The Jersey Limited Liability Partnership: A New Legal Vehicle for Professional Practice
The Limited Liability Partnerships (Jersey) Law 1997' is, at least in terms of the jurisdictions of the British Isles, a unique legislative experiment which, despite being legislation enacted by a small offshore jurisdiction, could well have a profound impact on the future legal framework of major United Kingdom professional practices, particularly those operating in the accountancy and legal services sectors. In a nutshell, the legislation creates an innovative legal vehicle the Jersey Limited Liability Partnership (LLP) which combines the traditional partnership structure with the twin fundamental principles of separate legal personality and limited liability characteristically found in company law codes. Perhaps more importantly from a professional practices perspective, the Jersey structure contains no restrictions on the participation of partners in a firm's management and thus does not reproduce the fundamental flaw of existing United Kingdom limited partnership legislation, the Limited Partnerships Act 1907, which confers limited personal liability (to the extent of their capital contributions) on limited partners but prohibits them from participating in partnership management. This prohibition has always made the United Kingdom limited partnership an unattractive choice of legal vehicle for professional practices. While the LLP concept has, until Jersey's bold and highly controversial initiative, been an unknown concept in British commercial law, it is well entrenched in America where some 40 State legislatures have enacted LLP legislation in recent years.2 Moreover, it seems probable that Jersey's move will act as a catalyst for a similar rapid proliferation of LLP legislation in both small and large jurisdictions of the British Isles: evidently, Jersey's 'micro' offshore jurisdiction counterparts (and competitors), Guernsey3 and the Isle of Man,4 are seriously contemplating the