Cayman LLCs vs Delaware LLCs vs Jersey LLCs ' Points Of Distinction

JurisdictionDelaware,United States
Law FirmOgier
Subject MatterCorporate/Commercial Law, Litigation, Mediation & Arbitration, Insolvency/Bankruptcy/Re-structuring, Corporate and Company Law, Insolvency/Bankruptcy, Trials & Appeals & Compensation
AuthorMr Nick Rogers
Published date15 February 2023

The Limited Liability Companies (Jersey) Law 2018 (Jersey LLC Law) came into force on 01 September 2022, which created a new type of entity, a Jersey limited liability company (Jersey LLC). This follows a similar development in the Cayman Islands, where the Limited Liability Companies Act, 2016 (as amended) of the Cayman Islands (Cayman LLC Act) created the Cayman limited liability company (Cayman LLC). Both Jersey LLCs and Cayman LLCs share many similarities to their Delaware counterparts (Delaware LLC), and both have been set up principally to target the North American market where these concepts are familiar.

Accordingly, both the Jersey LLC Law and the Cayman LLC Act include many concepts and provisions from the Delaware Limited Liability Company Act (the Delaware Act), adapted to accommodate various principles of Jersey and Cayman Islands common law and existing legislation.

This memorandum highlights key points of distinction in the provisions of the Jersey LLC Law, the Cayman LLC Act and the Delaware Act. However, this memorandum does not purport to cover all of the differences between such laws and is not to be taken as specific legal advice applicable to particular issues or circumstances. In addition, it may not be relied on as advice as to Delaware law on which Ogier is not qualified to advise. Although this memorandum may refer in certain instances to the default position under the Jersey LLC Law or the Cayman LLC Act, each of such laws provides considerable flexibility to vary this default position in the respective LLC agreements.

Issue

Delaware

Cayman

Jersey

Name

Must include "LLC", "L.L.C." or "Limited Liability Company" in its name.

Not required to include "LLC", "L.L.C." or "Limited Liability Company" in its name.

Must end with the words "Limited Liability Company" in full or either of the abbreviations "LLC" or "L.L.C.".

LLC agreement

No requirement to be in writing. LLC agreement may have an "as of" date which may be prior to registration.

Must be in writing. Cayman LLC Act provides that the LLC agreement shall only be effective on date of registration of the Cayman LLC, although parties may agree that the LLC agreement shall be deemed to take effect between themselves (but not against third parties) as at an earlier date.

Must be in writing. LLC agreement may have an "as of" date which may be prior to registration.

Member management by majority

Default position: management by members acting by majority in interest.

Default position: management by members acting by majority in number.

Default position: management by members acting by majority in number of the...

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