Bermuda's House of Assembly has concluded its third reading
of the Limited Liability Company Bill 2016 which has now been
introduced to the Senate.
A limited liability company (LLC) is a hybrid legal structure
allowing the contractual and operational flexibility of a
partnership to be housed within a corporate entity. Subject to
approval by the Senate, the introduction of LLC will be the first
new corporate structure introduced in Bermuda in 100 years.
Although new in Bermuda, LLCs are of course well known to those
located in or who do business with, the United States of America.
In particular, Bermuda's legislation has been modelled on the
Delaware LLC and consequently will provide a welcome degree of
familiarity to clients and their advisers.
Although the LLC vehicle may be utilised by clients in a broad
range of sectors, the LLC has undoubtedly been of great interest to
clients in the investment management/funds sector.
Appleby is pleased to have been able to work closely with the
legislature to ensure that Bermuda's existing funds law is
simultaneously amended so that LLCs are available immediately for
use in investment fund structures.
We believe that the commonality with Delaware legislation will
prove to be one of the many benefits of using a Bermuda LLC when
structuring investments, allowing for consistency across the
constitutional documents in a master/feeder structure, parity
amongst investors and reduce implementation costs, especially where
the documentation for any onshore vehicle is substantially in
Clients who work within family offices may also be interested in
working with LLCs as they offer flexibility in structuring
arrangements where there may be a number of family members but
where a partnership or trust structure is unattractive for other
Upon the passing of Bermuda's LLC legislation, Appleby will
release a detailed memorandum, setting out the key features of the
legislation, the entity itself and further detail on how our
clients might consider using Bermuda's newest vehicle.
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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When working with family businesses, it's sometimes surprising to see the gap between the founder and the next generation, particularly when the next generation do not see the importance of the business.
Luxembourg ranks as the largest EU fund domicile jurisdiction
and the second largest fund domicile jurisdiction globally.
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