The law of partnership in the BVI is governed by the Partnership Act 1996. This legislation accomplishes two goals, firstly, the codification of the law of partnership generally and, secondly, the Act provides for the establishment of limited partnerships.
The Act combines elements from the UK Limited Partnership Act 1907 and the Delaware Revised Uniform Limited Partnership Act 1983. International clients who choose the BVI for this vehicle will enjoy all the usual tax and limitation of liability benefits, with the added advantage of being offshore, as well as the option of using a BVI International Business Company as the general, or limited, partner.
One of the main advantages of operating through a partnership, rather than a company, relates to the peculiar tax treatment of partners. In a company, for instance, members are effectively taxed twice, once at the corporate level and again at the personal level. In a partnership, the flow-through provisions remove the first level of taxation, so that the general and limited partners are taxed only once. Because the BVI offers tax exemption for non-BVI limited partnerships, the partners are not taxed at all, while the limited partners enjoy the further advantage of their limited liability.
Non-BVI, or International Limited Partnerships are also attractive vehicles for use as mutual funds or other arrangements traditionally housed in a corporate structure. There are no company law rules governing matters such as maintenance and return of capital, meetings, dividends and duties of directors and these rules can be established in the Articles of the Limited Partnership.
Coverdale provides incorporation and maintenance services in relation to general and limited partnerships, as well as the International Business Companies (and its successor, the BVI Business Company), which can be used as the corporate entity to act as the general partner or the member partners. We are also able to provide all registered agent and registered office services for all forms of partnerships, as well as full administration services, including banking and accounting services.