GUERNSEY Law and Practice Contributed by: Matthew Brehaut, Carey Olsen
• its own memorandum and articles of incorpo - ration; • its own company registration number; and • its own board of directors (though the board composition of each incorporated cell must have one director in common with the board of the core). In a protected cell company, the cells are not separately registered legal entities, and the pro - tected cell company (as a single legal entity) has a single board of directors, and a memorandum and articles of incorporation. Limited partnerships A limited partnership is comprised of: • one or more general partners who are jointly and severally liable for all debts of the limited partnership without limitation; and • one or more limited partners who contribute (or agree to contribute) a specified sum to the capital of the limited partnership, and who are not liable for any debts of the limited part - nership beyond the amounts contributed (or agreed to be contributed). The property of the limited partnership is held on trust by the general partners jointly as assets of the limited partnership in accordance with the terms of the limited partnership agreement. Lim - ited partnerships are tax-transparent for Guern - sey tax purposes. Unit trusts A unit trust is not a separate legal entity but is a fiduciary relationship between a trustee and one or more beneficiaries in relation to particu - lar assets. This relationship is constituted by an agreement in writing, commonly known as a “trust instrument”. In the context of a fund established as a unit trust, the trust instrument
contains (in addition to elements/provisions relating to the relevant trust law) contractual provisions that will exist between a manager (appointed by the trustee to manage the assets) and the trustee. The assets of a unit trust are held by its trus - tee on trust for the benefit of the beneficiaries (the unit-holders (investors)) and are managed by the manager, who may appoint one or more investment managers or advisers to assist it. Contracts in relation to the management and administration of the trust will be entered into by the manager; whereas the trustee will enter into contracts in relation to the assets themselves, such as bank deposits, borrowings and security agreements. The participants’ interests in the above vehicles are referred to accordingly: • for companies – shares; • for limited partnerships – limited partnership interests; and • for unit trusts – units. Guernsey investment managers and/or invest - ment advisers of alternative investment funds are principally established as companies or lim - ited liability partnerships. 2.1.2 Common Process for Setting Up Investment Funds Every “collective investment scheme” (“fund”) domiciled in Guernsey will be subject to the pro - visions of Guernsey’s principal funds legislation (the Protection of Investors (Bailiwick of Guern - sey) Law, 2020, as amended (the “POI Law”)) and be regulated by Guernsey’s regulatory body for the finance sector (the Guernsey Financial Services Commission (GFSC)). The POI Law splits Guernsey funds into two categories:
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