Limited Partnership Act 1883

1 Limited partnerships may be formed (except for banking or insurance)

1A Interpretation

2 Constitution of, and con tribution to, limited part nership

3 Particulars of partnership

4 Formation of limited part nership

5 Consent of Minister

6 Name and registered office of limited partnership

7 Register of limited part ners

8 Inspection of register of limited partners

8A Power of Court to rectify register

8B Change of particulars of limited partnership

8C Management of limited partnership

8D Limited partner's liability to partnership

8E Liability for false state ments in certificates, etc.

8F Cancellation of limited partnership

8G Amendment or cancella tion by the Court

8H Offences in relation to certificates

9 General partners' liability to account

10 Civil and criminal liability of partners

11 Restriction on reduction of capital

12 Assignment of limited partner's interest

13 Restriction on assignment of partnership assets

14 Avoidance of assignments and securities in fraud of creditors

15 Postponement of claims of special partners in case of bankruptcy to other credi tors

16 Suits respecting business of limited partnership

17 [repealed]

18 [repealed]

19 [repealed]

20 Rights and liabilities of members of limited part nership

21 [repealed]

22 Registration, etc., of cer tificates, etc.; evidence

23 Meaning of "Gazette"

[18 December 1883]

[words of enactment omitted]

Limited partnerships may be formed (except for banking or insur ance)

1 Limited partnerships for the transaction of all mercantile, me chanical, manufacturing or other business, except banking or insur ance, may be formed by two or more persons.

Interpretation

1A In this Act, unless a contrary intention appears

"Court" means the Supreme Court;

"the limited partners' capital" means the sum referred to in sec tion 3(d);

"the minimum limited partners' capital" means the amount specified by the Minister as such in an order under section 5(3);

"the Minister" means the Minister of Finance;

"the register" means the register referred to in section 4(l)(b);

"the Registrar" means the Registrar of Companies;

"statutory value" means the statutory value referred to in sec tion 2(2)(a).

[section 1A inserted by 1990:59 effective 1 September 1990]

Constitution of, and contribution to, limited partnership

2 (1) Limited partnerships may consist of —

(a) one or more general partners who shall be jointly and severally responsible as partners now are by law; and

(b) any other persons who contribute, or under take to con-tribute, to the limited partnership cash or other prop erty (but not services) as capital, who shall be called limited partners and who, except as provided by this Act, shall not be liable for any debts of the limited part nership.

(2) Where the capital contribution of a limited partner, or a part of that contribution, is made or is undertaken to be made otherwise than in cash —

(a) there shall forthwith be assigned to that con tribution or part or intended contribution or part, in accordance with the partnership agree ment, a value to be known as the statutory value; and

(b) the statutory value shall, for the purposes of this Act, be accepted as the value of that contribution or part or in tended contribution or part, as the case may be.

(3) Within thirty days after a limited partner makes, or undertakes to make, a capital contribution to a limited partnership, a general partner shall—

(a) deliver a notice thereof, containing the particulars specified in subsection (4), to the Registrar for registration by him in the register; and

(b) deliver a copy of such notice to the Bermuda Monetary Authority.

(4) The notice referred to in subsection (3) shall contain the following particulars, that is to say,—

(a) the name of the limited partnership;

(b) the name and address of the limited partner that made, or undertook to make, the capital contribution; and

(5) The Minister may on application in writing made by a general partner exempt—

(a) a limited partnership the interests in which are traded on an appointed stock exchange or on a market which is supervised by a competent regulatory authority; or

(b) such other limited partnership as the Minister considers appropriate,

from complying with the requirements of subsection (3).

[section 2 repealed and replaced by 1990:59 effective 1 September 1990; and amended by 1995:35 effective 14 July 1995]

Particulars of limited partnership

3 The persons forming a limited partnership shall make and sev erally sign a certificate which shall contain the following particulars, that is to say —

(a) the name of the limited partnership;

(b) the names and respective places of residence of the general partners;

(d) the address of the registered office, in Ber muda, of the limited partnership; and

(e) the date when the limited partnership is to commence and the term, if any, for which it is entered into.

[section 3 repealed and replaced by 1990:59 effective 1 September 1990; and amended by 1995:35 effective 14 July 1995]

Formation of limited partnership

4 (1) A limited partnership shall be deemed to have been formed when—

(a) the consent of the Minister has been obtained thereto under section 5; and

(b) the certificate specified in section 3 has been registered in the office of the Registrar in a register to be kept by him for that purpose open to public inspection.

(2) An application for the Minister's consent under section 5 shall be in such form, and be accompa nied by such documents, as the Minister may require.

(3) The persons forming a limited partnership shall, not earlier than three months before making an application under subsection (2), publish in the Gazette an advertisement announcing the intention to form the limited partnership and specifying—

(a) the name of the limited partnership;

(b) the names and respective places of residence of the

general partners; and

[section 4 repealed and replaced by 1990:59 effective 1 September 1990]

Consent of Minister

5 (1) The Minister may grant or refuse his consent to an appli cation made to him under section 4(2).

(2) The Minister shall not be bound to give any reason for a decision under subsection (1) and that decision shall not be subject to appeal or review in any court.

(3) The Minister may from time to time by order subject to the negative resolution procedure prohibit the formation of limited partner ships, or any class of limited partnerships, the limited partners' capital of which is less than an amount specified in the order as the minimum limited partners' capital.

[Section 5 repealed and replaced by 1990:59 effective 1 September 1990]

Name and registered office of limited partnership

6 (1) The Registrar may refuse to register a lim ited partnership if, in the opinion of the Registrar, the name of the limited partnership is undesirable.

(2) The Registrar may, if in his opinion the name is not unde sirable, on application by any person intend ing to form a limited part nership, reserve a name for the exclusive use of the applicant for a pe riod not exceeding three months next after the date of the receipt of such ap plication.

(3) [Repealed]

(4) Every limited partnership shall have and use the words "Limited Partnership" or the abbreviation "L.P." at the end of its name; and those words and that abbre viation may be used interchangeably.

(5) A limited partnership shall, at all times, maintain a regis tered office, which shall not be a post office box, in Bermuda, to which all communications may be sent.

(6) [Repealed]

[section 6 repealed and replaced by 1990:59 effective 1 September 1990; and amended by 1998 : 22 effective 24 June 1998]

7 (1) The general partners shall establish and maintain up to date in the registered office of the limited partnership in Bermuda a register of limited partners which shall contain the particulars specified in subsection (2).

(2) The particulars referred to in subsection (1) are —

(a) the name and address of each limited partner;

(b) the date a person becomes, and the date, if applicable, he ceases to be, a limited partner;

(d) where a capital contribution or a part of a capital con tribution has been made or under taken to be made oth erwise than in cash, a statement of the statutory value of that con tribution or part or intended contribution or part.

(3) Where a person ceases to be a limited partner, the particu lars specified in subsection (2) in respect of that limited partner shall be maintained on the register of limited partners for a period of not less than six years commencing with the date of such cessation.

(4) A limited partnership the interests in which are traded on an appointed stock exchange or on a market which is supervised by a competent regulatory authority may keep, in any place outside Ber muda, one or more branch registers of limited partners after giving written notice to the Registrar of the place where each such branch reg ister is to be kept.

(5) A branch register shall be kept in the same manner in which the register of limited partners is by subsections (1) and (3) re quired to be kept.

(6) A limited partnership shall, as soon as rea sonably practi cable after the date on which an entry or alteration is made in a branch register of limited partners, make any necessary alteration in the regis ter of limited partners.

(7) In this section and in section 11—

(a) "appointed stock exchange" means any stock exchange;

and

(b) "competent regulatory authority" means any authority,

appointed by the Minister by notice in the Gazette to approve the offer ing of shares or debentures to the public by companies.

[section 7 repealed and replaced by 1990:59 effective 1 September 1990; and amended by 1995:35 effective 14 July 1995]

Inspection of register of limited partners

8 (1) The register of limited partners shall, during business hours and subject only to such reasonable restric tions as the general partners may impose, be open for inspection —

(a) by any limited partner, without charge; and

(b) by any other person on payment of five dollars, or such less sum as the general partners may determine, for each inspection.

(2) A limited partner or other person may require a copy of the register of limited partners, or any part thereof, on payment of five dol lars or such less sum as the general partners may determine, for every hundred words or fractional part thereof required to be copied.

(3) If an inspection or a copy required by this section is re fused, every general partner who is in default shall be liable in respect of each offence to a default fine not exceeding twenty dollars for every day during which the default continues.

(4) In this section and in section 8A the expres sion "register of limited partners" includes a branch register.

[section 8 repealed and replaced by 1990:59 effective 1 September 1990]

Power of court to rectify register

8A (1) If default is made or unnecessary delay occurs in entering on the register of limited partners a particular required by section 7, a limited partner may apply to the Court for rectification of the register.

(2) Where an application is made under this section, the Court may either refuse the application or order rectification of the register of limited partners and pay ment by any partner in default of any damages sustained by the limited partner.

(3) On an application under this section the Court may decide any question necessary or expedient to be decided for rectification or otherwise of the register of limited partners.

(4) The register of limited partners shall be prima facie evi dence of any matter by this Act required to be inserted therein.

Change of particulars of limited partnership

8B (1) Subject to the provisions of this section, the partners in a limited partnership may, from time to time, change any of the particu lars specified in the certificate referred to in section 3.

(2) The general partners shall, not earlier than three months before such change, other than a change referred to in section 3(d) or (e) publish an advertise ment in the Gazette announc ing the particular that it intends to change and specifying the proposed change.

(3) Where a change referred to in subsection (1) is in relation to —

(a) a change of the name of the limited partner ship;

(b) a change of general partners; or

the Minister's consent thereto shall be obtained by application by the general partners.

(4) The general partners shall, not later than thirty days after a change referred to in subsection (1) is made —

(a) make and severally sign a supplementary cer tificate supplementing, as the circumstances require, the cer tificate referred to in that sub section; and

(b) deliver the supplementary certificate to the Registrar for registration by him in the reg ister.

(5) Subject to the provisions of this section, a change referred to in subsection (1) is effective on the date of registration of the supple mentary certificate by the Registrar under subsection (4)(b).

(6) The provisions of section 5(1) and (2) shall, mutatis mutan dis, apply to an application under subsec tion (3) of this section as they apply to an application under section 4(2).

(7) Where a change referred to in subsection (3) is made oth erwise than in accordance with the provisions of this section, the Minis ter may petition the Court for the dissolution of the limited partnership.

(8) If the Court, on the hearing of a petition under subsection (7) is satisfied that a general partner or a person duly authorized by the general partners has contravened or caused or permitted the contra

vention of subsection (3), the Court may —

(a) make an order for the dissolution of the limited partner-ship; or

(b) impose a fine not exceeding five thousand dollars on any general partner or duly author ized person, as the case may be, who know ingly and wilfully contravened, or otherwise caused or permitted the contravention of, that subsection; or

[Section 8B amended by 1995:35 effective 14 July 1995]

Management of limited partnership

8C (1) A general partner in a limited partnership shall have all the rights and powers and be subject to all the restrictions and liabilities of a partner in a partnership that is not a limited partnership, except that, without the express prior consent, or the express ratification, in writing, of every other partner, a general partner shall not have au thority —

(a) to admit a person as a general or a limited partner to the limited partnership; or

(b) to do any act which makes it impossible to carry on the ordinary business of the limited partnership.

(2) A limited partner in a limited partnership shall be liable as a general partner if he takes part in the man agement of the limited partnership.

(3) For the purposes of subsection (2), a limited partner does not take part in the management of a limited partnership by reason only of the inclusion of the limited partner's name, or any part of it, in the name of the limited partnership or of his—

(a) being a contractor for, or an agent or employee of, the limited partnership or a general part ner;

(b) consulting or advising a general partner with respect to the business of the limited partner ship;

(bb)taking any actions, or making any decisions, in respect of any investment made by the limited partnership;

(d) approving or disapproving an amendment to the part nership agreement; or

(e) voting on any of the matters specified in subsection (4).

(4) The matters referred to in subsection (3)(e) are —

(a) the dissolution or winding up of the limited partnership;

(b) the sale, exchange, lease, mortgage, pledge or other transfer of all or substantially all of the assets of the limited partnership otherwise than in the ordinary course of business of the limited partnership;

(c) the incurring of indebtedness by the limited partnership otherwise than in the ordinary course of business of the limited partnership;

(d) a change in the general nature of the business trans acted by the limited partnership; or

(e) the removal of a general partner.

(5) The doing of any other act or thing or the voting on any other matter by a limited partner in rela tion to a limited partnership shall not, by reason only that such act or thing or such matter is not specified in subsection (3) or (4), be construed as taking part in the management of the limited partnership.

[section 8C amended by 1998 : 22 effective 24 June 1998]

Limited partner's liability to partnership

8D (1) A limited partner is liable to a limited part nership for the difference, if any, between —

(a) the value of money and the value of other property ac tually contributed; and

(b) the value of money and the statutory value of other property undertaken to be contributed,

to the limited partnership.

(2) A limited partner holds as trustee for the limited partner ship —

(a) specific property stated in the partnership agreement as contributed by him, but which has not in fact been contributed or which has been returned contrary to this Act; and

(b) money or other property paid or conveyed to him on ac count of his contribution to the limited partnership contrary to this Act.

(3) Where, in accordance with section 11, a limited partner —

(a) has received the return of the whole or part of his capi tal contribution to a limited part nership;

(b) has been released from the whole or part of the capital contribution that he has undertaken to make to a lim ited partnership; or

he is nevertheless , for the period of one year following the date of any such return or release, liable to the limited partnership or, where the limited partnership is dissolved, to its creditors for any amount, not exceeding the amount returned with interest or the value of money or other contri bution from which he has been released or the value of both such re turn and release, necessary to discharge the liabilities of the limited partnership to all creditors who extended credit to the limited partner ship or whose claim otherwise arose before the return of the contribu tion or release or the return and release, as the case may be.

(4) Where, in violation of section 11, a limited partner —

(a) has received the return of the whole or part of his capi tal contribution to the limited partnership;

(b) has been released from the whole or part of the capital contribution that he has undertaken to make to the limited partnership; or

he is, for the period of six years following the date of any such return or release, liable to the limited partnership or, where the limited partnership is dissolved, to its creditors for the amount of the contribution wrongfully returned with interest, or the value of the contribution wrongfully released, or the value of both (as the case may be).

[section 8D amended by 1998 : 22 effective 24 June 1998]

Liability for false statements in certificates, etc.

8E (1) If a certificate of limited partnership, a supplementary certificate or a certificate of cancellation, contains a false statement and a person who relied on that statement suffers loss, that person may re cover damages for that loss from —

(a) any person who signed the certificate, or caused an other to sign it on his behalf, and knew, and any gen eral partner who knew or should have known, the statement to be false at the time the certificate was signed; and

(b) any general partner who thereafter knows or should have known that any statement speci fied in the certifi cate has changed, making the statement false in any re spect within a suffi cient time before the statement was relied upon reasonably to have enabled that general partner to cancel or change the certificate, or to file a petition for its change or cancella tion under section 8G.

Cancellation of limited partnership

8F (1) A certificate of limited partnership shall be cancelled —

(a) upon the commencement of the winding up of the af fairs of a limited partnership conse quent on the disso lution of that limited part nership; and

(b) at any other time, if there are no limited partners.

(2) A certificate of cancellation shall, in respect of a limited partnership, specify —

(a) the name and the date of registration of the limited partnership;

(b) that the limited partnership is dissolved or that there are no limited partners, as the case may be; and

(c) the effective date of the cancellation (which shall be a date certain) if cancellation is not to be effective upon registration of the cer tificate by the Registrar under subsection (4).

(3) A certificate of cancellation shall be signed by at least one general partner.

(4) The general partners shall, within thirty days after the happening of an event referred to in subsection (1), deliver the certificate of cancellation to the Registrar for registration by him in the register.

Amendment or cancellation by the Court

8G (1) If a person required —

(a) by section 8B(4)(a) to sign a supplementary certificate in respect of a change of particu lar; or

(b) by section 8F(3) to sign a certificate of cancellation,

change or cancellation, as the case may be.

Offences in relation to certificates

8H A person who fails, without reasonable excuse —

(a) to publish an advertisement announcing the intention to change a particular under section 8B(2);

(b) to sign a certificate of cancellation under section 8F(3); or

is guilty of an offence and liable, on summary conviction, to a fine not exceeding five thousand dollars.

General partners' liability to account

9 The general partners shall be liable to account to each other, and to the limited partners, for their management of the concern, both at law and in equity, as other partners are now liable.

[section 9 amended by 1990:59 effective 1 September 1990]

Civil and criminal liability of partners

10 Every partner who is guilty of any fraud in the affairs of the partnership—

(a) shall be liable civilly to the party injured to the extent of his damage; and

(b) commits an offence against this Act:

Punishment on conviction on indictment: imprisonment for 4 years or a fine of $10,000 or both such imprisonment and fine.

[section 10 amended by 1990:59 effective 1 September 1990]

Restriction on reduction of capital

11 (1) Subject to the provisions of this section, no part of the lim ited partners' capital shall be withdrawn, nor shall any payment of a share of the profits or other compensation by way of income be made to a limited partner from the assets of the limited partnership if the with drawal or payment, as the case may be, would result in the limited partnership becoming insolvent.

(2) For the purposes of determining whether a withdrawal or a payment under subsection (1) would result in a limited partnership be coming insolvent, all the partners may agree that any liabilities of the limited part nership in respect of the partners shall not be taken into ac count.

(3) Subsection (1) shall not apply on the wind ing up of a lim ited partnership consequent on the disso lution of that limited partner ship.

(4) Subject to agreement between all the partners, a contribu tion reduction may be made in a limited part nership if —

(a) the conditions specified in subsection (5) are satisfied; and

(b) the requirements specified in subsection (6) are fulfilled.

(5) The conditions referred to in subsection (4)(a) are —

(a) a contribution reduction under subsection (8)(a)(i) shall not be made otherwise than in the form of a payment of cash unless all the partners otherwise agree;

(b) where there is in force under section 5(3) an order specifying the minimum limited part ners' capital in re spect of limited partnerships of a description to which the limited partner ship belongs, a contribution reduc tion shall not be made so as to cause the amount of the limited partners' capital in that limited part nership to fall below that minimum, whether or not that limited partnership was formed after the making of that order; and

(i) all the liabilities of the limited partner ship (not counting liabilities to general partners and lim ited partners on account of their capital contri butions to the limited partnership) have been dis charged; or

(ii) the limited partnership will be solvent immedi ately after the contribution reduc tion.

(6) Subject to subsection (6A), the requirements referred to in subsection (4)(b) are—

(a) on the effective contribution reduction date an affidavit shall be sworn by at least one general partner declaring either that on that date, after taking into account the contribution reduction, the limited partnership is solvent or that all the creditors of the limited partnership on that date have expressed in writing their concurrence in the contribution reduction;

(b) within thirty days after the effective contribution reduction date a general partner shall—

(i) deliver the affidavit referred to in paragraph (a) and a notice of the contribution reduction containing the particulars specified in paragraph (c) to the Registrar for registration by him in the register; and

(ii) deliver a copy of the affidavit and the notice to the Bermuda Monetary Authority; and

(i) the name of the limited partnership in respect of which the contribution reduction was made;

(ii) the name and address of the limited partner in favour of whom the contribution reduction was made; and

(iii) the amount and the effective date of the contribution reduction.

(6A) The Minister may on application in writing made by a general partner exempt—

(a) a limited partnership the interests in which are traded on an appointed stock exchange or on a market which is supervised by a competent regulatory authority; or

(b) such other limited partnership as the Minister considers appropriate,

from complying with the requirements of subsection (6).

(7) Subject to subsection (6A), if a provision of this section is contravened in relation to a limited partnership, every general partner shall be guilty of an offence and shall be liable, upon the contravention being proved in a court of summary juris diction, to a fine not exceeding five thousand dollars.

(7A) In this section "the Bermuda Monetary Authority" means the Bermuda Monetary Authority established under section 2 of the Bermuda Monetary Authority Act 1969.

(8) In this section—

(a) "contribution reduction", in relation to a limited partner in a limited partnership, means —

(i) in the case of a limited partner who has actually made a contribution or part contribution to the capital of the limited partnership, the return to him of such capital contribution or part thereof;

(ii) in the case of a limited partner who has under taken to contribute to the capital of the limited partnership, a release, in whole or in part, from that undertaking; or

(iii) both such return and release, in whole or in part; and

(b) "the effective contribution reduction date" means the date on which a contribution reduction is to take, or took, effect, as the case may be.

[section 11 replaced by 1990:59 effective 1 September 1990; and amended by 1995:35 effective 14 July 1995]

Assignment of limited partner's interest

12 Subject to the provisions of the partnership agree ment, a limited partner may —

(a) with the consent of the general partners; and

(b) by instrument in writing signed by the assig nor and the assignee,

assign his share or a part thereof, in a limited partner ship.

[section 12 repealed and replaced by 1990:59 effective 1 September 1990]

Restriction on assignment of partnership assets

13 No general assignment by a limited partnership in case of insol vency or insufficiency of assets for the payment of the partnership debts shall be valid without the consent in writing of two-thirds in value of the creditors of the partnership, nor unless it provides for a distribution of the partnership property among all the creditors in proportion to the amount of their several claims, of which notice shall be given in the Ga zette; but debts due to the Crown shall first be paid or secured.

Avoidance of assignments and securities in fraud of creditors

14 Every sale, assignment or transfer, of the property or effects of any limited partnership made by such partnership when actually insol vent or bankrupt, or in contemplation of insolvency or bankruptcy, or

after or in contemplation of the insolvency or bankruptcy of any partner, with intent to give a preference to any creditor or creditors of such part nership over any other creditor or creditors thereof, and every judgment confessed, lien created, or security given, by such partnership, or any partner thereof, under the like circumstances, and with the like intent, shall be void as against the creditors of such partnership.

Postponement of claims of limited partners in case of bankruptcy to other creditors

15 In case of the insolvency or bankruptcy of the partnership no limited partner shall under any circumstances be allowed to claim as a creditor until the claims of all the other creditors of the partnership are satisfied.

[section 15 amended by 1990:59 effective 1 September 1990]

Suits respecting business of limited partnership

16 All suits respecting the business of a limited partnership shall be prosecuted by and against the general partners only, except in those cases where limited partners are held severally responsible.

[section 16 amended by 1990:59 effective 1 September 1990]

17 [repealed by 1990:59 effective 1 September 1990]

18 [repealed by 1990:59 effective 1 September 1990]

19 [repealed by 1990:59 effective 1 September 1990]

Rights and liabilities of members of limited partnership

20 In all cases not otherwise herein provided for, the members of limited partnerships shall be subject to all the liabilities, and entitled to all the rights, of general partners.

21 [repealed by 1990:59 effective 1 September 1990]

Registration, etc., of certificates, etc.; evidence

22 (1) The Registrar shall establish and maintain a register in which shall be registered or recorded all certificates, notices and affi davits required by this Act.

(2) The register shall be open, during office hours, to the in spection of all persons desiring to view the register on payment to the Registrar of the fee of five dollars.

(3) A sum of one hundred and fifty dollars shall be paid to the Registrar for registering or recording every certificate, notice or affidavit, required by this Act.

(4) A certificate of the Registrar certifying that a certificate, no tice or affidavit required by this Act to be registered or recorded by him has been so registered or recorded shall be received in all courts and in all proceed ings whatsoever as evidence of the matter to which the cer tificate relates.

[section 22 repealed and replaced by 1990:59 effective 1 September 1990]

Meaning of "Gazette"

23 For the purposes of this Act "Gazette" includes a newspaper ap pointed by the Registrar of Companies under section 2(6) of the Compa nies Act 1981 [title 17 item 5].

[Amended by:

Bermuda Consolidated Legislation

Limited Partnership Act 1883