Limited liability partnership
A limited liability partnership is a partnership in which some or all partners have limited liabilities. It therefore can exhibit elements of corporations. In a LLP, each partner is not liable for another partner's misconduct or negligence; this is an important difference from the traditional partnership under the UK Partnership Act 1890, in which each partner has joint and several liability. In a LLP, some or all partners have a form of limited liability similar to that of the shareholders of a corporation. Unlike corporate shareholders, the partners have the right to manage the business directly. In contrast, corporate shareholders must elect a board of directors under the laws of various state charters; the board organizes itself and hires corporate officers who have as "corporate" individuals the legal responsibility to manage the corporation in the corporation's best interest. A LLP contains a different level of tax liability from that of a corporation. Limited liability partnerships are distinct from limited partnerships in some countries, which may allow all LLP partners to have limited liability, while a limited partnership may require at least one unlimited partner and allow others to assume the role of a passive and limited liability investor.
As a result, in these countries, the LLP is more suited for businesses in which all investors wish to take an active role in management. In some countries, an LLP must have at least one person known as a "general partner", who has unlimited liability for the company. There is considerable difference between LLPs as constituted in the U. S. and those introduced in the UK under the Limited Liability Partnerships Act 2000 and adopted elsewhere. The UK LLP is, despite its name legislated as a corporate body rather than as a partnership. For a fuller country-by-country listing of types of partnerships and companies, see List of business entities. Partnerships are governed on a state-by-state basis in Australia. In Queensland, a limited liability partnership is composed of at least one general partner and one limited partner, it is thus similar to. All provinces—except Yukon, Prince Edward Island, Nunavut—permit LLPs for lawyers and accountants. In British Columbia, the Partnership Amendment Act, 2004 permits LLPs for lawyers and other professionals, as well as businesses.
In China, the LLP is known as a Special general partnership. The organizational form is restricted to knowledge-based professions and technical service industries; the structure shields co-partners from liabilities due to the willful misconduct or gross negligence of one partner or a group of partners. There is no exact equivalent of a Limited Liability Partnership in France. A limited partnership is equivalent to the French law vehicle known as a fr:Société en Commandite. A partnership company can be an equity partnership, known as a fr:Société en Participation, of a general partnership known as a fr:Société en Nom Collectif; the German Partnerschaftsgesellschaft or PartG is an association of non-commercial professionals, working together. Though not a corporate entity, it can sue and be sued, own property and act under the partnership's name; the partners, are jointly and severally liable for all the partnership's debts, except when only some partners' misconduct caused damages to another party — and only if professional liability insurance is mandatory.
Another exception, possible since 2012, is a Partnerschaftsgesellschaft mbB where all liabilities from professional misconduct are limited by the partnership's capital. The Partnerschaftsgesellschaft is not subject to corporate or business tax, only its partners' respective income is taxed. An LLP is an approximate equivalent to the Greek ΕΠΕ meaning Company of Limited Liability. In an ΕΠΕ the partners own personal shares that can be sold by a partner only when all other partners agree; the business management can be exercised either directly by the board of partners or by a General Manager. In the aspect of liability, an ΕΠΕ is identical to an LLP. In Hungary, LLP is equivalent to the Hungarian "Betéti Társaság" which must have at least two members: at least one must have unlimited liability and at least one must have limited liability. BTs have legal personhood under Hungarian law; the Limited Liability Partnership Act 2008 was published in the official Gazette of India on 9 January 2009 and has been in effect since 31 March 2009.
However, only limited sections of the Act have been ratified. Rules of the Act were published in the official Gazette on 1 April 2009 and amended in 2017; the first LLP was incorporated on 2 April 2009. In India as in many other jurisdictions, an LLP is different from a Limited Partnership. An LLP operates like a limited partnership, but in an LLP, each member is protected from personal liability, except to the extent of their capital contribution in the LLP. In India, for all purposes of taxation, an LLP is treated like any other Partnership firm. Liability is limited to each partners agreed upon contribution to the LLP. No partner is liable on account of the independent or unauthorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner's wrongful business decisions or misconduct. An LLP shall be a body a legal entity separate from its partners, it will have perpetual succession. Indian Partnership Act, 1932 shall not be applicable to LLPs and there
British Virgin Islands company law
British Virgin Islands company law is codified in the BVI Business Companies Act, 2004, to a lesser extent by the Insolvency Act, 2003 and the Securities and Investment Business Act, 2010. The British Virgin Islands has 30 registered companies per head of population, the highest ratio of any country in the world. Annual company registration fees provide a significant part of Government revenue in the British Virgin Islands, which accounts for the comparative lack of other taxation. Accordingly, company law forms a much more prominent part of the law of the British Virgin Islands than might otherwise be expected; the first companies legislation in the British Virgin Islands was the Companies Act, 1884. However the great leap forward for company law in the jurisdiction occurred in 1984 with the passing of the International Business Companies Act, 1984; that legislation was passed to try and promote the incorporation of offshore companies as a method of economic development in the wake of the cancellation by the U.
S. A. of the double taxation treaty which had existed between the two countries prior to that time. The International Business Companies Act was enormously successful, resulted in the registration of a large number of companies. However, in the early 2000s the British Virgin Islands came under external pressure to repeal statutes such as the International Business Companies Act which provided for "ring-fenced" taxation; this led to the repeal of both the Companies Act and the International Business Companies Act and their replacement with the BVI Business Companies Act, which provided for equal tax treatment of all companies. The change had little impact on incorporation rates as the British Virgin Islands imposes no form of direct taxation. In the British Virgin Islands, only a licensed registered agent can form a company, it is not possible for a member of the public to do so. The principal reason for this is to reinforce anti-money laundering obligations under the Anti-Money Laundering and Terrorist Financing Code of Practice, 2008.
Any person who wishes to form a registered company must do so through a licensed agent, the agent is required to obtain client due diligence to comply with the regulations. All companies formed in the British Virgin Islands are now registered under the BVI Business Companies Act. In addition there are a small number of statutory corporations, most of which serve some kind of public function. Under the BVI Business Companies Act it is possible to register five broad types of company: Company limited by shares Company limited by guarantee and not authorised to issue shares Company limited by guarantee and authorised to issue shares Unlimited company authorised to issue shares Unlimited company not authorised to issue sharesIn practice the vast majority of companies are registered as companies limited by shares. Furthermore, when registering a company, the company may further be registered as: Segregated portfolio company Restricted purpose companyA segregated portfolio company is a company which segregates the assets and liabilities of different classes of shares from each other and from the general assets of the company.
All segregated portfolio companies are required to include the designation "" within their name, must comply with the Segregated Portfolio Company Regulations, 2005. A restricted purpose company is a special type of company intended for use in bankruptcy remote bond issues, which only has limited corporate capacity to undertake certain specific purposes. Unusually, in the British Virgin Islands the formation of a company does not involve the issuing of subscriber shares. Accordingly, when a company is incorporated it has no members; the registered agent has a statutory power to appoint the first directors of the company, the first directors can receive subscriptions and issue shares. However, until the first shares are issued the directors are liable for anything which they do in the name of the company. In the British Virgin Islands a company has separate legal personality from its members; the liability of the members of a company is limited to their shares or the amount of their guarantee.
Directors or officers of a company are not liable for the company's debts except insofar as they may otherwise be liable for their own conduct or actions. The primary circumstances where liability may be imposed upon directors in relation to their acts as directors are where the company has no members, where a person acts as a director despite being disqualified, where the director authorises payment of an unlawful distribution which cannot be recovered, where the director is guilty of trading whilst insolvent, misfeasance or fraudulent trading, or where the director undertakes personal responsibility or liability for certain actions. Conversely, the assets of a company are regarded as belonging to the company and not the company's members. In exception circumstances the courts are prepared to "pierce the corporate veil" and treat the assets of the company as belonging to the members, but the circumstances in which this will be done are rare and exceptional; the corporate constitution of a private company regis
A societas Europaea is a public company registered in accordance with the corporate law of the European Union, introduced in 2004 with the Council Regulation on the Statute for a European Company. Such a company may more transfer to or merge with companies in other member states; as of April 2018, more than 3,000 registrations have been reported, including the following nine components of the Euro Stoxx 50 stock market index of leading Euro Area companies: Airbus, Allianz, BASF, E. ON, Fresenius, LVMH Moët Hennessy Louis Vuitton, SAP, Schneider Electric and Unibail-Rodamco. National law continues to supplement the basic rules in the Regulation on formation and mergers; the European Company Regulation is complemented by an Employee Involvement Directive that sets rules for participation by employees on the company's board of directors. There is a statute allowing European Cooperative Societies; the Statute provides four ways of forming a European limited company: By merger of national companies from different member states By the creation of a joint venture between companies in different member states By the creation of an SE subsidiary of a national company By the conversion of a national company into an SEFormation by merger is available only to public limited companies from different member states.
Formation of an SE holding company is available to public and private limited companies with their registered offices in different member states or having subsidiaries or branches in member states other than that of their registered office. Formation of a joint subsidiary is available under the same circumstances to any legal entities governed by public or private law; the SE must have a minimum subscribed capital of €120,000 as per article 4 of the directive, subject to the provision that where a member state requires a larger capital for companies exercising certain types of activities, the same requirement will apply to an SE with its registered office in that member state. The registered office of the SE designated in the statutes must be the place where it has its central administration, to say its true centre of operations; the SE may transfer its registered office within the European Economic Area without dissolving the company in one member state in order to form a new one in another member state.
The order of precedence of the laws applicable to the SE is clarified. The registration and completion of the liquidation of an SE must be disclosed for information purposes in the Official Journal of the European Communities; every SE must be registered in the State where it has its registered office, in a register designated by the law of that State. The Statutes of the SE must provide as governing bodies the general meeting of shareholders and either a management board and a supervisory board or an administrative board. Under the two-tier system the SE is managed by a management board; the member or members of the management board have the power to represent the company in dealings with third parties and in legal proceedings. They are removed by the supervisory board. No person may be a member of both the management board and the supervisory board of the same company at the same time, but the supervisory board may appoint one of its members to exercise the functions of a member of the management board in the event of absence through holidays.
During such a period the function of the person concerned as a member of the supervisory board shall be suspended. Under the single-tier system, the SE is managed by an administrative board; the member or members of the administrative board have the power to represent the company in dealings with third parties and in legal proceedings. Under the single-tier system the administrative board may delegate the power of management to one or more of its members; the following operations require the authorization of the supervisory board or the deliberation of the administrative board: any investment project requiring an amount more than the percentage of subscribed capital the conclusion of supply and performance contracts where the total turnover provided for therein is more than the percentage of turnover for the previous financial year the raising or granting of loans, the issue of debt securities and the assumption of liabilities of a third party or suretyship for a third party where the total money value in each case is more than the percentage of subscribed capital the setting-up, disposal or closing down of undertakings, businesses or parts of businesses where the purchase price or disposal proceeds account for more than the percentage of subscribed capital the percentage referred to above is to be determined by the Statutes of the SE.
It may not be less than 5% nor more than 25%. The SE must draw up annual accounts comprising the balance sheet, the profit and loss account, the notes to the accounts, an annual report giving a fair view of the company's business and of its position. In tax matters, the SE is treated the same as any other multinational, i.e. it is subject to the tax regime of the national legislation applicable to the company and its subsidiaries. SEs are subject to taxes and charges in all member states where their administrative c
A corporation is an organization a group of people or a company, authorized to act as a single entity and recognized as such in law. Early incorporated entities were established by charter. Most jurisdictions now allow the creation of new corporations through registration. Corporations come in many different types but are divided by the law of the jurisdiction where they are chartered into two kinds: by whether they can issue stock or not, or by whether they are formed to make a profit or not. Corporations can be divided by the number of owners: corporation corporation sole; the subject of this article is a corporation aggregate. A corporation sole is a legal entity consisting of a single incorporated office, occupied by a single natural person. Where local law distinguishes corporations by the ability to issue stock, corporations allowed to do so are referred to as "stock corporations", ownership of the corporation is through stock, owners of stock are referred to as "stockholders" or "shareholders".
Corporations not allowed to issue stock are referred to as "non-stock" corporations. Corporations chartered in regions where they are distinguished by whether they are allowed to be for profit or not are referred to as "for profit" and "not-for-profit" corporations, respectively. There is some overlap between stock/non-stock and for-profit/not-for-profit in that not-for-profit corporations are always non-stock as well. A for-profit corporation is always a stock corporation, but some for-profit corporations may choose to be non-stock. To simplify the explanation, whenever "Stockholder" or "shareholder" is used in the rest of this article to refer to a stock corporation, it is presumed to mean the same as "member" for a non-profit corporation or for a profit, non-stock corporation. Registered corporations have legal personality and their shares are owned by shareholders whose liability is limited to their investment. Shareholders do not actively manage a corporation. In most circumstances, a shareholder may serve as a director or officer of a corporation.
In American English, the word corporation is most used to describe large business corporations. In British English and in the Commonwealth countries, the term company is more used to describe the same sort of entity while the word corporation encompasses all incorporated entities. In American English, the word company can include entities such as partnerships that would not be referred to as companies in British English as they are not a separate legal entity. Late in the 19th century, a new form of company having the limited liability protections of a corporation, the more favorable tax treatment of either a sole proprietorship or partnership was developed. While not a corporation, this new type of entity became attractive as an alternative for corporations not needing to issue stock. In Germany, the organization was referred to as Gesellschaft mit beschränkter Haftung or GmbH. In the last quarter of the 20th Century this new form of non-corporate organization became available in the United States and other countries, was known as the limited liability company or LLC.
Since the GmbH and LLC forms of organization are technically not corporations, they will not be discussed in this article. The word "corporation" derives from corpus, the Latin word for body, or a "body of people". By the time of Justinian, Roman law recognized a range of corporate entities under the names universitas, corpus or collegium; these included the state itself and such private associations as sponsors of a religious cult, burial clubs, political groups, guilds of craftsmen or traders. Such bodies had the right to own property and make contracts, to receive gifts and legacies, to sue and be sued, and, in general, to perform legal acts through representatives. Private associations were granted designated liberties by the emperor. Entities which carried on business and were the subjects of legal rights were found in ancient Rome, the Maurya Empire in ancient India. In medieval Europe, churches became incorporated, as did local governments, such as the Pope and the City of London Corporation.
The point was that the incorporation would survive longer than the lives of any particular member, existing in perpetuity. The alleged oldest commercial corporation in the world, the Stora Kopparberg mining community in Falun, obtained a charter from King Magnus Eriksson in 1347. In medieval times, traders would do business through common law constructs, such as partnerships. Whenever people acted together with a view to profit, the law deemed. Early guilds and livery companies were often involved in the regulation of competition between traders. Dutch and English chartered companies, such as the Dutch East India Company and the Hudson's Bay Company, were created to lead the colonial ventures of European nations in the 17th century. Acting under a charter sanctioned by the Dutch government, the Dutch East India Company defeated Portuguese forces and established itself in the Moluccan Islands in order to profit from the European demand for spices. Investors in the VOC were issued paper certificates as proof of share ownership, were able to trade their shares on the original Amsterdam
United States corporate law
United States corporate law regulates the governance and power of corporations in US law. Every state and territory has its own basic corporate code, while federal law creates minimum standards for trade in company shares and governance rights, found in the Securities Act of 1933 and the Securities and Exchange Act of 1934, as amended by laws like the Sarbanes–Oxley Act of 2002 and the Dodd–Frank Act of 2010; the US Constitution was interpreted by the US Supreme Court to allow corporations to incorporate in the state of their choice, regardless of where their headquarters are. Over the 20th century, most major corporations incorporated under the Delaware General Corporation Law, which offered lower corporate taxes, fewer shareholder rights against directors, developed a specialized court and legal profession. Nevada has done the same. Twenty-four states follow the Model Business Corporation Act, while New York and California are important due to their size. At the Declaration of Independence, corporations had been unlawful without explicit authorization in a Royal Charter or an Act of Parliament of the United Kingdom.
Since the world's first stock market crash corporations were perceived as dangerous. This was because, as the economist Adam Smith wrote in The Wealth of Nations, directors managed "other people's money" and this conflict of interest meant directors were prone to "negligence and profusion". Corporations were only thought to be legitimate in specific industries that could not be managed efficiently through partnerships. After the US Constitution was ratified in 1788, corporations were still distrusted, were tied into debate about interstate exercise of sovereign power; the First Bank of the United States was chartered in 1791 by the US Congress to raise money for the government and create a common currency. It had private investors, but faced opposition from southern politicians who feared federal power overtaking state power. So, the First Bank's charter was written to expire in 20 years. State governments could and did incorporate corporations through special legislation. In 1811, New York became the first state to have a simple public registration procedure to start corporations for manufacturing business.
It allowed investors to have limited liability, so that if the enterprise went bankrupt investors would lose their investment, but not any extra debts, run up to creditors. An early US Supreme Court case, Trustees of Dartmouth College v Woodward, went so far as to say that once a corporation was established a state legislature could not amend it. States reacted by reserving the right to regulate future dealings by corporations. Speaking, corporations were treated as "legal persons" with separate legal personality from its shareholders, directors or employees. Corporations were the subject of legal rights and duties: they could make contracts, hold property or commission torts, but there was no necessary requirement to treat a corporation as favorably as a real person. Over the late 19th century and more states allowed free incorporation of businesses with a simple registration procedure. Many corporations would be small and democratically organized, with one-person, one-vote, no matter what amount the investor had, directors would be up for election.
However, the dominant trend led towards immense corporate groups where the standard rule was one-share, one-vote. At the end of the 19th century, "trust" systems were used to concentrate control into the hands of a few people, or a single person. In response, the Sherman Antitrust Act of 1890 was created to break up big business conglomerates, the Clayton Act of 1914 gave the government power to halt mergers and acquisitions that could damage the public interest. By the end of the First World War, it was perceived that ordinary people had little voice compared to the "financial oligarchy" of bankers and industrial magnates. In particular, employees lacked voice compared to shareholders, but plans for a post-war "industrial democracy" did not become widespread. Through the 1920s, power concentrated in fewer hands as corporations issued shares with multiple voting rights, while other shares were sold with no votes at all; this practice was halted in 1926 by public pressure and the New York Stock Exchange refusing to list non-voting shares.
It was possible to sell voteless shares in the economic boom of the 1920s, because more and more ordinary people were looking to the stock market to save the new money they were earning, but the law did not guarantee good information or fair terms. New shareholders had no power to bargain against large corporate issuers, but still needed a place to save. Before the Wall Street Crash of 1929, people were being sold shares in corporations with fake businesses, as accounts and business reports were not made available to the investing public; the Wall Street Crash saw the total collapse of stock market values, as shareholders realized that corporations had become overpriced. They sold shares en masse, meaning meant; the result was that thousands of businesses were forced to close, they laid off workers. Because workers had less money to spend, businesses received less income, leading to more closures and lay-offs; this downward spiral began the Great Depression. Berle and Means argued that under-regulation was the primary cause in their foundational book in 1932, The Modern Corporation and Private Property.
They said di
S. A. or Société anonyme designates a type of corporation in countries that employ civil law. Depending on language, it means anonymous company, anonymous partnership, share company, or joint-stock company equivalent to public limited company in common law jurisdictions, it is different from private limited companies. Shareholders could be anonymous and collect dividends by surrendering coupons attached to their share certificates. Dividends were therefore paid to. Share certificates could be transferred and therefore the management of the company would not know who owned its shares. Like bearer bonds, illegal unregistered share ownership and dividend collection enabled money laundering, tax evasion, concealed business transactions in general, so governments passed laws to audit the practice. Nowadays, shareholders of S. A.s are not anonymous, though shares can still be held by holding companies in order to obscure the beneficiary. S. A. can be an abbreviation of: Sociedade Anónima in Galician and European Portuguese Sociedá Anónima in Asturian and Leonese Sociedade Anônima in Brazilian Portuguese Societat Anònima in Catalan Société anonyme in French Società Anonima in Italian Sociedad Anónima or Sociedad por Acciones in Spanish Mexican law takes into account the variability of the corporate stock, resulting in most S.
A. turning into Sociedad Anónima de Capital Variable, or Sociedad Anónima Bursátil de Capital Variable for publicly traded companies. Mexico has Sociedad de Responsabilidad Limitada de Capital Variable, analogous to the limited liability company. Spółka Akcyjna in Polish Societate pe Acțiuni in RomanianIt is equivalent in literal meaning and function to: Naamloze vennootschap in Dutch Ανώνυμη Εταιρεία, Anonymi Etaireia in Greek Perseroan Terbatas Terbuka in Indonesia Berhad in Malaysia Anonim Şirket in Turkish Corporación anónima in VenezuelaIt is equivalent in function to: Shoqëri Aksionare in Albanian شركة مساهة عامة ذات مسؤولية محدودة ش.ذ.م.م, Sharikah musāhamah ʿāmmah dhāt mas'ūliyyah maḥdūdah in Arabic Dioničko društvo in Croatian and Bosnian Акционерно дружество, Aktsionerno druzhestvo in Bulgarian Акционерско друштво, Aktsionersko drushtvo in Macedonian Akciová společnost in Czech Aktieselskab in Danish Société anonyme égyptienne or (شركة مساهمة مصرية (ش.م.م in Egypt Osakeyhtiö in Finnish Aktsiaselts in Estonian Aktiengesellschaft in German Részvénytársaság in Hungarian Hlutafélag in Icelandic Public Limited in India Public limited company in the United Kingdom and several Commonwealth countries Kabushiki Gaisha or 株式会社 in Japan Jusighoesa or 주식회사 in Korea Société anonyme laotienne in Laos Akcinė bendrovė in Lithuanian Akciju Sabiedrība in Latvian Aksjeselskap in Norwegian Акционерное общество, Aktsionernoye obshchestvo in Russian Деоничарско друштво, Deoničarsko društvo, or Акционарско друштво, Akcionarsko društvo in Serbian Akciová spoločnosť in Slovak Delniška družba in Slovene Aktiebolag in Swedish Акціонерне товариство, Aktsionerne tovarystvo in Ukrainian Publicly traded company or Incorporated in the United States, though the former term does not appear in the names of business entities Compañía Anónima in Andorra ក.អ or Société anonyme cambodgienne in Cambodia Président-directeur général Global Witness on Anonymous Companies
Cayman Islands company law
Cayman Islands company law is codified in the Companies Law and the Limited Liability Companies Law, 2016, to a lesser extent in the Securities and Investment Business Law. The Cayman Islands is a leading Offshore financial centre, financial services forms a significant part of the economy of the Cayman Islands. Accordingly company law forms a much more prominent part of the law of the Cayman Islands than might otherwise be expected. There are broadly two types of company in the Cayman Islands; the first, more prevalent, are companies formed under the Companies Law. Such companies may be formed as ordinary resident companies, ordinary non-resident companies, exempted companies, exempted limited duration companies or special economic zone companies; the second is limited liability companies formed under the Limited Liability Companies Law, 2016. LLCs are a form of hybrid between partnerships. Although they have separate legal personality they do not have share capital, are managed by the majority vote of their members In the Cayman Islands any one or more persons may by subscribing their name to a company memorandum incorporate a company for a lawful purpose.
In practice, companies are invariably formed by professional trust companies rather than members of the public. Under the Companies Law it is possible to register companies as either a company limited by shares or a company limited by guarantee. A company limited by guarantee may be incorporated with a share capital. In practice the vast majority of companies are incorporated as companies limited by shares. Where a company will carry out its business principally outside of the Cayman Islands, it will be registered as an exempt company; this broadly replicates the International Business Company concept from other jurisdictions, except that in relation to exempt companies, there is no tax saving. The main benefit of registering as an exempt company is that exempt companies do not need to file accounts. Exempted companies can be registered as limited duration companies, or as special economic zone companies. Limited duration companies are required to include “LDC” or “Limited Duration Company” in their name, special economic zone companies are required to include “SEZC” or “Special Economic Zone Company” in their name.
In the Cayman Islands company may further be registered as segregated portfolio company. A segregated portfolio company is a company which segregates the assets and liabilities of different classes of shares from each other and from the general assets of the company. All segregated portfolio companies are required to include the designation "SPC" or “Segregated Portfolio Company” in full within their name. In the Cayman Islands a company has separate legal personality from its members ); the liability of the members of a company is limited to their shares or the amount of their guarantee. Directors or officers of a company are not liable for the company's debts except insofar as they may otherwise be liable for their own conduct or actions; the primary circumstances where liability may be imposed upon directors in relation to their acts as directors are where the director is guilty of fraudulent trading or misfeasance, or where the director undertakes personal responsibility or liability for certain actions.
Conversely, the assets of a company are regarded as belonging to the company and not the company's members. In exception circumstances the courts are prepared to "pierce the corporate veil" and treat the assets of the company as belonging to the members, but the circumstances in which this will be done are rare and exceptional; the corporate constitution of a private company registered under the Companies Law consists of the memorandum and articles of association. Companies may adopt the statutory form of Articles set out in Schedule 1 to the Companies Law, but in practice few companies do so; the memorandum and articles of association of a company are filed with the Companies Registry but are not available for public inspection. The memorandum and articles of association can only be amended by a special resolution, which under Cayman Islands law means a two-thirds majority, although this can be increased under the articles of association. Any amendment to the memorandum or articles becomes effective upon the passing of the special resolution.
The company is required to file the special resolution with the Companies Registry, but failure to do so will not affect the effectiveness of the amendment. Once adopted, the memorandum and articles bind the company and each member of the company as if they had been executed by the same under seal; the constitutional documents of an LLC is the LLC agreement. This is much more akin to a partnership agreement than to the memorandum and articles of association of a company; the LLC agreement is not registered with the Companies Registry. The business and affairs of a Cayman Islands company are managed by its board of directors; the board must consist of one or more persons, these may be individuals or companies. Directors owe strict duties of good faith to exercise their powers for a proper purpose and in the best interests of the company; the Companies Law is entirely silent in relation to the position of the directors, the relevant legal principles are all derived from the common law. The members of the company are the owners of the co