The Limited Liability Companies Bill, 2015 was published on 18th
December 2015. It is likely to be enacted as the Limited Liability
Companies Law in January 2016 and brought into force before the end
of June 2016. Once that is completed, the Cayman Islands will then
be able to offer a Limited Liability Company ("Cayman
LLC") as an alternative, or as a compliment, to the
existing range of legal structures currently available in Islands.
The Cayman LLC's flexibility is anticipated to be utilised in a
wide variety of commercial structures and the planned introduction
of the Cayman LLC was particularly welcomed by the private
investment funds and financial services industries in Cayman and
elsewhere. The Cayman LLC is expected to assist the Cayman Islands
enhance its position as a leading offshore financial centre.
The Cayman LLC is based upon its Delaware (US) equivalent. The
genesis of the legislative drafting can be found in the Delaware
statute with Cayman legal concepts and specifics included. The
Cayman LLC will be a body corporate with separate legal
personality. The members will enjoy limited liability and a great
deal of flexibility in settling the terms of the agreement
governing how a Cayman LLC is to be operated including the
allocation of gains/losses, the return of capital, voting rights
and how it is managed. The governance structure of a Cayman LLC can
be particularly flexible. The members themselves can manage a
Cayman LLC, it may be managed by a managing member or by nonmember
managers and the agreement governing the operation of a Cayman LLC
can specify differing powers and duties for separate classes of
The formation process for a Cayman LLC will be simple and
deliberately similar to the process that would be typical for a
Delaware LLC. The agreement governing the operation of a Cayman LLC
is not required to be filed with the Registry. The Cayman LLC is
required to maintain registers of (1) members, (2) managers, and
(3) mortgages and charges, although similar to Cayman Islands
exempted companies it is only the register of managers which will
be filed with the Registry.
Importantly, existing Cayman Islands exempted companies will be
able to convert into a Cayman LLC, a Cayman LLC will be able to
participate in a merger or consolidation transaction, and non-
Cayman entities will be able to migrate into the Cayman Islands and
re-register as a Cayman LLC. A further release will be issued on
the enactment of the Bill and, once it has been confirmed, the date
upon which the new Law will enter into force.
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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