CHAPTER 312

EXEMPTED LIMITED PARTNERSHIP

[Assent 29th March, 1995]
[Commencement 31st May, 1995]

"contribution" means cash, property or other assets which a partner contributes to the capital of an exempted limited partnership (but shall not include any moneys lent by a partner to an exempted limited partnership);

"court" means the Supreme Court;

"exempted limited partnership" means a limited partnership registered under subsection (1) of section 9;

"general partner" means a person who is named as such in the statement filed pursuant to section 9 and if more than one shall mean each general partner;

"insolvency of the exempted limited partnership" means that the general partner is unable to pay the debts and obligations of the exempted limited partnership (otherwise than in respect of liabilities to partners on account of their partnership interest) in the ordinary course of business as they fall due out of the assets of the exempted limited partnership (without recourse to the separate assets of the general partner not contributed to the exempted limited partnership) and "solvent" shall be construed accordingly;

"limited partner" means a person who has become a limited partner in accordance with subsection (2) of section 4 and if more than one shall mean each limited partner;

"mortgage" means a legal mortgage by way of assignment and an equitable mortgage, charge or other form of security interest;

"partner" means a limited partner or a general partner;

"partnership agreement" means any agreement of the partners which provides for the establishment of and regulates the affairs of an exempted limited partnership, the conduct of its business and rights and obligations of the partners amongst themselves;

"partnership interest" means the interest of a partner in an exempted limited partnership in respect of profit, capital and voting or other rights, benefits or obligations to which he is entitled or subject pursuant to the partnership agreement or this Act;

"public in The Bahamas" excludes any International Business Company incorporated or continued under the International Business Companies Act or a foreign company registered pursuant to Part VI of the Companies Act, or any such company acting as general partner of a partnership registered pursuant to subsection (1) of section 9 or any director or officer of the same acting in such capacity;

"Registrar" means the Registrar of Exempted Limited Partnerships referred to in section 8.

(2) The provisions of the Partnership Limited Liability Act shall not apply to an exempted limited partnership.

Provided that such exempted limited partnership shall not undertake business with the public in The Bahamas other than so far as may be necessary for the carrying on of the business of that exempted limited partnership exterior to The Bahamas.

(2) An exempted limited partnership shall consist of one or more persons called general partners who shall, in the event that the assets of the exempted limited partnership are inadequate, be liable for all debts and obligations of the exempted limited partnership and one or more persons called limited partners who shall not be liable for the debts or obligations of the exempted limited partnership, save as provided in the partnership agreement and to the extent specified in subsection (2) of section 7 and subsection (2) of section 14 and provided also that a general partner, without derogation from his position as such, may take, in such exempted limited partnership, in addition an interest as a limited partner.

(3) A general partner shall act at all times in good faith in the interest of the exempted limited partnership.

(4) A body corporate, with or without limited liability, or a partnership (whether in the name of such partnership and whether or not an exempted limited partnership), may be a general or limited partner.

(5) Any one or more of the limited partners and general partners of an exempted limited partnership may be resident, domiciled, established, incorporated or registered pursuant to the laws of The Bahamas or outside The Bahamas provided that at least one general partner shall-

Provided that no exempted limited partnership shall have a name which, whether because it is identical or similar to the name of any other entity or because it falsely suggests the patronage of or a connection with some person or authority or because it suggests that the partnership is licensed whether in The Bahamas or elsewhere to carry on any type or class of business when it is not in fact so licensed or because of any other reason, is calculated or likely to mislead.

(2) Any property of the exempted limited partnership which is conveyed to or vested in or held on behalf of any one or more of the general partners or which is conveyed into or vested in the name of the exempted limited partnership shall be held or deemed to be held by the general partner and if more than one then by the general partners jointly upon trust as an asset of the exempted limited partnership in accordance with the terms of the partnership agreement.

(3) Any debt or obligation incurred by a general partner in the conduct of the business of an exempted limited partnership shall be a debt or obligation of the exempted limited partnership.

(4) Every exempted limited partnership shall have a registered office situate in The Bahamas for the service of process and to which all notices and communications may be addressed.

(2) If a limited partner takes part in the conduct of the business of an exempted limited partnership in its dealings with persons who are not partners, that limited partner shall be liable in the event of the insolvency of the exempted limited partnership for all debts and obligations of that exempted limited partnership incurred during the period that he so participates in the conduct of the business as though he were for such period a general partner:

Provided always that he shall be rendered liable pursuant to the foregoing provision only to a person who transacts business with the exempted limited partnership during such period with actual knowledge of such participation and who then reasonably believed such limited partner to be a general partner.

(3) A limited partner does not take part in the conduct of the business of an exempted limited partnership within the meaning of this section by doing one or more of the following-

(4) Subsection (3) shall not import any implication that the possession or exercise of any other power by a limited partner will necessarily constitute the taking part by such limited partner in the business of the exempted limited partnership.

(5) In the event of the dissolution of an exempted limited partnership its affairs shall be wound up by the general partner unless the court otherwise orders on the application of any partner or creditor of the exempted limited partnership pursuant to subsection (2) of section 15 or unless the business of the exempted limited partnership is assumed and continued in accordance with the proviso to subsection (3) of section 15.

(6) Subject to any express or implied term of the partnership agreement to the contrary and to subsection (3) of section 15-

(7) A limited partner-

Provided that such assignee shall not assume any liability of the assignor arising pursuant to subsection (2) of this section or subsection (2) of section 14 and provided further that, notwithstanding any term of the partnership agreement or any other agreement to the contrary, no such assignment shall relieve the assignor of any liability arising pursuant to such subsections:

Provided also that the provisions of this paragraph shall take effect only insofar as the partnership articles do not contain any provision to prohibit the right of a limited partner to assign his partnership interest (or any part thereof) or any provision requiring that the interest (or any part thereof) may be assigned only with the prior written consent of the general partner or of all the general partners if there be more than one;

(8) The register described in subsection (7)(b) shall be open to inspection by any person during all business hours and any mortgage of the whole or any part of a partnership interest shall have priority according to the date of service of written notice at the registered office mentioned in subsection (7)(b).

(9) If default is made by a general partner in the maintenance of the register mentioned in subsection (7)(b) each general partner in default shall upon summary conviction incur a penalty of twenty-five dollars for each day that such default continues.

(2) The Registrar shall maintain a record of each exempted limited partnership registered under this Act and all the statements filed in relation to such exempted limited partnership, which records and statements shall be kept open to public inspection during all usual business hours.

(3) The Registrar shall issue a certificate of registration under his hand and seal of office as soon as the registration of the statement pursuant to subsection (1) has been effected.

(4) No limited partner of an exempted limited partnership formed after the commencement of this Act shall have the benefit of limited liability until the date indicated on the certificate referred to in subsection (3) issued by the Registrar and a partnership registered in accordance with subsection (1) of section 21 shall obtain the benefit of limited liability under this Act with effect from such date but subject to subsection (2) of section 21.

(5) A certificate issued pursuant to subsection (3) shall be conclusive evidence that compliance has been made with all the requirements of this Act in respect of the formation and registration of an exempted limited partnership but subject to subsection (2) of section 21.

(6) If a person required by subsection (1) or subsections (1) or (2) of section 10 to execute and file a statement fails to do so, any other partner, and any assignee of a partnership interest, who is or may be affected by the failure or refusal, may petition the court to direct such person as the court sees fit to sign the statement and file the same on behalf of the person in default.

(7) Notwithstanding subsections (1) and (3), the Registrar may refuse to accept the registration of an exempted limited partnership and refuse to issue a certificate of such registration in any case where in his opinion the name of the proposed exempted limited partnership is in contravention of the proviso to subsection (1) of section 6.

(2) A statement signed in accordance with subsection (1) in respect of any arrangement or transaction consequent upon which any person will cease to be a general partner in any exempted limited partnership, shall, within fifteen days of such arrangement or transaction, be filed with the Registrar and, until such statement is so filed, the arrangement or transaction shall, for the purposes of this Act and the partnership agreement, be deemed to be of no effect.

(3) Save with the written consent of any person thereby affected no arrangement or transaction shall take effect to the extent that it seeks to relieve or discharge a general partner from the obligations of a general partner with regard to any debt or obligation of the exempted limited partnership to a person incurred before such arrangement or transaction takes effect.

(4) If default is made in compliance with the requirements of this section, each general partner in default shall incur a penalty of twenty-five dollars for each day that such default continues which penalty shall be a debt due to the Registrar and such general partner shall indemnify any person who thereby suffers any loss.

(5) The name of an exempted limited partnership shall not be changed so as to contravene the proviso to subsection (1) of section 6 and the Registrar may refuse to accept a statement under subsection (1) of this section which in his opinion seeks to effect such a change.

(2) The register described in subsection (1) shall be open to inspection by any person during all usual business hours.

(3) The register described in subsection (1) shall be prima facie evidence of the matters which are by subsection (1) directed to be inserted therein.

(4) If default is made in compliance with the requirements of this section each general partner in default shall upon summary conviction incur a penalty of twenty-five dollars for each day that such default continues and shall indemnify any person who thereby suffers any loss.

Provided that if the court deems it just and equitable any person or a general partner shall have the right to join in or otherwise institute proceedings against any one or more of the limited partners who may be liable pursuant to subsection (2) of section 7 or to enforce the return of the contribution, if any, required by subsection (2) of section 14.

(2) A limited partner may bring an action on behalf of an exempted limited partnership if any one or more of the general partners with authority to do so have without good cause refused to institute such proceedings.

(2) For a period of six months from the date of receipt by a limited partner of any payment representing a return of contribution or part thereof received by such limited partner in circumstances where the requirements of subsection (1) have not been met such payment shall, in the event of the insolvency of the exempted limited partnership within that six months period, be repayable by such limited partner with simple interest at the rate of ten percent per annum (calculated on a daily basis) to the extent that such contribution or part thereof is necessary to discharge a debt or obligation of the exempted limited partnership incurred during the period that the contribution represented an asset of the exempted limited partnership.

(3) In this section "receive" shall include the release of any obligation forming part of the capital contribution and, in this context, liabilities to make repayments pursuant to subsection (2) shall be read to refer to due performance of such obligations.

(2) On application by a partner or creditor, the court may decree dissolution of an exempted limited partnership and may make such orders and give such directions for the winding up of its affairs as may be just and equitable.

(3) Notwithstanding subsection (1) and notwithstanding any express or implied term of the partnership agreement to the contrary, the death, insanity, retirement, bankruptcy, commencement of liquidation proceedings, resignation, insolvency or dissolution of the sole or last remaining general partner shall cause the immediate dissolution of the exempted limited partnership which shall forthwith be wound up in accordance with the provisions of the partnership agreement or such orders as the court may decree pursuant to subsection (2):

Provided that if within ninety days of such date of dissolution the limited partners unanimously elect one or more new general partners the business of the exempted limited partnership is not hereby required to be wound up but may be assumed and continued as provided for in the partnership agreement or any subsequent agreement.

(2) A certificate of registration, a certificate of good standing or a copy of or extract from a registered statement filed with the Registrar issued pursuant this Act, if certified by the Registrar to be a true copy, shall be received in evidence in all legal proceedings.

(2) The Exchange Control Regulations Act shall not apply to an exempted limited partnership registered under this Act or to any transaction by a partner thereof:

Provided that the Exchange Control Regulations Act shall apply to a transaction by a partner who is a resident of The Bahamas for Exchange Control purposes.

(3) No estate, inheritance, succession or gift tax, rate, duty, levy or other charge is payable by a partner or his executors or administrators with respect to any interest in an exempted limited partnership.

(4) Notwithstanding any provision of the Stamp Act, all instruments-

shall be exempt from the payment of stamp duty.

(5) Notwithstanding any provisions of the Registration of Records Act-

shall be exempt from registration under that Act.

(6) The exemptions granted by this section shall remain in force for a period of fifty years from the date shown on the certificate of registration issued pursuant to subsection (3) of section 9.

(2) If default is made in compliance with the requirements of subsection (1), each general partner shall incur a penalty of ten dollars for each day that such default continues which penalty shall be a debt due to the Registrar save to the extent that the Registrar may waive such penalty in his discretion.

(2) With effect from the date indicated on the certificate of registration described in subsection (1) the exempted limited partnership and the partnership interests of the parties therein and their rights and liabilities as against any person who is not a partner shall cease to be governed by the provisions of the Partnership Act or the Partnership Limited Liability Act or the laws of such other jurisdiction, as the case may be, save in respect of any act or omission occurring before such date which shall continue to be governed by such Acts or laws of such other jurisdiction and provided always without prejudice to the foregoing generality that such registration shall not operate-