On the 18 December 2015 The Cayman Islands published its new law to allow for the formation of its new vehicle, the Limited Liability Company (‘LLC’).
This has been introduced in response to requests from the investment funds industry and is based chiefly on the Delaware ‘LLC’, which is a highly popular vehicle in the US commercial and corporate world.
The LLC is essentially a hybrid company combining characteristics of the Cayman Islands exempted company and the Cayman Islands exempted limited partnership whereas exempted companies have the rigidity of maintaining share capital and issuing shares to represent the underlying investment the exempted limited partnership offers capital accounting flexibility , but does not have a separate legal personality and needs to be operated by a separate general partner, the new LLC is designed to offer advantages from both and its key features are:-
– It is a body corporate with separate legal personality and limited liability
– It can be formed for any lawful business, purpose or activity
– Requires at least one member
– Simple registration, effected by appropriate fee and filing of the certificate of formation
– Manager may or may not be a member
– LLC agreement allows flexible arrangements on the internal workings of the vehicle
– LLC agreement is not required to be filed or registered with the Registrar of Companies
– It can apply for a fifty year tax undertaking certificate from the Cayman Islands Government
It is hoped that its flexible nature especially with regards to capital commitments will be beneficial for a wide range of both general corporate and commercial uses.
The Cayman Islands is already a popular choice for offshore incorporations and it is anticipated that the introduction of the LLC will further increase its appeal.