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LAWS OF MALAYSIA
REPRINT
Act 565
LABUAN OFFSHORE LIMITED
PARTNERSHIPS ACT 1997
Incorporating all amendments up to 1 January 2006 PUBLISHED BY
THE COMMISSIONER OF LAW REVISION, MALAYSIA
UNDER THE AUTHORITY OF THE REVISION OF LAWS ACT 1968 IN COLLABORATION WITH
PERCETAKAN NASIONAL MALAYSIA BHD
2006
LABUAN OFFSHORE LIMITED
PARTNERSHIPS ACT 1997
Date of Royal Assent ... ... ... ... ... 18 June 1997 Date of publication in the Gazette ... ... 30 June 1997 PREVIOUS REPRINT
First Reprint ... ... ... ... ... 2002
2
3
LAWS OF MALAYSIA
Act 565
LABUAN OFFSHORE LIMITED
PARTNERSHIPS ACT 1997
ARRANGEMENT OF SECTIONS
PART I
PRELIMINARY
Section
1. Short title
2. Interpretation PART II
ESTABLISHMENT OF OFFSHORE LIMITED PARTNERSHIPS
3. Offshore limited partnership
4. Registration of an offshore limited partnership
5. Amendment of partnership agreement
6. Name of partnership
7. Registered office
8. Contribution of limited partner
9. Rights and obligations of general partner
10. Enforcement of judgments against property of offshore limited partnership
11. Rights of limited partner
12. Share of profits
13. Dealings by limited partner with partnership
14. Limited partners' rights as between themselves
15. Return of limited partner's contribution 4 Laws of Malaysia ACT 565
Section
16. Limited partner's liability to partnership
17. Limited partner's liability to creditors
18. Admission of additional limited partners
19. Assignments
20. Notice of dissolution
21. Dissolution of offshore limited partnership
22. Dissolution of partnership on death, etc., of general partner
23. Power of court to order dissolution
24. Settling accounts on dissolution
25. Legal proceedings and service of documents
26. Authority to sign PART III
GENERAL PROVISIONS
27. Supervisory authority
28. Prohibition and restriction on offshore limited partnership
29. Fees
30. Inspection and production of documents kept by the Authority and the offshore limited partnership
31. Form of offshore limited partnership's records
32. Offences relating to the documents of offshore limited partnership
33. Offence by body corporate, etc.
34. Documents to be filed through trust company
35. Procedure where none laid down
36. Indemnity
37. Power to compound offences
38. Striking off
39. Restoration to register
40. Effect of striking off
41. Secrecy
42. Regulations
43. Minister's power to exempt
44. Saving provision Labuan Offshore Limited Partnerships 5
LAWS OF MALAYSIA
Act 565
LABUAN OFFSHORE LIMITED
PARTNERSHIPS ACT 1997
An Act to provide new laws for the establishment, regulation and dissolution of offshore limited partnerships and for matters connected therewith or incidental thereto.
[1 August 1997, P.U.(B) 305/1997]
BE IT ENACTED by the Seri Paduka Baginda Yang di-Pertuan Agong with the advice and consent of the Dewan Negara and Dewan Rakyat in Parliament assembled, and by the authority of the same, as follows:
PART I
PRELIMINARY
Short title
1. This Act may be cited as the Labuan Offshore Limited Partnerships Act 1997.
Interpretation
2. (1) In this Act, unless the context otherwise requires-- "Authority" means the Labuan Offshore Financial Services Authority established under section 3 of the Authority Act; "Authority Act" means the Labuan Offshore Financial Services Authority Act 1996 [Act 545];
"certificate" means any certificate issued under this Act; 6 Laws of Malaysia ACT 565
"Chairman" has the meaning assigned to it in the Authority Act; "court" means a court of competent jurisdiction;
"Director General" has the meaning assigned to it in the Authority Act;
"general partner" means a person who is named as such in the partnership agreement filed pursuant to subsection 4(4) and if more than one shall mean each general partner;
"Labuan" means the Federal Territory of Labuan;
"limited partner" means a person who is named as such in the register kept under subsection 7(5) and if more than one shall mean each limited partner;
"Minister" means the Minister for the time being charged with the responsibility for finance;
"non-resident" has the meaning assigned to it in the Labuan Trust Companies Act 1990 [Act 442];
"offshore company" has the meaning assigned to it in the Offshore Companies Act 1990 [Act 441];
"offshore financial services" has the meaning assigned to it in the Authority Act;
"offshore limited partnership" means--
(a) a general offshore limited partnership established under subsection 3(6);
(b) an offshore professional partnership established under subsection 3(4) to carry on one or more of the fields of practice mentioned in that subsection; and
(c) an offshore project partnership established under subsection 3(5) to carry on only the project or business specified in that subsection;
"partner" means a limited partner or a general partner; Labuan Offshore Limited Partnerships 7
"partnership agreement" means any agreement in writing of the partners as to the affairs of an offshore limited partnership and the rights and obligations of the partners among themselves; "partnership interest" means a partner's share of the profits and losses of an offshore limited partnership and the right to receive distributions of partnership assets and other benefits conferred by the partnership agreement;
"register" means a register maintained under subsection 4(5); "statutory value" has the meaning assigned to it under subsection 8(2);
"trust company" has the meaning assigned to it in the Labuan Trust Companies Act 1990.
(2) For the purposes of this Act, an offshore limited partnership is insolvent when the general partner is unable to discharge the debts and obligations of the offshore limited partnership (excluding liabilities to partners in respect of their partnership interests) as they fall due out of the assets of the offshore limited partnership without recourse to the separate assets of a general partner not contributed to the offshore limited partnership, and "solvent" shall be construed accordingly.
(3) Where any document is required to be filed, lodged or registered with the Authority through a trust company, the trust company shall, without prejudice to its duty as may be contained in the Labuan Trust Companies Act 1990, ensure the validity, veracity and authenticity of that document.
PART II
ESTABLISHMENT OF OFFSHORE LIMITED PARTNERSHIPS
Offshore limited partnership
3. (1) Subject to the provisions of this Act, an offshore limited partnership may be formed by any person for any lawful purpose. 8 Laws of Malaysia ACT 565
(2) An offshore limited partnership shall consist of not less than two partners and not more than twenty partners, of whom-- (a) one at least shall be a general partner; and
(b) one at least shall be a limited partner.
(3) A person may be a general partner and a limited partner at the same time in the same offshore limited partnership. (4) Where an offshore limited partnership is formed for the purpose of carrying on an offshore professional partnership, the offshore professional partnership--
(a) shall not carry on practice except in one or more of the following fields:
(i) accounting;
(ii) actuarial science;
(iii) engineering;
(iv) law; or
(v) such other fields as may be prescribed by the Authority;
(b) shall have in force professional indemnity insurance cover for not less than the prescribed amount with any insurer approved by the Authority; and
(c) shall consist of partners none of whom is a body corporate. (5) Where an offshore limited partnership is formed for the purpose of carrying on an offshore project partnership, the offshore project partnership--
(a) shall be established solely for the purpose of undertaking the project or business specified in its partnership agreement, being the only project or business to be undertaken by the offshore project partnership;
(b) shall incorporate in its partnership agreement a provision providing that the offshore project partnership shall be dissolved after the completion of the project or business specified in the agreement; and
(c) shall consist of partners each of whom is a body corporate. Labuan Offshore Limited Partnerships 9
(6) Where an offshore limited partnership is formed for the purpose of carrying on an offshore general limited partnership, the offshore general limited partnership may consist of any persons as partners.
(7) For the purpose of subsection (6), the word "person" shall include a body of persons, corporate or unincorporate. Registration of an offshore limited partnership
4. (1) An application for the registration of an offshore limited partnership shall be made to the Authority in the prescribed form and accompanied by the prescribed fee.
(2) Except as provided in this Act, no partnership shall be registered as an offshore limited partnership unless the Authority has received a certificate duly completed by the trust company certifying that one of the partners is--
(a) a registered offshore company;
(b) a trust company acting as trustee or nominee of a non- resident; or
(c) a non-resident.
(3) For the purpose of subsection (2), a trust company acting as trustee or nominee of a non-resident shall be deemed to be a non-resident.
(4) Notwithstanding subsection (2), the Authority shall not register an offshore limited partnership unless there has been filed with the Authority a partnership agreement executed by each person who is, on the formation of the offshore limited partnership, to be a general partner and the partnership agreement shall state-- (a) the name under which the offshore limited partnership is to be conducted;
(b) the intended address of the registered office of the offshore limited partnership;
(c) the full name and address of each general partner or, in the case of a body corporate, the place where it is incorporated and its registered or principal office; 10 Laws of Malaysia ACT 565
(d) the term, if any, for which the offshore limited partnership is to exist or, if for unlimited duration, a statement to that effect;
(e) the nature of business to be undertaken; and
(f) such other particulars as may be prescribed.
(5) The Authority shall maintain a register of offshore limited partnerships registered under this Act.
(6) On the registration of an offshore limited partnership, the Authority may issue a certificate to that effect and such certificate shall be signed by the Authority or any of its authorized officers and sealed with its seal.
(7) A certificate issued under subsection (6) shall be conclusive evidence that an offshore limited partnership has been registered with the Authority.
(8) A certificate of registration issued under subsection (6) shall be valid and effective for a period not exceeding one year from the date of registration or as may be specified in the certificate. (9) The registration of an offshore limited partnership may be renewed upon application being made to the Authority in the prescribed form and accompanied by the prescribed fee. (10) The Authority may impose or attach any condition, restriction or term as it thinks fit to any certificate issued under this section. Amendment of partnership agreement
5. (1) If any change is made or occurs in respect of any of the particulars in the partnership agreement of an offshore limited partnership registered under section 4, the offshore limited partnership shall within 30 days file with the Authority a notice signed by a general partner, specifying the nature of the change. (2) The Authority shall register the notice referred to in subsection (1), and upon payment of the prescribed fee the Authority may issue a certificate certifying the registration.
Labuan Offshore Limited Partnerships 11
(3) The certificate issued under subsection (2) shall be signed by the Authority or any of its authorized officers and sealed with its seal.
(4) If an offshore limited partnership fails to comply with subsection (1), each of the general partners shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one thousand ringgit, and, in the case of a continuing offence, to a further fine not exceeding two hundred ringgit for each day on which the offence continues after conviction.
Name of partnership
6. (1) The name of each offshore limited partnership shall end with the words "Limited Partnership" in full or the abbreviation "Ltd.P.".
(2) The name of a limited partner shall not appear in the name of an offshore limited partnership unless it is also the name of one of the general partners or the offshore limited partnership has been carried on under that name before the admission of that partner as a limited partner.
(3) The corporate name or any part of the corporate name of a limited partner shall not appear in the name of an offshore limited partnership unless it is also the corporate name or part of the corporate name of one of the general partners or the offshore limited partnership has been carried on under that name before the admission of that corporate partner as a limited partner. (4) A limited partner whose name or corporate name appears in the name of the offshore limited partnership contrary to subsection (2) or (3) shall be liable as a general partner to any creditor of the offshore limited partnership who has extended credit without actual knowledge that the limited partner is not a general partner. (5) The Authority may refuse to register an offshore limited partnership where the name of the offshore limited partnership to be registered is in its opinion in any way misleading or otherwise undesirable.
12 Laws of Malaysia ACT 565
Registered office
7. (1) An offshore limited partnership shall have a registered office in Labuan which shall be the registered office of a trust company. (2) An offshore limited partnership may change the address of its registered office from time to time by filing notice of such change with the Authority.
(3) The change of address shall be registered by the Authority and shall take effect upon such registration.
(4) Notwithstanding subsection (3), until the end of a period of 30 days beginning on the date on which a change of address of an offshore limited partnership is registered, a person may validly serve any document on the offshore limited partnership at its previous registered office.
(5) An offshore limited partnership shall keep at its registered office--
(a) a register showing for each limited partner-- (i) the full name and address of each limited partner who is an individual or, in the case of a body
corporate, its full name, the place where it is
incorporated and its registered or principal office; and
(ii) where the participation by limited partners is defined by percentage interests or by the number of units or other similar rights held by them, the percentage interest or the number and class of units or other rights held;
(b) a copy of the partnership agreement of the offshore limited partnership and each amendment made thereto;
(c) a statement of the amount of any contributions agreed to be made by limited partners and the time at which, or events on the happening of which, the contributions are to be made;
(d) a statement of the amount of money and the nature and value of any other property contributed by each limited partner and the dates thereof;
Labuan Offshore Limited Partnerships 13
(e) a statement of the amount of contributions returned to limited partners and the dates thereof; and
(f) such other particulars as may be prescribed.
(6) The documents kept under subsection (5) shall be-- (a) prima facie evidence of the particulars which are by that subsection directed to be contained therein;
(b) amended within 30 days of any change in the particulars contained therein; and
(c) available for inspection and copying without charge during ordinary business hours at the request of a partner. (7) If an offshore limited partnership fails to comply with this section, the offshore limited partnership and each of the general partners shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one thousand ringgit and, in the case of a continuing offence, to a further fine not exceeding two hundred ringgit for each day on which the offence continues after conviction.
Contribution of limited partner
8. (1) Any contribution to be made by a limited partner to an offshore limited partnership may be in the form of money in any currency, any other property, or services.
(2) Where the contribution of the limited partner is made or undertaken to be made otherwise than in cash--
(a) there shall forthwith be assigned to that contribution or part of that contribution or to that intended contribution or part of that intended contribution, in accordance with the partnership agreement, a value to be known as a statutory value; and
(b) the statutory value shall, for the purposes of this Act, be accepted as the value of that contribution or that part of the contribution or of that intended contribution or that part of the intended contribution, as the case may be. 14 Laws of Malaysia ACT 565
Rights and obligations of general partner
9. (1) A general partner in an offshore limited partnership shall have all the rights and powers and shall be subject to all the restrictions and liabilities of a partner in a partnership without limited partners except that, without the written consent or ratification by all the limited partners, a general partner has no authority to-- (a) do an act which makes it impossible to carry on the activities of the offshore limited partnership;
(b) possess any offshore limited partnership property, or dispose of any rights in any offshore limited partnership property, for other than a partnership purpose; or
(c) admit a person as a general partner or admit a person as a limited partner, unless the right to do so is given in the partnership agreement.
(2) Any property of an offshore limited partnership which is transferred to or vested in or held on behalf of any one or more of the general partners or which is transferred to or vested in the name of the offshore limited partnership shall be held or deemed to be held by the general partner, or, if more than one, by the general partners jointly, as an asset of the offshore limited partnership in accordance with the terms of the partnership agreement. (3) Any debt or obligation incurred by a general partner in the conduct of the activities of an offshore limited partnership shall be a debt or obligation of the offshore limited partnership. Enforcement of judgments against property of offshore limited partnership
10. (1) Subject to subsection (3), no judgment shall be enforced against any property of an offshore limited partnership unless such judgment has been granted against a general partner in his capacity as a general partner of that offshore limited partnership. (2) Creditors of a general partner or a limited partner, in that partner's capacity other than as a general partner or a limited partner of the offshore limited partnership, shall have no claim against the property of that offshore limited partnership. Labuan Offshore Limited Partnerships 15
(3) Nothing in subsection (1) shall preclude the enforcement of an order of the court relating to the property of an offshore limited partnership in any case where, by reason of any of the events mentioned in paragraph 22(1)(a) or 22(1)(b), a judgment could not be granted against a general partner in his capacity as a general partner of that offshore limited partnership.
Rights of limited partner
11. (1) A limited partner has the same right as a general partner-- (a) during business hours, to inspect and make copies of or take extracts from the offshore limited partnership books, documents and records; and
(b) to be given, on demand, true and full information of all things affecting the offshore limited partnership and to be given a formal account of partnership affairs whenever circumstances render it just and reasonable.
(2) A limited partner shall not be entitled to dissolve the offshore limited partnership by notice except as provided under subsection 22(3).
(3) Subject to any provision, express or implied, of the partnership agreement to the contrary, an offshore limited partnership shall not be dissolved by--
(a) in the case of a limited partner who is an individual, his death, legal incapacity, bankruptcy, retirement or withdrawal from the offshore limited partnership; or (b) in the case of a limited partner who is a body corporate, its dissolution, bankruptcy or withdrawal from the offshore limited partnership.
Share of profits
12. (1) A limited partner has, subject to this Act and the partnership agreement, the right to a share of the profits of the offshore limited partnership.
16 Laws of Malaysia ACT 565
(2) A limited partner may receive from the offshore limited partnership the share of the profits stipulated for such limited partner in the partnership agreement only if, at the time when and immediately after payment is made, the offshore limited partnership is solvent.
(3) For a period of six months from the date of receipt by a limited partner of any payment representing a share of the profits of the offshore limited partnership in circumstances where the requirements of subsection (2) have not been met, such payment shall be repayable by such limited partner with interest at the prescribed rate to the extent that such share of the profits is necessary to discharge a debt or obligation of the offshore limited partnership incurred during the period that the share of the profits represented an asset of the offshore limited partnership.
Dealings by limited partner with partnership
13. (1) A limited partner may lend money to, borrow money from and enter into transactions with the offshore limited partnership. (2) Except where the limited partner is also a general partner, a limited partner having, with respect to anything done under subsection (1), a claim against the assets of the offshore limited partnership shall rank as a creditor of the offshore limited partnership in respect of such claim.
(3) For the purposes of this section, a claim described in subsection (2) does not include a claim for a return of capital contributions. Limited partners' rights as between themselves
14. (1) Subject to subsection (2), limited partners, in relation to one another, shall rank--
(a) pari passu in respect of the return of their contributions; and
(b) pro rata to those contributions in respect of profits. (2) Where there is more than one limited partner, the partnership agreement may provide that one or more of the limited partners is to have greater rights than the other limited partners as to-- (a) the return of contributions;
Labuan Offshore Limited Partnerships 17
(b) profits: or
(c) any other matter.
Return of limited partner's contribution
15. (1) A limited partner shall not, on dissolution or otherwise, receive out of the capital of an offshore limited partnership a payment representing a return of any part of his contribution to the offshore limited partnership unless at the time of and immediately following such payment the offshore limited partnership is solvent.
(2) For a period of six months from the date of receipt by a limited partner of any payment representing a return of contribution or part thereof received by such limited partner in circumstances where the requirements of subsection (1) have not been met, such payment shall be repayable by such limited partner with interest at the prescribed rate to the extent that such contribution or part thereof is necessary to discharge a debt or obligation of the offshore limited partnership incurred during the period that the contribution represented an asset of the offshore limited partnership. (3) Notwithstanding the provision of this section, a limited partner shall not be liable to repay any payment representing a return of his contribution or part thereof, except--
(a) as provided in subsection (2); or
(b) in the case of fraud.
(4) Subject to subsections (1) and (2), a limited partner may demand payment representing the return of all or part of his contribution--
(a) on the dissolution of the offshore limited partnership; (b) at the time specified in the partnership agreement for its return; or
(c) after he has given six months' notice in writing to all other partners if no time is specified in the partnership agreement either for the return of the contribution or for the dissolution of the offshore limited partnership. 18 Laws of Malaysia ACT 565
(5) A limited partner has, notwithstanding the nature of his contribution, only the right to demand and receive money in return for it, unless--
(a) there is a statement to the contrary in the partnership agreement; or
(b) all the partners consent to some other manner of returning the contribution.
(6) In this section, "payment" includes the release of any obligation forming part of the capital contribution, and any liability to make repayments pursuant to subsection (2) shall be construed accordingly. Limited partner's liability to partnership
16. A limited partner shall be liable to the offshore limited partnership for the difference, if any, between the value of money or other property contributed by him to the offshore limited partnership or the statutory value and the value of money or other property specified in the records kept under subsection 7(5) to be contributed by him to the offshore limited partnership. Limited partner's liability to creditors
17. (1) Except as provided in this Act, a limited partner shall not be liable for the debts or obligations of the offshore limited partnership.
(2) A limited partner shall not be liable as a general partner unless the limited partner participates in the management of the offshore limited partnership.
(3) Subject to subsection (4), if a limited partner participates in the management of the offshore limited partnership in its dealings with persons who are not partners, that limited partner shall be liable in the event of the insolvency of the offshore limited partnership for all debts and obligations of the offshore limited partnership incurred during the period that the limited partner participated in the management of the offshore limited partnership as though the limited partner were for that period a general partner. Labuan Offshore Limited Partnerships 19
(4) A limited partner shall be liable under subsection (3) only to a person who transacts with the offshore limited partnership with actual knowledge of the participation of the limited partner in the management of the offshore limited partnership and who then reasonably believed the limited partner to be a general partner. (5) A limited partner shall not be deemed to participate in the management of an offshore limited partnership within the meaning of this section by doing one or more of the following: (a) being a contractor for or an agent or employee of the offshore limited partnership or of a general partner or acting as a director, officer or shareholder of a corporate general partner;
(b) consulting with and advising a general partner with respect to the activities of the offshore limited partnership; (c) investigating, reviewing, approving or being advised as to the accounts or affairs of the offshore limited partnership or exercising any right conferred by this Act;
(d) acting as surety or guarantor for the offshore limited partnership either generally or in respect of specific obligations;
(e) approving or disapproving an amendment to the partnership agreement;
(f) voting on, or otherwise signifying approval or disapproval of, one or more of the following:
(i) the dissolution and winding up of the offshore limited partnership;
(ii) the purchase, sale, exchange, lease, pledge, hypothecation, or creation of a security interest, or any other dealing in any asset by or of the
offshore limited partnership;
(iii) the creation or renewal of an obligation by the offshore limited partnership;
(iv) a change in the nature of the activities of the offshore limited partnership;
(v) the admission, removal or withdrawal of a general or a limited partner and the continuation of the
offshore limited partnership thereafter; or
20 Laws of Malaysia ACT 565
(vi) transactions in which one or more of the general partners have an actual or potential conflict of
interest with one or more of the limited partners; or
(g) bringing an action on behalf of the offshore limited partnership pursuant to subsection 25(3).
(6) Subsection (5) shall not be construed to imply that the possession or exercise of any other power by a limited partner will necessarily constitute the participation by such limited partner in the management of the offshore limited partnership. Admission of additional limited partners
18. An additional limited partner shall not be admitted to an offshore limited partnership except in accordance with the partnership agreement and by entry in the register under paragraph 7(5)(a). Assignments
19. (1) A limited partner shall not assign his interest, in whole or in part, in the offshore limited partnership unless-- (a) all the limited partners and all the general partners consent or the partnership agreement permits it; and
(b) the assignment is made in accordance with the terms of the consent or the partnership agreement, as the case may be.
(2) An assignee of the interest, in whole or in part, of a limited partner shall not become a limited partner in the offshore limited partnership until his ownership of the assigned interest is entered in the register referred to in paragraph 7(5)(a), and until so entered the assignee has none of the rights of a limited partner exercisable against the partnership or against any of the partners other than the assignor.
(3) Subject to subsection (4), on becoming a limited partner, an assignee shall acquire the rights and powers and is subject to all the restrictions and liabilities that his assignor had in respect of the assigned interest immediately before the assignment. Labuan Offshore Limited Partnerships 21
(4) On becoming a limited partner an assignee shall not assume any liability of the assignor arising under subsection 12(3), 15(2) or 17(3) and, notwithstanding any term of the partnership agreement or any other agreement to the contrary, no such assignment shall relieve the assignor of any liability under those subsections. (5) Any assignment made under this section shall be registered with the Authority by the offshore limited partnership. (6) On the registration of an assignment under subsection (5) and upon payment of the prescribed fee, the Authority may issue a certificate to that effect.
(7) A limited partner who contravenes subsection (1) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one thousand ringgit.
Notice of dissolution
20. (1) Except as provided in sections 22 and 23, an offshore limited partnership shall not be dissolved by an act of the partners until a notice of dissolution signed by a general partner has been filed by him with the Authority.
(2) When a notice of dissolution is filed with the Authority, the Authority may revoke the registration of the offshore limited partnership.
(3) If the offshore limited partnership is dissolved in contravention of subsection (1), each of the general partners shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one thousand ringgit.
Dissolution of offshore limited partnership
21. (1) In the event of the dissolution of an offshore limited partnership its affairs shall be wound up by the general partners unless the activities of the offshore limited partnership are taken over and continued in accordance with subsection 22(2) or unless the court otherwise directs under subsection 23(2). 22 Laws of Malaysia ACT 565
(2) If the affairs of the offshore limited partnership are not wound up by the general partners after its dissolution, each of the general partners shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one thousand ringgit. Dissolution of partnership on death, etc., of general partner
22. (1) Notwithstanding any provision, express or implied, in the partnership agreement to the contrary, but subject to subsection (2)--
(a) where the sole or last remaining general partner is an individual, his death, legal incapacity, bankruptcy, retirement or withdrawal from the offshore limited partnership; or
(b) where the sole or last remaining general partner is a body corporate, its dissolution, bankruptcy or withdrawal from the offshore limited partnership,
shall cause the immediate dissolution of the offshore limited partnership which shall forthwith be wound up--
(aa) in accordance with the partnership agreement; or (bb) in accordance with the directions of the court on the application of a limited partner or a creditor of the offshore limited partnership.
(2) An offshore limited partnership shall not be required to be wound up under subsection (1) if, within 60 days of the dissolution, the limited partners, either unanimously or as otherwise provided for in the partnership agreement, elect one or more general partners, in which event the offshore limited partnership shall be deemed not to have been dissolved and the activities of the offshore limited partnership may be taken over and continued as provided for in the partnership agreement or a subsequent partnership agreement. (3) If an offshore limited partnership is dissolved under subsection (1), and the activities of the offshore limited partnership are not taken over and continued in accordance with subsection (2), a notice of dissolution signed by a limited partner shall be filed within 30 days by him to the Authority who may thereupon cancel the registration of the offshore limited partnership. Labuan Offshore Limited Partnerships 23
(4) If the notice required to be filed under subsection (3) is not so filed, each of the limited partners shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one thousand ringgit.
Power of court to order dissolution
23. (1) The court may, on the application of a partner, order the dissolution of an offshore limited partnership if it is satisfied that--
(a) the offshore limited partnership is being conducted in a manner contrary to the terms of the partnership agreement of the offshore limited partnership;
(b) the offshore limited partnership is being conducted in a manner oppressive to one or more of the limited partners; or
(c) circumstances have arisen which render it just and equitable that the offshore limited partnership be dissolved. (2) Where an order is made under subsection (1) the court may give such directions as it thinks fit as to the winding up of the offshore limited partnership.
(3) Where an offshore limited partnership has been dissolved under this section the partner making the application shall cause the order of the court to be served on the Authority within 30 days after the making of the order and the Authority may thereupon cancel the registration of the offshore limited partnership. (4) If the order of the court is not served on the Authority as required under subsection (3), the partner referred to in that subsection shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one thousand ringgit.
Settling accounts on dissolution
24. Where accounts are settled after the dissolution of an offshore limited partnership, the liabilities of the partnership to creditors shall be paid first, and then tax liabilities due to the Government, and then, subject to the partnership agreement or to a subsequent 24 Laws of Malaysia ACT 565
agreement, the other liabilities of the partnership shall be paid in the following order:
(a) to general partners other than for capital and profits; (b) to limited partners in respect of the capital of their contributions;
(c) to limited partners in respect of their share of the profits; (d) to general partners in respect of their contributions; and (e) to general partners in respect of their share of profits. Legal proceedings and service of documents
25. (1) Except as provided in this Act, legal proceedings by or against an offshore limited partnership shall be instituted by or against any one or more of the general partners only and no limited partner shall be a party to or named in such proceedings. (2) A general partner or, with the leave of the court, any other person shall have the right to join or otherwise institute proceedings against one or more of the limited partners who may be liable to the offshore limited partnership pursuant to subsection 12(3), subsection 15(2), section 16 or subsection 17(3). (3) A limited partner may bring an action on behalf of an offshore limited partnership if any one or more of the general partners with authority to do so have, without reasonable ground, refused to institute such proceedings.
(4) For the purpose of this Act, service of a document on a general partner in respect of an offshore limited partnership may be effected by--
(a) delivering it to him; or
(b) sending it by post or delivering it to the registered office of the offshore limited partnership.
Authority to sign
26. Where a general partner executes a document on behalf of the offshore limited partnership, it shall be conclusively presumed in favour of any person who is not a partner that-- (a) the general partner has the authority under which he purports to act; and
(b) the executed document has been validly executed. Labuan Offshore Limited Partnerships 25
PART III
GENERAL PROVISIONS
Supervisory authority
27. (1) Without prejudice to the functions, powers and duties conferred or imposed upon the Authority under any other written law, the Authority shall have all the functions and powers conferred, and the duties imposed, on it by this Act.
(2) The Authority may authorize any of its members or officers to perform any of its functions, exercise any of its powers, or discharge any of its duties under this Act.
(3) Where any person is required by or under this Act to submit, produce or provide to the Authority any information, statistic, return or document, the Authority may specify that it shall be submitted, produced or provided in such form and manner and within such period or at such intervals or times, not inconsistent with any provision of this Act or the regulation made under this Act, as the Authority may set out in the specification, and such person shall not submit, produce or provide as true and accurate any information, statistic, return or document which he knows, or has reason to believe, to be false, inaccurate or misleading. (4) Any person who fails to comply with subsection (3) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding three years or to both.
Prohibition and restriction on offshore limited partnership
28. (1) An offshore limited partnership shall not carry on in Labuan any business which an offshore company is prohibited to carry on unless expressly permitted under this Act.
(2) The Minister may, by notice published in the Gazette, order that any offshore limited partnership be restricted from carrying on any specified business in Labuan and may, by notice published in the Gazette, impose conditions subject to which any specified business may be carried on by an offshore limited partnership in Labuan.
26 Laws of Malaysia ACT 565
(3) Any offshore limited partnership which contravenes subsection (1) or the restriction or order or condition imposed under subsection (2) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one thousand ringgit.
Fees
29. (1) The Authority may charge fees in respect of any services provided by the Authority under this Act.
(2) Any fees collected by or paid to the Authority under this Act shall form part of and credited into its Fund established under section 29 of the Authority Act.
Inspection and production of documents kept by the Authority and the offshore limited partnership
30. (1) Subject to the provisions of this Act, a person may if so authorized by the relevant offshore limited partnership-- (a) inspect a document served on, registered by or filed with the Authority under this Act and kept by the Authority or, if the Authority thinks fit, a copy thereof;
(b) require to be given to him a certificate of the registration of an offshore limited partnership or of any other document or part of any other document referred to in paragraph (a).
(2) A certificate given under paragraph (1)(b) shall be signed by the Authority and sealed with its seal.
(3) Notwithstanding any provision of this Act, the Authority may, at any time, require an offshore limited partnership or any of its partners to produce to the Authority any document relating to the partnership at the time and place as may be specified by the Authority.
Form of offshore limited partnership's records
31. The records which an offshore limited partnership is required by this Act to keep may be kept in the form of photographic film or may be entered or recorded by a system of mechanical or Labuan Offshore Limited Partnerships 27
electronic data processing or any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time.
Offences relating to the documents of offshore limited partnership
32. (1) Any person who makes a statement in any document, material, evidence or information which is required to be kept under subsection 7(5) or which is required to be served on the Authority under this Act that is false or misleading with respect to any material fact or that omits to state any material fact shall be guilty of an offence and shall on conviction be liable to a fine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding three years or to both.
(2) For the purpose of this section, every member and officer of the Authority shall be deemed to be a public servant within the meaning of the Penal Code [Act 574].
Offence by body corporate, etc.
33. Where an offence under this Act or any regulations made under this Act has been committed by a body corporate, any person who at the time of the commission of the offence was a director, manager, secretary or other similar officer or a partner of the body or was purporting to act in such capacity shall, as well as such body, be deemed to have committed such offence unless he proves that the offence was committed without his consent or connivance and that he exercised all such diligence to prevent the commission of the offence as he ought to have exercised, having regard to the nature of his functions in that capacity and to all the circumstances.
Documents to be filed through trust company
34. (1) Every document required or permitted to be lodged or filed with the Authority under this Act shall be lodged or filed through a trust company.
(2) Every application to the Authority for any certificate or for any extract or copy of any certificate to be issued under this Act or of any document lodged or filed with the Authority shall be made through a trust company.
28 Laws of Malaysia ACT 565
(3) Subsection (2) shall not apply where an application is made in respect of an offshore limited partnership by any of the partners of that offshore limited partnership and the document, certificate, extract or copy is for his own personal use.
Procedure where none laid down
35. In the event that any act or step is required or permitted to be done or taken under this Act and no form is prescribed or procedure laid down either in this Act or the regulations made under this Act application may be made to the Authority for directions as to the manner in which the same may be done or taken, and any act or step done or taken in accordance with his directions shall be a valid performance of such act or step.
Indemnity
36. The Authority or any officer or agent or servant of the Authority shall not be liable to be sued in any court for any act or matter done or ordered to be done or omitted to be done, by the Authority or him in good faith and in the intended exercise of any power or performance of any duty conferred or imposed on the Authority or him by or under this Act.
Power to compound offences
37. (1) The Chairman may, with the written consent of the Public Prosecutor, in a case where he deems it fit and proper so to do, compound any offence committed by any person which is punishable under this Act, by making a written offer to such person to compound the offence by paying to the Chairman, within such time as may be specified, an amount which shall not exceed fifty per centum of the amount of the maximum fine to which that person would have been liable if he had been convicted of the offence. (2) An offer under subsection (1) may be made at any time after the offence has been committed, but before any prosecution for it has been instituted, and where the amount specified in the offer is not paid within the time specified in the offer, or within such extended period as the Chairman may grant, prosecution for the offence may be instituted at any time thereafter against the person to whom the offer was made.
Labuan Offshore Limited Partnerships 29
(3) Where an offence has been compounded under subsection (1), no prosecution shall thereafter be instituted in respect of such offence against the person to whom the offer to compound was made.
(4) Any moneys paid to the Chairman pursuant to subsection (1) shall be paid into and form part of the Fund established under section 29 of the Authority Act.
Striking off
38. (1) Notwithstanding any provision in this Act, where the Authority is satisfied that an offshore limited partnership-- (a) has failed to renew its certificate of registration issued under subsection 4(6); or
(b) has contravened any provision of this Act,
the Authority may serve a notice on the offshore limited partnership notifying it that the name of the offshore limited partnership may be struck off the register, unless the offshore limited partnership takes any step or any action to remedy the breach as may be specified in the notice within 30 days from the date of the notice or such longer period as may be extended by the Authority. (2) In the event the Authority--
(a) receives from the offshore limited partnership a notice stating that it is likely to be unable to remedy the breach specified in the notice served on the offshore limited partnership under subsection (1); or
(b) receives no reply to a notice served on the offshore limited partnership under subsection (1),
the Authority may within 30 days from the date of the expiration of the period mentioned in the notice served under subsection (1) or thereafter, struck off the name of the offshore limited partnership from the register unless the offshore limited partnership or any person satisfies the Authority that the name should not be struck off.
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(3) An offshore limited partnership that has been struck off the register under this section remains liable for all claims, debts, liabilities and obligations of the offshore limited partnership, and the striking off shall not affect the liability of any of its partners. Restoration to register
39. Where the name of an offshore limited partnership has been struck off the register under subsection 38(2), the offshore limited partnership, or a partner or a liquidator thereof may, within 3 years immediately following the date of the striking-off, apply to the Authority to have the name of the offshore limited partnership restored to the register, and upon payment to the Authority of the prescribed fees and all other prescribed fees due, the Authority may restore the name of the offshore limited partnership to the register and upon restoration of the name of the offshore limited partnership to the register, the name of the offshore limited partnership shall be deemed never to have been struck off the register. Effect of striking off
40. (1) Where the name of an offshore limited partnership has been struck off the register, the offshore limited partnership, and the partners, liquidators and receivers thereof, shall not-- (a) commence or defend any legal proceedings, carry on any business or in any way deal with the assets of the offshore limited partnership;
(b) defend any legal proceedings, make any claim or claim any right for, or in the name of the offshore limited partnership; or
(c) act in any manner with respect to the affairs of the offshore limited partnership.
(2) Notwithstanding subsection (1), where the name of the offshore limited partnership has been struck off the register, the offshore limited partnership, or a partner, liquidator or receiver thereof, may--
(a) apply to the Authority for the offshore limited partnership to be registered afresh;
Labuan Offshore Limited Partnerships 31
(b) continue to defend proceedings that were commenced against the offshore limited partnership prior to the date of the striking off; and
(c) continue to carry on legal proceedings that were instituted on behalf of the offshore limited partnership prior to the date of striking off.
(3) The fact that the name of an offshore limited partnership has been struck off the register shall not be construed as preventing-- (a) the offshore limited partnership from being liable for any of its liabilities;
(b) any person from making a claim against the offshore limited partnership and pursuing the claim through to judgment or execution; or
(c) the court from granting any order as provided under this Act.
Secrecy
41. (1) All proceedings (other than criminal proceedings) involving any offshore limited partnership commenced in any court, either under the provisions of this Act or for the purpose solely of determining the rights or obligations of the partners, and any appeal therefrom, shall be heard in camera and no details of the proceedings shall be published.
(2) Where--
(a) in any proceedings for the winding up of an offshore limited partnership the court is satisfied that the offshore limited partnership or any of its partner thereof has failed to comply with any provisions of this Act; or
(b) an offshore limited partnership or any of its partner thereof is convicted by the court of any offence under this Act, the records, books and registers of that offshore limited partnership and the entries in the registers and records of the Authority relating to that offshore limited partnership shall not be opened to the public for inspection.
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(3) A person who, with respect to any offshore limited partnership, otherwise than for the purpose of the administration of this Act or as permitted under this Act for the carrying on of the business of the offshore limited partnership, in Labuan or elsewhere-- (a) divulges;
(b) attempts, offers or threatens to divulge; and (c) induces or attempts to induce other persons to divulge, any information concerning or touching upon partnership interest, management, any of the business, financial or other affairs or transactions of the offshore limited partnership shall be guilty of an offence.
(4) Nothing in this section shall prevent any court from exercising its discretion to require any person to produce any document or to give any evidence in any proceedings before the court which is relevant to those proceedings.
Regulations
42. The Minister may make regulations prescribing all matters and things required by this Act to be prescribed or provided, for the carrying out of, or giving full effect to, the provisions of this Act and for its due administration, including all or any of the following purposes:
(a) prescribing forms of application to be used for the purposes of this Act and the matters to be specified in such forms; and
(b) prescribing the manner in which accounting and other records shall be made or kept, and the declarations, reports, annexures, schedules or details which are to accompany or to be attached to such accounts or other records. Minister's power to exempt
43. The Minister may, on the recommendation of the Authority and by a notice in writing, exempt an offshore limited partnership or a partner or any person from section 4, 7, 8, 9, 11, 12, 13, 14, 15, 16, 18 or 24.
Labuan Offshore Limited Partnerships 33
Saving provision
44. (1) The rules of equity and of common law applicable to partnerships shall continue in force, except so far as they are inconsistent with the express provisions of this Act. (2) The provisions of the Partnership Act 1961 [Act 135] shall not be applicable to an offshore limited partnership established or registered under this Act.
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LAWS OF MALAYSIA
Act 565
LABUAN OFFSHORE LIMITED
PARTNERSHIPS ACT 1997
LIST OF AMENDMENTS
Amending law Short title In force from
-- NIL --
Labuan Offshore Limited Partnerships 35
LAWS OF MALAYSIA
Act 565
LABUAN OFFSHORE LIMITED
PARTNERSHIPS ACT 1997
LIST OF SECTIONS AMENDED
Section Amending authority In force from
-- NIL --
DICETAK OLEH
PERCETAKAN NASIONAL MALAYSIA BERHAD,
KUALA LUMPUR
BAGI PIHAK DAN DENGAN PERINTAH KERAJAAN MALAYSIA
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