Bermuda Exempted Limited Liability Companies

1. INTRODUCTION

The principal statute governing the formation and operation of Bermuda LLCs is the Limited Liability Company Act 2016 (the "Act")

An LLC is a separate legal entity which, subject to its LLC agreement, has the capacity, rights, powers and privileges of a natural person. Subject to the Act, any one or more persons may form an LLC for any lawful business, purpose or activity.

Bermuda law distinguishes between those LLCs which are owned predominantly by Bermudians ("local LLCs") and those which are owned predominantly by non-Bermudians ("exempted LLCs"). Only local LLCs are permitted to carry on and compete for business which is in Bermuda without a licence. Exempted LLCs may be resident in Bermuda and carry on business from Bermuda in connection with transactions and activities which are external to Bermuda. In practice, the activities of most exempted LLCs are unlikely to infringe this requirement.