Legislation was recently put before Parliament to introduce
Bermuda's newest form of commercial vehicle: the limited
liability company ("LLC"). The new law establishing the
Bermuda LLC is heavily (and intentionally) influenced by the
Delaware Limited Liability Company Act to accommodate the
main efficiencies of a Delaware LLC.
Recognizing the commercial utility of the limited liability
company, Economic Development Minister Dr. Grant Gibbons, when
tabling the legislation, succinctly explained the features that
make LLC's so attractive to legal advisors in the United
"LLCs are typically viewed as hybrid entities because they
offer characteristics and advantages of both partnerships and
corporations. The fundamental similarity to partnerships is that
LLCs are managed and operated pursuant to a contractual agreement
among the members, who are owners of the LLC. This provides
significant flexibility for LLC members to determine the most
appropriate terms and conditions for administration and governance
of the LLC. LLCs are also similar to corporations, in that LLC
members generally enjoy limited liability, so any personal
liability is limited to the value of each member's capital
contribution to the LLC. This limitation on liability typically
remains in place even if LLC members actively participate in the
management of an LLC. In fact, the ability of the members to both
manage the day to day operations of an LLC while retaining their
limited liability are two cornerstones of this structure and are
particularly attractive to investors."
It is expected that the flexible contractual arrangements
possible through use of the Bermuda LLC will be applied in a
variety of private equity fund, joint venture, asset holding and
Bermuda's development as an offshore jurisdiction responsive
to the needs of its market continues apace.
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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