At its most basic level a partnership requires no formalities and no registration and is the simplest manner in which to carry on a business. Partnerships have been used for many centuries and were subject to a body of common law rules that evolved to regulate both the dealings of the partnership with third parties, and the dealings of the partners with one another. These rules were initially embodied in legislation in England by the Partnership Act 1890 (the "1890 Act"), which largely codified the existing common law rules relating to general partnerships. Other types of partnership have since evolved; the limited partnership was established in England by the Limited Partnership Act 1907 (the "1907 Act") and more recently limited liability partnerships have become common in various jurisdictions. The 1890 Act is still in force in England and Wales and the common law rules contained in it formed the basis for the general partnership laws of most common law jurisdictions.
In the Cayman Islands, partnerships are regulated by the Partnership Law (2013 Revision) (the "Partnership Law") and the Exempted Limited Partnership Law (2014) (the "Exempted Limited Partnership Law"). As well as general partnerships, the Partnership Law sets out the rules for "ordinary" limited partnerships. The Exempted Limited Partnership Law establishes a second type of limited partnership, an exempted limited partnership, which is designed to be more appropriate for the Cayman jurisdiction.
There are three types of partnership under Cayman Islands Law:
- General Partnerships
- Limited Partnerships
- Exempted Limited Partnerships