Limited Liability Partnerships
(Dissolution and Winding Up) (Jersey) Regulations 2018
Made 11th July 2018
Coming into force 1st
August 2018
THE STATES, in pursuance of Article 38 of the Limited Liability Partnerships
(Jersey) Law 2017[1], have made the following
Regulations –
PART 1
INTRODUCTION
1 Interpretation
(1) In
these Regulations “Law” means
the Limited Liability Partnerships (Jersey) Law 2017[2].
(2) For
the purposes of these Regulations, a limited liability partnership is insolvent
if it is unable to discharge its debts, excluding any liability to a partner or
former partner in respect of the partner’s partnership interest, as they
fall due.
PART
2
DISSOLUTION of Limited Liability Partnership
2 Application
of Part 2
This Part applies to the
dissolution of any limited liability partnership.
3 Dissolution
upon a change in the partners in a partnership
Subject to Regulation 4,
a limited liability partnership shall not be dissolved by any change in the
persons who are partners in it unless the partnership agreement so provides.
4 Dissolution upon partnership ceasing to have 2 or more partners
(1) Subject
to Regulation 7, but despite any provision, express or implied, of the
partnership agreement to the contrary a limited liability partnership shall be
dissolved immediately upon there ceasing to be 2 or more partners in the limited
liability partnership.
(2) Where
a limited liability partnership is dissolved under paragraph (1), the last
remaining partner shall, within 28 days after the date of dissolution,
deliver to the registrar a statement of dissolution signed by that partner.
(3) Upon
receiving a statement under paragraph (2), the registrar shall register
the statement and issue a certificate of dissolution and shall –
(a) serve
the certificate on the limited liability partnership;
(b) register
the certificate; and
(c) publish
a notice stating that such a certificate has been issued.
(4) Subject
to paragraph (5), a last remaining partner who fails to comply with paragraph (1)
shall be guilty of an offence.
(5) A last
remaining partner shall not be guilty of an offence under paragraph (4)
unless that partner knew, or the circumstances of the dissolution are such that
the last remaining partner ought to have known, that the limited liability
partnership had dissolved.
(6) Subject
to Article 22(6) of the Law, a certificate issued under paragraph (2)
is conclusive evidence that the limited liability partnership is dissolved.
5 Dissolution
by act of partner or other occurrence
(1) Where
a limited liability partnership is dissolved by any act of a partner, or by any
occurrence (other than under Regulation 4(1) or by order of the Royal
Court), in either case, in accordance with the partnership agreement, the
secretary shall, within 28 days after the date of dissolution, deliver to
the registrar a statement of dissolution signed by the secretary.
(2) Upon
receiving a statement under paragraph (1), the registrar shall register
the statement and issue a certificate of dissolution and shall –
(a) serve
the certificate on the limited liability partnership;
(b) register
the certificate; and
(c) publish
a notice stating that such a certificate has been issued.
(3) Subject
to paragraphs (4) and (5), a secretary who fails to comply with paragraph (1)
shall be guilty of an offence.
(4) A
secretary shall not be guilty of an offence under paragraph (3) unless the
secretary knew, or the circumstances of the dissolution are such that the
secretary ought to have known, that the limited liability partnership had
dissolved.
(5) If
the limited liability partnership has no secretary on the date of dissolution,
the duty of the secretary described in paragraph (1) shall rest with the
partners who were remaining on that date and, accordingly, if none of those
partners comply with paragraph (1), they shall all be jointly and
severally guilty of an offence.
(6) Subject
to Article 22(6) of the Law, a certificate issued under paragraph (2)
is conclusive evidence that the limited liability partnership is dissolved.
6 Power
of Court to order dissolution
(1) The
Court may, on the application of any partner in a limited liability
partnership, order the dissolution of the limited liability partnership in any
of the following cases –
(a) when a partner, other
than the partner making the application, becomes in any way permanently
incapable of performing that partner’s part of the partnership agreement;
(b) when the Court, having
regard to the nature of the partnership, is of the opinion that a partner,
other than the partner making the application, has been guilty of conduct that
would prejudicially affect the carrying on of the partnership business;
(c) when a partner, other
than the partner making the application, wilfully or persistently commits a
breach of the partnership agreement, or otherwise behaves in matters relating
to the partnership business in such a manner that it is not reasonably
practicable for the other partner or partners to carry on that business in
partnership with that partner;
(d) when the partnership business
can only be carried on at a loss; or
(e) whenever (in any case)
circumstances have arisen which, in the opinion of the Court, render it just
and equitable that the limited liability partnership be dissolved.
(2) Where
the Court orders the dissolution of a limited liability partnership under paragraph (1),
the partner making the application shall deliver a copy of the order to the
registrar within 28 days after it is made.
(3) Upon
receiving an order made under paragraph (1), the registrar shall –
(a) register
the order;
(b) issue
a certificate of dissolution; and
(c) publish
a notice stating that such a certificate has been issued.
(4) A
partner making the application under this Regulation who fails to comply with paragraph (2)
shall be guilty of an offence.
(5) Subject
to Article 22(6) of the Law, a certificate issued under paragraph (3)
is conclusive evidence that the limited liability partnership is dissolved.
7 Continuation
of partnership following dissolution
(1) Where,
following dissolution of a limited liability partnership but before completion
of the winding up of its affairs, 2 or more of the partners are to acquire the
partnership interests of each of the remaining partners, either by agreement or
upon a direction of the Court pursuant to Regulation 10(2), then upon such
acquisition taking place –
(a) the winding up of the affairs
of the limited liability partnership shall not be completed and the limited
liability partnership shall continue as if it had not been dissolved; and
(b) the partners whose
interests are acquired shall be taken to retire from the limited liability
partnership.
(2) The
limited liability partnership shall, within 28 days after the acquisition
described in paragraph (1), send to the registrar a statement of cancellation
of dissolution signed by one of the acquiring partners, specifying the date
when the retiring partner’s interests are to be acquired, in addition to
any statement that must be sent under Article 19 of the Law.
(3) A
limited liability partnership that fails to comply with paragraph (2) shall
be guilty of an offence.
(4) Subject
to paragraphs (5) and (6), where, following dissolution of a limited liability
partnership in the circumstances described in Regulation 4(1) but before
completion of the winding up of its affairs, there is only one partner who intends
to continue the partnership by entering into a partnership agreement with one
or more persons who shall also acquire partnership interests in the limited
liability partnership, then subject to paragraph (5), upon giving notice
of that intention to the registrar –
(a) the winding up of the
affairs of the limited liability partnership shall not be completed and the
limited liability partnership shall continue as if it had not been dissolved;
and
(b) the partners whose
interests are acquired shall be taken to retire from the limited liability
partnership.
(5) The
notice referred to in paragraph (4) must be given to the registrar within
7 days of the dissolution.
(6) Where
notice is given to the registrar under paragraph (4), the limited
liability partnership shall, within 90 days after the dissolution
described in paragraph (4), send to the registrar a statement of
cancellation of dissolution signed by one of the acquiring partners, specifying
the date when the retiring partners’ interests are to be acquired, in
addition to any statement that must be sent under Article 19 of the Law.
(7) Upon
receiving a statement under paragraph (2) or (6), the registrar shall register
the statement and issue a certificate to that effect, and shall –
(a) serve
the certificate on the limited liability partnership;
(b) register
the certificate; and
(c) publish
a notice stating that such a certificate has been issued.
(8) Where
the limited liability partnership fails comply with paragraph (5) or (6),
the dissolution of the limited partnership under Regulation 4(1) shall not
be void.
(9) A
certificate issued under paragraph (7) is conclusive evidence that the certificate
of dissolution issued under Regulation 5(2) in respect of the limited
liability partnership is void.
(10) For the
purposes of Article 22(6)(b) of the Law, the Court may make an order declaring
a certificate of dissolution void under Article 22(6) of the Law if –
(a) a certificate
of dissolution was issued in respect of the limited liability
partnership under Regulation 5 or 6 or this Regulation;
(b) Part 4
does not apply in respect of the limited liability partnership; and
(c) all
persons who were partners in the limited liability partnership immediately
before its dissolution consent to the order being made.
(11) For the
purposes of Article 23(4)(b) of the Law, the Court may make an order
declaring the cancellation of registration void under Article 23(4) of the
Law if –
(a) the
limited liability partnership was not wound up under Part 4; and
(b) all
persons who were partners in the limited liability partnership immediately
before its dissolution consent to the order being made.
PART 3
Winding up of solvent limited liability
partnership
8 Application
of Part 3
This Part applies in respect of the winding up of a solvent limited
liability partnership.
9 Winding
up
(1) A
limited liability partnership that is solvent at the date of dissolution shall
have its affairs wound up by a dissolution manager in accordance with this
Part.
(2) Subject
to paragraph (3) –
(a) where the limited
liability partnership is dissolved in the circumstances described in Regulation 4,
the dissolution manager shall be the person who, at the date of dissolution,
was the last remaining partner or –
(i) if that partner
is deceased, his or her personal representatives, or
(ii) if that partner
is a body corporate that is in the course of being wound up, the liquidator or person
winding up the affairs of that partner;
(b) in the event of the
dissolution of a limited liability partnership in any other circumstances, the
dissolution manager shall be the person appointed by the partners for the
purpose or, if none, shall be all of the partners jointly.
(3) The
Court may appoint or remove a dissolution manager upon the application of –
(a) a partner in the
limited liability partnership;
(b) a person who is the
dissolution manager by virtue of paragraph (2) or previously appointed as the
dissolution manager under this paragraph; or
(c) any other person who appears to the Court to be an interested party, where the Court is satisfied that a person described in sub-paragraph (a)
or (b) is unable or unwilling to make an application under this paragraph.
(4) Subject
to paragraphs (5) and (6), the dissolution manager shall, as agent for the
limited liability partnership, do whatever is necessary or desirable to achieve
a beneficial winding up of the limited liability partnership’s affairs,
or otherwise as the partnership agreement may provide.
(5) If,
at any stage during the winding up of a limited liability partnership that was,
or is believed to have been, solvent at the date of dissolution, it becomes
apparent that it was insolvent at that date or has become insolvent following
dissolution, the dissolution manager shall –
(a) cease
winding it up pursuant to this Part; and
(b) take
the steps the dissolution manager is required to take under Part 4.
(6) Upon
the dissolution of a limited liability partnership in the circumstances
described in Regulation 4(1), or upon the limited liability partnership
ceasing to have 2 or more partners at any time during the winding up of its
affairs following its dissolution in any other circumstances –
(a) the limited liability partnership
shall cease to be a legal person, if no notice is given under Article 7(4)
within the time period specified in Article 7(5);
(b) the duty to appoint a
secretary under Article 8 of the Law shall cease to apply;
(c) the limited liability
partnership property vested in the limited liability partnership and the
beneficial interest of the limited liability partnership in any limited
liability partnership property held by any person on its behalf, shall vest in
the dissolution manager;
(d) the dissolution manager
shall, in the person’s capacity as such, do whatever is necessary or desirable
to achieve a beneficial winding up of the limited liability partnership’s
affairs, or otherwise as the partnership agreement may
provide;
(e) any proceedings which
might have been continued or commenced against the limited liability
partnership may be continued or commenced against the dissolution manager in that capacity;
(f) any judgment
obtained against the limited liability partnership prior to its ceasing to have
2 or more partners and any judgment obtained against the dissolution manager in
any proceedings continued or commenced in accordance with sub-paragraph (e)
shall be enforceable only against the limited liability partnership property.
(7) Where
the name of a limited liability partnership is inscribed in the Public Registry
as the holder of, or as having an interest in, immovable property, the dissolution
manager, in whom that property or interest vests by virtue of paragraph (6)(c)
shall deliver to the Judicial Greffier notice of such vesting within 28 days
after the property so vests.
(8) It
shall be an offence for the dissolution manager to fail to comply with paragraph (7).
10 Power
of Court to give directions as to winding up
(1) The
Court may give such directions as it thinks fit in the course of the winding up
of the affairs of a limited liability partnership upon the application of –
(a) any partner in the limited
liability partnership;
(b) the secretary of the
limited liability partnership;
(c) any creditor of the limited
liability partnership;
(d) the dissolution manager;
or
(e) any other person who appears to the Court to be an interested party, where the Court is satisfied that a person described in sub-paragraph (a),
(b) (c) or (d) is unable or unwilling to make an application under this
paragraph.
(2) Without
prejudice to the discretion conferred by paragraph (1), on an application
by the relevant majority, the Court may give a direction that the applicants
purchase the partnership interest of each of the remaining partners at such a
price and otherwise upon such terms as it thinks fit.
(3) In paragraph (2),
“relevant majority” in relation to a limited liability partnership
shall have the meaning assigned to it for the purposes of that paragraph by the
partnership agreement or, if no meaning is so assigned, shall mean a majority
of the partners of which such partnership was composed at the date of its
dissolution, being either –
(a) a majority of the
partners by number; or
(b) such number of partners
as were at the date of dissolution together entitled to a majority share of the
limited liability partnership property remaining upon dissolution, after
payment of any liabilities described in Regulation 11(1).
(4) In paragraph (2),
the reference to the partnership interest of each of the remaining partners
includes the partnership interest of any deceased partner and of any partner,
other than an individual, which has ceased to exist.
11 Settling
accounts on winding up
(1) Where
accounts are settled in the course of the winding up of the affairs of a
limited liability partnership, the liabilities of the limited liability partnership
shall be paid in the following order of priority –
(a) payment
of any fees and penalties imposed by the Commission on the limited liability
partnership under the Law or any other enactment;
(b) subject to the provisions of any enactment as to preferential
payments, liabilities to creditors, excluding any partner or former partner in
the limited liability partnership in respect of the partner’s or former
partner’s partnership interest or in respect of any loan made by the
partner or former partner to the limited liability partnership for any purpose;
then
(c) subject to the
partnership agreement and to any agreement between the limited liability partnership
and the former partner in question –
(i) liabilities to
former partners in the limited liability partnership in respect of any loans
made by them to the limited liability partnership for any purpose, then
(ii) liabilities to
former partners in the limited liability partnership in respect of their
partnership interests; then
(d) subject to the
partnership agreement –
(i) liabilities to
partners in the limited liability partnership in respect of any loans made by
them to the limited liability partnership for any purpose, then
(ii) liabilities to
partners in the limited liability partnership in respect of their partnership
interests.
(2) Subject
to the partnership agreement, any limited liability partnership property
remaining after payment of the liabilities described in paragraph (1)
shall be distributed equally to the partners.
12 Completion
of winding up
(1) Within
28 days after the completion of the winding up of the affairs of a limited
liability partnership, a statement to that effect signed by the dissolution
manager shall be delivered to the registrar.
(2) It
shall be an offence for the dissolution manager to fail to comply with paragraph (1).
(3) Upon
delivery of the statement under paragraph (1), the registrar shall cancel
the entry in the register relating to the limited liability partnership and
issue a certificate of cancellation to the dissolution manager.
PART 4
WINDING
UP of insolvent Limited Liability Partnership
13 Application and
interpretation of Part 4
(1) This Part applies in respect of the winding
up of an insolvent limited liability partnership, whether insolvent at the date
of dissolution or becoming insolvent following dissolution.
(2) In this Part –
“insolvency manager” means, in relation to an insolvent
limited liability partnership, the person for the time being appointed under Regulation 17, 19
or 20 to be responsible for its insolvent winding up;
“insolvency committee” means, in relation to an
insolvent limited liability partnership, the committee appointed under Regulation 18.
14 Winding up
(1) Subject
to paragraphs (2) and (3) –
(a) where the limited
liability partnership is dissolved in the circumstances described in Regulation 4,
the dissolution manager shall be the person who, at the date of dissolution,
was the last remaining partner or –
(i) if that partner
is deceased, his or her personal representatives, or
(ii) if that partner
is a body corporate that is in the course of being wound up, the liquidator or person
winding up the affairs of that partner;
(b) in the event of the
dissolution of a limited liability partnership in any other circumstances, the
dissolution manager shall be the person appointed by the partners for the
purpose or, if none, shall be all of the partners jointly;
(2) If
the winding up of the affairs of a limited liability partnership began at a
stage during which the limited liability partnership was, or was believed to
have been, solvent at the date of dissolution, the person who was the
dissolution manager under Part 3 shall be the dissolution manager for the
purposes of this Part.
(3) The
Court may appoint or remove a dissolution manager upon the application of –
(a) a partner in the limited
liability partnership;
(b) a person who is the
dissolution manager by virtue of paragraph (1) or (2) or having been appointed
as the dissolution manager under this paragraph; or
(c) any other person who appears to the Court to be an interested party, where the Court is satisfied that a person described in sub-paragraph (a)
or (b) is unable or unwilling to make an application under this paragraph.
(4) No
appointment may be made pursuant to paragraph (3) in respect of an
insolvent limited liability partnership after an insolvency manager is first
appointed for it.
(5) Notwithstanding
that a partner continues to be an agent of the limited liability partnership, the
partner’s ability to bind the insolvent limited liability partnership
shall cease upon dissolution of the limited liability partnership.
(6) Upon
the dissolution of a limited liability partnership in the circumstances
described in Regulation 4, or upon the limited liability partnership
ceasing to have 2 or more partners at any time during the winding up of its
affairs following its dissolution in any other circumstances –
(a) the
limited liability partnership shall cease to be a legal person;
(b) the
duty to appoint a secretary under Article 8 of the Law shall cease to
apply;
(c) the
limited liability partnership property vested in the limited liability
partnership and the beneficial interest of the limited liability partnership in
any limited liability partnership property held by any person on its behalf,
shall vest in the dissolution manager;
(d) any
proceedings which might have been continued or commenced against the limited
liability partnership may be continued or commenced against the dissolution
manager in that capacity;
(e) any
judgment obtained against the limited liability partnership prior to its dissolution,
and any judgment obtained against the dissolution manager in any proceedings
continued or commenced in accordance with sub-paragraph (d), shall be
enforceable only against the limited liability partnership property.
(7) Where
the name of a limited liability partnership is inscribed in the Public Registry
as the holder of, or as having an interest in, immovable property, the
dissolution manager, in whom that property or interest vests by virtue of paragraph (6)(c)
shall deliver to the Judicial Greffier notice of such vesting within 28 days
after the property so vests.
(8) It
shall be an offence for the dissolution manager to fail to comply with paragraph (7).
15 Partnership
insolvent upon or following dissolution
(1) If
the dissolution manager becomes aware, or forms the opinion, that the limited
liability partnership is insolvent at the date of dissolution or at any time
following dissolution, the dissolution manager –
(a) shall
within 7 days of becoming aware, or forming the opinion, send a notice of
that fact to the registrar; and
(b) shall –
(i) by not less than
14 days’ notice, call a meeting of all known creditors of the
limited liability partnership, to be held within Jersey within 28 days of
sending the notice referred to in sub-paragraph (a) and, in the notice,
nominate an insolvency manager,
(ii) not less than
10 days before the day for which the meeting is called under clause (i),
publish a notice of the meeting,
(iii) when the notice is given
to the creditors under clause (i), deliver a copy of it to the registrar,
(iv) during the period
before the creditors’ meeting is held, furnish any creditor free of
charge with such information concerning the affairs of the limited liability
partnership as the creditor may reasonably request, and
(v) make out a statement as
to the affairs of the limited liability partnership and lay that statement
before the creditors’ meeting.
(2) If
the dissolution manager is qualified for appointment as the insolvency manager
for the limited liability partnership, the dissolution manager may nominate himself
or herself under paragraph (1)(b)(i).
(3) The
dissolution manager shall be the chairman at the creditors’ meeting.
(4) During
the period after which the dissolution manager becomes aware or forms the
opinion that the limited liability partnership is insolvent and before the
appointment of an insolvency manager, the dissolution manager shall not take
any action, except action sanctioned by the Court, in respect of the limited
liability partnership, other than to secure compliance with this Regulation or to
protect the limited liability partnership property.
(5) The
insolvent winding up of a limited liability partnership commences –
(a) where
the limited liability partnership is insolvent upon dissolution, on the date of
dissolution; and
(b) where
the partnership becomes insolvent following dissolution, on the day on which
the creditors’ meeting is held.
(6) A
dissolution manager who fails to comply with any requirement in paragraph (1)
or (3) shall be guilty of an offence.
(7) A
dissolution manager who fails to comply with paragraph (4) shall be guilty
of an offence.
(8) The
registrar shall publish a notice, or copy of a notice, received under this
Regulation.
16 Procedure at
creditors’ meeting
(1) Any
meeting of creditors of an insolvent limited liability partnership is competent
to act if a quorum is present.
(2) A creditors’
meeting shall not be competent to act unless there are present in person or by
proxy at least 3 creditors, or all of the creditors if their number does
not exceed 3, being in either case entitled to vote.
(3) Every
creditor who has been given notice of a creditors’ meeting shall be entitled
to vote at the meeting or any adjournment of it.
(4) Votes
shall be calculated according to the amount of the creditor’s debt on the
day the insolvent winding up commences.
(5) A
creditor shall not vote in respect of a debt for an unliquidated amount, or any
debt whose value is not ascertained, except where the dissolution manager (or,
if an insolvency manager has been appointed, the insolvency manager) agrees to
put upon the debt an estimated minimum value for the purpose of entitlement to
vote.
(6) For
a resolution to pass at a creditors’ meeting it must be supported by
creditors the values of whose votes are at least half the value of the votes of
the creditors who vote on the resolution.
17 Appointment of
insolvency manager
(1) The
creditors at a creditors’ meeting may nominate an insolvency manager.
(2) The
person nominated by the creditors to be insolvency manager or, if none, the person
nominated by the dissolution manager, is appointed with effect from the
conclusion of the creditors’ meeting.
(3) A
creditor or partner of the limited liability partnership or the dissolution
manager may, within 7 days after the day on which the nomination was made
by the creditors, apply to the Court for an order either –
(a) directing
that the person nominated by the dissolution manager shall be the insolvency
manager instead of or jointly with the person nominated by the creditors; or
(b) appointing
some other person to be the insolvency manager.
(4) Upon
the appointment of the insolvency manager –
(a) all
the powers and duties of the dissolution manager shall cease;
(b) any
limited liability partnership property and any beneficial interest of the
limited liability partnership in any limited liability partnership property
vested in the dissolution manager pursuant to Regulation 9(6)(c) or 14(6)(c)
shall vest in the insolvency manager; and
(c) any
proceedings which might have been continued or commenced against the limited
liability partnership, or against the dissolution manager pursuant to Regulation 9(6)(e)
or 14(6)(d), may only be continued or commenced against the insolvency manager
in the insolvency manager’s capacity as such.
(5) Where
the name of the dissolution manager is inscribed in the Public Registry as the
holder of, or as having an interest in, immovable property which vests in the
insolvency manager by virtue of paragraph (4)(b), the insolvency manager
shall deliver to the Judicial Greffier notice of the vesting, within 28 days
after the property so vests.
(6) Any
judgment –
(a) obtained
against the limited liability partnership prior to its dissolution, or obtained
against its dissolution manager under Article 9(6)(f), which has not been
satisfied before the limited liability partnership became insolvent; or
(b) obtained
against the insolvency manager in the insolvency manager’s capacity as
such in any proceedings continued or commenced in accordance with paragraph (4)(c),
shall only be enforceable against the limited liability partnership
property.
(7) The
insolvency manager shall, within 14 days of the insolvency manager’s
appointment, deliver notice thereof to the registrar and to the creditors.
(8) An
insolvency manager who fails to comply with paragraphs (5) or (7) shall be
guilty of an offence.
18 Appointment of
insolvency committee
(1) A
creditors’ meeting may, in addition to appointing an insolvency manager
under Regulation 17, appoint an insolvency committee consisting of not
more than 5 persons to exercise the functions conferred on it by this Part.
(2) If
an insolvency committee is appointed, the partners of the limited liability
partnership may appoint such number of persons not exceeding 5 as they
think fit to act as members of that insolvency committee.
(3) The
creditors may resolve that all or any of the persons so appointed by the
partners ought not to be members of the insolvency committee and, if the
creditors so resolve –
(a) the
persons mentioned in the resolution are not then, unless the Court otherwise
directs, qualified to act as members of that insolvency committee; and
(b) on
an application to the Court under this provision, the Court may appoint other
persons to act as such members in place of the persons mentioned in the resolution.
(4) The
insolvency committee shall, within 14 days of the insolvency
committee’s appointment, deliver notice thereof to the registrar.
19 Remuneration of
and vacancy in office of insolvency manager
(1) An
insolvency manager is entitled to receive such remuneration as is agreed
between the insolvency manager and the insolvency committee or, if there is no
insolvency committee, between the insolvency manager and the creditors or,
failing any such agreement, as is fixed by the Court.
(2) The
creditors at a creditor’s meeting may remove an insolvency manager other
than an insolvency manager appointed by the Court.
(3) If
a vacancy occurs, by death, resignation or otherwise, in the office of the
insolvency manager –
(a) the
creditors may appoint another insolvency manager, except when the appointment
in respect of which the vacancy now arises was by the Court; and
(b) the
Court may appoint another insolvency manager upon an application made under Regulation 17(3)
when the appointment in respect of which the vacancy now arises was by the
Court.
(4) Where
a vacancy in the office of insolvency manager is filled, either by appointment by
the creditors or by the Court, Regulation 17(4), (5), (6), (7) and (8)
shall apply for the purposes of notification of the appointment to the
registrar and the vesting of such property in, the continuation and
commencement of such proceedings against and the payment of any amount to, the
new insolvency manager as was formerly vested in or might have been continued
or commenced against or paid to, the previous insolvency manager in the
insolvency manager’s capacity as such, as if any reference in them to the
person responsible for winding up the affairs of the limited liability
partnership were a reference to the previous insolvency manager and any
reference to the insolvency manager were a reference to the new insolvency
manager.
20 Appointment or
removal by the Court of insolvency manager
(1) If
for any reason there is no insolvency manager in an insolvent winding up, the
Court may, on the application of a person who appears to be an interested
party, appoint such a person.
(2) The
Court may, on the application of any person who appears to the Court to be an
interested party, remove an insolvency manager and appoint another.
21 Reference of
questions and powers to the Court
(1) The
insolvency manager, a partner in the limited liability partnership or a
creditor of the limited liability partnership may apply to the Court for the
Court to –
(a) determine
a question arising in an insolvent winding up; or
(b) exercise
all or any of the powers which the Court or the Viscount might exercise if a
declaration had been made in relation to the limited liability partnership
under the Bankruptcy (Désastre)
(Jersey) Law 1990[3].
(2) The
Court may accede wholly or partially to the application on such terms and
conditions as it thinks fit or may make such other order on the application as
it thinks just.
(3) An
Act of the Court recording the making of an order under this Regulation staying
the proceedings in the winding up shall, within 14 days after the making
of the order, be delivered by the insolvency manager, or otherwise as may be
ordered by the Court, to the registrar, who shall register it.
(4) A
person who fails to deliver an order to the registrar, as required by paragraph (3),
shall be guilty of an offence.
22 Application of
the law relating to désastre
(1) Subject
to paragraph (2), in an insolvent winding up, the same rules prevail with
regard to –
(a) the
respective rights of secured and unsecured creditors;
(b) debts
provable;
(c) the
time and manner of proving any debt;
(d) the
admission and rejection of the proof of any debt;
(e) the
setting off of any debts; or
(f) subject
to the provision in Regulation 24(1), the order of payment of debts,
as are in force for the time being with respect to persons against
whom a declaration has been made under the Bankruptcy
(Désastre) (Jersey) Law 1990 with the substitution of
references to the insolvency manager and to the commencement of the insolvent
winding up respectively for references to the Viscount and to the date of the
declaration.
(2) Any
surplus remaining after payment of the debts proved in the insolvent winding
up, before being applied for any other purpose, shall be applied in paying
interest on those debts which bore interest prior to the commencement of the
insolvent winding up –
(a) in
respect of the period during which they have been outstanding since the
commencement of the insolvent winding up; and
(b) at
the rate of interest that applied in respect of those debts before the winding
up.
23 Arrangement when
binding on creditors
(1) An
arrangement entered into between a limited liability partnership and its
creditors immediately preceding the commencement of an insolvent winding up or
in the course of an insolvent winding up, or between the insolvency manager and
the creditors in the course of an insolvent winding up, is (subject to the
right of appeal under paragraph (2)) binding –
(a) on
the limited liability partnership;
(b) on the
insolvency manager; and
(c) on
the creditors, if acceded to by three-quarters in number and value of them.
(2) A
creditor may, within 3 weeks from the completion of the arrangement,
appeal to the Court against it and the Court may upon such appeal amend, vary
or confirm the arrangement, as it thinks just.
24 Settling accounts
on winding up
(1) Where
accounts are settled in the course of the winding up of the affairs of a
limited liability partnership, the liabilities of the limited liability partnership
shall be paid in the following order of priority –
(a) payment
of any fees and penalties imposed by the Commission on the limited liability
partnership under the Law or any other enactment;
(b) payment
of the insolvency manager’s costs and remuneration;
(c) subject
to the provisions of any enactment as to preferential payments, liabilities to
creditors, excluding any partner or former partner in the limited liability
partnership in respect of the partner’s or former partner’s
partnership interest or in respect of any loan made by the partner or former
partner to the limited liability partnership for any purpose;
(d) subject
to the partnership agreement and to any agreement between the limited liability
partnership and the former partner in question –
(i) liabilities to
former partners in the limited liability partnership in respect of any loans
made by them to the limited liability partnership for any purpose, then
(ii) liabilities to
former partners in the limited liability partnership in respect of their
partnership interests; then
(e) subject
to the partnership agreement –
(i) liabilities to
partners in the limited liability partnership in respect of any loans made by
them to the limited liability partnership for any purpose, then
(ii) liabilities to
partners in the limited liability partnership in respect of their partnership
interests.
(2) Subject
to the partnership agreement, any surplus of limited liability partnership
property remaining after payment of the liabilities described in paragraph (1),
including interest referred to in Regulation 22(2), shall be distributed
equally to the partners.
(3) All
costs, charges and expenses properly incurred in the winding up of an insolvent
limited liability partnership, including the remuneration of the insolvency
manager, are payable out of the limited liability partnership property in
accordance with Regulation 22(1) and paragraph (1).
25 Meetings of
insolvent limited liability partnership and creditors
(1) If
an insolvent winding up continues for more than 12 months, the insolvency
manager shall call a meeting of the partners in the limited liability
partnership and a meeting of its creditors, to be held on the first convenient
date within 3 months after the end of the first 12 months from the
commencement of the insolvent winding up, and of each succeeding 12 months
or such longer period as the registrar may allow, shall lay before the meetings
a report giving an account of the insolvency manager’s acts and dealings
and of the conduct of the winding up during the preceding 12 months.
(2) The
insolvency manager shall, not less than 21 days before a meeting referred
to in paragraph (1), serve on the partners and creditors of the limited
liability partnership and deliver to the registrar a notice of each meeting,
together with a copy of the insolvency manager’s report referred to in paragraph (1).
(3) The
registrar shall publish the copy of the insolvency manager’s report delivered
to it under paragraph (2).
(4) For
the purpose of paragraph (2) service shall be treated as having been
effected –
(a) on
a partner if the notice and report are delivered to the partner either by such
means as the insolvency manager and the partner agree or, in the absence of any
such agreement, in accordance with Article 25 of the Law; and
(b) on
a creditor if the notice and report are delivered to the creditor either by
such means as the insolvency manager and creditor agree, or in the absence of
any such agreement, if they are served on the creditor by post.
(5) An insolvency
manager who fails to comply with paragraph (1) or (2) shall be guilty of
an offence.
26 Insolvency
manager’s report on completion of winding up
(1) As
soon as the affairs of an insolvent limited liability partnership are fully
wound up, the insolvency manager shall prepare a report of the winding up,
showing how it has been conducted and how the limited liability partnership
property has been disposed of, and thereupon shall call a meeting of the
partners in the limited liability partnership and a meeting of its creditors
for the purpose of laying the report before the meetings and giving an
explanation of it.
(2) Notice
of each meeting, together with a copy of the insolvency manager’s report
of the winding up, must be served on the partners and creditors of the limited
liability partnership not less than 21 days before the meeting.
(3) For
the purpose of paragraph (2) service shall be treated as having been
effected –
(a) on
a partner if the notice and report are delivered to the partner either by such
means as the insolvency manager and the partner agree or, in the absence of any
such agreement, in accordance with Article 25 of the Law; and
(b) on
a creditor if the notice and report are delivered to the creditor either by
such means as the insolvency manager and creditor agree, or in the absence of
any such agreement, if they are served on the creditor by post.
(4) An
insolvency manager who fails to comply with paragraph (1) or (2) shall be
guilty of an offence.
27 Completion of
winding up
(1) Within
7 days after the date of the meetings described in Regulation 26 (or,
if they are not held on the same day, after the date of the later one) the
insolvency manager shall deliver to the registrar –
(a) subject
to paragraphs (2) and (3), a statement signed by the insolvency manager of
the holding of the meetings and their dates; and
(b) a
copy of the insolvency manager’s report.
(2) If
a quorum is not present at the creditors’ meeting, the insolvency manager
shall, in lieu of the statement required by paragraph (1)(a), deliver to
the registrar a statement that the meeting was duly called and that no quorum
was present.
(3) If
all the partners, or so many of the partners as the partnership agreement
requires, are not present at the partners’ meeting, the insolvency
manager shall, in lieu of the statement required by paragraph (1)(a),
deliver to the registrar a statement that the meeting was duly called but not
held.
(4) An
insolvency manager who fails to comply with paragraph (1), (2) or (3)
shall be guilty of an offence.
28 Effect of
declaration that a limited liability partnership is en désastre
(1) Where
a declaration, or an order recalling a declaration, is made in respect of a
limited liability partnership, the Viscount shall deliver a copy of the
declaration or order to the registrar within 28 days of its being made.
(2) Upon
receiving a copy of a declaration or of an order recalling a declaration, the
registrar shall register it and issue a certificate to that effect.
(3) In
this Regulation –
“declaration” shall have the same meaning as in the Bankruptcy (Désastre) (Jersey) Law 1990;
and
“order recalling a declaration” shall be construed in
accordance with Article 7 of that Law.
29 Cancellation of
registration following insolvent winding up
(1) Upon
receipt of –
(a) a
statement delivered to the registrar under Regulation 27; or
(b) notification
under Article 36(3) of the Bankruptcy
(Désastre) (Jersey) Law 1990,
in respect of an insolvent limited liability partnership, the
registrar shall forthwith register the statement or notification.
(2) Subject
to paragraph (3), at the end of 3 months from the registration of the
statement or notification under paragraph (1), the registrar shall cancel
the entry in the register relating to the limited liability partnership and
issue a certificate of cancellation to the insolvency manager or the Viscount,
as the case may require.
(3) The
Court may, on the application of the insolvency manager or Viscount, as the
case may require, or of another person who appears to the Court to be
interested, make an order deferring the date on which a certificate of
cancellation of registration is issued to such date as the Court thinks fit.
(4) The
person on whose application an order of the Court under paragraph (3) is
made shall, within 14 days after the making of the order, deliver to the
registrar the order of the Court for registration.
(5) A person
on whose application the order is made who fails to comply with paragraph (4)
shall be guilty of an offence.
30 Powers and duties
of insolvency manager
(1) An
insolvency manager may, with the sanction of the Court or the insolvency committee
(or, if there is no such committee, a meeting of the creditors) –
(a) pay
a class of creditors in full;
(b) compromise
any claim by or against the limited liability partnership, or by or against the
dissolution manager or the insolvency manager under these Regulations.
(2) An
insolvency manager may, without sanction, exercise any power of the limited
liability partnership other than a power under paragraph (1) that may be
required for the beneficial winding up of the limited liability partnership’s
affairs.
(3) An
insolvency manager may summon a meeting of the partners of the limited
liability partnership for the purpose of obtaining their sanction for any other
purpose the insolvency manager may think fit.
(4) The
insolvency manager shall pay the debts of the limited liability partnership in
accordance with this Part.
(5) The
appointment or nomination of more than one insolvency manager shall declare
whether any act to be done is to be done by all or any one or more of them and,
in default, any such act may be done by 2 or more of them.
31 Power to disclaim
onerous property
(1) The
insolvency manager may, within 6 months after the commencement of the
insolvent winding up, by the giving of notice signed by the insolvency manager
and referring to this Regulation and Regulation 32 to each person who is
interested in, or under any liability in respect of, the property disclaimed,
disclaim any onerous movable property, or any onerous immovable property, and
may do so notwithstanding that the insolvency manager has taken possession of
it, endeavoured to sell it or otherwise exercised rights of ownership in
relation to it.
(2) For
the purposes of this Regulation –
(a) onerous
movable property is any –
(i) unprofitable
contract,
(ii) a contract lease,
and
(iii) other movable property
of the limited liability partnership which is unsaleable or not readily
saleable or is such that it may give rise to a liability to pay money or
perform any other onerous act;
(b) onerous
immovable property is any immovable property of the limited liability
partnership situated outside Jersey and having the characteristics mentioned in
sub-paragraph (a)(iii).
(3) A
disclaimer under this Regulation –
(a) shall
operate so as to determine, as from the date of the disclaimer, the rights,
interests and liabilities of the limited liability partnership in or in respect
of the property disclaimed; but
(b) shall
not, except so far as is necessary for the purpose of releasing the limited
liability partnership from liability, affect the rights or liabilities of any
other person.
(4) A person
sustaining loss or damage in consequence of the operation of a disclaimer under
this Regulation shall be deemed to be a creditor of the limited liability
partnership to the extent of the loss or damage in the winding up.
32 Power of Court in
respect of disclaimed property
(1) This
Regulation applies where the insolvency manager has disclaimed property under Regulation 31.
(2) An
application may be made to the Court under this Regulation by –
(a) a person
who claims an interest in the disclaimed property; or
(b) a person
who is under a liability in respect of the disclaimed property, not being a
liability discharged by the disclaimer.
(3) Subject
to paragraph (4), the Court may, on an application under this Regulation,
make an order on such terms as it thinks fit for the vesting of the disclaimed
property in, or for its delivery to –
(a) a person
entitled to it or a trustee for such a person; or
(b) a person
subject to a liability mentioned in paragraph (2)(b) or a trustee for such
a person.
(4) The
Court shall not make an order by virtue of paragraph (3)(b) except where
it appears to the Court that it would be just to do so for the purpose of
compensating the person subject to the liability in respect of the disclaimer.
(5) The
effect of an order under this Regulation shall be taken into account in
assessing for the purpose of Regulation 31(4) the extent of loss or damage
sustained by a person in consequence of the disclaimer.
33 Unenforceability
of liens on records
(1) Subject
to paragraph (2), in an insolvent winding up, a lien or other right to
retain possession of any records of a limited liability partnership shall be
unenforceable to the extent that its enforcement would deny possession of those
records to the insolvency manager.
(2) Paragraph (1)
does not apply to a lien on documents which give a title to property and are
held as such.
34 Transactions at
an undervalue and preferences
(1) Where
an insolvent limited liability partnership has at a relevant time –
(a) entered
into a transaction with any person at an undervalue; or
(b) given
a preference to any person,
the insolvency manager may apply to the Court for such order as the
Court thinks fit for restoring the position to what it would have been if the
limited liability partnership had not entered into that transaction or given
that preference, as the case may be.
(2) For
the purposes of this Regulation, a limited liability partnership enters into a
transaction with a person at an undervalue if the limited liability partnership –
(a) makes
a gift to that person or otherwise enters into a transaction with that person
on terms for which there is no “cause”; or
(b) enters
into a transaction with that person for a “cause” the value of
which, in money or money’s worth, is significantly less than the value,
in money or money’s worth, of the cause
provided by the limited liability partnership.
(3) For
the purposes of this Regulation, a limited liability partnership gives a
preference to a person if –
(a) that
person is one of the creditors of the limited liability partnership or a surety
or guarantor for any of the debts or other liabilities of the limited liability
partnership; and
(b) the
limited liability partnership –
(i) does anything, or
(ii) suffers anything
to be done,
which has the effect of putting that person into a position which,
in the event of the insolvent winding up of the limited liability partnership,
will be better than the position the person would have been in if that thing
had not been done.
(4) The
Court shall not make an order under this Regulation in respect of a preference
given to any person unless the limited liability partnership which gave it was
influenced in deciding to give it by a desire to produce in relation to that person
the effect referred to in paragraph (3)(b).
(5) Subject
to paragraph (6), the time at which a limited liability partnership enters
into a transaction at an undervalue or gives a preference is a relevant time if
the transaction is entered into or the preference given –
(a) in
the case of a transaction at an undervalue, at a time in the period of 5 years
ending with the date of commencement of the insolvent winding up;
(b) in
the case of a preference which is not a transaction at an undervalue, at a time
in the period of one year ending with that date.
(6) Subject
to paragraph (7), where a limited liability partnership enters into a
transaction at an undervalue or gives a preference at a time mentioned in paragraph (5)(a)
or (b), that time is not a relevant time unless the limited liability
partnership –
(a) is
at that time unable to pay its debts as they fall due; or
(b) becomes
unable to pay its debts as they fall due in consequence of the transaction or
preference.
(7) Paragraph (6)
shall not apply to a transaction at an undervalue which takes place less than 2 years
before the date of commencement of the insolvent winding up.
(8) In
this Regulation, “cause”
has the meaning assigned to it by the customary law of Jersey.
35 Responsibility
for debts and wrongful trading
(1) Where
any limited liability partnership property, including a share in the limited
liability partnership’s profits, is withdrawn by a partner at a time when
the limited liability partnership is unable to pay its debts, or if the limited
liability partnership becomes unable to pay its debts as a result of the
withdrawal, the partner shall be liable for any debt or loss to which Article 4(1)
of the Law applies, but the partner’s liability shall be limited to an
amount equal to the value of the withdrawal, less any amount previously
recovered from him by virtue of this Regulation or Article 5 or 12 of
the Law.
(2) Notwithstanding
Article 5 of the Law but subject to paragraph (5), if, in the course
of an insolvent winding up, it appears that paragraph (1) applies in
relation to a person who is or has been a partner of the limited liability
partnership, the Court, on the application of the insolvency manager, may, if
it thinks it proper to do so, order that that person be personally responsible,
without any limitation of liability, for all or any of the debts or other
liabilities of the limited liability partnership arising after the time
referred to in paragraph (3).
(3) This
paragraph applies in relation to a person if –
(a) at
some time before the date of commencement of the insolvent winding up that person –
(i) knew that there
was no reasonable prospect that the limited liability partnership would avoid
insolvency, or
(ii) on the facts
known to the person was reckless as to whether the limited liability
partnership would avoid insolvency; and
(b) that
person was a partner in the limited liability partnership at that time.
(4) For
the purposes of paragraph (3), a person shall not be treated as having had
knowledge of any matter by reason only that another partner in the limited
liability partnership had such knowledge.
(5) The
Court shall not make an order under paragraph (2) with respect to any person
if it is satisfied that after either condition specified in paragraph (3)(a)
was first satisfied in relation to the person that person took reasonable steps
with a view to minimizing the potential loss to creditors of the limited
liability partnership.
(6) On
the hearing of an application under this Regulation, the insolvency manager may
give evidence or call witnesses.
36 Responsibility
for fraudulent trading
(1) If,
in the course of an insolvent winding up, it appears that any business of the
limited liability partnership has been carried on with intent to defraud
creditors of the limited liability partnership or creditors of another person,
or for a fraudulent purpose, the Court may, on the application of the
insolvency manager, order that persons who were knowing parties to the carrying
on of the business in that manner are to be liable to make such contributions
to the limited liability partnership property as the Court thinks proper.
(2) For
the purposes of paragraph (1) a partner in a limited liability partnership
shall not be treated as having been a knowing party to the carrying on of the
business in the manner described in that paragraph by reason only that another
partner in the limited liability partnership was knowingly such a party.
(3) On
the hearing of an application under this Regulation the insolvency manager may
give evidence or call witnesses.
(4) Where
the Court makes an order under this Regulation or Regulation 35, it may
give such further directions as it thinks proper for giving effect to the order.
(5) Where
the Court makes an order under this Regulation or Regulation 35 in
relation to a person who is a creditor of the limited liability partnership, it
may direct that the whole or part of a debt owed by the limited liability
partnership to that person and any interest thereon shall rank in priority
after all other debts owed by the limited liability partnership and after any
interest on those debts.
(6) This
Regulation and Regulation 35 have effect notwithstanding that the person
concerned may be criminally liable in respect of matters on the ground of which
the order under paragraph (1) is to be made.
37 Extortionate
credit transactions
(1) This
Regulation applies in an insolvent winding up where the limited liability
partnership is, or has been, a party to a transaction for, or involving, the
provision of credit to the limited liability partnership.
(2) The
Court may, on the application of the insolvency manager, make an order with
respect to the transaction if the transaction is or was extortionate and was
entered into in the period of 3 years ending with the commencement of the
insolvent winding up.
(3) For
the purposes of this Regulation, a transaction is extortionate if, having
regard to the risk accepted by the person providing the credit –
(a) the
terms of it are or were such as to require grossly exorbitant payments to be
made (whether unconditionally or in certain contingencies) in respect of the
provision of the credit; or
(b) it
otherwise grossly contravened ordinary principles of fair dealing,
and it shall be presumed, unless the contrary is proved, that a
transaction with respect to which an application is made under this Regulation
is, or as the case may be, was extortionate.
(4) An order
under this Regulation with respect to a transaction may contain one or more of
the following as the Court thinks fit –
(a) provision
setting aside the whole or part of an obligation created by the transaction;
(b) provision
otherwise varying the terms of the transaction or varying the terms on which a
security for the purposes of the transaction is held;
(c) provision
requiring a person who is or was a party to the transaction to pay to the
insolvency manager sums paid to that person, by virtue of the transaction, by
the limited liability partnership;
(d) provision
requiring a person to surrender to the insolvency manager property held by the person
as security for the purposes of the transaction;
(e) provision
directing accounts to be taken between any persons.
38 Application of
provisions to insolvent limited liability partnership en désastre
Notwithstanding any other provision to the contrary in the Bankruptcy (Désastre) (Jersey) Law 1990,
Regulations 35, 36, and 37 shall apply to an insolvent limited
liability partnership in respect of which a désastre
is declared under the Bankruptcy
(Désastre) (Jersey) Law 1990 as if –
(a) any
reference to an insolvent winding up was a reference to a désastre; and
(b) any
reference to the insolvency manager was a reference to the Viscount.
39 Delivery and
seizure of property
(1) Where
a person has in the person’s possession or control property or records to
which a limited liability partnership appears in an insolvent winding up to be
entitled, the Court may require that person forthwith (or within a period which
the Court may direct) to pay, deliver, convey, surrender or transfer the
property or records to the insolvency manager.
(2) Where –
(a) the
insolvency manager seizes or disposes of property which is not property of the
limited liability partnership; and
(b) at
the time of seizure or disposal the insolvency manager believes, and has
reasonable grounds for believing, that the insolvency manager is entitled
(whether in pursuance of an order of the Court or otherwise) to seize or
dispose of that property,
the insolvency manager shall not be liable to any person in respect
of loss or damage resulting from the seizure or disposal except in so far as
that loss or damage is caused by the negligence of the insolvency manager, and
shall have a lien on the property, or the proceeds of its sale, for expenses
incurred in connection with the seizure or disposal.
40 Duty to
co-operate with insolvency manager
(1) In
an insolvent winding up, each of the persons mentioned in paragraph (2)
shall –
(a) give
the insolvency manager information concerning the limited liability partnership
and its establishment, business, dealings, affairs, or property which the
insolvency manager may at any time after the commencement of the insolvent
winding up reasonably require; and
(b) attend
on the insolvency manager at reasonable times and on reasonable notice when
requested to do so.
(2) The
persons referred to in paragraph (1) are –
(a) those
who are, or have at any time been, partners in the limited liability
partnership or have at any time held themselves out to be partners in the
limited liability partnership;
(b) any
person who is or has been a secretary of the limited liability partnership;
(c) those
who are in the employment of the limited liability partnership, or have been in
its employment within one year before the commencement of the insolvent winding
up, and are, in the opinion of the insolvency manager, capable of giving
information which the insolvency manager requires; and
(d) those
who are, or have within that year been, partners in or in the employment of
another partnership with separate legal personality which is or was a partner
in the limited liability partnership in question or officers of, or in the
employment of, any person who is or was a partner in the limited liability
partnership in question.
(3) For
the purposes of paragraph (2), “employment” includes
employment under a contract for services (contrat de
louage d’ouvrage).
(4) A
person who fails to comply with paragraph (1) shall be guilty of an
offence.
41 Insolvency manager to report criminal offences
(1) If
it appears to the insolvency manager that any person has been guilty of an act
or omission in relation to the limited liability partnership for which that person
is criminally liable, the insolvency manager shall –
(a) forthwith
report the matter to the Attorney General; and
(b) furnish
the Attorney General with information and give the Attorney General access to,
and facilities for inspecting and taking copies of, documents (being
information or documents in the possession of or under the control of the
insolvency manager and relating to the matter in question) as the Attorney
General requires.
(2) Where
a report is made to the Attorney General under paragraph (1), the Attorney
General may refer the matter to the Chief Minister or the Commission for
further enquiry; and the Chief Minister or the Commission, as the case may be –
(a) shall
thereupon investigate the matter; and
(b) may
also, if they think it necessary for the purposes of their investigation, investigate
the affairs of –
(i) any person
mentioned in Regulation 40(2),
(ii) any company or
partnership of which the limited liability partnership is or was a member, or
(iii) any director or
employee of such a company, or any employee or partner of such a partnership,
and shall report upon the affairs of the partner, company, director
or employee so far as they think that the results of their investigation of
that person’s affairs are relevant to the investigation of the affairs of
the limited liability partnership.
(3) The
Chief Minister or the Commission may appoint one or more inspectors to carry
out an investigation and report to him or her for the purposes of paragraph (2).
(4) If
it appears to the Court in the course of an insolvent winding up that any person
has been guilty as mentioned in paragraph (1), and that no report with
respect to the matter has been made by the insolvency manager to the Attorney
General under that paragraph, the Court may (on the application of a person
interested in the insolvent winding up or of its own motion) direct the
insolvency manager to make such a report; and on a report being made
accordingly this Regulation shall have effect as though the report had been
made in pursuance of paragraph (1).
42 Obligations and
powers arising under Regulation 41
(1) If
the Chief Minister, the Commission or an inspector appointed by either of them
to carry out an investigation considers that any person is or may be in
possession of information relating to a matter which they believe to be
relevant to an investigation pursuant to Regulation 41(2), the Chief
Minister, the Commission or inspector may require the person –
(a) to
produce and make available to them all records in the person’s custody or
power relating to that matter;
(b) at
reasonable times and on reasonable notice, to attend before them; and
(c) otherwise
to give them all assistance in connection with the investigation which the person
is reasonably able to give,
and it is that person’s duty to comply with the requirement.
(2) The
Chief Minister, the Commission or an inspector appointed by either of them to
carry out an investigation may, for the purposes of the examination, examine on
oath any such person as is mentioned in paragraph (1), and may administer
an oath accordingly.
(3) An
answer given by a person to a question put to the person in exercise of the
powers conferred by paragraph (1) may not be used by the prosecution in
evidence against the person in any criminal proceedings except for the purposes
of proceedings under paragraph (7) or Regulation 44.
(4) This
paragraph applies where the Chief Minister, the Commission or an inspector
appointed by either of them to carry out an investigation has reasonable
grounds for believing that any employee, former employee, partner or former
partner in, or director or former director of, the person whose affairs are
being investigated maintains or has maintained a bank account of any
description –
(a) whether
alone or jointly with another person; and
(b) whether
in Jersey or elsewhere,
into or out of which there has been paid money which has been in any
way connected with an act or omission, or series of acts or omissions, which
constitutes misconduct (whether fraudulent or not) on the part of that employee,
former employee, partner, former partner, director or former director, towards
the person or its remaining partners or its members, as the case may be.
(5) In
a case where paragraph (4) applies, the Chief Minister, the Commission or
the inspector may require the employee, former employee, partner, former
partner, director or former director, as the case may be, or any of them, to
produce and make available to the Chief Minister, the Commission or inspector,
as the case may be, all records in the possession or control of the employee,
former employee partner, former partner, director or former director, as the
case may, be relating to that bank account.
(6) Where
criminal proceedings are instituted by the Attorney General following a report
or reference under Regulation 41 the insolvency manager and every partner,
agent and employee of the limited liability partnership past and present (other
than the defendant) shall give the Attorney General any assistance in connection
with the prosecution which they are reasonably able to give; and for this
purpose “agent” includes a banker, advocate or solicitor of the
limited liability partnership and a person employed by the limited liability
partnership as auditor.
(7) If
a person fails or neglects to give assistance as required by paragraph (6),
the Court may, on the application of the Attorney General, direct the person to
comply with that paragraph; and if the application is made with respect to an
insolvency manager, the Court may (unless it appears that the failure or
neglect to comply was due to the insolvency manager not having in his or her
hands sufficient assets of the limited liability partnership to enable him or
her to do so) direct that the costs shall be borne by the insolvency manager
personally.
(8) A person
who knowingly or recklessly makes to the Chief Minister, the Commission or an
inspector appointed by either of them any statement, whether written or oral,
which conveys, or purports to convey, any information or explanation which the Chief
Minister, the Commission or inspector requires, or is entitled to require, in
the course of an investigation and is misleading, false or deceptive in a
material particular, shall be guilty of an offence.
43 Authority for
search
(1) An
inspector appointed under Regulation 41(3) may for the purpose of the
investigation apply to the Bailiff for a warrant under this Regulation in
relation to specified premises.
(2) If
the Bailiff is satisfied that the conditions in paragraph (3) are
fulfilled the Bailiff may issue a warrant authorizing a police officer and any
other person named in the warrant to enter the specified premises (using such
force as is reasonably necessary for the purpose) and to search them.
(3) The
conditions referred to in paragraph (2) are –
(a) that
there are reasonable grounds for suspecting that there is on the premises
material (whether or not it can be particularised) which is likely to be of
substantial value (whether by itself or together with other material) to the
investigation for the purpose of which the application is made; and
(b) that
the investigation for the purposes of which the application is made might be
seriously prejudiced unless immediate entry can be secured to the premises.
(4) Where
a person has entered premises in the execution of a warrant issued under this
Regulation, the person may seize and retain any material, other than items
subject to legal professional privilege, which is likely to be of substantial
value (whether by itself or together with other material) to the investigation
for the purpose of which the warrant was issued.
(5) In
this Regulation, “premises” includes any place and, in particular,
includes –
(a) any
vehicle, vessel, aircraft or hovercraft;
(b) any
offshore installation; and
(c) any
tent or movable structure.
(6) Any
person who wilfully obstructs any person acting in the execution of a warrant
issued under this Regulation shall be guilty of an offence.
44 Failure to
co-operate with Chief Minister, Commission or inspector
(1) If
any person –
(a) fails
to comply with a requirement under Regulation 42; or
(b) refuses
to answer any question put to the person by the inspectors for the purpose of
the investigation,
the Chief Minister, the Commission or the inspector may certify the
refusal in writing to the Court.
(2) The
Court may thereupon inquire into the case and, after hearing any witness who
may be produced against or on behalf of the alleged offender and any statement
in defence, the Court may punish the offender as if the offender had been guilty
of contempt of the Court.
45 Inspector’s
report to be evidence
(1) A
copy of a report of an inspector is admissible in legal proceedings as evidence
of the opinion of the inspector in relation to a matter contained in the report
if the copy has been certified to be a true copy by whichever of the Chief
Minister or the Commission appointed the inspector.
(2) A
document purporting to be a certificate mentioned in paragraph (1) shall
be received in evidence and be deemed to be such a certificate unless the contrary
is proved.
46 Privileged
information
Nothing in this Part requires
the disclosure or production to the Chief Minister or the Commission or to an
inspector appointed by either of them –
(a) by
a person of information or records which the person would in an action in the
Court be entitled to refuse to disclose or produce on the grounds of legal
professional privilege in proceedings in the Court except, if the person is a
lawyer, the name and address of the person’s client;
(b) by
a limited liability partnership’s bankers (as such) of information or
records relating to the affairs of any of their customers other than the
limited liability partnership or other person under investigation.
47 Enforcement of
duty of partner or insolvency manager to deliver document or give notice
(1) If,
in an insolvent winding up, a partner or the insolvency manager who has
defaulted in delivering a document or in giving any notice which the partner or
insolvency manager is by law required to deliver or give, fails to make good
the default within 14 days after the service on the partner or insolvency
manager of a notice requiring the partner or insolvency manager to do so, the
Court may, on an application made by a creditor or a partner, or by the
registrar, make an order directing the partner or the insolvency manager to
make good the default within the time specified in the order.
(2) The
Court’s order may provide that costs of and incidental to the application
shall be borne, in whole or in part, by the partner or the insolvency manager
personally.
(3) Nothing
in paragraph (1) prejudices the operation of any enactment imposing
penalties on a partner or an insolvency manager in respect of a default
mentioned therein.
48 Qualifications of insolvency manager
(1) A person
who is not an individual is not qualified to act as an insolvency manager.
(2) A person
is not qualified to be appointed as an insolvency manager unless the person is
a member of –
(a) the
Institute of Chartered Accountants in England and Wales;
(b) the
Institute of Chartered Accountants of Scotland;
(c) the
Association of Chartered Certified Accountants; or
(d) the
Institute of Chartered Accountants in Ireland.
(3) None
of the following persons is so qualified –
(a) a
partner, former partner, officer, former officer, employee or former employee
of the limited liability partnership;
(b) any
partner in a partnership with separate legal personality which is itself a
partner in the limited liability partnership;
(c) a
secretary or former secretary of the limited liability partnership;
(d) any
officer, former officer, employee or former employee of a company which is a
partner in the limited liability partnership; or
(e) where
a partner in the limited liability partnership is also a partner in another
partnership, any partner in that partnership.
(4) Notwithstanding
paragraph (1), the Viscount, by virtue of the Viscount’s office, is
a person qualified for appointment as an insolvency manager.
49 Corrupt
inducement affecting appointment as insolvency manager
A person who gives or agrees or offers to give a partner in or
creditor of an insolvent limited liability partnership any valuable benefit
with a view to securing the person’s own appointment or nomination, or to
securing or preventing the appointment or nomination of some person other than himself
or herself, as the insolvency manager, shall be guilty of an offence.
50 Notification by
insolvency manager of resignation, removal or vacation.
(1) An
insolvency manager who resigns, is removed or for any other reason vacates
office shall, within 14 days after the resignation, removal or vacation of
office, give notice thereof, signed by the insolvency manager, to the registrar
and to the creditors.
(2) An
insolvency manager who fails to comply with paragraph (1) shall be guilty
of an offence.
51 Notification of
winding up of insolvent limited liability partnership
(1) When
an insolvent limited liability partnership is being wound up, every invoice, order
for goods or services or business letter issued by or on behalf of the limited
liability partnership or the insolvency manager, being a document on or in
which the name of the limited liability partnership appears, shall contain a
statement that the limited liability partnership is subject to an insolvent
winding up.
(2) An insolvency
manager of an insolvent limited liability partnership who fails to comply with paragraph (1)
shall be guilty of an offence.
52 Bar against other
proceedings in bankruptcy
The winding up of an insolvent limited liability partnership under
this Part bars the right to take any other proceedings in bankruptcy against
the limited liability partnership except the right of a creditor to apply for a
declaration under the Bankruptcy
(Désastre) (Jersey) Law 1990.
Part 5
MISCELLANEOUS AND GENERAL
53 Restriction
on disposal of records
(1) The records of a limited liability
partnership which has been wound up under Part 3 or Part 4 shall be
kept in Jersey by the, dissolution manager, insolvency manager or any other
person to whom the records have been committed, as the case may be, and shall not
be destroyed until after 10 years from the date of the cancellation of
registration of the limited liability partnership.
(2) Subject to paragraph (1), when an
insolvent limited liability partnership has been wound up under Part 4,
and registration is about to be cancelled, its records and those of the
insolvency manager must be retained in the way that the insolvency committee
or, if there is no such committee, the creditors of the limited liability
partnership may direct.
(3) After 10 years from the cancellation of
registration of the limited liability partnership, no responsibility rests on
the limited liability partnership, the insolvency manager or a person to whom
the custody of the records has been committed, by reason of any record not
being forthcoming to a person claiming to be interested in it.
(4) A person who contravenes paragraph (1)
or (2) shall be guilty of an offence.
54 Recognition of
proceedings in other jurisdictions
(1) This
Regulation applies where an order is made by a court outside Jersey for the
dissolution or winding up of the affairs of a limited liability partnership,
and references in this Regulation to an order shall be construed accordingly.
(2) For
the purposes of these Regulations, a limited liability partnership shall not be
taken to be dissolved by an order until that order has been recognized by the
Court, but, once an order has been recognized by the Court, it shall be taken
to be an order for the dissolution and winding up of the affairs of the limited
liability partnership.
(3) An
application to the Court for recognition of an order may be made by the person
appointed under it to wind up the affairs of the limited liability partnership
or, if none, the person on whose application the order was made.
(4) In
determining whether or not to recognize an order the Court shall have regard to
whether the grounds on which it is made would constitute grounds for dissolution
in Jersey.
(5) Where
the Court decides to recognize an order, it may also appoint a person to be
responsible for winding up the affairs of the limited liability partnership and
give such directions as it thinks fit as to the winding up.
(6) Where
the Court decides to recognize an order in respect of a limited liability
partnership, the insolvency manager or person appointed under paragraph (5)
shall deliver a copy of the decision of the Court to the registrar within
28 days after it is made.
(7) Upon
receiving a copy of the order of court referred to in paragraph (6), the
registrar shall register it and issue a certificate to that effect.
(8) An
insolvency manager or other person appointed under paragraph (5) that
fails to comply with paragraph (6) shall be guilty of an offence.
55 Penalties
(1) The
penalty for an offence committed under Regulation 5(3), 5(5), 6(4), 7(3),
9(8), 12(2), 14(8), 17(8), 21(4), 25(5), 26(4) 27(4), 29(5), 53(4) or 54(8)
shall be liable to a fine not exceeding level 3 on the standard scale.
(2) The
penalty for an offence under Regulation 15(6), 50(2) or 51(2) shall be a
fine.
(3) The
penalty for an offence under Regulation 15(7) or 40(4) shall be 6 months
imprisonment and a fine.
(4) The
penalty for an offence under Regulation 42(8), 43(6) or 49 shall be 2 years
imprisonment and a fine.
56 Consequential
amendment
In Article 23(4) of the Money Laundering (Jersey) Order 2008
for sub-paragraph (j) there shall be substituted the following
sub-paragraph –
“(j) an inspector appointed
by the Chief Minister under Regulation 41(3) of the Limited Liability
Partnerships (Dissolution and Winding Up) (Jersey) Regulations 2018[4];”.
57 Citation
and commencement
These Regulations may be
cited as the Limited Liability Partnerships (Dissolution and Winding Up)
(Jersey) Regulations 2018 and shall come into force immediately upon the commencement
of the Law.
dr. m. egan
Greffier of the States