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Cayman equity funds/Grenadians urged to accept sacrifices

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  • The ELP's name must include the letters
  • The ELP must have a registered office in the Cayman Islands, for service of process and forwarding of notices and communications.
  • The ELP cannot undertake business with the public in the Cayman Islands (other than as may be necessary for the carrying on of its business outside the Islands); this is the basis on which the ELP obtains its "exempted" status.
  • The GP must act at all times in good faith in the interests of the ELP.
  • The GP is liable for any debts and obligations of the ELP if the ELP's assets are insufficient to discharge them. Any debt or obligation incurred by the GP in the conduct of the ELP's business shall be treated as a debt or obligation of the ELP. Any property of the ELP conveyed to the ELP or to its GP will be deemed to be held by the GP on trust for the ELP as an asset of the ELP.
  • A limited partner may not participate in the conduct of the ELP's business, and all contractual documents and papers must be executed by the GP as the contractual party acting on behalf of the ELP. Any limited partner participating in this way,
  • The ELP Law set outs certain non- exhaustive "safe harbours" of activities in which a limited partner may engage without risk of losing its limited liability
  • A limited partner that receives any return of its contributed capital in a period of
  • A limited partner may transfer all or any part of its partnership interest in the manner provided by the LPA, but such transfer shall not absolve the transferor of any liability previously incurred in respect of (i) its taking part in the conduct of the ELP's business, or (ii) amounts of capital received and required to be returned (both as described above).
  • An ELP shall continue until wound up and dissolved by resolution of the general partners and a two-thirds majority of limited partners, unless the LPA provides otherwise; and the provisions of the Companies Law and the Companies Winding Up Rules shall apply to govern the winding up and dissolution of an ELP (except to the extent that such provisions are inconsistent with the ELP Law).
  • If, following the ELP's registration, any change is made to its name, the general nature of its business, its registered office address, its duration or the name and address of its GP (or one of them), the
  • The GP must maintain or cause to be maintained at the ELP's registered office in the Cayman Islands a register of partnership interests in the ELP (which must be updated within 21 days of any change) and a register of mortgages and charges on partnership interests. The register of partnership interests is not open to inspection by a non-partner unless the general partner consents, whereas the mortgages register is. Both registers may be maintained in written or electronic form.
  • The limited partners will not be liable for any debts and obligations of the ELP if the ELP's assets are insufficient to discharge them.
  • The ELP Law provides that a limited partner may demand and receive from the GP information about the ELP's business and financial condition, but
  • A GP or limited partner may contract with, or lend money to, the ELP qua partner
  • No capital commitment is required of the GP or of a limited partner (although the LPA will typically provide for such); contributions may be made in cash, property or other assets (but not by way of loan by a partner to the ELP).
  • The GP may take an interest in the ELP as
  • The ELP Law provides, subject to any provision of the LPA to the contrary, that the ELP shall be automatically dissolved
  • Capital calls can be effected in one of two ways: (i) partly paid shares are issued in respect of the first closing, with provision for additional sums to be paid on those shares on each subsequent closing or capital call; or (ii) fully paid shares equal
  • Capital accounting can be replicated by including in the articles a mechanism
  • Interest payments made by additional partners being admitted in subsequent closings can be implemented by the establishment in the company’s books of
  • Claw-back provisions are possible, but more difficult, to draft in articles of association.

Published July 7, 2014

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