- SEYCHELLES LIMITED PARTNERSHIPS
Passed as part of a package of Legislative upgrades in 2003 The Limited Partnership Act provides for the creation of Limited Partnerships (LPs) in Seychelles. (A copy of the Act can be accessed by clicking here ).
The LP gives rise to tax saving opportunities, in that it may receive income sourced outside of Seychelles which can then be redistributed to non-Seychelles resident partners without giving rise to any tax liability in Seychelles. (This is particularly advantageous to entrepreneurs looking to participate in international joint ventures).
- Features and Advantages of the Seychelles LP include:
- The LP must maintain a Seychelles “registered office”
- One or more “general partners” is needed (who shall, in the event that the assets of an LP are inadequate, be liable for the debts of the LP)
- One or more “limited partners” is needed (who shall not be liable for LP debts, except in certain limited cases)
- An annual certificate must be filed confirming compliance by the LP with the provisions of the Act
- Neither the General Partner nor Limited Partner has to be Seychelles resident
- The General Partner can be a Seychelles resident individual or a Seychelles IBC, domestic company or CSL (or an LP)
- A general partner may also be a limited partner
- An LP shall not carry on business in Seychelles, except to the extent that it must (ie for the effective conducting of the LP’s ex-Seychelles business)
- Tax Exemptions
- An LP is exempt from all Seychelles taxes as would otherwise apply to the profits of the LP
- An LP is exempt from stamp duty on property transfers, share transfers and other business transactions
- An LP is exempt from trades tax on all furniture and equipment imported into Seychelles for office use by the LP
- An LP is exempt as an employer from having to make payments as would otherwise be required pursuant to the Social Security Act
- The above exemptions are guaranteed for twenty years and shall continue in force thereafter unless otherwise provided for by law
- Extent of the Law
A Seychelles domiciled Limited Partnership must conduct its business outside Seychelles although it has to keep a registered office in Seychelles for the receipt of legal notices etc. The Limited Partnership may carry on business in Seychelles as long as this business achieves the primarily goals of the Limited Partnership, which must be non-Seychelles focused.
Partners may be resident, domiciled, established, incorporated or registered pursuant to Seychelles or international law.
Every Seychelles Limited Partnership must have a name which includes the words “Limited Partnership”, “L.P.” or “LP” and may include the name of any partner (or any abbreviation thereof).
The general partners are responsible for overseeing the administration and management of the Limited Partnership.
General partners are also responsible for the execution on behalf of the Limited Partnership of any letters, contracts, deeds, instruments and/or other documents.
General partners can be made liable for any debts and obligations of the LP if the liabilities exceed the assets of the Limited Partnership.
- Limited Partners
The limited partner/s must not take part in the conduct of the business and (subject to certain rare exceptions) shall not be liable for any debts and obligations exceeding the assets of the Limited Partnership.
A limited partner is not however regarded as taking part in the conduct of the Limited Partnership if he/she is involved in any of the following:
- Being a contractor or an agent or employee of the Limited Partnership or of a general partner or acting as a director, officer or shareholder of a corporate general partner
- Consulting with and advising a general partner with respect to the business of the Limited Partnership
- Investigating, reviewing, approving or being advised as to the accounts or business affairs of the Limited Partnership or exercising any right conferred in the Limited Partnership Act, 2003
- Acting as a surety or guarantor for the Limited Partnership either generally or in respect of specific obligations
- Approving or disapproving an amendment to the partnership agreement; or
- Voting as a limited partner on any matter
NOTE: Limited Partners need to take care whenever they take part in the conduct of the business of the LP, in respect of its dealings with persons who are not partners.
If a Limited Partner is involved in the carrying on of business with persons who are not partners (and in the event that LP becomes insolvent) the limited partner can be made liable for all debts and obligations of the Limited Partnership incurred during the period in which he or she was so involved.
- Statutory Registers
The general partner is also responsible for maintaining in the LP’s registered office a register which must include details of:
- The name and address of each partner
- The amount of financial contribution or contributions by each partner
- The date the financial contribution or contributions were made by each partner
- The date and amount of any payment to any partner (where such payment constitutes a return of any part of that partner’s financial contribution)
This register, including all particulars, must be made available for inspection and for copying (free of charge) by any partner, upon request.
- Registration Requirements
- A Limited Partnership must file an annual return certifying compliance with the Act.
- If during the life of a Limited Partnership, changes are made to the statement as filed, the general partner must file particulars of the said changes with the Registrar within 60 days.
- In the event that a general partner ceases to be a general partner, a statement signed by another general partner setting out details of the new arrangement must be filed with the Registrar within 15 days. (Unless such a statement is filed, the new arrangement, and the partnership agreement, will have no effect at law).
- Anything which seeks to relieve a general partner of his obligations shall have no effect unless written consent is obtained from all persons affected by the proposed change.
- If/when the partners decide to dissolve the LP, notice of the dissolution signed by a general partner must be filed with the Registrar.
- How To Apply For Registration as a Limited Partnership in Seychelles
An application for the registration of a Limited Partnership must be made to the Registrar of Limited Partnerships (ie SIBA – The Seychelles International Business Authority).
Pursuant to section 9(1) of the Act one must file with the Registrar a statement signed by or on behalf of the general partner/s containing the following details:
- The name of the Limited Partnership;
- The general nature of the business of the Limited Partnership;
- The address in Seychelles of the registered office of the Limited Partnership;
- The full name and address of the designated general partner, and of any other general partners and in the case of a corporate general partner, the certificate of registration and a certificate of good standing (or any similar document under the laws of the jurisdiction of incorporation) must be annexed to the statement or, where applicable, a certificate of good standing and a certificate of registration under Part VII of Companies Act, 1972;
- A declaration stating that the Limited Partnership shall not carry on business in Seychelles except so far as may be necessary for the carrying on of the business of that Limited Partnership outside Seychelles.
- Proof of Registration
Once the application is approved the Registrar will issue a Certificate of Registration specifying the date on which the registration of the Limited Partnership is to take effect.
The certificate is conclusive evidence that all the requirements of the Limited Partnership Act 2003, in respect of the formation and registration of a Limited Partnership, have been complied with.
- Changes To Registered Particulars
- If any particulars contained in the statement filed under section 9(1) are to be amended, the general partner has 60 days in which to file details of the change with the Registrar
- However, if there is a change to the particulars affecting the general partner, then that change must be filed with the Registrar within 15 days
- The name of the Limited Partnership can be changed subject to filing requirements as set out in the Act.
- Resignation or Retirement of Partners
If a partner ceases to be a partner and a replacement has been identified, then the Partnership may continue provided that the procedures mentioned in section 4 of the Act are adhered to. (A copy of the Act can be accessed by clicking here ).
If there is no readily available replacement, the following must be undertaken:
- A notice of dissolution will have to be signed by the general partner and filed with the Registrar to make the dissolution effective.
- The Limited Partnership may thereafter be wound up in accordance with the provisions of the partnership agreement.
- Upon voluntary dissolution, the Registrar will de-register the limited Partnership.
The Registrar of Limited Partnerships will issue a notice of deregistration:
- If any general partner, officer, manager or agent has in Seychelles or elsewhere in connection with the management or conduct of the affairs of that Limited Partnership committed an offence involving dishonesty, or has obtained credit or transfer or delivery of assets or performance of services by false representation made fraudulent by dishonest concealment of material facts
- If the limited partnership has conducted illegal activities
- If the Limited Partnership has brought the image of the Seychelles into disrepute
- If the Limited Partnership has contravened and failed to comply with the provisions of the Limited Partnership Act, 2003
- Appeals against Deregistration
The deregistration notice shall contain the reasons for deregistration and the partners will thereafter have one month to make written representations giving reasons as to why the Registrar should not proceed with the deregistration:
- If within that month written representations are made, the Registrar will decide whether or not to proceed with thederegistration.
- If the partnership is aggrieved by this decision, the Limited Partnership may appeal to the Seychelles Courts.
- If the limited Partnership does not make written representations within the month provided, the Registrar may by notice served on the limited partnership remove the registration.
- The deregistration shall only take effect immediately after 90 days, (within which time the Limited Partnership can appeal to the court), of the expiry of the notice (as referred to in section 16).
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