Private Trust Company
Limited Partnership
The Private Trust Company (“PTC”) is a highly attractive estate planning tool. It acts as a trustee to a limited number of trusts either for the benefit of a single family or for the benefit of different branches of a family or for distinct (but related) family groups.
The main attractiveness of the PTC is that, as opposed to a “qualified trustee”, the PTC is not required to be a management company licenced by the Financial Services Commission to provide trusteeship services (provided that such services are not available to the public). Since the nature of the activity of the PTC is more similar to that of an investment holding vehicle, it can operate as a GBL1 or GBL2.
Advantages of the PTC
- Flexibility in decision making
- Actions of the trustee can be closely monitored by the family
- Provides a holding structure for underlying operating companies in different jurisdictions leading to the start of a Family Office where all the financial affairs may be centralised
- Structure can accommodate high risk assets which a normal trustee would otherwise not accept or would only accept for a very high Trustee fee
- Administration of PTC and of underlying trusts and operating companies undertaken by professional management company in a low cost jurisdiction, i.e. Mauritius
- There is no public register of directors and shareholders of the PTC and also no registration of the individual underlying trusts
- Enables client to have control without compromising the validity of the structure
- Provides protection to the client who may not feel comfortable with third party acting as trustee
- Enables family participation and empowerment of children
- Provides a convenient way to pass control and influence over family business interests and wealth to the next generation.
Governed under the recently enacted Limited Partnership Act 2011, a Limited Partnership (LP) is a vehicle designed to bring flexibility in the existing Mauritius corporate sphere.
A Limited Partnership is a blend of partnership with a private limited company. It gives owners the flexibility of operating as a partnership while having a separate legal identity. A Limited Partnership requires at least one General Partner (“GP”) and one Limited Partner (“LP”).
The GP is the deciding body of the Limited Partnership and has the authority to conduct and manage the business and affairs of the Limited Partnership and exercise all its rights, powers and authority. The GP is personally liable for partnership debts. The LP’s liability is limited to the capital contributed or agreed to be contributed in the Limited Partnership and cannot execute documents on behalf of the Limited Partnership nor bind the Limited Partnership.
An LP is significantly more attractive than a company for investment vehicles such as private equity funds and joint ventures. An LP may be set up for a wide range of lawful business activities which may be carried out both within and outside Mauritius; though for those LP seeking a Category 1 Global Business (GBC1) licence activities would in principle need to be conducted outside Mauritius.
Salient features of an LP
- Can elect to have a legal personality upon registration or at a later stage such that it has unlimited capacity and can sue or may be sued in its own name.
- Consist of one or more general partners and one or more limited partners. Partnership property shall be held by the Limited Partnership itself where it has legal personality or by the general partner where this is not the case.
- Must have a registered agent in Mauritius.
- A foreign Limited Partnership may apply to the Registrar of Companies to be registered as, and continue as, a Limited Partnership in Mauritius.
- Existence is successive until dissolution.
- Rights of partners are largely determined by the partnership agreement.
- The General Partners are jointly and severally liable for the LP’s debts and obligations and the Limited Partners are liable up to the amount they have committed to contribute.
- Must prepare financial statements within 6 months of its balance sheet date.
- Must file its financial statements with the Registrar of Companies. A Limited Partnership holding a Global Business Licence shall file its financial statements only with the Financial Services Commission.
