How To Set Up An Llc In The Cayman Islands

The introduction of the Cayman Islands limited liability company (the "LLC") corporate structure in 2022 past the Limited Liability Companies Law, 2022 (the "LLC Police force") has so far been proven bonny for general partner entities and other carried involvement distribution vehicles. The LLC has the benefit of being (like a Cayman Islands exempt company) a split corporate entity with limited liability, simply does not have the maintenance of capital restrictions applicable to exempt companies, and therefore has more flexibility to make distributions of income and capital through the terms of the LLC agreement. For the same reason, LLCs are also proving attractive for management visitor entities.

Key Features of Cayman LLCs

• An LLC formed nether the LLC Constabulary volition be similar in construction to that of the Delaware LLC as the LLC Constabulary is broadly based on the Express Liability Visitor Act in the State of Delaware. Yet the LLC Police has besides preserved the broad legal principles applicative to Cayman Islands companies and the rules of equity and common constabulary. Section 3 of the LLC Law expressly states that: "The rules of equity and of common law applicable to companies registered in the Islands, as modified by the Companies Law and any other Laws in force in the Islands applicable to such companies, shall apply to a limited liability company, except in so far as such rules and police force or modifications thereto are inconsistent with the limited provisions of this Law or the nature of a limited liability company".
• An LLC is a corporate entity which has separate legal personality to its members.
• Germination of an LLC is straightforward. It requires the filing of a registration statement with the Companies Regis-attempt and payment of the requisite Government fee.
• An LLC must have at least one member. Information technology tin can be fellow member managed (by some or all of its members) or the LLC agreement can provide for the appointment of persons (who need non be members) to manage and operate the LLC.
• The liability of an LLC'south members is limited. Members can have majuscule accounts and can concur amongst themselves (in the LLC agreement) how the profits and losses of the LLC are to be allocated and how and when distributions are to exist made (similar to a Cayman Islands exempted express partnership).
• An LLC may be formed for any lawful business, purpose or activity and it has full power to behave on its business or affairs unless its LLC agreement provides otherwise.
• An LLC may (just is not required to) use i of the following suffixes in its name: "Express Liability Company", "LLC" or "L.L.C.".
• The following statutory registers are required to be maintained for an LLC just, similarly to the requirement for a Cayman Islands exempted company, merely an LLC's register of managers is required to be filed with the Companies Registry:
  1. a. a annals of members;
  2. b. a register of managers; and
  3. c. a register of mortgages and charges.
• The register of managers and register of mortgages and charges are required to be maintained in a manner similar to the register of directors and register of mortgages and charges for a Cayman Islands exempted company.
• Subject area to whatever express provisions of an LLC agreement to the contrary, a director of the LLC will non owe any du-ty (fiduciary or otherwise) to the LLC or any fellow member or other person in respect of the LLC other than a duty to act in good organized religion in respect of the rights, authorities or obligations which are exercised or performed or to which such managing director is field of study in connection with the management of the LLC provided that such duty of good faith may be expanded or restricted by the limited provisions of the LLC agreement.

Expected Benefits of the LLC Vehicle

Under the LLC Law, it is possible to:

• Form and register a LLC;
• Catechumen an existing Cayman Islands exempted company into an LLC;
• Merge an existing Cayman Islands exempted company into an LLC; and
• Migrate an entity formed in another jurisdiction (e.1000. Delaware) into the Cayman Islands as an LLC.

This is non intended to be a substitute for specific legal advice or a legal opinion.
For specific advice, please contact:

E: yun.sheng@hcsoffshore.com

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Source: https://www.hcsoffshore.com/cayman-islands-limited-liability-companies/

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