An LP's Right To Information In A Cayman Islands Exempted Limited Partnership

The Cayman Islands exempted limited partnership (ELP) is a popular form of investment vehicle. Here, Carey Olsen's James Noble and Yang Yang examine the extent of the rights of limited partners to the information in the investment vehicles in which they often entrust their money with another person for a long period of time and remedies as may be available under the Cayman statues and common law.

A Cayman ELP is commonly established pursuant to an Exempted Limited Partnership Agreement (the LPA). Often the relevant fund documents would also include a private placement memorandum and any subscription agreements and side letters (the Fund Documents). While the general partner manages the ELP pursuant to the Fund Documents, the Fund Documents commonly include specific provisions on the right of a limited partner to receive information in relation to the ELP.

The rights of a limited partner to receive information in respect of the ELP are also expressly provided by section 22 of the Exempted Limited Partnership Law (2018 Revision) (the ELP Law):

"Subject to any express or implied term of the partnership agreement, each limited partner may demand and shall receive from a general partner true and full information regarding the state of the business and financial condition of the exempted limited partnership."

Despite these often general provisions, we have been on numerous occasions instructed to provide Cayman Islands law advice regarding the specific rights of a limited partner to information under the Fund Documents, as well as any statutory rights to receive information.

In Dorsey Ventures Limited and XIO GP Limited (FSD 38 of 2018, unreported 22 October 2018) the Grand Court of the Cayman Islands provided clarification regarding the extent of a limited partner's rights to information in an ELP.

LP's Right to information

Under section 22 of the ELP Law a limited partner may "demand and shall receive from a general partner true and full information regarding the state of the business and financial condition of the exempted limited partnership." However, these rights are also "subject to any express or implied provisions of a partnership agreement".

In general, the general partner would be in breach of the Fund Documents if it fails to provide information expressly provided by the Fund Documents. The general partner would also be in breach of the statutory provisions of the ELP Law in respect of the "true and full information regarding the...