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PE funds legislation, structure and structure selection - Coggle Diagram

- - - - International LP
        
        Established under the Partnership Act 1996
        
        Has at least one GP and at least one LP
        
        LPs liability is restricted to the maximum capital they contributed
        
        The Partnership Act Is unique in that it allows the limited partners a greater degree of involvement in the management of a LP than some other jurisdictions
        
        Specific advanatges
        
        Ability to have a PE fund with no cap on the number of LPs allowed to invest
        
        Confidentiality - there is no requirement to disclose the identity of the LPs or their capital contributions to the publi
        
        No requirement for the LP or GP to be resident in the BVI
      - Business companies
        
        Incorporated under the BVI Business Companies Act
        
        Often incorporated to act as the GP of a fund entity
        
        Some advantages
        
        Shares can be issued in any currency
        
        Confidentiality - there is no requirement to file the register of members or register of directors in the public domain
        
        A BC can be incorporated with only one shareholder and one director
        
        There is no requirement to appoint a company secretary
        
        Exemption from all local taxes
        
        There is no requirement for accounts and records of a BC do not need to be filed with the BVI authorities
      - Unit trusts
        
        Works in a similar way to an English unit trust where the trustee of the BVI unit trust has legal ownership over the assets of the fund for the benefit of the investor in accordance with the terms of the trust deed
        
        A BVI unit trust is not a separate legal entity
        
        Unit trusts are not commonly used fro PE funds in the BVI unless for example it is preferable for an investor to hold units instead of holding shares in a company
      - Segregated portfolio companies
        
        Only investment funds or insurance companies can be incorporated as a BVI SPC following approval from the Financial Services Commission
        
        A BVI SPC is a single company that contains a number of segregated portfolios
        
        The assets in each portfolio are ring-fenced and only the assets in each portfolio are available to meet the liabilities of the relevant portfolio
        
        SPC's are the BVI equivalent of PCCs
        
        Under BVI law there are additional requirements for SPCs such as implementing satisfactory procedures that ensure that the assets of each portfolio are held separately
        
        These additional requirements often lead to increased administration costs, however a well run SPC can often be a more cost effective structure in the long run than an umbrella fund structure consisting of multiple companies