Labuan Limited Partnership

A Labuan Limited Partnership (LP) is a business entity comprising two or more partners who operate or manage a business together.

The minimum number of partners for a Labuan LP is two partners, ie one general partner and one limited partner; the maximum number of partners allowed is fifty partners.

Partners may be a corporation except for firms which are set up for professional practice, in which case it must consist of natural persons only and supplemented with professional indemnity insurance coverage issued by an insurer approved by Labuan FSA.

 

General Partner

A general partner shall have all the rights and powers and shall be subjected to all the restrictions and liabilities of a partner. Therefore, they have management control; share the right to use partnership property; share the profits of the firm in predefined proportions; and have joint and several liabilities for the debts of the partnership.

Limited Partner

A limited partner shall contribute capital to the partnership but not participate in the daily operations of the partnership. The limited partner shall not be liable as a general partner unless the limited partner participates in the management of the Labuan LP.

A person may be a general partner and a limited partner at the same time in the same Labuan LP.

Registration requirements

The general process for registering a Labuan LP involves the following:

  1. The applicant must appoint a Labuan trust company for the registration, which would conduct due diligence on the applicant. All documentation required to be submitted to Labuan FSA must be filed through a Labuan trust company.
  2. A Labuan LP shall have the words “Limited Partnership”, “Ltd.P.”, “LP” or “L.P” as part of its name (any other abbreviations in romanised characters or words in the applicant’s national language which connotes a limited partnership or any abbreviation may be approved by Labuan FSA).
  3. The name may be in foreign characters, alphabets or languages provided that an accurate and certified rendition of the name in the English language is clearly stated on all its documents.
  4. The application for registration must be accompanied by the relevant documents and payments.

 

Name of Labuan limited partnership

(1) The name of a Labuan limited partnership shall end with the words “Limited Partnership” in full or the abbreviation “Ltd.P.”, “LP”, “L.P” or any other form of abbreviation in romanised character or words in the national language of a country which connotes a limited partnership or any abbreviation thereof as may be approved by the Authority.

(2) The name of a Labuan limited partnership may be in foreign characters, alphabet or language provided that an accurate and certified rendition of the name in the English language is employed and is clearly stated in every written communication sent by, or on behalf of, the Labuan limited partnership and every document issued or signed by, or on behalf of, the Labuan limited partnership.

(3) The name of a limited partner shall not appear in the name of a Labuan limited partnership unless it is also the name of one of the general partners or the Labuan limited partnership has been carried on under that name before the admission of that partner as a limited partner.

(4) The corporate name or any part of the corporate name of a limited partner shall not appear in the name of a Labuan limited partnership unless it is also the corporate name or part of the corporate name of one of the general partners or the Labuan limited partnership has been carried on under that name before the admission of that corporate partner as a limited partner.

(5) A limited partner whose name or corporate name appears in the name of the Labuan limited partnership contrary to subsection (3) or (4) shall be liable as a general partner to any creditor of the Labuan limited partnership who has extended credit without actual knowledge that the limited partner is not a general partner.

(6) A Labuan limited partnership shall not be registered where the name of the Labuan limited partnership to be registered is in the opinion of the Authority in any way misleading or otherwise undesirable.

 

Rights and Obligations of General Partner

A general partner in a Labuan limited partnership shall have all the rights and powers and shall be subject to all the restrictions and liabilities of a partner in a partnership without limited partners except that, without the written consent or ratification by all the limited partners, a general partner has no authority to—

(a) do an act which makes it impossible to carry on the activities of the Labuan limited partnership;

(b) possess any Labuan limited partnership property, or dispose of any rights in any Labuan limited partnership
property, for other than a partnership purpose; or

(c) admit a person as a general partner or a limited partner, unless the right to do so is given in the partnership
agreement.

 

A general partner shall, unless otherwise provided for in the partnership agreement, carry out all the functions necessary and connected with the conduct of activities of the Labuan limited partnership, and shall discharge all obligations imposed on the general partner or on the Labuan limited partnership.

 

A property of a Labuan limited partnership which is transferred to or vested in or held on behalf of any one or more
of the general partners or which is transferred to or  vested in the name of the Labuan limited partnership shall be held or deemed to be held by the general partner, or, if more than one, by the general partners jointly, as an asset of the Labuan limited partnership in accordance with the terms of the partnership agreement.

 

A debt or an obligation incurred by a general partner in the conduct of the activities of a Labuan limited partnership shall be a debt or an obligation of the Labuan limited partnership.

 

A general partner shall at all times act in good faith in the interests of the Labuan limited partnership.

 

Rights of Limited Partner

A limited partner has the same right as a general partner—
(a) during business hours, to inspect and make copies of or take extracts from the Labuan limited partnership books,
documents and records; and
(b) to be given, on demand, true and full information of all things affecting the Labuan limited partnership and to be
given a formal account of partnership affairs whenever circumstances render it just and reasonable to do so.

 

(2) A limited partner shall not be entitled to dissolve a Labuan limited partnership by notice except as expressly provided in the partnership agreement

 

(3) Subject to any provision, express or implied, of the partnership agreement to the contrary, a Labuan limited partnership shall not be dissolved by—
(a) in the case of a limited partner who is an individual, his death, legal incapacity, bankruptcy, retirement or
withdrawal from the Labuan limited partnership; and
(b) in the case of a limited partner which is a corporation, its dissolution, bankruptcy or withdrawal from the Labuan
limited partnership.

 

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