CAYMAN ISLANDS Law and Practice Contributed by: Christie Walton, Patrick Rosenfeld and Philip Dickinson, Maples Group
partner (or any agent or delegate of the general partner) under general legal principles of agency on behalf of the exempted limited partnership. Any right or property of the exempted limited partnership that is conveyed to, vested in or held either on behalf of the general partner or in the name of the exempted limited partnership is an asset of the exempted limited partnership held upon trust in accordance with the terms of the relevant law. 2.1.2 Common Process for Setting Up Investment Funds The formation and registration processes in the Cayman Islands are streamlined and efficient. Exempted companies are formed upon the filing of a declaration and the memorandum and arti - cles of association with the Registrar. Exempted limited partnerships and limited liability compa - nies are formed upon the execution of the rel - evant operating agreement and the filing of a registration statement with the Registrar. With limited exceptions, all open-ended funds must register with the Cayman Islands Monetary Authority (CIMA) under the Mutual Funds Act (As Revised), and all closed-ended funds must reg - ister with CIMA under the Private Funds Act (As Revised). To register an open-ended fund, the requisite application form and offering memorandum must be submitted to CIMA in advance of the fund launch and directors must be registered under the Director Registration and Licensing Act. The administrator and auditor of the fund must submit consent letters confirming respon - sibility for these important roles. To register a closed-ended fund, the requisite application form and offering memorandum (or summary of terms) must be submitted to CIMA
within 21 days of a fund accepting capital com - mitments or, if earlier, prior to the fund receiv - ing any capital contributions for the purpose of investments. The administrator and auditor of the fund must submit consent letters confirming responsibility for these important roles. 2.1.3 Limited Liability The Cayman Islands legal system is based on well-recognised legal concepts founded in Eng - lish law, including limited liability and separate corporate personality, which underpin the cor - porate, partnership and trust vehicles used as collective investment schemes, all of which were tried and tested and found to be robust during the 2008 global financial crisis. As a general rule, in the absence of a contrac - tual arrangement to the contrary, the liability of a shareholder of a Cayman Islands company that has been incorporated with limited liability and with share capital is limited to the amount from time to time unpaid in respect of the shares it holds. A Cayman Islands company has a legal personality separate from that of its sharehold - ers, and it is separately liable for its own debts due to third parties. A Cayman Islands exempted limited partnership does not have a legal personality separate from its partners. General partners have unlimited liability for all the debts and obligations of such partnerships by virtue of the Cayman Islands Exempted Limited Partnership Act (As Revised). Fund investors typically subscribe for limited partnership interests on which their liability is generally limited to their contributed capital and outstanding capital commitment (if any). However, there are limited circumstances under Cayman Islands law whereby an investor who takes part in the conduct of the business of the
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