Limited Liability Company Act 2016 passed in
News Alert published by Appleby in July 2016
The Limited Liability Company Act 2016 (LLC Act) has today passed in the Senate and is set to come into force in the near future. The LLC Act introduces into Bermuda the first new corporate structure 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 it 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. Appleby is ideall
What is an LLC?
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. Like a Bermuda exempted company, an LLC has separate legal personality and the liability of its members is limited. Whilst members of a Bermuda company receive shares, members of a Bermuda LLC will each have an interest in a capital account in a similar way to partners in a partnership. Under the Bermuda LLC Act parties can create bespoke vehicles having the contractual freedom to set out in the LLC agreement the terms of operation and management of the LLC as well as expressly agreeing on the allocation of profits and timing of distributions amongst its members. A Bermuda LLC may be managed by one or more members (a managing member) or a manager may be appointed who may or may not be entitled to share in the profits of the LLC.