Each vehicle has its own distinct characteristics that may make it preferable to another in a given situation.

For example, while the owners of a company or an LLC and the limited partners of an LP each enjoy limited liability, limited partners of an LP may lose their limited liability status if they actively participate in the management of the LP, thereby incurring unlimited liability. In contrast, owners of a company or an LLC are permitted to participate in the management of the business of the company or the LLC, as applicable, without fear of losing their respective limited liability protection as investors in these entities.

As another example, a company may be preferable to both an LP and an LLC structure, given certain of its attributes such as unlimited duration, less cumbersome ownership transfer mechanics and simpler procedures for raising capital investment.

When making the decision to form a new vehicle, most business owners choose a form that best suits the needs of their business at that point in time.

However, over time, the business or the commercial environment can change dramatically. New laws or regulations can be introduced that affect important aspects of a business such as tax liability, risk exposure or disclosure requirements. The nature of a business can also change, which may necessitate a change to an entity’s legal form. Accordingly, such changes may mean that a particular commercial form may no longer serve its original purpose and objectives.

Fortunately, Bermuda has recently made legislative amendments that afford certain business owners more choices – including the flexibility to convert an existing entity into another type of entity through a simplified and streamlined process without having to dissolve and create a completely new entity. These amendments serve to further enhance Bermuda’s attractiveness to international businesses as a flexible commercial jurisdiction able to meet its needs, even as they evolve.

Read More

Type

Insight

Locations

Bermuda

Share
Twitter LinkedIn Email Save as PDF
More Publications
24 Nov 2022

Information Technology, Outsourcing, Privacy & Data Protection

All aspects of Bermuda's economy rely on information technology and data processing - an essential i...

Contributors: Duncan Card
22 Nov 2022

A Look Back on 2022 and What to Expect for 2023

As we approach the end of 2022, we are able to look back and say with certainty that the arena of la...

14 Nov 2022

When will the court enforce a promise?

As we all know, promises are made and broken all the time. What, if anything, can the law do to assi...

4 Nov 2022

Legally speaking: what not to do when outsourcing operations

In the course of my career, I have drafted, negotiated or otherwise provided commercial and legal ad...

1 Nov 2022

The Insolvency Review – Edition 10

The Insolvency Review offers an in-depth review of the most consequential features of the insolvenc...

25 Oct 2022

Bermuda: Mergers & Acquisitions Comparative Guide 2022

This country-specific Q&A provides an overview to Mergers & Acquisitions laws and regulati...

Contributors: Katie Blundy
24 Oct 2022

Directors’ duties on the eve of insolvency

It is common knowledge that directors of companies owe a duty to the company to act in its best inte...

Contributors: James Batten
13 Oct 2022

Employee probation periods: an update

The Employment Act 2000 is the island’s key piece of employment legislation, applicable to employe...

Contributors: Kiara Wilkinson
6 Oct 2022

Centre Stage: Bermuda’s Role In An Insurtech Revolution

Bermuda is rapidly becoming a focus for insurtechs seeking the island’s expertise, the accessibili...

5 Oct 2022

Bermuda’s Life Marketplace Supports Growing Demands Stemming From Aging Populations

Bermuda’s robust long-term re/insurance sector is well-positioned to support demands for life and ...