i e AT 19 of 1996 LIMITED LIABILITY COMPANIES ACT 1996

Transcription

1 i e AT 19 of 1996 LIMITED LIABILITY COMPANIES ACT 1996

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3 Limited Liability Companies At 1996 Index i e LIMITED LIABILITY COMPANIES ACT 1996 Index Setion Page PART 1 LIMITED LIABILITY COMPANIES 7 CHAPTER I - INTRODUCTION 7 1 Desription of the features of limited liability ompanies A Limited liability ompany may have one or more members Status, purposes and powers of limited liability ompanies Name of limited liability ompany Registered offie Registered agent... 9 CHAPTER II - REGISTRATION 10 6 Formation Artiles of organisation Registration of limited liability ompany Change et of registered offie or registered agent Annual returns Department of Eonomi Development may strike defunt limited liability ompany off register A Alternative proedure for dissolving solvent limited liability ompanies B Restoration of dissolved limited liability ompanies to the register C Power of Department to refuse to register or reeive douments D Appeals from deisions of Department CHAPTER III - CAPITAL: CONTRIBUTIONS, WITHDRAWAL, REDUCTION, ETC Contributions to apital Liability of members of limited liability ompanies Withdrawal or redution of members ontributions to apital Division of profits; impairment of apital Members interest and transferability CHAPTER IV - MANAGEMENT Management AT 19 of 1996 Page 3

4 Index Limited Liability Companies At Contrating debts Aounting reords Registration of harges Exeution of instruments Unauthorised assumption of powers Waiver of notie CHAPTER V - PROCEEDINGS AND INSPECTION Parties to ations Servie of proess Inspetion of affairs of ompanies PART 2 DISSOLUTION OF LIMITED LIABILITY COMPANIES Cirumstanes in whih limited liability ompanies are to be wound up Winding up proedure Distribution of assets in winding up Dissolution Appliation of bankrupty rules in winding up of insolvent limited liability ompanies Jurisdition of the High Court Appliation of Part X of the Companies At Property disovered after dissolution Power of ourt to delare dissolution of limited liability ompany void Offenes PART 3 TAXATION 32 CHAPTER I to 45 [Repealed] CHAPTER II - TAXATION OF OTHER LIMITED LIABILITY COMPANIES [Inserts setion 2M in the Inome Tax At 1970.] [Inserts setion 63A in the Inome Tax At 1970.] PART 4 GENERAL Inspetion of douments by the publi Offenes: members and offiers Fees Publi douments A Interpretation [Amendments to Companies At 1931 and Partnership At 1909] A Power to make orders as to disposal of valueless douments Finanial provision Short title and ommenement SCHEDULE 1 37 STATUS AND POWERS OF LIMITED LIABILITY COMPANIES 37 Page 4 AT 19 of 1996

5 Limited Liability Companies At 1996 Index SCHEDULE 2 38 MATTERS TO BE SPECIFIED IN THE ARTICLES OF ORGANISATION 38 SCHEDULE 3 39 REGISTRATION OF CHARGES 39 Provisions as to Limited Liability Company s Register of Charges and as to Copies of Instruments reating Charges 43 SCHEDULE 4 44 OFFENCES ETC ANTECEDENT TO OR IN THE COURSE OF WINDING UP 44 ENDNOTES 49 TABLE OF LEGISLATION HISTORY 49 TABLE OF RENUMBERED PROVISIONS 49 TABLE OF ENDNOTE REFERENCES 49 AT 19 of 1996 Page 5

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7 Limited Liability Companies At 1996 Setion 1 i e LIMITED LIABILITY COMPANIES ACT 1996 Reeived Royal Assent: 9 July 1996 Passed: 9 July 1996 Commened: 1 August 1996 AN ACT to provide for the establishment of limited liability ompanies; for the taxation of suh ompanies; and for other purposes. PART 1 LIMITED LIABILITY COMPANIES CHAPTER I - INTRODUCTION 1 Desription of the features of limited liability ompanies (1) A limited liability ompany formed under this At is a body of one or more persons the prinipal features of whih are that the ompany has legal personality and apaity for the exerise of its purposes and powers (setion 2); and [Repealed] 1 () (d) (e) (f) (g) the liability of its members is limited to the extent of their ontribution to its apital (setion 13); and restritions are imposed on the transfer of members interests in the ompany (setion 16); and the management of the ompany is vested in the members in proportion to their ontribution to the apital of the ompany or as otherwise permitted by this At (setion 17); and the ompany must be wound up and dissolved on the happening of ertain events suh as the death or resignation of a member (setion 27); and the profits of the ompany will be treated as the inome of the members for the purposes of inome tax (setion 46). 2 (2) This setion is for the purposes of explanation only and does not affet the operation of the following provisions of this At. AT 19 of 1996 Page 7

8 Setion 2 Limited Liability Companies At A Limited liability ompany may have one or more members (1) A limited liability ompany may be formed under setion 6 by one or more persons and may have one or more members. (2) Subsetion (1) has effet despite ontrary provision in any enatment or rule of law. (3) Subsetion (4) has effet in relation to an enatment or rule of law whih applies in relation to a limited liability ompany. (4) The enatment or rule of law applies to a limited liability ompany whih is formed by one person or whih has one member as it applies in relation to suh a ompany whih is formed by 2 or more persons or whih has 2 or more members, with any neessary modifiations. (5) Subsetion (4) is subjet to express provision to the ontrary. (6) Without limiting subsetion (4), if a limited liability ompany has only one member, referenes in this At to members, all members, other members and remaining members are to be treated as referenes to the sole member. 3 2 Status, purposes and powers of limited liability ompanies (1) A limited liability ompany is a legal entity whih is distint from its members, manager and registered agent. (2) A limited liability ompany whih is organised under this At may undertake any lawful ativity, trade or business exept to () [Repealed] 4 (d) suh business as may be presribed. 5 (3) Nothing in this At shall be interpreted as preluding a person who arries on a business whih requires liensing or authorisation under any statutory provision from forming a limited liability ompany; or preluding a limited liability ompany from holding any shares in, or debentures of a body orporate whih arries on suh a business, if the appliable statutory provision does not prohibit it and the body liensing or authorising the oupation does not prohibit it in exerise of any power onferred under suh provision. (4) A limited liability ompany has the status and powers speified in Shedule 1. Page 8 AT 19 of 1996

9 Limited Liability Companies At 1996 Setion 3 3 Name of limited liability ompany (1) The words limited liability ompany, or its abbreviations LLC or L.L.C. shall be inluded at the end of the name of every limited liability ompany. (2) The omission of the words limited liability ompany, or the abbreviations LLC or L.L.C. in the use of the name of the limited liability ompany shall render any person who partiipates in the omission, or knowingly aquieses in it, liable for any indebtedness, damage or liability oasioned by the omission. (3) The Company and Business Names et At 2012 has effet in respet of the names of limited liability ompanies whih are formed under this At. 6 (4) The requirements of that At are additional to the requirements of this At. 7 (5) to (7) [Repealed] 8 (8) to (10) [Repealed] 9 4 Registered offie (1) A limited liability ompany shall at all times maintain a registered offie in the Island. (2) If a limited liability ompany fails for 1 month to maintain a registered offie in ontravention of subsetion (1) it shall be guilty of an offene and shall be liable on summary onvition to a fine not exeeding 5,000; and it shall be deemed to be defunt until a registered offie is established and a statement in the presribed form is delivered to the Department Registered agent (1) A limited liability ompany shall at all times maintain a registered agent in the Island who shall hold the presribed qualifiations. (2) If a limited liability ompany fails for 1 month to maintain a registered agent in ontravention of subsetion (1) it shall be guilty of an offene and shall be liable on summary onvition to a fine not exeeding 5,000; and it shall be deemed to be defunt until a registered agent is appointed and a statement in the presribed form is delivered to the Department. 11 AT 19 of 1996 Page 9

10 Setion 6 Limited Liability Companies At 1996 CHAPTER II - REGISTRATION 6 Formation (1) Any person who is resident in the Island may apply to form a limited liability ompany by delivering to the Department () artiles of organisation whih omply with the requirements of this At and whih are signed by (i) (ii) the person forming the ompany; and the first members named in the artiles of organisation; and a onsent in the presribed form signed by the person named in the artiles as the registered agent; and a statement in the presribed form of the intended registered offie in the Island. 12 (2) The person forming the ompany need not be a member of the limited liability ompany. 7 Artiles of organisation (1) The artiles of organisation shall speify the name of the limited liability ompany; (1A) [Repealed] 13 () (d) the names and addresses of its members; the name and address of its registered agent in the Island; (e) the matters referred to in Shedule 2. Exept where the artiles of organisation fix a time for the dissolution of the limited liability ompany, the duration of the ompany shall not be limited to any fixed period of time. 14 (2) It is not neessary to set out in the artiles of organisation any of the powers speified in this At. (3) Subjet to subsetion (5), the artiles of organisation shall be amended when () (d) there is a hange in the name of the limited liability ompany; or there is a hange in the amount or the harater of the ontributions to apital; there is any hange in the membership of the limited liability ompany; there is a false or erroneous statement in the artiles of organisation; Page 10 AT 19 of 1996

11 Limited Liability Companies At 1996 Setion 8 (e) (f) (g) there is a hange in the time as stated in the artiles of organisation for the dissolution of the limited liability ompany; a time is fixed for the dissolution of the limited liability ompany if no time is speified in the artiles of organisation; or the members desire to make a hange in any other statement in the artiles of organisation in order that it shall aurately represent the agreement between them. (4) Any amendment to the artiles of organisation shall be adopted in aordane with the operating agreement or with the onsent of all members. (5) Where a limited liability ompany amends its artiles of organisation its registered agent shall within 1 month of the making of the amendment deliver to the Department notie, in the presribed form, of the amendment and the Department shall retain it with the registered opy of the artiles of organisation of the ompany. 15 (6) Where a limited liability ompany hanges its name, the Department shall on delivery of the douments referred to in subsetion (5), and subjet to ompliane with the requirements of the Company and Business Names et At 2012, issue a replaement ertifiate of organisation to meet the irumstanes of the ase. 16 (7) A hange of name shall have effet from the date on whih a replaement ertifiate is issued. (8) A hange of name of a limited liability ompany shall not affet any rights or obligations of the ompany, or render defetive any legal proeedings by or against the ompany, and any legal proeedings that might have been ontinued or ommened against it by its former name may be ontinued or ommened against it by its new name. 8 Registration of limited liability ompany (1) If the Department is satisfied that the requirements of this At in respet of the registration and of matters preedent and inidental to registration have been omplied with, it shall retain and register the douments delivered under setion (2) On the registration of douments under subsetion (1), the Department shall ertify that the limited liability ompany is organised and registered under this At. 18 (3) A ertifiate of organisation shall be onlusive evidene that all the requirements of this At in respet of registration and of matters preedent and inidental to registration have been omplied with and that a limited liability ompany has been organised and registered under this At. AT 19 of 1996 Page 11

12 Setion 9 Limited Liability Companies At 1996 (4) A limited liability ompany shall not transat business nor inur indebtedness, exept that whih is inidental to its organisation and registration; or to obtaining subsriptions for or payment of ontributions, until the ertifiate of organisation is issued. 9 Change et of registered offie or registered agent (1) If for any reason there is a hange in the registered offie or the registered agent of a limited liability ompany, the ompany shall deliver to the Department within 1 month of the hange a statement in the presribed form. 19 (2) If a limited liability ompany fails to omply with subsetion (1) it shall be guilty of an offene and shall be liable on summary onvition to a fine not exeeding 5,000; it shall be deemed to be defunt until the statement is delivered to the Department Annual returns (1) Every limited liability ompany shall in eah year deliver an annual return in the presribed form to the Department within one month of the anniversary of the ompany s registration under this At. 21 (2) The annual return shall state () (d) the address of the registered offie of the ompany; the name and address of the registered agent of the ompany; the name and address of the manager (if any) of the ompany, the date of his eletion and the period of his appointment; 22 the names and addresses of the members of the ompany, or, where any of those partiulars remain unhanged, it shall state that fat. (3) If a limited liability ompany fails to omply with subsetion (1) it shall be guilty of an offene and shall be liable on summary onvition to a fine not exeeding 5,000; it shall be deemed to be defunt until the annual return is delivered to the Department. 23 Page 12 AT 19 of 1996

13 Limited Liability Companies At 1996 Setion Department of Eonomi Development may strike defunt limited liability ompany off register (1) Where the Department has reasonable ause to believe that a limited liability ompany is not arrying on business or in operation, it may send a letter inquiring whether the ompany is arrying on business or in operation; and stating that if no answer is reeived within 2 months from the date of the letter, a notie will be published with a view to striking the name of the ompany off the register. 24 (2) A letter sent under subsetion (1) of this setion shall be sent by reorded delivery. (3) If the Department either reeives an answer to the effet that the limited liability ompany is not arrying on business or in operation, or does not within 2 months after sending the letter under subsetion (1) of this setion reeive any answer, it will publish and send to the ompany by post, a notie that at the expiration of 2 months from the date of that notie the name of the ompany mentioned therein will, unless ause is shown to the ontrary, be struk off the register and the ompany will be dissolved. 25 (4) If, in any ase where a limited liability ompany is being wound up, the Department has reasonable ause to believe either that no liquidator is ating, or that the affairs of the ompany are fully wound up, and the returns required to be made by the liquidator have not been made for a period of 6 onseutive months, the Department shall publish and send to the ompany or the liquidator, if any, a like notie as is provided in the last preeding subsetion. 26 (5) At the expiration of the time mentioned in the notie the Department may, unless ause to the ontrary is previously shown by the ompany, strike its name off the register, and shall publish notie and on the publiation the ompany shall be dissolved: Provided that the liability of every manager, if any, and member shall ontinue and may be enfored as if the ompany had not been dissolved; and nothing in this subsetion shall affet the power of the ourt to wind up a limited liability ompany the name of whih has been struk off the register. 27 (6) If a limited liability ompany or any member or reditor feels aggrieved by the ompany having been struk off the register, the ourt on an appliation made by the ompany or member or reditor before the expiration of 12 years from the publiation of the notie aforesaid may, if AT 19 of 1996 Page 13

14 Setion 11 Limited Liability Companies At 1996 satisfied that the ompany was at the time of the striking off arrying on business or in operation or otherwise that it is just that the ompany be restored to the register, order the name of the ompany to be restored to the register, and upon an offie opy of the order being delivered to the Department for registration together with suh fee as may be presribed under setion 50 for the restoration of the ompany to the register, the ompany shall be deemed to have ontinued in existene as if its name had not been struk off, and the ourt may by order give suh diretions and make suh provisions as seem just for plaing the ompany and all other persons in the same position as nearly as may be as if the name of the ompany had not been struk off. 28 (7) A notie to be sent under this setion to a liquidator may be addressed to the liquidator at his last known plae of business, and a letter or notie to be sent under this setion to a limited liability ompany may be addressed to the ompany at its registered offie, or, if no offie has been registered or the Department has reasonable ause to believe that the registered offie has been abandoned, to the are of the manager, the registered agent or any member whose name and address are known to the Department, or may be sent to eah of the persons who subsribed to the artiles of organisation, addressed to him at the address mentioned in the artiles of organisation. 29 (8) For the purposes of this setion, a limited liability ompany whih has failed to forward an annual return to the Department within 6 months after the ompany s return date under setion 10, shall be deemed not to be in operation until suh return is forwarded to the Department. 30 (9) Subsetion (8) is without prejudie to setion 10(3) of this At. (10) For the purposes of this setion and setion 11A, a notie shall be onsidered published () by publishing a notie in one edition of a newspaper published and irulating in the Isle of Man; and by publishing a notie on the Department of Eonomi Development website for a minimum period of one month; and 31 by the Department maintaining a urrent list in the presribed form and with the presribed partiulars of limited liability ompanies in respet of whih notie has been published and by making suh list available for inspetion by any person A Alternative proedure for dissolving solvent limited liability ompanies (1) Where a limited liability ompany has eased to operate and has disharged all its debts and liabilities (other than ontributions to apital owed to its members) the registered agent or any member of the Page 14 AT 19 of 1996

15 Limited Liability Companies At 1996 Setion 11 ompany may apply to the Department for a delaration of dissolution of the ompany. 33 (2) An appliation by a limited liability ompany under this setion in the presribed form for a delaration of dissolution shall be in writing and shall be aompanied by a statutory delaration made by a manager or a member of the limited liability ompany stating that the ompany has eased to operate, that it has omplied with its obligations under setion 10 and that to the best of his knowledge and belief and having made full enquiry into the affairs of the limited liability ompany the manager or member is satisfied that the limited liability ompany has disharged all its debts and liabilities (other than ontributions to apital owed to its members); and the partiulars ontained within the last annual return of the limited liability ompany (or, in the ase of a ompany for whih an annual return has not fallen due, the partiulars filed on first registration) remain aurate at the date of making the statutory delaration or that they are aurate as amended by the appliant at the date of making the statutory delaration. (3) Upon reeipt of an appliation under subsetion (1) the Department shall publish a notie in the manner presribed by setion 11(10) to the effet that the appliant has applied to the Department for a delaration of dissolution of the limited liability ompany and that, unless written objetion is made to the Department within one month of the date of publiation of the notie, the Department may dissolve the ompany; and within one month of the date of publiation of the notie obtain written notie from the Finanial Supervision Commission, the Assessor of Inome Tax, the Colletor of Customs and Exise and the Attorney General that they have no objetion to the making of a delaration of dissolution in respet of the limited liability ompany. 34 (4) The ourt, on being satisfied that the period made available to the Assessor of Inome Tax or the Colletor of Customs and Exise or the Attorney General by the Department for the making of objetions under subsetion (3) requires to be extended, may upon appliation order that the period for objetions shall be extended on suh terms and onditions as it deems appropriate. 35 (5) Before making an appliation to the Department under this setion, the appliant shall ensure that there has been sent by pre-paid post to the registered agent and to the manager (if any) and eah member of the limited liability ompany at the last address of whih the limited liability AT 19 of 1996 Page 15

16 Setion 11 Limited Liability Companies At 1996 ompany has notie, a notie to the effet that the appliant proposes to apply to the Department for a delaration of dissolution of the limited liability ompany and that, unless written objetion is made to the Department within one month of the date the notie was posted, the Department may dissolve the limited liability ompany. 36 (6) The Department shall not make a delaration of dissolution of a limited liability ompany earlier than one month after the date of the publiation of the notie required by subsetion (3) of this setion. 37 (7) On reeipt of any written objetion to the dissolution of the limited liability ompany, the Department shall forthwith notify the appliant for the delaration of dissolution of the reeipt of the objetion and of the identity of the objetor. 38 (8) Where any manager, member or reditor of a limited liability ompany has objeted to the dissolution of the limited liability ompany the Department shall not delare the dissolution thereof unless the manager, member or reditor, as the ase may be, withdraws the objetion; or the Department deides that the objetion is ompletely without justifiation, and 39 the objetor has not appealed against the Department s deision within the time speified in setion 11D(1), or the ourt has upheld the Department s deision. 40 (9) If the Department is not prevented from delaring the dissolution of a limited liability ompany pursuant to this setion and agrees to the dissolution, it shall notify the limited liability ompany that, subjet to the ompany s artiles of organisation, operating agreement or other doument evidening agreement between the members, it is entitled to distribute its surplus assets among its members aording to their respetive rights and, notwithstanding any other provision of this At or any rule of law, the limited liability ompany may distribute its surplus assets aordingly. 41 (10) Subjet to subsetion (11) of this setion, on reeipt of notifiation from a limited liability ompany that its surplus assets have been distributed in aordane with subsetion (9) of this setion, the Department may, by notie in one newspaper published and irulating in the Isle of Man, delare that the limited liability ompany is dissolved and, on the publiation of the notie, the limited liability ompany shall be dissolved. 42 (11) Notwithstanding the dissolution of the limited liability ompany the liability, if any, of every manager and member of the ompany shall ontinue and may be enfored as if the limited liability ompany had not been dissolved; and Page 16 AT 19 of 1996

17 Limited Liability Companies At 1996 Setion 11 notwithstanding that a limited liability ompany has been dissolved, or that its surplus assets have been distributed in aordane with this setion, the ourt may wind up the limited liability ompany as if it had not been dissolved, or its surplus assets had not been distributed, as the ase may be. (12) Where a limited liability ompany has been dissolved pursuant to this setion, the ourt, on an appliation made by the Department or the manager (if any), a member or reditor of the limited liability ompany before the expiration of 12 years from the publiation of the notie of dissolution, may, if satisfied that at the time of dissolution of the limited liability ompany it was in operation or had not disharged all its debts and liabilities or otherwise that it is just that the dissolution of the limited liability ompany be revoked, order that the dissolution of the limited liability ompany be revoked, and upon a sealed opy of the order being delivered to the Department for registration, the limited liability ompany shall be deemed to have ontinued in existene as if it had not been dissolved; and the ourt may by the order give suh diretions and make suh provisions as seem just for plaing the limited liability ompany and all other persons in the same position as nearly as may be as if the limited liability ompany had not been dissolved. 43 (13) An order under subsetion (12) may be made on suh terms and onditions as the ourt thinks fit B Restoration of dissolved limited liability ompanies to the register (1) A limited liability ompany or any manager, member or reditor thereof who feels aggrieved by a ompany having been either struk off the register under setion 11 of this At; or dissolved under setion 11A of this At, may, before the expiration of 12 years from the publiation of a notie under setion 11(5) or setion 11A(10), make appliation to the Department for a diretion under this setion. 45 (2) Upon reeipt of an appliation under subsetion (1) the Department shall, within a reasonable time, publish notie of the appliation on the Department of Eonomi Development website and shall maintain a urrent list of appliations. 46 (3) An appliation under subsetion (1) shall be in the presribed form and shall be aompanied by a opy of the notie given under subsetion (4) of this setion; and written notie from the Finanial Supervision Commission, the Attorney General, the Assessor of Inome Tax and the Colletor of Customs and Exise stating that they have no objetion to the restoration of the limited liability ompany to the register. 47 AT 19 of 1996 Page 17

18 Setion 11 Limited Liability Companies At 1996 (4) Before making an appliation to the Department under subsetion (1) of this setion, the appliant shall ensure that there has been published in one newspaper published and irulating in the Isle of Man; and sent by post to eah member of the limited liability ompany at the last address of whih the limited liability ompany has notie, a notie to the effet that the appliant proposes to apply to the Department for a diretion restoring the limited liability ompany to the register and that unless written objetion is made to the Department within one month of the date of publishing or posting, as the ase may be, the Department may make suh diretion. 48 (5) The Department shall not make a diretion under this setion earlier than one month after the date of publiation or posting, as the ase may be, of the last notie published or posted for the purposes of subsetion (4) of this setion. 49 (6) On reeipt of any written objetion to the restoration of the limited liability ompany, the Department shall forthwith notify the appliant of the reeipt of the objetion and of the identity of the objetor. 50 (7) The Department shall not make a diretion under this setion unless () there are no objetions to the restoration of the limited liability ompany under this setion; or all objetions are withdrawn; or the Department deides that the objetions are without justifiation and the objetor has not appealed against the Department s deision within the time speified in setion 11D of this At or the ourt has upheld the Department s deision. 51 (8) On reeipt of an appliation under this setion the Department, if satisfied that there are good grounds for restoration of the limited liability ompany to the register, may diret the name of the ompany to be restored to the register. 52 (9) A diretion given under this setion may be made subjet to onditions and the Department may inlude suh further diretions and suh provisions as seem just for plaing the limited liability ompany and all other persons in the same position as nearly as maybe as if the ompany had not been dissolved and without prejudie to the generality of the foregoing any fees and duties due to the Department shall be due and payable at the rates prevailing at the date of suh restoration. 53 (10) When the appliant delivers a ertified opy of the diretion for registration the limited liability ompany shall be deemed to have ontinued in existene as if it had not been dissolved. Page 18 AT 19 of 1996

19 Limited Liability Companies At 1996 Setion 11 (11) This setion is without prejudie to the powers of the ourt under setion 11(6) or setion 11A(12) C Power of Department to refuse to register or reeive douments (1) Subjet to setion 11D, a doument shall be deemed not to have been submitted under this At to the Department (whether by delivery, filing, prodution, forwarding, lodging, eletroni filing or otherwise) until the time when it is aepted for registration or otherwise reeived by the Department. 55 (2) The Department may presribe regulations for the eletroni filing of any doument required to be filed under this At. 56 (3) If in the opinion of the Department any doument submitted to it under this At () (d) (e) (f) (g) ontains any matter ontrary to law; or does not omply with this At; or has not been duly ompleted; or ontains any misdesription or error, or any matter that is not learly legible; or is not furnished in suh manner and onforming to suh requirements as the Department may reasonably require for the purpose of enabling the proessing and opying of the doument; or is not aompanied by the orret fee or duty; or is not in the presribed format; it may refuse to aept for registration or otherwise reeive the doument, and may request either that the doument be appropriately amended or ompleted and submitted to it again or that a fresh doument be submitted in its plae or that the doument be submitted again with the orret fee or duty. 57 (4) The Department may require any person who submits a doument to it under this At to produe to it suh other doument or to give to it suh information as it onsiders neessary in order to form an opinion whether it may refuse under subsetion (3) of this setion to aept for registration or to otherwise reeive the doument D Appeals from deisions of Department (1) Any person who is aggrieved by the refusal of the Department to register a limited liability ompany, or to register or reeive any doument submitted to it under this At, or who is aggrieved by any other at or deision of the Department under this At, may appeal to a ourt of AT 19 of 1996 Page 19

20 Setion 12 Limited Liability Companies At 1996 summary jurisdition within 21 days after the date of the refusal or other at or deision, or within suh further time as the ourt may allow. 59 (2) On hearing the appeal, the ourt may onfirm the refusal or other at or deision of the Department, or give suh diretions or make suh determination in the matter as the ourt thinks fit. 60 (3) No right of appeal shall lie under this setion against any at or deision of the Department in respet of whih there is any express provision in this At in the nature of an appeal or review; or that is delared by this At to be onlusive or final, or that is embodied in any doument delared by this At to be onlusive evidene of any at, deision, matter, or thing. 61 (4) Subjet to subsetion (5), notwithstanding any other provision of any enatment or any rule of law, where a person appeals or applies to the ourt in respet of an at or deision of the Department under setion 11C until a deision on the appeal or appliation is given, the Department, and any person authorised by it under that setion for the purpose, may ontinue to exerise its powers under that setion as if no suh appeal or appliation had been made, and no person shall be exused from fulfilling his obligations under that setion by reason of that appeal or appliation. 62 (5) To the extent that an appeal or appliation in respet of any suh at or deision is allowed or granted, as the ase may be the Department shall ensure that, forthwith after the deision on the appeal or appliation is given, all reords made by it, or by a person authorised by it for that purpose, under setion 11C in respet of that at or deision are destroyed or expunged; and 63 no information aquired under setion 11C of this At in respet of that at or deision shall be admissible in any proeedings. 64 CHAPTER III - CAPITAL: CONTRIBUTIONS, WITHDRAWAL, REDUCTION, ETC 12 Contributions to apital The ontributions to apital of a member to a limited liability ompany may be in ash, property or servies rendered, or by means of a promissory note or any form of binding obligation to ontribute ash or property or to perform servies. 13 Liability of members of limited liability ompanies (1) The liability of a member is limited to Page 20 AT 19 of 1996

21 Limited Liability Companies At 1996 Setion 14 the differene between his ontributions to apital as atually made and that stated in the artiles of organisation, operating agreement, subsription for ontribution or other doument exeuted by the member as having been made by the member; and any unpaid ontribution to apital whih he agreed in the artiles of organisation, operating agreement or other doument exeuted by the member to make in the future at the time and on the onditions stated in the artiles of organisation, operating agreement or other doument evidening suh agreement. (2) Subjet to subsetion (3), the liabilities of a member speified in subsetion (1) an be waived or ompromised with the onsent of all members. (3) A waiver or ompromise under subsetion (2) shall not affet the rights of any reditor of, or any other person having a laim against, the limited liability ompany. (4) When the whole or part of the apital of a ontributor has been returned to him, he shall for a period of 6 years after the return ontinue to be liable to the limited liability ompany for any sum (not exeeding the amount returned) neessary to disharge its relevant liabilities. (5) For the purposes of subsetion (4), the relevant liabilities are the liabilities to all reditors of, and other persons having laims against, the limited liability ompany, in respet of any redit extended during the period that the returned apital ontribution was held by the limited liability ompany; or any laims whih arose before the return. 14 Withdrawal or redution of members ontributions to apital (1) A member shall not reeive out of the property of a limited liability ompany any part of his ontribution to apital unless () all liabilities of the limited liability ompany, exept liabilities to members on aount of their ontributions to apital, have been paid or there remains property of the limited liability ompany suffiient to pay them; the onsent of all members is had, unless the return of the ontribution to apital may be rightfully demanded as provided in this At; and 65 the artiles of organisation permit the withdrawal or redution. (2) Subjet to the provisions of subsetion (1), a member may demand the return of his ontribution on the dissolution of the limited liability ompany; or AT 19 of 1996 Page 21

22 Setion 15 Limited Liability Companies At 1996 unless otherwise prohibited or restrited in the operating agreement, after the member has given all other members of the limited liability ompany prior notie in writing in onformity with the operating agreement. (3) If the operating agreement does not prohibit or restrit the right to demand the return of apital and no notie period is speified, a member making the demand must give 6 months prior notie in writing. (4) In the absene of a statement in the artiles of organisation to the ontrary or the onsent of all members of the limited liability ompany, a member, irrespetive of the nature of his ontribution, has only the right to demand and reeive ash in return for his ontribution to apital. (5) A member of a limited liability ompany may have the limited liability ompany dissolved and its affairs wound up when the member rightfully but unsuessfully has demanded the return of his ontribution; or the other liabilities of the limited liability ompany have not been paid, or the property of the limited liability ompany is insuffiient for their payment and the member would otherwise be entitled to the return of his ontribution. 15 Division of profits; impairment of apital (1) Subjet to subsetion (2), a limited liability ompany may, from time to time, divide and alloate the profits and losses of its business among the members and among lasses of the members of the ompany in aordane with the operating agreement. (2) No distribution shall be made if, after suh distribution, the assets of the limited liability ompany would not be in exess of all liabilities of the limited liability ompany exept liabilities to members on aount of their ontributions. (3) If the operating agreement does not so provide, profits and losses shall be alloated on the basis of the value of the ontributions made by eah member to the extent they have been reeived by the limited liability ompany and have not been returned. (4) Subjet to subsetion (5), distributions of ash or other assets of a limited liability ompany shall be alloated among the members and among lasses of members in the manner provided in the operating agreement. (5) If the operating agreement does not so provide, distributions shall be made on the basis of the value of the ontributions made by eah member to the extent they have been reeived by the limited liability ompany and have not been returned. (6) The provisions of this setion relating to the alloation of losses shall not affet the limitation on liability of members under setion 13. Page 22 AT 19 of 1996

23 Limited Liability Companies At 1996 Setion Members interest and transferability (1) The interest of all members in a limited liability ompany onstitutes the personal estate of the member, and may be transferred or assigned as provided in the operating agreement. (2) If all the members of a limited liability ompany other than the member proposing to dispose of his interest do not approve of the proposed transfer or assignment by unanimous written onsent, the transferee of the member s interest shall have no right to beome a member of the limited liability ompany; or to partiipate in the management of the business and affairs of the limited liability ompany. (3) Suh a transferee shall only be entitled to reeive the share of profits or other ompensation by way of inome and the return of ontributions, to whih the original member would otherwise have been entitled. CHAPTER IV - MANAGEMENT 17 Management (1) Subjet to the following provisions of this setion, a limited liability ompany shall be managed by its members. (2) The rights of the members to manage a limited liability ompany shall be in proportion to their ontribution to the apital of the ompany, as adjusted from time to time to reflet any additional ontributions or withdrawals by the members. (3) If provision is made for it in the artiles of organisation, management of the limited liability ompany may be vested in a manager who shall be eleted by the members in a manner provided for in the operating agreement; and hold offie for suh period as the members shall determine, unless the operating agreement expressly provides otherwise. (4) The manager and any person appointed by him, shall have any suh right or duty as is speified in the operating agreement; and expressly onfirmed by the members. 18 Contrating debts Exept as otherwise provided in this At, no debt shall be ontrated or liability inurred by or on behalf of a limited liability ompany, exept by any member if management of the limited liability ompany is retained by the members; or AT 19 of 1996 Page 23

24 Setion 19 Limited Liability Companies At 1996 its manager if management of the limited liability ompany has been onferred on a manager. 19 Aounting reords (1) Every limited liability ompany shall ause aounting reords to be kept in aordane with the provisions of this setion. (2) The aounting reords shall be suffiient to show and explain the ompany s transations. (3) The aounting reords shall be suh as to dislose, within a reasonable time and with reasonable auray, the finanial position of the ompany at any time. (4) The aounting reords shall in partiular ontain entries from day to day of all sums of money reeived and expended by the ompany and the matters in respet of whih the reeipt and expenditure takes plae; a reord of the assets and liabilities of the ompany; and () where the ompany s business involves dealing in goods (i) (ii) (iii) statements of stok held by the ompany at the end of eah finanial year of the ompany; all statements of stoktakings from whih any suh statement as is mentioned in sub-paragraph (i) has been or is to be prepared; and exept in the ase of goods sold by way of ordinary retail trade, statements of all goods sold and purhased showing the goods and the buyers and sellers in suffiient detail to enable the goods and the buyers and sellers to be identified. (5) Subjet to subsetion (6), the aounting reords shall be kept at the registered offie of the ompany or at suh other plae as the members of the ompany think fit and shall at all times be open to inspetion by the members of the ompany. (6) If aounting reords are kept at a plae outside the Island by a ompany, aounts and returns with respet to the business dealt with in the aounting reords so kept shall be sent to, and kept at a plae in the Island and shall at all times be open to inspetion by the members of the ompany. (7) The aounts and returns to be sent to the Island in aordane with subsetion (6) shall be suh as to dislose with reasonable auray the finanial position of the business in question at intervals not exeeding 6 months. Page 24 AT 19 of 1996

25 Limited Liability Companies At 1996 Setion 20 (8) Subjet to any diretion with respet to the disposal of any reords kept by a ompany given under any regulations under setion 28, any aounting reords whih a ompany is required by this setion to keep shall be preserved by it for 6 years from the date on whih they are made. (9) If a ompany fails to omply with any provision of subsetions (1) to (6), every member and manager (if any) of the ompany shall be guilty of an offene. (10) A person shall not be guilty of an offene under subsetion (9) if he shows that he ated honestly and that in the irumstanes in whih the business of the ompany was arried on the default was exusable. (11) If any member or manager of a ompany fails to take all reasonable steps for seuring ompliane by the ompany with subsetion (8) or has intentionally aused any default by the ompany thereunder he shall be guilty of an offene. (12) Any person guilty of an offene under this setion shall be liable on onvition on information to ustody for a term not exeeding 2 years, or to a fine, or to both; on summary onvition, to ustody for a term not exeeding 6 months, or to a fine not exeeding 5,000, or to both. 20 Registration of harges Shedule 3, whih provides for the registration of harges, shall have effet. 21 Exeution of instruments Instruments and douments providing for the aquisition, mortgage or disposition of property of a limited liability ompany shall be valid and binding upon the limited liability ompany if exeuted by any member if management of the limited liability ompany is retained by the members; or its manager if management of the limited liability ompany has been onferred on a manager. 22 Unauthorised assumption of powers All persons who assume to at as a limited liability ompany without authority to do so shall be jointly and severally liable for all debts and liabilities. 23 Waiver of notie When, under this At or under the artiles of organisation or operating agreement of a limited liability ompany, notie is required to be given to a member or to a manager of a limited liability ompany having a manager or AT 19 of 1996 Page 25

26 Setion 24 Limited Liability Companies At 1996 managers, a waiver in writing signed by the person or persons entitled to the notie, whether before or after the time stated in it, is equivalent to the giving of notie. CHAPTER V - PROCEEDINGS AND INSPECTION 24 Parties to ations A member of a limited liability ompany is not a proper party to proeedings by or against a limited liability ompany, exept where the objet is to enfore a member s right against or liability to the limited liability ompany. 25 Servie of proess (1) Any proess, notie or demand required or permitted to be served upon a limited liability ompany may be served on the ompany at its registered offie. (2) Where this subsetion applies to a limited liability ompany, any doument may be served on it by sending a opy of the doument by post to eah person who, on the date on whih the doument is sent, is shown as a member of the ompany in the douments kept by the Department. 66 (3) Subsetion (2) applies to a limited liability ompany where the person having ontrol of the premises at whih the ompany purports to have its registered offie has delivered to the Department a notie in the presribed form stating that the ompany does not have authority to maintain its registered offie at the premises. 67 (4) This setion shall not limit or affet the right to serve any proess, notie or demand required or permitted by law to be served upon a limited liability ompany in any other manner now or hereafter permitted by law. 26 Inspetion of affairs of ompanies (1) The High Court may on the appliation of the Department of Eonomi Development, the Commission or a member of a limited liability ompany appoint one or more ompetent inspetors to investigate the affairs of the ompany and to report as the ourt direts. 68 (2) It shall be the duty of all members, managers and registered agents of the limited liability ompany, and of other persons who, in the opinion of the inspetors, have or may be in possession of, any book, doument or other reords of or relating to the ompany to produe to the inspetor all suh books and douments whih are in their ustody or power; to attend before the inspetors when required to do so; and Page 26 AT 19 of 1996

27 Limited Liability Companies At 1996 Setion 27 () otherwise to give the inspetors all assistane in onnetion with the investigation whih they are reasonably able to give. (3) The inspetors may examine on oath the persons mentioned in subsetion (2) in relation to the affairs of the ompany and may administer an oath aordingly. (4) If any person mentioned in subsetion (2) refuses to produe to the inspetors any book or doument whih it is his duty under this setion so to produe; or to answer any question whih is put to him by the inspetors with respet to the affairs of the ompany, the inspetors may ertify the refusal under their hand to the High Court, and the ourt may thereupon enquire into the ase, and after hearing the evidene of the inspetors and any evidene whih may be offered in defene, may punish the offender in the like manner as if he had been in ontempt of the ourt. (5) On the onlusion of the investigation the inspetors shall report their opinion to the ourt, and a opy of the report shall be forwarded by the ourt to the Department or the Commission (whihever made the appliation under subsetion (1), the registered offie of the ompany, its registered agent and manager (if any). 69 (6) If at any stage during the ourse of an inspetion under this setion it appears to the High Court that any person may have been guilty of an offene in relation to the ompany, it may refer the matter to the Attorney General. (7) The expenses of and inidental to an inspetion under this setion shall be paid by the appliant or by the ompany or in part by the appliant and in part by the ompany aording to the diretion of the ourt. (8) Any balane of the expenses not defrayed either by the ompany or the appliant shall be defrayed by the Treasury. 70 (9) The power of the High Court under this setion shall be exerisable in respet of a limited liability ompany notwithstanding that it is in the ourse of winding up. PART 2 DISSOLUTION OF LIMITED LIABILITY COMPANIES 27 Cirumstanes in whih limited liability ompanies are to be wound up (1) The affairs of a limited liability ompany organised under this At shall be wound up on the ourrene of any of the following events AT 19 of 1996 Page 27

28 Setion 28 Limited Liability Companies At 1996 () (d) (e) when the period (if any) fixed by the artiles of organisation for the duration of the limited liability ompany expires; or 71 by the unanimous written agreement of all members; or subjet to subsetion (2) and to setion 28(2), on the death, retirement, resignation, expulsion, dissolution of a member or ourrene of any other event whih terminates the ontinued membership of a member in the limited liability ompany; or 72 where the High Court makes an order under setion 32; or in any other ase for whih this At provides, but its separate existene shall Continue until a ertifiate of dissolution has been issued by the Department or until an order dissolving the limited liability ompany has been made by the High Court. 73 (2) The affairs of a limited liability ompany are only to be wound up on the ourrene of an event speified in subsetion (1)() if the operating agreement of the ompany so provides Winding up proedure (1) On the ourrene of any of the events speified in setion 27(1) to () and (e) the remaining members of a limited liability ompany shall be deemed to be joint provisional liquidators of the ompany for the purpose of winding up the affairs of the ompany; and shall forthwith deliver to the Department a notie in the presribed form of provisional intent to wind up the ompany, and 75 the ompany shall ease to arry on its business, exept insofar as may be neessary for the intended winding up of its business. 76 (2) If, within 60 days of the ourrene of any of the events speified in setion 27(1)(), there is delivered to the Department a notie in the presribed form that all the remaining members have agreed to ontinue the business of the ompany; and 77 have entered into a legally binding agreement with the former member, his agent or personal representatives for the purhase of his interest in the ompany, the obligation to wind up the ompany shall ease to have effet and the ompany may ontinue to arry on its business. 78 (3) Exept where a notie has been delivered under subsetion (2), on the expiry of 60 days following the ourrene of any of the events speified in setion 27(1) to () and (e) the provisional liquidators shall be obliged to proeed to wind up the affairs of the ompany; and Page 28 AT 19 of 1996