In a discussion centering around limited liability and unlimited liability business structures in Guyana, the question was asked whether there needs to be a new structure that has limited liability but has less formal documentation requirements – an entry level limited liability structure that could be a step up from a business name registration and a stepping stone to a Limited Liability Company.

In a recently published videocast titled, Raising the Bar – Business Structures, Brenden Glasford of McKay Law Group and editor of Sidebargy.com and Nigel Hughes Managing Partner of Hughes Field and Stoby the two attorneys-at-law discussed the need for this new business structure. Hughes asked the question in light of all the compliance requirements for private limited liability companies. In response Glasford suggested that a limited liability structure following the pattern of the LLC which exists in the US or the LLP which is available in the UK could be introduced to ease new business owners into the a limited liability business structure without the stringent documenting and reporting requirements that are required for Private Limited Liability Companies.

What would introducing a new limited liability structure look like in Guyana based on what happens in other countries? There would need to be specific legislation or amendment to existing legislation that would allow for this new structure. To lessen confusion, Guyana should adopt an LLP as an intermediate limited liability business structure.

An ideal process to register a LLP should look like the following steps. First, the partners should be required to draft, sign execute and record a Partnership Deed which would set out the particulars of the LLP such as, the details of the business activities, details of the members, where the business will be carried on, member designations and duties, members capital contributions and liabilities, profit and loss splits, whether the members are salaried employees, decision making rules and procedures, the partners dispute resolution policy, how new partner may be brought in an appointed, provision for leaving, death or incapacity and of course how the LLP can be dissolved.

Secondly the partners should be able to submit the deed with a name reservation for their LLP and a form setting out the particulars of the LLP.

At the end of the process the partners should receive a certificate of registration for the LLP by the regulator of the legislative scheme.