The Limited Liability Company (LLC) is the
first new legal vehicle to be introduced into Bermuda in many
The LLC was introduced by the Limited Liability Company Act 2016
(LLC Act), which was passed in the Senate in July
2016 and became operative on 1 October 2016.
The new legislation provides an additional option for those
structuring investment funds, private equity vehicles and
investment holding vehicles. As it is modelled on the Delaware LLC,
it will be familiar to those that do business with the United
This commonality with the Delaware LLC is one of the many
benefits of using an LLC to structure investment vehicles. The LLC
allows greater consistency between onshore/offshore structures and
will potentially reduce implementation costs when using
documentation employed by onshore vehicles. American managers using
a Delaware LLC onshore now have the option of forming a Bermuda LLC
The LLC is a hybrid legal vehicle that has many of the features
of a partnership with separate legal personality - but within a
corporate entity. The LLC also has much of the flexibility of a
partnership and the terms of the LLC agreement - including
operations, management and allocations of profits - can be made
Like a company limited by shares and a limited partnership, the
liability of an LLC's member is limited.
Bermuda exempted companies have separate legal personality but
must maintain a share capital while an exempted limited partnership
has greater contractual flexibility in relation to capital
accounting provisions. The members of an LLC have an interest in a
capital account like a partnership.
Article first published in the Royal Gazette in November
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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