The British Virgin Islands (the “BVI”) has consistently sought to modernise its legislation to meet the ever-changing demands of the financial sector. On January 11 2018, the new BVI Limited Partnership Act 2017 (the “Act”) came into effect and is designed to enhance the commercial attractiveness of the BVI as the jurisdiction of choice when structuring corporate arrangements.
The changes are anticipated to expand the use of limited partnerships beyond investment funds and into areas such as venture capital investments, management buy-out, project finance transactions and real estate development.
Key features of new Limited Partnerships
The aspects of the Act that enhance the commercial attractiveness of limited partnerships are significant. There are now mechanisms in place for:
- the registration and ranking of charges over the assets of limited partnerships and for recording the variation and release of such charges;
- the continuation of limited partnerships into and outside of the BVI;
- the merger and consolidation of two or more limited partnerships;
- arrangements or scheme of arrangements between the limited partnership and/or its partners and creditors;
- the appointment of the official receiver as liquidator; and
- the registered agent of a limited partnership be a limited partner of the partnership.
From a management perspective, the Act brings welcomed certainty. It sets out clearly the provisions related to the dealings, changes, liabilities, and responsibilities of partners, as well as the termination and subsequent asset distribution of the partnership.
From a constitutional perspective, the Act has done away with the memorandum and articles of partnership and the filing of supplemental or amended constitutional documents in the event of a change in general partners. Under the Act, the constitutional documents of a LP are its statement of limited partnership and its limited partnership agreement, and a LP is simply required to file a notice of any changes in its general partners with the BVI Registrar of Limited Partnerships. Like the articles of partnership, the limited partnership agreement is not required to be filed.
To view the Act, click here.
How Vistra can support
Vistra has in-house expertise that can support clients with practical knowledge and legal services on how to optimise the opportunities brought by the new legislation.
Vistra’s mission is to provide support for LPs throughout their natural life cycle. Our LP services range from the administrative to advisory. We can assist with standard procedures such as the formation and registration of LPs as well as more complex matters such as the drafting, reviewing and/or filing of specialised documents (including bespoke articles of partnership and transactional documents such as loan agreements, security agreements and registers of charges). We can help with understanding and navigating the provisions of the Act as well as providing advice on structuring corporate arrangements utilising LPs.
Please do not hesitate to contact your account manager or firstname.lastname@example.org for further information.