US VIRGIN ISLANDS LAW AND PRACTICE Contributed by: Marjorie Roberts, Sean Foster, Renée Marie André, Lisa Wisehart, David Bornn, Duncan J. J. Kessler and Jessica McKenney, Marjorie Rawls Roberts PC
Limited liability companies The USVI has adopted the Uniform Limited Liability Company Act (13 V.I.C. §§ 1101-2203) and the for - mation and governance of an LLC is similar to that imposed in the fifty states and the District of Columbia. An LLC is formed upon filing Articles of Organization with the Office of the Lieutenant Governor of the USVI, Division of Corporations & Trademarks (the “Division”), requires at least one member and may be structured as member-managed or manager-managed. The mini - mum capital required for an LLC to conduct business in the USVI is USD1,000.00. Partnership structures A foreign limited liability company (“FLLC”) is an entity that is organised under laws outside of the USVI and that may transact business in the USVI after filing a certificate of authority with the Division. An FLLC is covered by title 13 sections 2001-2009 of the VI Code. An FLLC’s internal affairs, organization and liability for its members, managers and transferees are governed by the laws of the state or other jurisdiction where the FLLC was organised. An FLLC cannot be denied a statement of authority because of differences in law between the jurisdiction in which it was organised and the USVI. However, an FLLC may not exercise powers or engage in business that an LLC cannot exercise or engage in the USVI. Title 13 section 2003 of the VI Code lists activities of FLLCs that are not consid - ered transacting business in the USVI, including deal - ing with actions or proceedings, holding meetings of managers or members, or other activities regarding its internal affairs, maintaining bank accounts, selling through independent contractors, transacting busi - ness in interstate commerce, etc. LLCs provide limited liability to their member(s) and manager(s). Thus, a member or manager is not per - sonally liable for any debt, obligation, or liability of an LLC solely by reason of being or acting as a member or manager. The LLC is well-suited to a wide range of business activities and provides its members with governance flexibility. For example, LLCs do not require mandatory annual meetings, the appointment of directors or officers, or other than certain statu - tory fiduciary duties – duty of loyalty, duty of care, the obligation of good faith and fair dealing and access to books and records, and an LLC’s operating agree -
ment may set forth provisions that differ from the pro - visions found in the LLC Act. Partnerships are another entity form often utilised in the USVI. The USVI has adopted the Uniform Part - nership Act and the Uniform Limited Partnership Act. The most common forms of partnerships used in the USVI are limited partnerships (“LPs”) and limited liabil - ity limited partnerships (“LLLPs”), both of which are subject to the Uniform Limited Partnership Act. All partnerships require at least two partners and, similar to LLCs, they provide governance flexibility: there are no statutory meeting requirements, and the appoint - ment of directors and officers is not required. The business and affairs of an LP and an LLLP are controlled by a general partner, whereas the limited partners are passive investors and do not have the right to manage or control the partnership’s business operations. With an LP, the general partner has unlim - ited liability and, as long as they do not engage in management and control of an LP, the limited partners have limited liability and are not liable for the debts and obligations of the LP solely by reason of being a limited partner. LPs are formed by filing a Certificate of Limited Partnership with the Division. Once formed, an LP may elect to qualify as an LLLP. In order to make the election, a statement of qualifica - tion must be filed with the Division. Unlike LPs, LLLPs provide limited liability protection to both the general partner(s) and the limited partner(s). If all partners of a partnership wish to manage and control the partnership’s business operations and seek limited liability protection, an LLP is the preferred entity. LLPs are subject to the Uniform Partnership Act under title 26 sections 1-274 of the V.I. Code and are formed by filing a Statement of Qualification with the Division. A FLLP is formed and has status as an LLP under laws outside the USVI and can transact business in the USVI by filing a statement of foreign qualification. An FLLP is covered under title 26 sections 241-245 of the VI Code. The relations among and between the partners, the partnership, and the partners’ liabilities for partnership obligations are governed by the laws
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