¶ 1601
Overview
Three provisions. Part IV of the Limited Liability Companies Act, headed "Relationship of Limited Liability Company and Members to Third Parties," opens with three provisions that define the Belize LLC as a protective vehicle. Section 33 sets out the liability shield: the LLC alone is liable for its own debts, and no member, manager, officer, employee or agent is liable for them by reason of that status. Section 34 forbids the Belize court to entertain any action that seeks to disregard the LLC as a separate legal entity, and provides that close affiliation with other entities is no ground for doing so. Section 35 provides that the LLC's property is held only in its own name, that a member has no interest in it, and that it is not available to satisfy any claim or judgment against a member. Limited Liability Companies Act, Cap. 270:01, ss. 33–35 (rev. ed. 2020) (Belize) ("LLC Act"). None of the three was amended by the two amending Acts of 2023 (see supra ch. 14).
Outside and inside protection. The three provisions work in two directions. Sections 33(1)–(4) protect members and managers from the LLC's creditors: the "outside" creditor of the business cannot reach the personal assets of those who own or run it. Sections 33(5), 34 and 35 protect the LLC from its members' creditors: the personal creditor of a member cannot reach the LLC's property, either by treating the LLC as liable for the member's debt, by disregarding the LLC as the member's alter ego, or by asserting that the member owns the LLC's assets. The second direction is the one that matters most in asset protection planning. A member's personal creditor is left with the charging order under section 36, which is the sole and exclusive remedy against the member's interest (see infra ch. 17), and with the narrow fraudulent-conveyance action under section 37, which leaves the transfer standing and is barred after short periods (see infra ¶ 1670.05; ch. 17).
The distinctive feature. Every LLC statute contains a liability shield. Section 34 has no counterpart in the American statutes. Most American statutes say nothing about veil piercing and leave it to the courts; some, such as Wyoming's since 2016, narrow the factors a court may consider; none forbids the court to hear the claim at all (see infra ¶ 1650). Section 34 is framed as a limit on the court's jurisdiction to entertain a class of proceedings. It forecloses in Belize the alter-ego, reverse-piercing and single-enterprise theories on which American creditors most often rely against single-member and closely held LLCs.
The limits. The three provisions protect status. They do not protect conduct. A member or manager who commits a tort, gives a guarantee, acts with apparent but without actual authority, or receives a distribution the Act prohibits is liable on that ground (see infra ¶ 1620). The provisions bind the Belize court and, through section 38 and the common law of recognition, govern what a foreign judgment can achieve in Belize. They do not bind a foreign court, which may apply its own law to pierce a Belize LLC and may act against assets and persons within its reach (see infra ¶ 1680). Planning with a Belize LLC therefore combines reliance on the statute in Belize with conduct that would preserve the entity under any law.
Plan of the chapter. This chapter examines the shield in section 33(1)–(3) (¶ 1610); the liabilities that remain, including apparent authority, own conduct, wrongful distributions and the two-year period in section 33(6) (¶ 1620); section 33(5) (¶ 1630); section 34 (¶ 1640) and its comparison with American and English law (¶ 1650); section 35 and its consequences for creditors, spouses and bankruptcy trustees (¶ 1660); the remedies that remain open to a creditor (¶ 1670); the position before foreign courts and of a single-member LLC held by a Belize trust (¶ 1680); and planning, model provisions and a checklist (¶ 1690).
Relation to other chapters. The history of the Act and the 2023 reforms are examined supra ch. 14, and formation, the operating agreement and management supra ch. 15. The charging order and the fraudulent-conveyance provision are examined in full infra ch. 17. The choice-of-law rule under which a foreign court looks to Belize law for the internal affairs of a Belize LLC, and the effect of section 38, are introduced supra ¶¶ 430.02–.03 and 480. The treatment of Belize structures by foreign courts is examined infra ch. 26, and structures combining a Belize trust and LLC infra ch. 27.
Sources. The text of sections 33 to 40 is taken from the 2020 revised edition of the Act, read with the amending Acts No. 29 and No. 48 of 2023, neither of which touches Part IV. Section references in this chapter are to the Act as so amended. No reported Belize decision applying sections 33, 34 or 35 has been found. The analysis therefore rests on the text, on the general law of Belize as a common-law jurisdiction (see supra ch. 2) and, for comparison, on the American and English authorities discussed in ¶ 1650.