Nevis Limited Liability Company Ordinance

The Nevis Limited Liability Company Ordinance was enacted in 1995 and provides Nevis, through this state-of-the-art LLC legislation, with a springboard to solve many of the problems that perturb lawyers and businessmen using, or hoping to use LLCs.

The Nevis is LLC is a business entity that provides an alternative to those who might consider using corporations or partnerships. It is analogous to limited liability companies in the U.S., to limited life companies elsewhere in the Caribbean, to GmbH's in Germany, to SARL's in France and to Limitada's in Latin America.

The owners of the Nevis LLC are referred to as members, who may be thought of in the same way as one thinks of partners in a partnership or shareholders in a corporation. Their precise characterization will depend on the nature of the LLC's management. The management might be vested in all of its members, who would have many of the characteristics of partners in a general partnership. Alternatively, the company might be run by designated managers, who may come from the ranks of the members or might be hired from the outside, making the company appear to be like a limited partnership or a corporation with general partners or officers and directors, in which case the members will be more passive investors like limited partners or shareholders.

A Nevis LLC is formed by filing articles of organization with the Registrar of Offshore Companies. The company's operations and the rights among the members are defined through an operating agreement. A foreign LLC (or like entity) may easily convert to a Nevis LLC by simply going through the conversion procedure (no more difficult than filing articles of organization): other foreign entities, such as corporations, may convert after transferring their domicile under equally simple processes.

Only the LLC is liable for its debts. No member, except those who may have affirmatively guaranteed company debts has liability for any LLC obligation.

Limited liability companies generally may be taxed either as corporations, with potential corporate level tax, or as partnerships, with income and losses flowing through to the members without any incidence of tax effects at the entity level. The Nevis LLC Ordinance permits planners to structure their Nevis LLC in any manner that suits their situation. Hence, if partnership tax treatment is desired, the Nevis LLC could be structured to lack continuity of life, free transferability, centralized management, or limited liability (only two need be avoided).

The Nevis LLC can be used for any business venture or professional practice anywhere in the world outside Nevis, including international financing arrangements to gather funds internationally for U.S. or non-U.S. operations, real estate holding in the U.S. or elsewhere, manufacturing concerns and operational or investment vehicles for offshore trusts.