Government plans on making amendments to two pieces of legislation in a bid to make Bermuda more competitive with other offshore jurisdictions as a place of registration for trusts and limited partnerships.

The Trusts (Special Provisions) Amendment Act 1998, and The Limited Partnership Amendment Act 1998 were tabled in the House on Friday.

Finance Minister Grant Gibbons said the amendment to the Trusts (Special Provisions) Act 1989 refined the requirements and definitions of purpose trusts.

A special purpose trust allows the setting up of a trust relationship without requiring a corporate structure. The amendment would broaden the ability to use trusts for non-charitable purposes, and streamlines the existing legislation in terms of who can be a trustee.

When the amendment is passed there will no longer be any need for one of the trustees to be a "designated person''. Bermuda will also do away with a register of purpose trusts on the Island.

Another section will allow more flexibility in modifying a trust through the courts.

"Bermuda led the way in developing purpose trusts,'' Dr. Gibbons told The Royal Gazette . "A number of other jurisdictions have copied us and refined it. We now find ourselves a bit old fashioned.'' The amendment was drafted in consultation with the Bermuda International Business Association trust committee, and with the Law Reform Committee.

The partnership amendment tabled will modify Bermuda's Limited Partnership Act 1883. The amendment will allow the name of a limited partner to be incorporated in the name of a partnership without leading to a loss of the partner's limited liability.

The amendment would also allow a limited partner to participate in the investment strategy of the partnership without been taken as participation in the management of the partnership.

A third clause clarifies the liability of limited partners who make withdrawals of capital from the partnership, whether lawful or unlawful. In the case of a lawful reduction of capital a limited partner's liability to the partnership or creditors continues for a period of one year. The liability is only related to matters arising before the capital was returned or released.

In the case of an unlawful reduction of capital the limited partner's six year continuing liability for the sum will be extended to creditors if the partnership has been dissolved and to interest on the capital sum.

Grant Gibbons