The LLC Bill, which introduces a Cayman Islands LLC as a new
type of entity, is based on the Delaware LLC concept, combined with certain
aspects of a Cayman Islands Exempted Company and Limited
Partnership. The Cayman Islands LLC will allow clients who are
familiar with Delaware LLCs to utilize a similar flexible structure
based in the Cayman Islands, which does not have the constraints of
Cayman Islands LLCs are required to maintain a registered office
in the Cayman Islands with at least one registered member.
The availability of Cayman Islands LLCs is likely to position
the jurisdiction favourably for offshore investment funds; it is
expected to be particularly attractive to the private equity
industry, family offices and stakeholders looking for a flexible
corporate structure, or structure that has similar characteristics
of a Delaware LLC.
Reportedly Cayman's Minister of Financial
Services, Commerce and Environment Wayne Panton told the
Legislative Assembly that "given the position of the Cayman
Islands as a leading jurisdiction for investment fund formation, an
LLC will increase the versatility and attractiveness of our
financial services products and has created a significant buzz in
the market place and gives our industry a new product to frame a
marketing push around."
The LLC Bill was developed due to industry demand and will allow
the Cayman Islands to offer a new investment vehicle in addition to
the existing and popular, Exempted Company, Exempted Limited
Partnership and Unit Trust Structure.
General characteristics of LLCs vs
The most common form of
Owners of an LLC are
referred to as members.
Shareholders are liable
for the obligations of the corporation to the extent of their
Liability is limited to
the extent of their capital contribution.
Is taxed as a separate
legal entity, and can be incorporated in any state, federal
district or territory, irrespective of the place from where it is
managed or where its operations are conducted.
Depending on the initial
choice of structure, an LLC may be taxed as a disregarding entity,
a partnership or a corporation.
Is required to maintain
a ledger detailing how the company reached important decisions,
voting records of shareholders and directors.
LLCs are required to
submit annual state reports but aren't required to hold annual
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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