¶ 1501
Overview
Scope of the chapter. This chapter examines the internal law of the Belize limited liability company: how an LLC is formed, what its articles of organisation must contain, what the operating agreement may do, how members are admitted and leave, how interests are transferred, how the company is managed and by whom, and when it ends. The protective provisions of the statute, which are the reason most clients choose a Belize LLC, are treated separately. Chapter 16 examines the liability shield, the bar on actions to disregard the company and the rule that a member has no interest in company property, and chapter 17 examines the charging order and the position of a member's creditors (see infra chs. 16, 17). Taxation of the LLC after the 2023 reforms is examined in chapter 28 (see infra ch. 28), and the history of the statute and the 2023 amendments in chapter 14 (see supra ch. 14). The internal rules examined here matter to the protective provisions all the same. A charging order gives the creditor the rights of an assignee, and what an assignee may receive depends on the distribution, transfer and management provisions of the statute and the operating agreement. A structure that relies on a manager outside the reach of a foreign court depends on the management provisions. A practitioner who drafts the operating agreement well gives the protective provisions the setting in which they work.
The statutory text. The statute was enacted as the International Limited Liability Companies Act, Act No. 13 of 2011, and appears in the 2020 revised edition as Chapter 270:01 under that name. International Limited Liability Companies Act, Cap. 270:01 (rev. ed. 2020). The International Limited Liability Companies (Amendment) Act 2023, No. 29 of 2023, renamed it the Limited Liability Companies Act, removed the restriction that confined it to persons who do not reside in Belize, repealed section 15 (which barred an LLC from doing business in Belize or with Belize residents), replaced the tax exemption in section 94 and redefined "dollar" to mean the Belize dollar (see supra ¶ 120.02; ch. 14). The Limited Liability Companies (Amendment) (No. 2) Act 2023, No. 48 of 2023, added a register of beneficial owners, an annual attestation report, a duty to file the company's records with the Belize Companies and Corporate Affairs Registry, retention rules and wider powers for the Registrar and the Financial Services Commission. Limited Liability Companies (Amendment) (No. 2) Act 2023, No. 48 of 2023, ss. 2–10 (Belize). This chapter cites the statute as the Limited Liability Companies Act, Cap. 270:01, and refers to sections of the 2020 revised edition as amended in 2023. The revised edition predates both amending Acts, and several of its provisions still speak of an "international" limited liability company; the 2023 renaming Act provides that a reference in other legislation to the former name is read as a reference to the new one. Where a provision discussed here was changed in 2023, the text says so.
The design of the statute. The Act follows the pattern of the American LLC statutes from which it borrows much of its vocabulary: articles of organisation, an operating agreement, members and managers, assignees, capital accounts, distributions and a charging order. Its defaults, however, differ from those of the Delaware and uniform acts in ways that reflect its origin as an asset-holding vehicle for non-residents. Management vests in managers unless the articles reserve it to the members. A member may not transfer an interest or withdraw without unanimous consent. A creditor who obtains a charging order or another remedy against a member's interest becomes an assignee "and nothing more." Votes cast under duress are disregarded, managers resident in a country affected by an event of duress are removed automatically, and no person may honour an instruction given under compulsion by a foreign court. Limited Liability Companies Act, Cap. 270:01, ss. 54(1), 58(1), 59(1), 63(1), 64(3)–(4), 65 (rev. ed. 2020, as amended 2023). Most of these defaults may be varied by the operating agreement. The drafter's task is to decide which defaults suit the client and to write the agreement accordingly.
Default rules and the operating agreement. Almost every rule in Parts V to VII of the Act opens with "unless otherwise provided in an operating agreement" or "except as provided in an operating agreement." The Act contains no general statement of the policy of freedom of contract of the kind found in the Delaware statute, and no list of provisions that may not be varied of the kind found in the uniform acts. The scope of the operating agreement is set by section 52(2): it "governs relations among and between the members and the managers and the limited liability company and may contain any provision that is not contrary to law and that relates to the business of the limited liability company." Id. s. 52(2). Where a section does not carry the qualifying words, the drafter should treat it as mandatory. Table 15-1 (¶ 1520.08) lists the principal defaults and whether the agreement may vary them.
No reported decisions. No reported Belize decision interpreting the provisions of the Act discussed in this chapter has been located. Proceedings under the Act are heard in camera, and the court's decisions on the application or interpretation of the Act are to be published only in edited form after the parties have been consulted. Id. s. 96(1)–(2). The analysis that follows rests on the statutory text, the International Limited Liability Companies (Registration) Regulations 2012 and the general law. Where the Act borrows a term from American LLC law, American decisions may assist in its construction, but the Belize court is not bound by them and the Act's text differs in important respects (see supra ch. 2 on precedent and persuasive authority).
Plan of the chapter. Section ¶ 1510 deals with formation, the articles of organisation, the name, the registered agent, the annual certificate and the 2023 filing duties. Section ¶ 1520 examines the operating agreement. Sections ¶ 1530 to ¶ 1550 deal with members: admission, interests, capital, distributions, records, transfers, assignees, withdrawal, cessation and expulsion. Section ¶ 1560 deals with management and voting, and section ¶ 1570 with the emergency manager, events of duress and the succession committee. Section ¶ 1580 covers classes and series, merger and consolidation, transfer of domicile and dissolution. Section ¶ 1590 collects drafting points, model provisions and a formation checklist.