The Cayman Islands: Asset Protection in Limited Partnerships

Offshore Asset Protection

Guatemala Asset Protection

Login Form

Offshore Education

Offshore Legal Articles

The Cayman Islands: Asset Protection in Limited Partnerships

Asset protection has been a major concern of most individuals and corporate entities for the longest time especially when there’s a possibility that creditors will be pounding on their doors in the near future. The Cayman Islands have been compared to a few other financial centers considered as tax havens. While there are certain laws covering limited partnerships that seem favorable to the investor, laws in the island prove to be more beneficial in the long run.

For instance, limited partnerships’ stipulations and policies can be changed in Delaware through merely an ancillary agreement or a side letter. In the Cayman Islands, this mere action is not enough to touch on major changes. Disclosure clauses also differ in both investment locations. Delaware used to allow partners in a limited partnership to receive all information regarding the partnership. However, it had been changed in recent years to only allow certain information to be passed on to the partners. Disclosure of information that could have negative effects on the partners and the partnership could be withheld under the new law. Here is where the ancillary agreement comes in. This non-disclosure agreement can be altered with merely an ancillary agreement among the partners.

In the island, non-disclosure of such information to partners cannot be easily altered by a side letter or ancillary agreement. But the limited partners can come to an agreement regarding such terms before finalizing their partnership agreement. In cases where the partnership has already been sealed and the need for more information arises, the limited partnership in the island can choose to use a side letter governed by another jurisdiction like Delaware’s. The downside is it would take more effort to secure such a letter and the urgency of the matter would not be properly addressed.

The best thing to do before entering into any asset protection partnerships is to always consider possible scenarios in the future so you will have all the bases covered.

< Prev		Next >

[ Back ]

offshorelegal@hush.com

Sales

	Panama City, Panama (Spanish) +(507) 832-0020
	Miami, USA +(786) 375-5435
	Miami, USA +(786) 393-5190
	Toronto, Canada +(647) 477-6352
	London, UK + 44 20 3006-3097