¶ 1601
Overview
Scope of the chapter. This chapter examines the events that change who owns a Nevis limited liability company, that end a member's participation in it, or that end or transform the company itself. It begins with the member's interest as property and the rules on its assignment (¶ 1610). It then turns to the events that end membership involuntarily, above all the death, incapacity, bankruptcy or dissolution of a member, and to their effect on a company with one member (¶ 1620), and to the events a member or the company initiates, namely resignation, withdrawal, expulsion and redemption, together with the statutory payout rule (¶ 1630). The chapter then examines the events of dissolution and the 2022 amendment that confirmed that removal from the register is not one of them (¶ 1640), judicial dissolution under section 75 and the only Nevis decision on it (¶ 1650), and the winding up that follows dissolution (¶ 1660). The last three parts address the transactions that change the company's form or domicile without winding it up: mergers and consolidations, including the short-form and cross-border mergers and the dissenters' rights added in 2022 (¶ 1670), conversion and transfer of domicile (¶ 1680), and, in outline, the United States tax consequences of these transactions, with a drafting checklist (¶ 1690).
The statutory text. The provisions examined are Parts IX, XII, XIII, XIV and XV of the Nevis Limited Liability Company Ordinance, Cap. 7.04(N), in the Revised Edition showing the law as at December 31, 2020 ("NLLCO"), together with the amendments made since that edition. Three amending Ordinances matter here. The Nevis Limited Liability Company (Amendment) Ordinance, No. 2 of 2022, inserted sections 72A to 72E, which provide for short-form mergers of subsidiaries, mergers and consolidations with foreign companies, member approval of sales of all or substantially all the assets, and dissenters' rights. It also substituted the restoration provisions of section 73. Nevis Limited Liability Company (Amendment) Ordinance, No. 2 of 2022, §§ 3–4 (assented to Oct. 20, 2022; published Nov. 10, 2022, Official Gazette No. 67 of 2022). The 2023 amendment inserted section 67A on records, and the 2025 amendment extended section 67A and changed the agent for service of process after a company departs from Nevis. Nevis Limited Liability Company (Amendment) Ordinance, No. 3 of 2023, § 6; Nevis Limited Liability Company (Amendment) Ordinance, No. 4 of 2025, §§ 3–4. The 2022 Ordinance does not appear in the 2020 Revised Edition, and practitioners working from that edition alone will miss it. Its text is set out and discussed in paragraph 1670 (see infra ¶ 1670).
The organizing idea. The Ordinance separates the economic rights in a member's interest from the governance rights that come with membership. A member may assign the economic rights freely unless the operating agreement provides otherwise, but the assignee does not become a member without the consent of the other members. NLLCO § 59(1)–(4). The same separation governs the involuntary events: a member who dies, becomes bankrupt, resigns or is expelled is "treated as having relinquished his member's interest" and "shall become an assignee." Id. § 57(2). The departing member's estate, trustee in bankruptcy or successor therefore holds economic rights without a vote, and cannot compel the company to buy the interest before dissolution. Id. § 57(3). The design protects the remaining members from having a stranger forced on them as a co-manager. It also means that a member's exit is governed almost entirely by the operating agreement. Where the agreement is silent, the Ordinance leaves the departing member, or the member's estate, holding an illiquid economic interest in a company it cannot control.
The single-member company. Most Nevis LLCs used in asset protection and estate planning have one member, often a trustee. The default rules that end membership and dissolve the company on the death, bankruptcy or dissolution of a member were written with multi-member companies in mind. They operate harshly on a company with one member. Chapter 12 identified the problem (see supra ¶ 1260.05). This chapter examines it in detail and sets out the provisions that solve it (see infra ¶¶ 1620.05–1620.09).
Relation to other chapters. Formation, removal from the register, restoration and the procedure for transferring domicile were introduced in chapter 12 (see supra ¶¶ 1280, 1290). The operating agreement, admission of members, voting and distributions were examined in chapter 13 (see supra ch. 13), and the fiduciary duties of managers and members in chapter 14 (see infra ch. 14). The charging order, which gives a member's judgment creditor the rights of an assignee and nothing more, is examined in chapter 15 (see infra ch. 15). The use of Nevis LLCs in international structures and their classification for United States tax purposes are examined in chapter 17, and United States reporting in chapter 29 (see infra chs. 17, 29). Fraudulent-disposition claims against transfers to and from a company are examined in chapter 21 (see infra ch. 21). The American law of transfers, dissociation, dissolution and organic transactions is treated more fully in the companion volume (see Lighthouse on Limited Liability Companies chs. 29–34).
No Nevis case law on most of the provisions. Apart from SM Life Ventures LLC v. Morrice, which concerned the court's power to order a buyout and to decree dissolution under the 1995 Ordinance (see infra ¶ 1650.04), no decision of the Nevis courts construing the provisions examined in this chapter has been found. Where the chapter states how a provision is likely to be read, it relies on the text, on the construction clause in section 3(2), which directs the court to consider the law of other jurisdictions with similar statutes, and on the Delaware decisions under provisions that the Nevis Ordinance follows (see supra ¶ 1220).