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Marshall Island Limited liability company - LLC
In 1996, the Marshall Islands enacted a Limited Liability Company Act. The law was modeled after Delaware's LLC law. LLC combines the favorable elements of a corporation and a partnership. An operating agreement governs members but they have limited liability, as well as shareholders of a corporation. Unlike the limited partnership, however, where the general partner remains personally liable in the event of a business loss, the LLC allows all members to contribute without risking personal liability.
The main documents forming and governing an LLC are:
- Certificate of Formation (establishing the LLC)
- Operating Agreement (defining the economic organization, management responsibilities and other arrangements for members or owner of the LLC)
LLCs formed pursuant to the Marshall Islands Act must file a certificate of formation setting forth:
- LLCs name
- Registered Agent's name and address
- The latest date in which the limited liability company may be dissolved, it if has an established dissolution date.
- Any other matters the members determine to include therein.
Members in an LLC are not required to participate in the management of the entity; instead they may designate âmanagersâ (who may or may not be members) to manage affairs of the LLC. Members may also actively participate in management without losing their limited liability. Flexible management makes a LLC an excellent vehicle for transactions requiring a considerable degree of passive investment such as venture capital projects, investment in real estate, oil or technology, as well as research and development of business.