¶ C01
Introduction and Use
What this appendix contains. This appendix sets out two model operating agreements for a limited liability company formed under the Limited Liability Companies Act, Cap. 270:01, as amended by the International Limited Liability Companies (Amendment) Act, 2023, No. 29 of 2023, and the Limited Liability Companies (Amendment) (No. 2) Act, 2023, No. 48 of 2023 (the "Act"). Model A is an agreement for a single-member company whose sole member is the trustee of a Belize trust, the combination examined in chapter 27 (see supra ¶ 2730). Model B is an agreement for a manager-managed company with several members, drawn for a family holding company whose members are family trusts and individuals. Four riders follow: a creditor rider, a duress rider, a United States classification rider and a series rider. The appendix closes with schedules, a joinder, the consents that a trustee-member and a protector should give, and a checklist of filings.
Sources. Every provision is drawn on the text of the Act as amended, read in full for chapters 14 to 17, and on the conclusions reached in those chapters. The Act is cited by section. A note after each article states the section that the article applies or varies and the paragraph of this book where the point is examined. Where a chapter has already set out a model provision on the same subject, the article below adopts it, with changes to fit the defined terms used here (see supra ¶¶ 1590, 1690, 1790).
How the Act shapes the agreement. Five features of the Act determine the structure of both models. First, management is vested in managers unless the articles of organisation reserve it to the members. LLC Act s. 63(1) (see supra ¶ 1560). The models adopt manager management and say so in the articles, as section 20(2) requires. Second, the default rules in section 64(1) require the consent of all members for a list of acts that includes amending the agreement, admitting a member, approving a merger and changing "the tax status of the limited liability company in any jurisdiction." Id. s. 64(1)(a)–(f). Each model states who may take those steps. Third, a creditor of a member has only the rights of an assignee, and an assignee has only the right to receive distributions "if and to the extent any are made," together with allocations of profit and loss. Id. ss. 36(2), 57, 59(1) (see supra ¶¶ 1720, 1770). The distribution and transfer articles are drafted around those rules. Fourth, section 65 removes managers affected by an event of duress and forbids anyone in control of company property from acting on a compelled instruction, including one made under a foreign court order. Id. s. 65(1), (6) (see supra ¶ 1570). The models designate a manager in Belize and build on the section. Fifth, since 2023 the operating agreement and every amendment must be filed with the Registry, although public inspection of the Register is limited to the company's name, registered agent and date of registration. Id. ss. 9(4)–(5), 97C (see supra ¶ 1460.05).
What the models do not do. The models do not create segregated series. Section 51 permits classes and series of members' interests, but the Act contains no rule that confines the debts of one series to the assets of that series (see supra ¶ 1580.02). A client who needs segregation should use separate companies. Rider 4 explains the limited use the models make of section 51. The models also do not choose the company's classification for United States tax purposes by default. A Belize LLC whose members all have limited liability is an association taxable as a corporation unless it elects otherwise. Treas. Reg. § 301.7701-3(b)(2)(i)(B) (see supra ¶ 2720.04). Rider 3 contains the authority and covenant needed to make the election, and chapter 30 examines the consequences.
Defined terms. The models use a small set of defined terms: the "Act," the "Articles" (the articles of organisation), the "Company," "Manager" and "Managers," the "Belize Manager" (a Manager that is a company incorporated, or a person licensed, in Belize), "Member," "Membership Interest," "Capital Contribution," "Registered Agent," "Protector" (the protector of a trust that is a Member), "Event of Duress" (an event of duress as defined in section 2 of the Act or an event listed in section 65(2)), "Charged Interest" (a Membership Interest affected by any event described in section 59(1)) and "Succession Committee." Model B adds "Family Member," "Family Trust" and "Permitted Transfer." The terms agree with those used in the model trust deed in Appendix B and in the model provisions of chapters 15 to 17.
Placeholders and alternatives. Words in square brackets, such as [Company name] or [date], are to be completed. A bracketed passage introduced by "Alternative" offers a different provision for a different case. The drafter should delete every placeholder and every unused alternative before execution, because the agreement as signed is filed with the Registry and is the agreement a Belize court will construe. LLC Act s. 9(4) (see supra ¶ 1460.05).
Governing law and forum. The Act provides that any dispute among the parties to an operating agreement, or among the members and managers, "shall be resolved by the Supreme Court and any appellate court having jurisdiction over Belize." LLC Act s. 12(1). The Supreme Court is now styled the High Court (see supra ch. 2). Proceedings under the Act or for the determination of the rights of members, managers or registered agents are heard in camera. Id. s. 96(1) (see supra ch. 25). Both models choose Belize law and the High Court of Belize and do not provide for arbitration, which would sit uneasily with section 12(1).
Using the models with the rest of the structure. The models assume that the trust which holds the Membership Interest is a Belize trust registered under Part XA of the Trusts Act, whose deed follows Appendix B (see supra ch. 6; see supra app. B). The trustee signs as Member in its capacity as trustee. The protector of the trust is given consent rights that mirror those in the trust deed. The company's manager is either the Belize trust company that acts as trustee or a private trust company (see supra ch. 13). Where the company will own assets in the United States, the drafter should read chapter 27 on where assets sit before choosing Model A (see supra ¶ 2760).