Most Popular Article in Cayman Islands, January 2016
The Limited Liability Companies Bill, 2015 (the
"LLC Bill") has been published in the Cayman Islands and
is expected to be enacted into law in early 2016. This paves the
way for the introduction of a new type of corporate vehicle in the
Cayman Islands: the Limited Liability Company (the "Cayman
WHAT IS A CAYMAN LLC?
Whilst there are various types of limited liability companies
presently available in the Cayman Islands, the Cayman LLC will be a
distinct entity. The LLC Bill has been modelled using both local
legislation (notably the Cayman Islands company and partnership
laws) as well as the limited liability legislation of Delaware. As
such, the Cayman LLC will have certain features of Cayman companies
and partnerships (for example, member liability not being limited
by shares nor by guarantee but rather by reference to members'
capital accounts and capital contributions) and also features of a
Delaware LLC (for example, allowing for freedom of contract amongst
the members as to determining the internal operations of the
company). In addition, some key features of the Cayman LLC include:
separate legal personality; limited liability for its members;
member managed or manager managed. The law implementing the Cayman
LLC will also allow for conversion (i.e. a Cayman exempted company
will be able to convert into a Cayman LLC), merger and
consolidation and continuation into and out of the Cayman
WHY USE A CAYMAN LLC?
The Cayman Islands is the leading jurisdiction globally for fund
formation. Given the obvious benefits of using a Cayman LLC
(including, simplified fund administration, similar corporate
features to a Delaware LLC and the general flexible nature of such
an entity) together with the longstanding industry demand for this
type of vehicle in the Cayman Islands, once the LLC Bill is enacted
into law, we expect that the Cayman LLC will hit the ground
The Cayman LLC is expected to become available in the early part
of 2016. We will provide a further update once the LLC Bill is
enacted into law.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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