Government Proposes Legislation to Operationalise LLP Regime
The Cayman Islands Government will propose legislative changes relating to limited liability partnerships (LLPs), prior to the legislation becoming operational this year.
The Limited Liability Partnership (Amendment) (No.2) Bill, 2020 and the Securities Investment Business (Amendment) (No.2) Bill, 2020 will be presented by the Minister of Financial Services, the Hon. Tara Rivers, at the Legislative Assembly, which begins its latest meeting on Wednesday, 14 October.
An LLP is a partnership with separate legal personality, which provides limited liability for its partners. The creation of the LLP business structure will offer local professional firms (such as those relating to legal and accounting services) to utilise an alternative to companies and general partnerships. LLPs also are expected to appeal to international clients who use Cayman entities in their portfolios.
The LLP amendment aligns LLPs with legislative changes made this year to the Companies Law and the Limited Liability Companies Law. Accordingly, LLPs will be obligated to provide nature of business information on annual returns, and beneficial ownership information, to General Registry. The LLP amendment also allows for an administrative fines regime for breaches of beneficial ownership information.
The Securities Investment Business amendment will improve the commercial functionality of LLPs.
Cayman’s LLP regime, which includes the amendment laws passed since 2017, is expected to become operational later this year.