Nevis LLC

What the Nevis LLC is

Formation of the Nevis Limited Liability Company takes place under the Nevis Limited Liability Company Ordinance 1995. As a hybrid vehicle, it resembles a US LLC in pairing limited liability with flexible management, yet it falls under Nevis law, is incorporated in Nevis, and carries particular provisions that lend it real usefulness within asset protection arrangements. When planning structures involve offshore trusts, this is the Nevis entity chosen most often.

There is no share capital in the conventional sense within a Nevis LLC. Instead, members own membership interests whose worth mirrors their proportional stake in the company. It is common in planning structures for a single member — holding the full 100 percent of the membership interest — to be the sole owner, with that member being the trust.

Charging order protection

For a judgment creditor pursuing a member of a Nevis LLC, the charging order stands as the sole available remedy. Even after securing a judgment against a member, such a creditor cannot: seize the membership interest or force its sale; cast votes on LLC matters; compel distributions; oust or swap out the manager; or otherwise assume control of the entity. What the creditor gains is merely the right to collect distributions should any be made, and nothing beyond that.

Where the trust is the single member of the LLC, protection at the LLC tier comes from the charging order mechanism. Should a creditor somehow get through the trust tier to attack the trust's membership interest, the charging order still stands as the sole remedy against that interest. Moreover, in a single-member LLC the charging order is of little practical worth, since the manager may simply refuse to make distributions. See the charging order page for the full analysis.

Management and operations

A manager runs the LLC, and in the trust-and-LLC arrangement this role is usually filled by the settlor, operating within boundaries fixed by the trust as legal owner of the membership interest. Everyday investment choices, oversight of the company's accounts, and operational tasks are handled by the manager, who does not require the trustee to sign off on individual transactions. The trustee, however, keeps the power to dismiss the manager and to define the limits the manager works within.

It is the LLC's operating agreement that spells out what the manager may do, the circumstances allowing the manager's removal, and how the entity is governed overall. For the structure to function as intended, drafting this agreement well matters just as much as the trust deed. The same logic regarding retained control holds true here: the trustee's oversight should place genuine limits on the manager's authority rather than leaving those limits merely on paper.

Pairing with a trust

In the typical arrangement the Nevis LLC sits as the operating entity beneath a Nevis or Cook Islands trust. Ownership of the LLC membership interest rests with the trust, while the settlor runs the LLC inside the parameters set by the trustee. Because assets sit in the LLC rather than being held directly by the trust, the structure delivers operational flexibility at the LLC tier alongside offshore trust protection at the level of the membership interest. To reach the settlor, a creditor would have to: break through the trust tier to get at the membership interest, and then confront the charging order as the only remedy against that interest.

The Nevis LLC compared with the Cook Islands LLC

Within a trust-and-LLC structure, a Cook Islands LLC created under Cook Islands company law and a Nevis LLC created under the Nevis Ordinance play the same role. Which one is chosen normally tracks the trust: where a Nevis trust is used, the LLC will generally be a Nevis LLC; where the trust is a Cook Islands trust, the LLC beneath it might be either Cook Islands or Nevis. The charging order provisions of the Nevis LLC are, generally speaking, robust and on par with those of the Cook Islands. Always verify the law as it currently stands with a qualified adviser in the jurisdiction concerned.

See Nevis LLC charging order for the complete protection analysis and Nevis trust and LLC for the combined structure.