The Cayman Islands recently published draft legislation to introduce the limited liability partnership (LLP) as a new partnership vehicle in the Cayman Islands. The new LLP is expected to be popular with professional services firms in the Cayman Islands as well as the private equity industry and is a welcome addition to the existing range of vehicles available in the Cayman Islands.
The Limited Liability Partnership Bill, 2017 (the Bill) provides for the formation, registration and operation of an LLP, as an entity with limited liability and legal personality separate from its partners (distinguishing it from the popular Cayman Islands exempted limited partnership which is not a separate legal entity). An LLP will be able to be formed to carry on a business for any lawful purpose, by at least two partners, with no Cayman Islands residency requirements for partners. The Bill also provides for the conversion of existing Cayman Islands partnerships into LLPs and the continuation of foreign LLPs into the Cayman Islands.
Following the successful introduction of LLCs (limited liability companies similar to Delaware LLCs) in the Cayman Islands in 2016, LLPs will further increase the wide range of vehicles available in the Cayman Islands, maintaining its position as a leading international finance centre and bringing it in line with other jurisdictions where LLPs are already available.