The highly anticipated Limited Liability Companies Law, 2016 (LLC Law) was published in the Cayman Islands on 8 June 2016 and is expected to come into force by a separate commencement order in late June.
The introduction of the new Cayman Islands limited liability company (an LLC) satisfies the demands of stakeholders, in particular in North America and Asia, for a more flexible corporate offshore structure and provides a welcome addition to the existing range of corporate vehicles available in the Cayman Islands. The LLC is closely aligned with the Delaware limited liability company and is expected to be popular as a vehicle of choice for investment fund and private equity structures, as well as corporate transactions, including joint ventures, special purpose vehicles and holding companies, where the LLC structure can be tailored to suit the particular transaction.
The LLC Law provides for the formation and operation of an LLC in the Cayman Islands, as a body corporate with limited liability and separate legal personality from its members. The LLC Law also provides for the conversion or merger of existing Cayman Islands exempted companies into LLCs and the continuation into the Cayman Islands as an LLC of entities established in another jurisdiction. Please see our legal update dated 7 January 2016, which sets out the key features and characteristics of the new LLC.
We will provide a further update once the date of entry into force of the LLC Law is confirmed. If you have any feedback, questions or comments please do not hesitate to contact one of the authors or your usual Harneys contact.
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