Malaysia legislation
Section 56
of LABUAN LIMITED PARTNERSHIPS AND LIMITED LIABILITY PARTNERSHIPS ACT 2010
Section 56
(2)
A partner is not personally liable, directly or indirectly, by way of indemnification, contribution, assessment or otherwise, for an obligation referred to in subsection (1) solely by reason of being a partner of the Labuan limited liability partnership.
Act 707
(3)
Subsections (1) and (2) shall not affect the personal liability of a partner in tort for his own wrongful act or omission, but a partner shall not be personally liable for the wrongful act or omission of any other partner of the Labuan limited liability partnership.
(4)
Where a partner of a Labuan limited liability partnership is liable to any person, other than another partner of the Labuan limited liability partnership, as a result of a wrongful act or omission of his in the course of the business of the Labuan limited liability partnership or with its authority, the Labuan limited liability partnership is liable to the same extent as the partner.
(5)
The liabilities of the Labuan limited liability partnership shall be met out of the property of the Labuan limited liability partnership.
(6)
Notwithstanding anything in this Act, a partner or former partner of a Labuan limited liability partnership who receives a distribution from the Labuan limited liability partnership—
(a)
when the Labuan limited liability partnership is insolvent and knew or ought to have known at the time of the distribution that the Labuan limited liability partnership was insolvent; or
(b)
which results in the Labuan limited liability partnership becoming insolvent and knew or ought to have known at the time of distribution that the Labuan limited liability partnership would become insolvent as a result of the distribution, shall be personally liable to the Labuan limited liability partnership for the amount or value of the distribution if it was received within a period of six months before the commencement of the winding-up of the Labuan limited liability partnership.
Labuan Limited Partnerships and Limited
Liability Partnerships 51
(7)
For the purposes of this section—
(a)
a Labuan limited liability partnership is insolvent at a particular time if—
(i)
it is at that time, unable to pay its debts as they become due in the normal course of business; or
(ii)
at that time, the value of the Labuan limited liability partnership’s assets is less than the value of its liabilities;
(b)
“distribution” means any payment of dividends, distribution of profits, return or refund of capital by the Labuan limited liability partnership, whether in cash or in kind;
and
(c)
a partner or former partner shall be deemed to have received a distribution if the distribution is received by that partner or former partner’s assignee.
Power of partner to bind the Labuan limited liability partnership