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Overseas Partnerships Act 1995

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Overseas Partnerships Act 1995
The Laws of Bermuda
Annual Volume of Public Acts 1995 : 32

1
169

BERMUDA
1995 : 32

OVERSEAS PARTNERSHIPS ACT 1995

[Date of Assent 7 July 1995]

[Operative Date 28 July 1995]

ARRANGEMENT OF SECTIONS

1 Citation
2 Interpretation
3 Overseas partnership not

to carry on business
without a permit

4 Application for permit by
overseas partnership

5 Consent of Minister
6 Matters to be taken into

consideration by Minister
7 Form and proof of permit
8 Permit may be subject to

conditions, etc.
9 Registration of permit
10 Register of overseas

partnerships
11 Restrictions on activities

of overseas partnership
12 Registered office

13 Resident representative
14 Duties of resident

representative
15 Records to be kept by

overseas partnership
16 Appointment and duties

of inspector
17 Letterheads and service of

process
18 Revocation of a permit
19 Revocation procedure
20 Appeals to Supreme Court
21 Surrender of permit
22 Change in respect of

overseas partnership
23 Fees
24 Default fine
25 Construction of "partner"

OVERSEAS PARTNERSHIPS ACT 1995

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170

26 Application of Act No. 41
of 1966 to overseas
partnerships

27 Amendment of Act No. 15
of 1990

28 Amendment of Act No. 57
of 1969

WHEREAS it is expedient to make provisions for the purpose of
enabling overseas partnerships to be granted permits to engage in or
carry on a trade or business in Bermuda and for matters incidental to
such purpose:

Be it enacted by The Queen's Most Excellent Majesty, by and
with the advice and consent of the Senate and the House of Assembly of
Bermuda, and by the authority of the same, as follows:

PART I

PRELIMINARY

Citation
1 This Act may be cited as the Overseas Partnerships Act 1995
and shall come into operation on a day to be appointed by the Minister
by notice published in the Gazette.

Interpretation
2 (1) In this Act, unless the context otherwise requires —

"appointed newspaper" means the Gazette, or newspaper
appointed by the Registrar under section 2(2) of the
Exempted Partnerships Act 1992;

"certificate of overseas partnership" means the certificate referred
to in section 4(3);

"Court" means the Supreme Court;

"default fine" has the meaning given in section 24;

"exempted undertaking" has the meaning assigned to it by
section 2(1) of The Companies Act 1981;

"Minister" means the Minister of Finance;

"overseas partnership" means a partnership formed under a law
other than the law of Bermuda;

"permit" means a permit issued under section 7;

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Annual Volume of Public Acts 1995 : 32

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"registered office" means the registered office referred to in
section 12;

"Registrar" means the Registrar of Companies;

"resident representative" means the person appointed under
section 13;

(2) For the purposes of this Act the expression "engage in or
carry on any trade or business in Bermuda" has the meaning assigned to
that expression by section 133 of the Companies Act 1981.

PART II

OVERSEAS PARTNERSHIPS

Overseas partnership not to carry on business without a permit
3 An overseas partnership shall not engage in or carry on any
trade or business in Bermuda without a permit from the Minister issued
under section 7.

Application for permit by overseas partnership
4 (1) Subject to the provisions of this Act, an overseas
partnership may apply to the Minister for a permit to engage in or carry
on any trade or business in Bermuda.

(2) An application for the Minister's consent to the issue of a
permit shall be in such form, and be accompanied by such documents,
as the Minister may require.

(3) The persons seeking to obtain a permit shall make and
severally sign a certificate which shall contain the following particulars,
that is to say—

(a) the name of the partnership;

(b) the names of all the general partners and their
respective addresses;

(c) the name of the resident representative and his address
if his address is different from the address of the
registered office;

(d) the address of the registered office in Bermuda of the
overseas partnership;

(e) the general nature of the business to be transacted by
the overseas partnership;

OVERSEAS PARTNERSHIPS ACT 1995

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172

(f) the law governing the overseas partnership;

(g) the address outside Bermuda of the principal place of
business, if any, of the partnership; and

(h) the term, if any, for the duration of the partnership.

(4) Within three months prior to an application for a permit
under subsection (1), the partnership shall publish in an appointed
newspaper an advertisement announcing the intention to apply for a
permit and specifying—

(a) the name of the partnership;

(b) the names of all the general partners;

(c) the law governing the partnership; and

(d) the general nature of the business to be transacted by
the partnership.

Consent of Minister
5 (1) The Minister may grant or refuse consent to an application
made to him under section 4(1).

(2) Where the Minister refuses consent to an application he
shall not be bound to give any reason for such refusal and that refusal
shall not be subject to appeal or review in any court.

Matters to be taken into consideration by Minister
6 Without prejudice to the discretion conferred on the Minister by
section 5, the Minister shall, in deciding whether or not to grant a
permit, have regard to—

(a) the economic situation in Bermuda and the due
protection of persons already engaged in or carrying on
any trade or business in Bermuda;

(b) the nature and previous conduct of the overseas
partnership; and

(c) any advantages or disadvantages which may result from
the overseas partnership engaging in or carrying on a
trade or business in Bermuda.

Form and proof of permit
7 (1) A permit shall be in such form as the Minister may
determine and shall—

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(a) state that the Minister approves the names of all the
general partners and the general nature of the business
to be transacted by the overseas partnership;

(b) specify any conditions or restrictions subject to which
the permit is granted; and

(c) be signed by the Minister.

(2) A copy of every permit shall be lodged by the Minister with
the Registrar.

(3) A certificate purporting to be signed by the Registrar—

(a) certifying that a permit was or was not in force in respect
of an overseas partnership at the time specified in the
permit; and

(b) specifying the conditions or restrictions, if any, subject
to which the permit was granted,

shall be admissible in evidence in proceedings under this Act without
further proof and shall be prima facie evidence of the facts certified or
specified therein.

Permit may be subject to conditions, etc.
8 (1) Where the Minister grants a permit pursuant to an
application under section 4, that permit may be subject to such
conditions or restrictions, if any, as the Minister may think fit to impose.

(2) Without prejudice to the generality of subsection (1), a
permit may require that an overseas partnership shall have one or more
partners ordinarily resident in Bermuda.

(3) The Minister may, on the application of the general
partners, vary any condition or restriction subject to which a permit is
granted.

(4) Where under subsection (3) the Minister varies the
conditions or restrictions of a permit he shall cause the variation to be
delivered to the Registrar for registration by him in the register.

Registration of permit, etc.
9 (1) Subject to the provisions of this section, a permit issued by
the Minister may be delivered to the Registrar for registration and shall
be effective on the date that it is so registered by the Registrar.

(2) The persons seeking to register a permit shall deliver to the
Registrar the certificate of overseas partnership and the permit.

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174

(3) If the Registrar does not consider the name of the overseas
partnership undesirable, the Registrar shall register the permit and shall
issue a certificate of registration which shall specify the date of
registration of the permit and to which shall be attached a facsimile of
the certificate of overseas partnership and a copy of the permit.

(4) The Registrar may—

(a) refuse to register a permit if, in the opinion of the
Registrar, the name of the overseas partnership is
undesirable; and

(b) if in his opinion a name is not undesirable, on
application by any person intending to register a permit,
reserve that name for the exclusive use of the applicant
for a period not exceeding three months next after the
date of receipt of such application.

Register of overseas partnerships
10 (1) The Registrar shall establish and maintain in such form as
he shall determine a register of overseas partnerships in which shall be
registered—

(a) the certificate of overseas partnership; and

(b) the permit issued by the Minister.

(2) The register shall be open to inspection by members of the
public during ordinary business hours on payment of such fee, not
exceeding five dollars, as the Minister may determine.

Restrictions on activities of overseas partnership
11 (1) An overseas partnership shall not—

(a) acquire or hold land in Bermuda other than by way of
lease or tenancy agreement for a term not exceeding
twenty-one years, being land required for the business of
the overseas partnership;

(b) take any mortgage of land in Bermuda without the prior
written consent of the Minister;

(c) acquire any bonds, or debentures secured on any land
in Bermuda other than bonds or debentures issued by
the Government or a public authority;

(d) except as provided in paragraph (e)(iii), acquire any
shares issued by any company incorporated in

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Bermuda, or acquire any interest in any business or
undertaking in Bermuda;

(e) carry on business of any kind or type whatsoever in
Bermuda either alone or in partnership or otherwise
except—

(i) carrying on business with persons outside
Bermuda;

(ii) doing business in Bermuda with an exempted
undertaking in furtherance only of the business
of the overseas partnership carried on outside
Bermuda;

(iii) buying or selling or otherwise dealing in shares,
loans, debenture stock, obligations, mortgages
or other securities issued or created by an
exempted undertaking;

(iv) transacting banking business in Bermuda with
and through a bank licensed under the Banks
Act 1969;

(v) effecting or concluding contracts in Bermuda,
and exercising in Bermuda all other powers, so
far as may be necessary for the carrying on of its
business with persons outside Bermuda;

(vi) if the articles of partnership expressly so
provide, acting as manager or agent for, or
consultant or adviser to the business of any
exempted undertaking whether or not such
business is the sole business of the overseas
partnership.

(2) Nothing in subsection (1)(e) shall be taken to prohibit an
overseas partnership from effecting or concluding contracts or
arrangements with persons in Bermuda for the supply of goods and
services to the overseas partnership necessary for the purpose of
enabling the overseas partnership to carry on its business with persons
outside Bermuda.

(3) An overseas partnership shall not engage in, or carry on the
business of, conveying or arranging for the conveyance of passengers,
goods or mail by ship within the waters of Bermuda except—

(i) where the ship is owned, operated or chartered
by or on behalf of the overseas partnership;

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(ii) where the conveyance is of a passenger
employed by the overseas partnership or of
goods which are or are to become the property of
the overseas partnership; or

(iii) when the business is negotiated by a local
company as defined by the Companies Act 1981.

(4) An overseas partnership shall not engage in retail trade in
Bermuda, including retail trade with an exempted undertaking or any
other person.

(5) An overseas partnership shall transact all banking business
conducted in Bermuda with and through a bank incorporated in
Bermuda.

(6) If an overseas partnership does anything in contravention of
the provisions of subsection (1), then the land, merchandise, stocks,
shares, bonds, debentures, securities, property or other interests so
acquired or disposed of, taken or held, will be liable to escheat under the
Escheats Act 1871 or under any other Act relating to escheat.

(7) It is hereby declared that in any proceedings for escheat
under subsection (6), the question whether any land, merchandise,
stocks, shares, bonds, debentures, securities, property or other interests
have been taken, acquired, disposed of or held in contravention of the
provisions of subsection (1), shall be decided as a question of fact.

Registered office
12 An overseas partnership shall, at all times, maintain in Bermuda
a registered office, which shall not be a post office box, to which all
communications may be sent.

Resident representative
13 An overseas partnership shall—

(a) appoint, and at all times maintain in Bermuda, a
resident representative; and

(b) within thirty days after the appointment of a resident
representative notify the Registrar of his name and
address.

Duties of resident representative
14 (1) Where a resident representative knows or has reasonable
cause to believe—

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(a) that an overseas partnership has changed a matter
referred to in section 22, and in a case where—

(i) the Minister's consent is required under
subsection (1)(a) of that section, no consent has
been obtained; or

(ii) the Minister is required to be notified under
subsection (4) of that section, the Minister has
not been so notified;

(b) that there is a breach of any condition or restriction
subject to which the Minister consented to the
registration of a permit under section 8(1) or to a change
of a matter under section 22(1)(a);

(c) that the overseas partnership has failed to deliver to the
Registrar for registration by him a supplementary
certificate referred to in section 22(5);

(d) that the overseas partnership has failed to pay any fee
required by any provision of this Act; or

(e) that the overseas partnership is not keeping records of
its acts and financial affairs in accordance with section
15,

the resident representative shall within thirty days of any of the matters
specified in paragraph (a) to (e) coming to his knowledge or belief, as the
case may be, make a written report to the Minister and such report shall
contain all the information that is available to the resident
representative.

(2) Where a resident representative knows or has reasonable
cause to believe that an overseas partnership has commenced winding
up its affairs consequent on the dissolution of the overseas partnership,
the resident representative shall forthwith give written notice of that fact
or that belief, as the case may be, to the Minister.

(3) A resident representative who fails to comply with
subsection (1) or (2) is guilty of an offence and liable on conviction by a
court of summary jurisdiction to a fine not exceeding five thousand
dollars.

Records to be kept by overseas partnership
15 Every overseas partnership shall keep at its registered office in
Bermuda such records of its acts and financial affairs as will show
adequately the trade or business it is engaging in or carrying on or has
engaged in or carried on in Bermuda except that if the records of its acts

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and financial affairs are kept at some place outside Bermuda there shall
be kept at the registered office of the overseas partnership in Bermuda
such records as will enable all the partners to ascertain with reasonable
accuracy the financial position of the partnership at the end of every
three months.

Appointment and duties of inspector
16 (1) The Minister may at any time appoint one or more
inspectors to investigate the affairs of an overseas partnership and to
report thereon in such manner as the Minister may direct.

(2) The expenses of and incidental to such investigation shall
be defrayed by the overseas partnership unless the Minister otherwise
directs.

(3) A general partner or a resident representative of an overseas
partnership shall take such steps as are reasonable to produce to an
inspector such books or documents as the inspector may require for the
purposes of an investigation.

(4) A general partner or a resident representative of an overseas
partnership who, in the course of an investigation of the affairs of the
overseas partnership—

(a) refuses to produce any book or document which is in his
possession and which is required by the inspector to be
produced; or

(b) refuses to answer any question relating to the affairs of
the overseas partnership which he might reasonably be
expected to know,

is guilty of an offence and liable on conviction by a court of summary
jurisdiction to a fine not exceeding five thousand dollars.

(5) An inspector may take evidence upon oath in investigating
the affairs of an overseas partnership and for that purpose may
administer an oath.

(6) An investigation under this section shall be held in private
unless the overseas partnership requests that it be held in public.

(7) An inspector investigating the affairs of an overseas
partnership may from time to time report to the Minister and shall, on
completion of the investigation—

(a) submit a written report to the Minister; and

(b) submit a copy of such report to all the partners.

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(8) Except at the request of an overseas partnership or on the
direction of the Minister, no other person shall be informed of the nature
or contents of a report referred to in subsection (7).

(9) If the Minister, after examining a report referred to in
subsection (7), considers that an overseas partnership, a partner, the

resident representative or any officer, agent or employee of the overseas
partnership—

(a) has knowingly and wilfully done anything in
contravention of this Act, the Minister may revoke the
permit granted under section 7;

(b) is carrying on the affairs of the overseas partnership in a
manner that is detrimental to the interests of the
creditors of the overseas partnership,

the Minister may require the overseas partnership to take such
measures as he considers necessary in relation to its affairs.

(10) Any proceedings in connection with the holding of an
investigation by an inspector in pursuance of the provisions of this
section shall for the purposes of those provisions of the Criminal Code
relating to perjury, be deemed to be judicial proceedings.

Letterheads and service of process
17 (1) Every overseas partnership shall have the following
particulars on all letters sent from a place of business in Bermuda in
connection with that business, that is to say,—

(a) the name of the overseas partnership;

(b) the law governing the partnership; and

(c) the address of its registered office.

(2) Any notice, instrument or other document, and any legal
process to be delivered to, or served on, an overseas partnership for the
purposes of this Act may be delivered or served by leaving it at the
registered office of the overseas partnership or by delivering it to a
general partner or to the resident representative.

(3) If the registered office cannot reasonably be found, any
such notice, instrument, document or legal process may be delivered or
served by leaving it at the office of the Registrar and publishing a notice
of the fact in an appointed newspaper.

(4) Delivery or service pursuant to subsection (3) shall be
deemed to be delivery to, or service on, an overseas partnership.

OVERSEAS PARTNERSHIPS ACT 1995

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180

Revocation of a permit
18 The Minister may at any time revoke the permit of an overseas
partnership if—

(a) the partnership or any of its servants or agents
contravenes a condition of its permit;

(b) in the opinion of the Minister the partnership is carrying
on business in a manner detrimental to the public
interest;

(c) the partnership ceases to engage in or carry on any
trade or business in Bermuda;

(d) a court or other competent authority in any country
makes an order for the dissolution of the partnership; or

(e) there is a substantial change in the nature of the
business carried on by the partnership and the Minister
had not, pursuant to section 22(1)(a), consented to such
change.

Revocation procedure
19 (1) The Minister shall give an overseas partnership reasonable
notice in writing of his intention to revoke its permit under section 18
and shall afford the partnership an opportunity of making
representations to him.

(2) A notice under subsection (1) shall specify the grounds on
which the Minister intends to revoke the permit.

(3) Upon the revocation of its permit an overseas partnership
shall forthwith cease to engage in or carry on any trade or business in
Bermuda unless the Minister in his discretion authorizes the partnership
so to do—

(a) pending the determination of an appeal against the
revocation; and

(b) for such period as the Minister may specify for the
purpose of ceasing its business in Bermuda.

(4) When the Minister revokes the permit of an overseas
partnership the Registrar may, if he is satisfied that it would be in the
interests of any creditor of the partnership or of any other person to
whom the partnership has an obligation that the affairs of the
partnership in Bermuda should be wound up, petition the Court to wind
up its affairs and the Court may make such orders for the winding up of
the affairs of the overseas partnership as is practicable.

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Appeals to Supreme Court
20 (1) A partnership aggrieved by the revocation by the Minister of
a permit may appeal to the Court within twenty-one days or such longer
period as the Court may allow after receipt of notification of such
revocation.

(2) If an appeal is allowed by the Court, the partnership shall
be entitled to engage in or carry on any trade or business in Bermuda in
the same manner as it did before its permit was revoked.

(3) If an appeal is dismissed by the Court, the partnership
shall, forthwith or in such time as the Minister may allow, cease to
engage in or carry on any trade or business in Bermuda.

(4) Section 62 of the Supreme Court Act 1905 shall be deemed
to extend to the making of rules under that section to regulate the
practice and procedure on an appeal under this section.

Surrender of permit
21 (1) Where an overseas partnership ceases to carry on any trade
or business in Bermuda, a general partner or the resident representative
may deliver to the Registrar for registration by him in the register a
certificate of surrender of the permit issued by the Minister under section
7.

(2) A certificate of surrender shall specify—

(a) the name of the overseas partnership and the date of
registration of the permit granted by the Minister; and

(b) that the overseas partnership has ceased to engage in or
carry on any trade or business in Bermuda.

(3) A certificate of surrender shall be signed by at least one
general partner or by a person duly authorized to sign on behalf of the
overseas partnership.

(4) Subject to subsection (5), upon delivery to the Registrar of a
certificate of surrender, the provisions of this Act shall cease to have
effect in respect of the overseas partnership.

(5) Subsection (4) is without prejudice to any proceedings by,
or against, the overseas partnership.

Change in respect of overseas partnership
22 (1) Subject to the provisions of this section, the general
partners of an overseas partnership may, from time to time—

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(a) subject to subsection (2), with the prior written consent
of the Minister obtained by application of the general
partners—

(i) change the general partners;

(ii) change the name of the overseas partnership; or

(iii) change the general nature of the business
transacted by the overseas partnership;

(b) subject to subsection (4), change the resident
representative; or

(c) change any of the following matters, that is to say,—

(i) the registered office;

(ii) the term, if any, for the duration of the
partnership; or

(iii) the principal place of business, if any, outside
Bermuda, of the partnership.

(2) The general partners shall, not earlier than three months
before making a change referred to in subsection (1)(a), publish an
advertisement in an appointed newspaper specifying the proposed
change.

(3) The provisions of section 5(1) and (2) and section 8 shall,
mutatis mutandis, apply to an application made under subsection (1)(a) of
this section as they apply to an application made under section 4.

(4) The general partners shall, not later than thirty days before
making a change referred to in subsection (1)(b), in writing, notify the
Minister of the proposed change.

(5) The general partners shall, not later than thirty days after a
change referred to in this section is made—

(a) make and severally sign a supplementary certificate
supplementing, as the circumstances require, the
certificate of overseas partnership; and

(b) deliver the supplementary certificate to the Registrar for
registration by him in the register.

(6) Where an overseas partnership fails to comply with
subsections (1), (2), (4) or (5) the overseas partnership shall be liable to a
default fine.

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Fees
23 (1) The fee specified in Part I of the Schedule to this Act shall
accompany an application for the Minister's consent under section 4.

(2) The persons seeking to register a permit shall—

(a) at the time of registration of that permit; and

(b) thereafter, on or before 31 January in each year,

pay to the Registrar the fee specified in Part II of the Schedule.

(3) Where a permit is registered after 31 August in any year,
the fee payable at the time of such registration shall be one half of the
amount referred to in subsection (2)(a).

(4) If an overseas partnership fails to comply with subsection
(2)(b) the overseas partnership shall be liable to a default fine.

(5) The fees specified in Part III of the Schedule shall, in
addition to the fees specified in Part I and II, be payable in respect of the
matters specified in the said Part III.

(6) The Minister may, from time to time, by order, amend the
Schedule to this Act and such order shall be subject to the affirmative
resolution procedure.

(7) In this section "annual fee" means the fee referred to in
subsection (2)(b).

Default fine
24 (1) Where in this Act it is provided that an overseas
partnership, or any person who is in default shall be liable to a default
fine, such overseas partnership or such person shall, for every day
during which the default, refusal or contravention continues, be liable to
a fine of twenty dollars.

(2) Notwithstanding subsection (1), an individual who is in
default shall only be liable to a fine if he knowingly is guilty of the default
or knowingly and wilfully authorizes or permits the default.

(3) It shall be lawful for the Registrar, in any case where a
person fails to comply with a provision of this Act which is subject to a
default fine and the failure is not due to wilful neglect or default, to
accept payment of a penalty of two hundred and fifty dollars, and in
such case subsection (1) shall not apply.

(4) Any penalty payable under this Act may be recovered by the
Accountant General in the Supreme Court or in a court of summary
jurisdiction as a civil debt.

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184

Construction of "partner"
25 For the avoidance of a doubt it is hereby declared that where a
permit is registered under this Act, then, for the purposes of the overseas
partnership to which the permit was granted, unless the context
otherwise requires—

(a) references to "partner" shall be construed as references
to "general partner"; and

(b) anything required to be done or suffered by a partner
shall be construed as being required to be done or
suffered, as the case may be, by a general partner.

Application of Act No. 41 of 1966 to overseas partnerships
26 The Exempted Undertakings Tax Protection Act 1966 shall apply
to overseas partnerships as if they were exempted partnerships.

Amendment of Act No. 15 of 1990
27 The Stamp Duties (International Business) Relief Act 1990 is
amended—

(a) in section 2(3)—

(i) in the definition of the expression "international
business" by inserting immediately before the
words "or exempted partnership" the words ",
overseas partnership"; and

(ii) by deleting the full stop at the end of the
definition of the expression "international
business" and substituting therefore a semi-
colon; and by inserting next after the definition
of that expression the following:

"overseas partnership" has the meaning
assigned to it by section 2(1) of the Overseas
Partnerships Act 1995.".

Amendment of Act No. 57 of 1969
28 The Bermuda Monetary Authority Act 1969 is amended in
section 21(1)(d) by inserting next after the words "Companies Act 1981"
the words "or pursuant to section 4 of the Overseas Partnerships Act
1995".

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185

SCHEDULE (section 23)

PART I

Activity Fee Payable

Fee to accompany application
for Minister's consent under
section 4 $185.00

PART II

Fee Payable

Fee payable on registration of
overseas partnership under
section 23(2)(a) $250.00

Annual fee payable by overseas
partnership under section
23(2)(b)) $2000.00

PART III

Additional Fees

Fee Payable

On Delivery of documents to
Registrar for registration of
permit under section 9(2)

$50.00

On an application for
Minister's consent to change a
matter under section 22(1)(a) $50.00

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186

For preparation of a copy of
any document by a public
officer:—

(a) for the first 3 pages
or part thereof

(b) for each additional 3
pages or part thereof

$3.00

$3.00

For a search by a public officer
of the records maintained by
the Registrar for the purpose of
obtaining a certificate that the
Overseas Partnership Act 1995
has been complied with $50.00

For certifying and sealing a
copy of any document or set of
documents $50.00

For registering or recording
every certificate required by
this Act $150.00

For each inspection of the
register under section 10(2) $5.00