Typically, a partnership does not have to comply with any formalities or registration as it is typically based on trust.  It is the simplest manner of carrying out a business.  Partnerships have been in existent for many centuries.  The practice of entering into partnerships started in England.  Originally, partnerships have always been general partnerships, but from these forms emerged the limited partnerships and limited liability partnerships.  Laws relating to these types of partnerships were passed in England in 1907.  This was the Limited Partnership Act of 1907.  These two may imply the same concept and meaning, but they are distinct forms of partnerships.  The law of England on limited partnerships was eventually adopted as the basis for drafting laws by other jurisdictions like the Cayman Islands.

In Cayman Islands, the law on partnerships relating to limited partnership is the Exempted Limited Partnership Law.  The country has two types of limited partnership – the ordinary and the exempted limited partnership.  The ordinary type is an adoption of the United Kingdom’s common form of limited partnership, but the Exempted Limited Partnership is a form which is ideal for a jurisdiction which places great emphasis on tax-free banking and the islands’ asset protection.

Indeed, a limited partnership in this country is one method of securing and keeping your assets safe from suits and attachments.  Generally, a limited partner does not participate in the management of the business.  In return, his liability to the partnership’s creditors is limited to his capital.  In most jurisdictions, if a limited partner participates in the operation of the business, he would be deemed a general partner.  The island, however, is more relaxed with regard to this matter.  There are many advantages to setting up a limited partnership in the country, but foremost of which, is the fact that you would be availing of its asset protection.