The Nevis Limited Liability Company Ordinance 1995, as amended to 1st January, 2002
Since the foundational company law decision in the House of Lords in the case of Salomon v. Salomon & Co back in 1896 which firmly upheld the concept of a corporation as an independent legal entity there have been attempts to strengthen the corporate veil or corporate shield which protects the human entities involved in the legal entity.
The most evolved form of the corporation is the Limited Liability Company. A Limited Liability Company is a combination of the best of all that the corporate world has to offer.
The advantage of being a sole proprietor of a company or forming a partnership is the elimination of ‘double taxation’ in that a sole proprietor or partnership is not taxed as a separate entity from its owners. The formation of a corporation allows the usual protection of the corporate shield which insulates the shareholders from liability for the actions of the corporation.
Although a corporation provides protection to its shareholders from liability for the debs of the business, the profits are taxed at the corporate level and again after the distribution of dividends to shareholders at the personal income tax level.
A Limited liability Company has the protection of the corporate structure and the benefit of a “pass through” tax structure. With a Limited Liability Company owners (members) are not held liable for debts and liabilities of the company plus the benefit of “pass through taxation.”
The Nevis Limited Liability Ordinance
The Government of the Federation of St. Kitts and Nevis in its bid to keep up with the developmental trends in the corporate and financial world, was one of the first Caribbean offshore jurisdictions to enact A Limited Liability Company Ordinance as early as 1995 and continues to make amendments to this legislation, providing a very attractive, ultra modern limited liability structure that offers maximum flexibility and protection.
With The Nevis Limited Liability Company Ordinance:
- Recognition of single member LLC as legitimate;
- Members may be individuals or entities of any nationality or domicile;
- Members may assign their interest to other parties unless otherwise restricted;
- Members privacy is protected;
- Enforces confidentiality;
- Re-domiciliation of any foreign LLC or company is permitted;
- A re-domiciled LLC will be deemed to have been a Nevis LLC from its original date of conception in its original jurisdiction;
- Company records may be located anywhere;
- No annual or other reports to be filed by members;
- No reporting requirements;
- Articles of Origination may easily be amended;
- Can be consolidated with other LLCs or other business entities;
- LLC may have perpetual succession or specific termination event or date;
- Members can actively participate in the management or take a more passive role;
- No stock limitations;
- Can issue preferred interest similar to preferred stock corporations;
- No taxes are levied in Nevis on assets or income generated outside of Nevis.
- Fees paid to Minister of Finance in accordance to schedule of fees;
- Filing of articles of organization along with appropriate fee receipt to the Registrar of companies.
Articles of Organization must contain:
- Name of Company (which name shall not be the same as or similar to that of any other company of any type or kind);
- Statement that the company is being formed under the Nevis LLC Ordinance;
- Latest date on which the company is to be dissolved (if any);
- Name and address of the registered agent in Nevis (who would manage the LLC).
The Nevis Limited Liability Company is a modern and innovative vehicle for the sophisticated investor interested in asset protection and tax advantages. It is a flexible and secure form of corporation offering complete confidentiality of all members’ names. In fact naming a member or manager of a Nevis LLC in any legal action brought against the company is legal ground for dismissal of the suit.
Any action to enforce a request for any information, which the manager reasonably believes to be in the nature of trade secrets or other information the disclosure of which the manager in good faith believes is not in the best interest of the LLC or could damage the LLC or its business or which the LLC is required by an agreement with a third party or by law to keep confidential, must be brought about through the High Court of Nevis. Additionally, failure of the LLC to keep records shall not be ground for holding any member or manager liable for any debts, liabilities or obligations of the LLC.
The Nevis LLC is a separate legal entity with rights and liabilities separate from its members, it can sue and be sued, and hold title to property in its own name. It is a highly flexible creature capable of doing all things necessary for the furtherance of its purpose within the confines of the law independent of its members and managers.