The possibility to apply to the Registrar of Companies to be designated as a LLC is normally offered only to Global Business Companies, that is, for GBC1 and GBC2. They can apply to the Registrar of Companies either at the time of incorporation, during or after this procedure. Where the LLCs have been properly adapted, they can fulfil the functions of a Limited Liability Partnership (LLP).
Part XXIII of the Companies Act 2001 provides for the details pertaining to the setting up and management of LLCs. For instance, their duration is limited to 50 years, with the possibility of extending it to a maximum of 150 years by way of a special resolution. Furthermore, the life of the LLC to be automatically terminated upon the occurrence of a prescribed event, may it be the firm’s winding up for reason of a member’s death, insanity, bankruptcy, expulsion, cessation or dissolution.
Also, the LLC’s constitution does not allow for the transfer of any share or other interest of the shareholder unless it has been ratified by a unanimous shareholder resolution or as the constitution may require and it can allow for the LLC to be managed by either its member (s) or a manager.
The advantages and uses of LLCs are normally as follows:
- Allows for the protection of worldwide assets (Shares, securities, real estate and others)
- High confidentiality is maintained
- Can benefit from tax exemption in many cases
- Members’ liability is guaranteed, as LLCs function like LLPs