Bermuda LLC Limited Liability Company Formation

Limited Liability Companies (LLCs)

LLCs in Bermuda may be formed under the Limited Liability Company Act 2016. LLCs must register
with the Registrar of Companies. Operating your business as an LLC can be as simple or as complex as
the terms set forth in the LLC agreement. If the LLC agreement does not provide for a particular
situation, the Limited Liability Company Act 2016 would apply. LLCs are either local or exempted.
LLCs are typically viewed as hybrid entities because they offer characteristics and advantages of both
partnerships and corporations. LLCs are similar to partnerships in that LLCs are managed and operated
pursuant to an LLC agreement amongst the members (owners) of the LLC. This provides significant
flexibility for LLC members to determine the most appropriate terms and conditions for the
administration and governance of the LLC. Operating your business as an LLC is similar to a limited
company in that the business’s finances are separate from your personal finances, but there are more
formalities and reporting and management responsibilities. LLCs are also similar to limited companies
in that LLC members will have limited liability for the debts of the business. This limitation on liability
typically remains in place even if LLC members actively participate in the management of an LLC. In
fact, the ability of the members to both manage the day-to-day operations of an LLC while retaining
their limited liability are two cornerstones of this structure and are particularly attractive to business

7/4/2018 Setting up a business in Bermuda 5/5
Bermuda LLCs fall into two principal categories: LLCs formed by Bermudians to trade primarily in
Bermuda (local LLCs) and LLCs formed by non-Bermudians for the purpose of conducting business
outside Bermuda (exempted LLCs). Exempted LLCs are so called because these LLCs are exempted
from those provisions of the Limited Liability Company Act which stipulate that at least 60% of the
equity must be beneficially owned by Bermudians.

Formation of LLCs in Bermuda

To set up an LLC in Bermuda, you will require assistance from a law firm, accounting firm, or
corporate service provider (CSP) located in Bermuda. These professionals will take you through each
step of LLC formation in Bermuda including, but not limited to:
· Name reservation
· Disclosure and vetting of proposed beneficial owners (members) in the LLC, including personal
declarations where required
· Drafting the LLC agreement
· Based on the nature of the proposed business activities, any license or permit applications
required to be submitted
· Selecting a registered office in Bermuda
· Selection of resident representative in Bermuda if required
· Payment of government fees