¶ 1301
Overview
Scope of the chapter. This chapter examines the internal law of a Nevis limited liability company: who its members are, who manages it, how decisions are taken, how money goes in and comes out, what the members may learn about its affairs, and the agreement through which the members arrange all of these matters for themselves. The governing statute is the Nevis Limited Liability Company Ordinance, Cap. 7.04(N) (rev. ed. 2020), as amended by Ordinance No. 3 of 2023 and Ordinance No. 4 of 2025 ("NLLCO"). Its provisions on the operating agreement, management, voting, agency, contributions, distributions, membership and records are found in sections 27, 31 to 33 and 48 to 68. Chapter 12 examined the formation of the company, the admission of its first members and the records the company must keep (see supra ch. 12). Fiduciary duties, conflicts of interest and indemnification are left to chapter 14, the rights of a member's creditors to chapter 15, and transfers, withdrawal and dissolution to chapter 16 (see infra chs. 14–16).
The statutory method. The Ordinance is a statute of default rules. Most of the provisions examined in this chapter open with the words "unless otherwise provided in the operating agreement" or an equivalent phrase, and the members may displace them. NLLCO §§ 33, 48, 49, 50, 51, 54, 57, 59. The operating agreement may contain any provision about the company's business, the conduct of its affairs and the relations among its members and managers that is "not inconsistent with this Ordinance, any other Ordinance of Nevis, any act of Saint Christopher and Nevis or the Articles of Organisation." Id. § 27(1). A small number of provisions cannot be varied, and the most important of them, the member's right to inspect the company's books and records, is described by the Ordinance itself as "a fundamental right." Id. § 68(7). Paragraph 1320 identifies the mandatory rules (see infra ¶ 1320).
Where the defaults come from. The vocabulary of the Ordinance ("operating agreement", "manager", "member's interest", "Articles of Organisation") is the vocabulary of the American LLC statutes, and several of its default rules follow American models closely. Others are its own. Three Nevis defaults differ from the Delaware and uniform-act defaults in ways that matter to planners: voting by members is measured by capital contributions instead of shares of profits (see infra ¶ 1360.02); a manager may dispose of the company's assets in the usual course of its business without a vote of the members, although since 2022 a disposition of all or substantially all the assets outside that course needs a two-thirds vote of the members (see infra ¶ 1340.06); and the Ordinance imposes no solvency limit on distributions (see infra ¶ 1370.06). Section 3(2) directs a court construing the Ordinance to "the construction of similar laws in other jurisdictions," so American decisions are relevant where the Nevis words follow American words (see supra ¶¶ 260.01–260.06, 1220.01–1220.02). The fuller comparative treatment of the American law appears in the companion volume (see Lighthouse on Limited Liability Companies chs. 3, 13–20).
The only Nevis decision. The single reported decision of the Nevis courts on the internal affairs of a Nevis LLC is SM Life Ventures LLC v. Morrice, decided under the 1995 Ordinance in 2012. Chapters 2 and 3 discussed it for what it says about the construction clause and the jurisdiction of the High Court (see supra ¶¶ 260.05, 360). This chapter discusses it for what it says about the operating agreement: the procedure for amending it, the use of written resolutions, the absence of a statutory buy-out remedy and the limits on derivative claims (see infra ¶ 1360.08).
Organization. Paragraph 1310 examines the operating agreement as a legal instrument: its definition, its parties, its form, its amendment and its enforcement. Paragraph 1320 identifies the rules that the agreement cannot change. Paragraph 1330 treats the admission of members after formation and the classes and series of interests. Paragraphs 1340 and 1350 examine the two management structures and the authority of members and managers to bind the company. Paragraph 1360 covers voting, meetings and written consents, and closes with the case discussion of SM Life. Paragraph 1370 treats contributions, allocations and distributions. Paragraph 1380 covers information rights, the liability shield and the remedies of a member who is dissatisfied with the management. Paragraph 1390 sets out model provisions and a drafting checklist.