The Cayman Islands LLC is a corporate structure closely mirroring the Delaware LLC in the United States. This article delves into the primary attributes of LLCs and their formation under the Limited Liability CompaniesAct (LLC Act) in the Cayman Islands.
Overview of LLCs
An LLC in the Cayman Islands is a body corporate with limited liability, designed for any lawful purpose and capable of performing all functions of a natural person. Unlike Delaware, the Cayman Islands necessitate an LLC agreement among members. The LLC Act offers considerable flexibility in structuring this agreement, with numerous default provisions applying in the absence of explicit agreements.
Applications of LLCs
LLCs have gained popularity in various fields, including investment fund structures, private equity, corporate transactions, joint ventures, and holding companies. Their flexibility is especially appealing in scenarios where a corporate structure is preferred but with the adaptability typically associated with exempted limited partnerships. The LLC format is particularly attractive to US clients seeking offshore vehicles akin to their onshore Delaware LLCs.
Establishment Procedures for LLCs
Registration
To register an LLC, one must file a registration statement with theRegistrar of LLCs, including details like the LLC's name, registered office address, initial members, business nature, and financial year-end. Any changes in these details must be filed with the Registrar within a specified period.
LLC Agreement
The LLC agreement, governing the conduct and business of the LLC, is mandatory and customizable. It is not a public document but binds all members.
Distinct Features of an LLC
- Separate Legal Personality: LLCs have a separate legal status from their members.
- Taxation: LLCs enjoy exemption from local income or gains taxes, with an option to secure a tax undertaking certificate.
- Application of Related Laws: LLCs fall under various CaymanIslands laws, including the Mutual Funds Act and Private Funds Act.
Members and Interests
LLCs must always have at least one member. They can issue LLC interests based on the terms of the LLC agreement. Transfers of interests are subject to the agreement's provisions or the approval of all members.
Management Structure
LLCs can vest management powers in members or designated managers, with no residency requirements for either. Managers have a duty of good faith, which can be adjusted by the LLC agreement.
Ongoing Obligations and Compliance
LLCs have annual filing requirements and must maintain various statutory registers, including members, managers, and beneficial ownership.They are also subject to account maintenance requirements to ensure transparency and financial accountability.
Public Availability of Information
Certain information about an LLC, such as the names of current managers and the company's registered office location, is publicly accessible.
Economic Substance and Regulatory Compliance
LLCs engaged in certain 'relevant activities' must comply with the Economic Substance Act (ES Act). Additionally, LLCs structured as mutual or private funds are subject to regulation under the Mutual Funds Act and PrivateFunds Act, respectively, and must adhere to anti-money laundering legislation.
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Data Protection
The designated Data Protection Officer for Milliard Law is Owen Jones, who is reachable at bradley.mindrup@milliard.law.
Cookies Policy
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