A Continuous and Successive Existence (A Limited Partnership is not just for Christmas)

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The Limited Partnerships (Guernsey) Law, 1995 which came into effect on 1st February, 1996 created the opportunity to form Limited Partnerships in Guernsey. This provided an alternative form of trading vehicle and also a vehicle which has become one of the principle structures used for the formation of Funds in Guernsey. According to the most recently-published information available, as at the end of June, 2001 there were 88 Closed-Ended Funds established as Limited Partnerships in Guernsey, representing 29% of the total number of Closed-Ended Funds formed in Guernsey.

The Limited Partnerships (Guernsey) (Amendment) Law, 1997 which became effective as from 1st May, 2001 has enhanced the attractiveness of the Guernsey Limited Partnership by enabling partners to elect to have the Limited Partnership recognized as having legal personality and thus for contracts to be entered into in the name of the Limited Partnership and for the Limited Partnership to hold property in its own name. The election to have legal personality forms part of the process of establishing the Limited Partnership and must be made at the time of formation. Once the election is made, it is irrevocable. It is a requirement for Limited Partnerships to have the designation "Limited Partnership" or alternatively the initials "L.P." or "LP" forming part of the name. Where there is an election to have legal personality, the name of the Limited Partnership must also include the word "Incorporated" or some similar designation which must be acceptable to the Guernsey Financial Services Commission.

For the purposes of forming a Limited Partnership in Guernsey the following must be submitted to H M Greffier (effectively the Company Registry) in Guernsey:

Written consent for the registration of the Limited Partnership from the Guernsey Financial Services Commission under the Control of Borrowing (Bailiwick of Guernsey) Ordinance, 1959;

- A copy of the Limited Partnership Agreement;

- A Statutory Filing Fee of £100.00;

I. The name of the Limited Partnership;

II. The nature and principal place of business;

III. Its registered office;

IV. The full name and address of each General Partner;

V. The duration of the Partnership and the date of commencement of the term (if no term is fixed, there must be a statement to that effect in which case the Partnership shall be dissolved upon the expiration of thirty years or sooner from the date of registration);

VI. A declaration that the Limited Partnership shall have legal personality (if applicable).

In the event that a Limited Partnership is not registered, it is deemed that all partners are General Partners.

The Limited Partnership must consist of at least one General Partner, which may be a limited liability company. The General Partner is responsible for the conduct and management of the Limited Partnership and the General Partner's liability is unlimited.

The liability of the Limited Partners is limited, however, it is important that the Limited Partners do not participate in the conduct and management of the business of the Limited Partnership otherwise any Limited Partner who does become so involved will be deemed to be a General Partner and thus lose the protection of limited liability.

For taxation purposes in Guernsey, the Limited Partnership is regarded as transparent and there is no requirement to submit tax returns to the Guernsey tax authorities for the partnership itself. Taxation is based on the residence of the partners and partners who are not resident in Guernsey are not liable to Guernsey Income Tax, assuming the Limited Partnership does not transact business within the Island.

Deutsche Bank International Trust is able to provide services in relation to Limited Partnerships, although not at this time for the purposes of Fund Administration. However, we are considering further developments in this area.

1. Source: Guernsey Financial Services Commission - Quarterly statistical Review 30 June, 2001