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Other Vehicles (Limited liability partnerships (LLP) (LLP's in…
Other Vehicles
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Special Purpose Vehicles
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Usually offshore companies, although LPs or PCCs may be used
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Or the share capital may be held by a non-charitable purpose trust without ascertainable beneficiaries but with an ascertainable purpose
The purpose of the trust may be to establish the underlying company and to enter into any agreements relating to a particular transaction
Can be used to isolate a purpose or transaction from other activities or parties involved with a transaction
Can be used where it is necessary that the vehicle should not be treated as being owned or controlled by an party to a transaction. Such a structure are usually owned by a charitable purpose trust and are referred to as orphans structures (not beneficially owned by anyone)
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May issue debt instruments, used for off-balance-sheet investments or set up as a bankruptcy remote vehicle
Partnerships
General partnerships have been available for many years, others such as incorporated limited partnerships and separate limited partnerships are relatively recent developments
Avoid some the risks that a sole trader may be exposed to as the responsibilities are shared between the partners
As well as sharing the responsibilities and liabilities of the partnership, each partner shares the profit and losses of the business
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Do not involve the ongoing fees that companies are subject to, such as annual return fees
Do not generally have limited liability but may be preferable over a company because the business is not such that limited liability is required for the owners
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Private Trust Companies
A company which is formed to act as a trustee of one particular trust or group of trusts ie for one individual or a family
Permitted in many offshore centres including BVI, Cayman Islands, Guernsey and Jersey
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Family members may be appointed to board alongside trust company business professionals and other advisers
Allows family members to be far more involved with the administration of the trust fund than otherwise possible if a professional trustee was appointed
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May enter into an agreement with a professional trust company to ensure administrative matters (ie record keeping requirements adhered to / preparation of financial statements) are undertaken
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Foundations
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In some offshore centres, the provision of a member of the council of foundation is a regulated activity which must therefore be provided by a licensed trust company business service provider
Charter & Regulations
Charter: A document which is usually available for public inspection and which sets out the name of the foundation, its duration, objects, and names and addresses of the first council members
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The beneficiaries have no interest in the foundation assets and are not owed a fiduciary duty by the foundation council unless this is expressly provided for by the charter or regulations
The constitution of the foundation can be drafted flexibly, for example a foundation may exist with no beneficiaries, whereas a trust would fail for a lack of object and therefore cease to exist
Key Persons
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A council administers the foundation and carries out its objects in accordance with the charter and regulations
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Uses of foundations
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May wish to use a foundation within commercial transactions, especially where an orphaned special purpose vehicle is required
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It is optional for foundations in Panama to have a guardian, whereas in Jersey a guardian must be appointed to oversee the administration of the foundation and ensure that the council carries out its functions properly
