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The main features of a Cyprus LLP are as follows:
1. The partners holding shares in a Cyprus LLP can be either legal or natural persons.
2. The partners of a Cyprus LLP can comprise of up to one hundred persons.
3. The Cyprus LLP comprises:
(a) One or more general partners who are liable for all debts and obligations of the partnership and are authorised to manage, operate and bind the LLP as such.
(b) One or more Limited Liability Partners, who merely contribute capital towards shares in the partnership and can enjoy limited liability in the same manner as shareholders enjoy limited liability in a limited company.
4. A Cyprus LLP cannot be considered a legal entity with a separate legal personality.
5. A Cyprus LLP can have share capital.
6. A Cyprus LLP partner cannot take part in the management and the operations of a Cyprus LLP, without being liable for all the debt and obligations of the LLP which arise whilst that partner takes part in such a role as a general partner.
7. A limited liability partner cannot be authorized to bind the Cyprus LLP.
8. Dividend distributions are decided by the general partners, similar to the manner applicable to companies.
9. The Cyprus LLP is tax transparent, with tax obligations arising at the level of the partners.
10. A limited liability partner cannot dissolve the partnership by notice and, also, neither does his/her death or bankruptcy or incapacity constitute grounds or dissolution of the Cyprus LLP.
11. Under Article 48 of the Law, a Cyprus LLP must be registered with the Office of the Registrar within 30 days of its establishment, with details of partners, their relative contributions and the partnership's activities being submitted. Failure to register with affect the limited liability of each partner, where the entity will be considered a General Partnership.
12. Under the Law, Partnerships are required to keep proper books of account and make them available for inspection by the partners, with audited accounts being required when the income of each partner exceeds a specified threshold.
The Cyprus LLP, being a form of partnership, is much like those widely used in other jurisdictions such as Poland (SKA) and Luxembourg (SCSp). However, it is predicted that the Cyprus LLP's use will increase for investment and commercial transactions involving Polish Closed End Fund (FIZ) structures, due to recent changes in the tax liability of the Polish SKA, which became subject to Polish Corporate Income Tax as from 1st January 2014.
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