Law 144(I) of 2015 amends the Partnerships and Business Names Law (Cap 116) to introduce the concept of partnerships limited by shares (commonly referred to as limited liability partnerships, or LLPs) to the law of Cyprus. LLPs and their equivalents are widely used in other jurisdictions, particularly for investment holding purposes, and their introduction into Cyprus will provide a convenient new vehicle.
A partnership limited by shares is similar to the conventional limited partnership, which could (and still may) be formed under the Partnerships and Business Names Law. There must be at least one general partner, with unlimited liability for the debts and obligations of the partnership, and one or more limited partners. The liability of the limited partners in an LLP is restricted to the amount unpaid on the shares they hold in the partnership, in the same way as shareholders in a limited company. As in a conventional limited partnership, only general partners may participate in the management and the operations of the partnership, and be authorised to bind the partnership; limited partners may not.
Like all other partnerships, partnerships limited by shares have no separate legal personality and are transparent for tax purposes, with tax being assessed on the partners.
The amending law also increases the limit on the total number of partners in any type of partnership to 100.
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