Lighthouse
Lighthouse on Nevis: Trusts, LLCs, and Multiform Foundations

Detailed Contents

This table lists every chapter, section and subsection of Lighthouse on Nevis: Trusts, LLCs, and Multiform Foundations with its paragraph (¶) number. Each entry links to its place in the text.

Chapter 1Nevis as a Financial Center: The Federation, the Constitution and the Island's Legislative Competence

  1. ¶ 101Overview
    1. 101.01Scope of the chapter
    2. 101.02The constitutional basis of the Nevis statutes
    3. 101.03Four statutes, one registry
    4. 101.04Why the frame matters
    5. 101.05The size of the sector
    6. 101.06The plan of the chapter
  2. ¶ 110The Federation and Its History
    1. 110.01Colonial origins
    2. 110.02Union and the West Indies
    3. 110.03Anguilla's departure
    4. 110.04Independence and the 1983 Constitution
    5. 110.05An asymmetric federation
    6. 110.06The 1998 secession referendum
    7. 110.07The currency and the region
  3. ¶ 120The 1983 Constitution and the Competence of the Nevis Island Legislature
    1. 120.01The Nevis Island Legislature
    2. 120.02The Nevis Island Administration
    3. 120.03The grant of legislative power
    4. 120.04Exclusivity
    5. 120.05The limits of Nevis's competence
    6. 120.06Entrenchment
    7. 120.07Secession
    8. 120.08Secession and the Nevis statutes
    9. 120.09Disputes between the Administration and the Government
  4. ¶ 130Making Nevis Law: Ordinances, Assent, Publication and the Revised Editions
    1. 130.01Bills and assent
    2. 130.02Financial measures
    3. 130.03Citation
    4. 130.04The Revised Editions
    5. 130.05Renumbering
    6. 130.06Drafts and proposals
    7. 130.07Federal Acts that affect Nevis entities
    8. 130.08The common law and English authority
  5. ¶ 140The Growth of the Financial-Services Statutes
    1. 140.01The pattern
    2. 140.021984: the business corporation
    3. 140.031994: the international exempt trust
    4. 140.041995 and 2017: the limited liability company
    5. 140.052004: the multiform foundation
    6. 140.062018 onward: the international-standards amendments
    7. 140.07The registry in numbers
    8. 140.08The pace of change
  6. ¶ 150The Institutions
    1. 150.01The institutional map
    2. 150.02The Administration and the Minister
    3. 150.03The regulator
    4. 150.04The registry
    5. 150.05The courts
    6. 150.06The Financial Intelligence Unit and other federal bodies
  7. ¶ 160Nevis in Comparative Perspective
    1. 160.01The peer jurisdictions
    2. 160.02Political status
    3. 160.03The trust statutes
    4. 160.04The LLC statutes
    5. 160.05The foundation statutes
    6. 160.06Records of decided cases
  8. ¶ 170International Standards and Information Exchange
    1. 170.01Why international standards bind Nevis
    2. 170.02Anti-money laundering
    3. 170.03Exchange of information on request
    4. 170.04Automatic exchange
    5. 170.05The European Union list
    6. 170.06Beneficial ownership
    7. 170.07Citizenship by investment
  9. ¶ 180Choosing Nevis: Practitioner Considerations and Risks
    1. 180.01The decision
    2. 180.02The case for Nevis
    3. 180.03Legislative change
    4. 180.04Constitutional and political risk
    5. 180.05Reputational and banking risk
    6. 180.06The client's home jurisdiction
    7. 180.07Federal and Nevis vehicles
  10. ¶ 190Plan of the Treatise and How to Use It
    1. 190.01The structure
    2. 190.02Paragraph numbering and citation
    3. 190.03Statutory text
    4. 190.04Examples, Planning Notes and Comments
    5. 190.05The readers
    6. 190.06Using the companion volumes

Chapter 2Sources of Law: Ordinances, Revised Editions, the Common Law and English Authority

  1. ¶ 201Overview
    1. 201.01Scope
    2. 201.02The layers
    3. 201.03Why the sources matter
    4. 201.04Plan of the chapter
    5. 201.05Terminology
  2. ¶ 210The Hierarchy of Nevis Law
    1. 210.01The Constitution
    2. 210.02Federal Acts
    3. 210.03Ordinances
    4. 210.04Incidental provisions and inconsistency
    5. 210.05Federal law with Nevis consent
    6. 210.06Additions to the specified matters
    7. 210.07Subsidiary legislation
  3. ¶ 220Existing Laws and the 1983 Transition
    1. 220.01The transitional provisions
    2. 220.02Construction in conformity
    3. 220.03Allocation between the legislatures
    4. 220.04Prescribed matters
    5. 220.05Meaning of "existing law."
    6. 220.06The Supreme Court Order
    7. 220.07Continuity after 1983
  4. ¶ 230The Interpretation Act
    1. 230.01The statute
    2. 230.02Reach
    3. 230.03Definitions that matter to planners
    4. 230.04Commencement and judicial notice
    5. 230.05Citation
    6. 230.06Repeal and substitution
    7. 230.07Imperial Acts
  5. ¶ 240The Common Law, Equity and English Statutes
    1. 240.01The question
    2. 240.02The common law of England
    3. 240.03The jurisdiction of the High Court
    4. 240.04Equity and inherent jurisdiction
    5. 240.05The limit: jurisdiction is not substantive law
    6. 240.06Case discussion: Wang Ruiyun v. Gem Global Yield Fund Ltd.
    7. 240.07English statutes displaced by the Ordinances
  6. ¶ 250The Revised Editions, the Gazette and the Authoritative Text
    1. 250.01Why the text matters
    2. 250.02The revision programme
    3. 250.03The statutory authority
    4. 250.04Consequence of the supplement method
    5. 250.05Amendments after the latest edition
    6. 250.06Printing and publication
    7. 250.07The Gazette and authentic copies
  7. ¶ 260Statutory Directions on Construction
    1. 260.01The construction clauses
    2. 260.02What the clauses do
    3. 260.03"Similar laws in other jurisdictions."
    4. 260.04The trust Ordinance's rule of freedom of disposition
    5. 260.05Case discussion: SM Life Ventures LLC v. Morrice
    6. 260.06Using foreign decisions under the clauses
  8. ¶ 270Precedent and Persuasive Authority
    1. 270.01The structure of the courts
    2. 270.02The Privy Council
    3. 270.03The Court of Appeal
    4. 270.04The High Court
    5. 270.05English authority
    6. 270.06Offshore and United States authority
    7. 270.07Case discussion: In re Corona Trust
  9. ¶ 280Proper-Law Provisions and the Reach of Nevis Law
    1. 280.01Choice of law as a source question
    2. 280.02The proper law of an international trust
    3. 280.03Severable aspects and changes of proper law
    4. 280.04The proper law of a multiform foundation
    5. 280.05The limits of unilateral rules
  10. ¶ 290Researching and Citing Nevis Law
    1. 290.01The official sources
    2. 290.02Reading the revised text
    3. 290.03Drafts and bills
    4. 290.04Citation in this treatise
    5. 290.05Proving Nevis law abroad
    6. 290.06A research checklist

Chapter 3The Courts: The High Court (Nevis Circuit), the Eastern Caribbean Court of Appeal and the Privy Council

  1. ¶ 301Overview
    1. 301.01Scope of the chapter
    2. 301.02One court for nine jurisdictions
    3. 301.03The final court
    4. 301.04What the record shows
    5. 301.05Why the absence of appellate authority matters
    6. 301.06Plan of the chapter
  2. ¶ 310The Eastern Caribbean Supreme Court: Origins and Constitutional Status
    1. 310.01Creation in 1967
    2. 310.02The present name
    3. 310.03The Constitution adopts the court
    4. 310.04Entrenchment
    5. 310.05Neither federal nor island
    6. 310.06The local Act
    7. 310.07Consequences for the planner
  3. ¶ 320The High Court, Nevis Circuit
    1. 320.01Circuits
    2. 320.02Jurisdiction in general
    3. 320.03Inherent jurisdiction
    4. 320.04Limits of the inherent jurisdiction
    5. 320.05Constitutional jurisdiction
    6. 320.06Commercial judges
    7. 320.07Hearings in private
    8. 320.08Suits involving the Nevis Island Administration
  4. ¶ 330Civil Procedure Under the 2023 Rules
    1. 330.01The 2023 Rules
    2. 330.02The overriding objective
    3. 330.03Starting a claim
    4. 330.04Administration claims
    5. 330.05Part 67 and the trust Ordinance together
    6. 330.06Service outside the jurisdiction
    7. 330.07Is a Nevis LLC a "company" for rule 7.3(7)?
    8. 330.08Interim remedies in outline
  5. ¶ 340The Court's Jurisdiction Under the Nevis Ordinances
    1. 340.01Two kinds of provision
    2. 340.02When the court has jurisdiction over an international trust
    3. 340.03The court's general powers over a trust
    4. 340.04The 2015 limit on orders interfering with trust property
    5. 340.05Validity, foreign law and foreign judgments
    6. 340.06Conditions on a creditor's action against a trust
    7. 340.07The LLC Ordinance
    8. 340.08Judicial dissolution and continuing jurisdiction
    9. 340.09The Multiform Foundations Ordinance
  6. ¶ 350Case Discussion: In re Corona Trust
    1. 350.01Citation and court
    2. 350.02Facts
    3. 350.03Proceedings
    4. 350.04Holding: the protector
    5. 350.05Holding: the amendments
    6. 350.06Orders
    7. 350.07Lessons
  7. ¶ 360Case Discussion: SM Life Ventures LLC v. Morrice
    1. 360.01Citation and court
    2. 360.02Facts
    3. 360.03The interlocutory judgment
    4. 360.04Interim relief
    5. 360.05Trial: no buy-out power
    6. 360.06Trial: no order against other members
    7. 360.07Trial: the dissolution power
    8. 360.08Trial: the power not exercised
    9. 360.09Other relief
    10. 360.10The 2017 Ordinance
    11. 360.11Lessons
  8. ¶ 370The Court of Appeal
    1. 370.01An itinerant court
    2. 370.02Appeals as of right under the Constitution
    3. 370.03Final and interlocutory decisions
    4. 370.04Leave and time limits
    5. 370.05Case discussion: Millennium Financial Ltd. v. McNamara
    6. 370.06Appellate authority from other member states
  9. ¶ 380The Privy Council
    1. 380.01The final court of appeal
    2. 380.02Appeals as of right and by leave
    3. 380.03The 1967 Appeals Order
    4. 380.04Case discussion: Ross v. Bank of Commerce
    5. 380.05The value threshold in practice
    6. 380.06No Privy Council authority on the Ordinances
  10. ¶ 390Practice: Litigating a Nevis Structure
    1. 390.01Where disputes arise
    2. 390.02Drafting for the Nevis court
    3. 390.03When the client is sued abroad
    4. 390.04When the creditor comes to Nevis
    5. 390.05Choosing Nevis counsel
    6. 390.06Checklist
    7. 390.07Summary

Chapter 4Regulation: The Financial Services Regulation and Supervision Department, Registered Agents and Service Providers

  1. ¶ 401Overview
    1. 401.01Scope of the chapter
    2. 401.02Three layers
    3. 401.03Why the layers matter to the planner
    4. 401.04Sources
    5. 401.05Plan of the chapter
  2. ¶ 410The Financial Services Regulatory Commission
    1. 410.01The statute
    2. 410.02A federal body
    3. 410.03Objects
    4. 410.04Functions
    5. 410.05Two operational departments
    6. 410.06Composition
    7. 410.07The First Schedule
    8. 410.08The Licensing Committee carve-out for Nevis
    9. 410.09Licensing requirement and offence
    10. 410.10Examination and investigation
    11. 410.11Sanctions and the 2026 amendment
    12. 410.12The 2026 administrative penalty regulations
    13. 410.13Appeals Tribunal under the Act
  3. ¶ 420The Nevis Branch, the Regulator and the Licensing Committee
    1. 420.01The Nevis Branch
    2. 420.02The Nevis Regulator
    3. 420.03The Registrar
    4. 420.04The Nevis Licensing Committee
    5. 420.05Advisory committees
    6. 420.06How the pieces fit
  4. ¶ 430Regulated Activities under the 2021 Ordinance
    1. 430.01Enactment and commencement
    2. 430.02The prohibition
    3. 430.03Corporate services business
    4. 430.04The significant-interest exception
    5. 430.05Trust business
    6. 430.06Protectors
    7. 430.07Trustees of international trusts
    8. 430.08Comparison with Saint Kitts
  5. ¶ 440Licensing: Eligibility, Fitness, Classes, Fees and Renewal
    1. 440.01The application
    2. 440.02The Committee's investigation
    3. 440.03Eligibility
    4. 440.04Fit and proper
    5. 440.05The four classes
    6. 440.06The fifty-entity tier
    7. 440.07Grant, refusal and issue
    8. 440.08Conditions
    9. 440.09Place of business
    10. 440.10Duration, renewal and lapse
    11. 440.11Publication
    12. 440.12Restricted words
  6. ¶ 450Supervision, Enforcement, Confidentiality and Appeals
    1. 450.01The Regulator's responsibilities
    2. 450.02Examinations
    3. 450.03Records and client money
    4. 450.04Change of control
    5. 450.05The graduated sanctions
    6. 450.06Revocation
    7. 450.07Unlicensed business
    8. 450.08Fixed and administrative penalties
    9. 450.09Effect on clients' transactions
    10. 450.10Appeals
    11. 450.11Surrender
    12. 450.12Confidentiality and exchange of information
    13. 450.13Immunity
  7. ¶ 460Registered Agents under the Entity Ordinances
    1. 460.01Who may be a registered agent
    2. 460.02The duty to maintain an agent
    3. 460.03What the agent does
    4. 460.04Resignation by the agent
    5. 460.05The fees condition
    6. 460.06Change of agent by the entity
    7. 460.07Records held at the agent's office
    8. 460.08Service when there is no agent
  8. ¶ 470The Registries, Annual Filings and Fees
    1. 470.01The registers
    2. 470.02Electronic filing
    3. 470.03Registration and annual renewal of trusts
    4. 470.04The consequence of lapse
    5. 470.05Confidentiality of the trust register
    6. 470.06Annual renewal of LLCs and corporations
    7. 470.07Annual return of foundations
    8. 470.08Trust fees
    9. 470.09Searches
    10. 470.10Planning summary
  9. ¶ 480Anti-Money-Laundering and Information Duties of Service Providers
    1. 480.01Scope
    2. 480.02The service provider as gatekeeper
    3. 480.03Compliance and reporting officers
    4. 480.04Beneficial owners of the licensee
    5. 480.05Records for the authorities
    6. 480.06Designated non-financial businesses and professions
  10. ¶ 490Practice: Choosing, Monitoring and Changing a Service Provider
    1. 490.01The provider as a structural element
    2. 490.02Choosing a provider
    3. 490.03Drafting for the provider's failure
    4. 490.04When a provider loses its licence
    5. 490.05Annual monitoring
    6. 490.06Checklist

Part II: International Exempt Trusts

Chapter 5The Nevis International Exempt Trust Ordinance: Scope, History and the Register of Trusts

  1. ¶ 501Overview
    1. 501.01Scope
    2. 501.02The text cited
    3. 501.03Three ideas
    4. 501.04The trust in the Nevis structure
    5. 501.05Terminology
    6. 501.06Plan of the chapter
  2. ¶ 510History of the Ordinance
    1. 510.01Enactment
    2. 510.02The context
    3. 510.03The five amending Ordinances
    4. 510.04The 2000 amendments
    5. 510.05The 2015 amendments
    6. 510.06The revised edition and renumbering
    7. 510.07Drafts that were not enacted
    8. 510.08Subsidiary legislation
  3. ¶ 520The Architecture of the Ordinance
    1. 520.01Nine Parts and two Schedules
    2. 520.02Part I: Preliminary matters (sections 1–5)
    3. 520.03Part II: Spendthrift, charitable and non-charitable trusts (sections 6–12)
    4. 520.04Part III: Termination or failure (sections 13–16)
    5. 520.05Part IV: Breach of trust (sections 17–22)
    6. 520.06Part V: Powers of the Court (sections 23–33)
    7. 520.07Part VI: Trustees, protectors and beneficiaries (sections 34–42)
    8. 520.08Part VII: Registration (sections 43–48)
    9. 520.09Part VIII: Exemption from taxes (section 49)
    10. 520.10Part IX: Miscellaneous provisions (sections 50–64)
    11. 520.11The Schedules
  4. ¶ 530The Definition of Trust and the Key Definitions
    1. 530.01The statutory definition of a trust
    2. 530.02Trust and international trust
    3. 530.03The definitions in section 2
    4. 530.04"Settlor."
    5. 530.05"Beneficiary" and "interest."
    6. 530.06"Protector."
    7. 530.07"Creditor" and "intent to defraud."
    8. 530.08"Foreign court" and "Court."
    9. 530.09"Property."
    10. 530.10"Spouses."
    11. 530.11Other definitions
  5. ¶ 540What Is an International Trust
    1. 540.01The definition
    2. 540.02Registration as an element
    3. 540.03The qualifying trustee
    4. 540.04The qualifying trustee and the licensing law
    5. 540.05Non-residence: the definition
    6. 540.06Reading the residence test
    7. 540.07"At all times."
    8. 540.08No land in the Federation
    9. 540.09What happens when a condition fails
    10. 540.10Comparison
  6. ¶ 550Exempt Status and the Protective Core
    1. 550.01Why "exempt."
    2. 550.02The tax exemption
    3. 550.03Validity against foreign law
    4. 550.04Duration and accumulation
    5. 550.05The settlor's retained powers and benefits
    6. 550.06The protective core
    7. 550.07Community and entireties property
  7. ¶ 560Registration
    1. 560.01The registrar and the two registers
    2. 560.02Which register
    3. 560.03The qualified foreign trust
    4. 560.04The application
    5. 560.05The certificate in practice
    6. 560.06Entry and the certificate of registration
    7. 560.07The certificate as conclusive evidence
    8. 560.08Translations
    9. 560.09Ministerial powers
    10. 560.10Timing of registration and funding
  8. ¶ 570Renewal, Fees, Lapse and Termination
    1. 570.01The annual certificate
    2. 570.02The ninety-day period
    3. 570.03The 2000 amendments
    4. 570.04The consequence of lapse
    5. 570.05Fees
    6. 570.06What the fees show
    7. 570.07Notice on removal of a trustee
    8. 570.08Termination
    9. 570.09Books of account
  9. ¶ 580Confidentiality, Immunity and the Advisory Committee
    1. 580.01The closed register
    2. 580.02The Confidential Relationships Act
    3. 580.03Proceedings in camera
    4. 580.04Limits of confidentiality
    5. 580.05Immunity of officials
    6. 580.06The Advisory Committee
    7. 580.07Interaction with the licensing regime
  10. ¶ 590The Ordinance in Court and in Practice
    1. 590.01The reported decisions
    2. 590.02Case discussion:
    3. 590.03Registration and maintenance checklist
    4. 590.04Looking ahead

Chapter 6Creating an International Trust: Settlors, Capacity, Formalities, Governing Law and Validity

  1. ¶ 601Overview
    1. 601.01Scope of the chapter
    2. 601.02The statutory text
    3. 601.03Two layers of law
    4. 601.04The planner's aim
    5. 601.05Plan of the chapter
  2. ¶ 610The Trust and the International Trust
    1. 610.01The statutory definition of a trust
    2. 610.02The international trust
    3. 610.03The qualifying trustee
    4. 610.04Non-resident settlor and beneficiaries
    5. 610.05No Nevis land
    6. 610.06Registration
    7. 610.07The conclusive certificate and its limits
  3. ¶ 620The Settlor
    1. 620.01Definition
    2. 620.02Gratuitous contribution
    3. 620.03Several settlors
    4. 620.04Testamentary settlement
    5. 620.05Natural persons and business entities
    6. 620.06The settlor as trustee
    7. 620.07The settlor as beneficiary
  4. ¶ 630Capacity
    1. 630.01The general-law question
    2. 630.02The Ordinance's rule: Nevis law decides
    3. 630.03What the rule displaces
    4. 630.04Mental capacity
    5. 630.05Minors and persons under disability
    6. 630.06Corporate settlors
    7. 630.07Vitiating factors
  5. ¶ 640Formalities and the Constitution of the Trust
    1. 640.01The Ordinance prescribes no form
    2. 640.02"Formalities" under the Ordinance
    3. 640.03Declaration and transfer
    4. 640.04Completing the transfer
    5. 640.05Case discussion: T. Choithram International SA v. Pagarani
    6. 640.06Particular assets
    7. 640.07Additions
  6. ¶ 650The Three Certainties
    1. 650.01The general rule
    2. 650.02Intention
    3. 650.03Subject matter
    4. 650.04Objects: beneficiaries
    5. 650.05Uncertainty as a ground of invalidity
    6. 650.06Adding and excluding beneficiaries
    7. 650.07Conditions on benefit
    8. 650.08Entities as beneficiaries
    9. 650.09Purposes
  7. ¶ 660Governing Law
    1. 660.01Why the proper law matters
    2. 660.02The rule in section 4
    3. 660.03Express or implied choice
    4. 660.04Closest connection
    5. 660.05The Nevis fallback
    6. 660.06Severable aspects
    7. 660.07Change of governing law
    8. 660.08Choice of law in a foreign court
  8. ¶ 670Validity and What Foreign Law Cannot Invalidate
    1. 670.01The structure of the validity provisions
    2. 670.02Validity notwithstanding the settlor's home law
    3. 670.03Grounds of invalidity under Nevis law
    4. 670.04The validating rule
    5. 670.05Exclusion of foreign law
    6. 670.06Heirship and relationship claims
    7. 670.07Bankruptcy and the Statute of Elizabeth
    8. 670.08Community property and tenancy by the entireties
    9. 670.09Freedom of disposition
  9. ¶ 680Settlor Control, Self-Settled Trusts and Sham
    1. 680.01The statutory list
    2. 680.02The closing rule
    3. 680.03Sham at general law
    4. 680.04Sham and section 53
    5. 680.05The evidence that decides sham
    6. 680.06Ineffective trusts: when powers are property
    7. 680.07Case discussion: Tasarruf Mevduati Sigorta Fonu v. Merrill Lynch Bank & Trust Co. (Cayman) Ltd.
    8. 680.08Case discussion: JSC Mezhdunarodniy Promyshlenniy Bank v. Pugachev
    9. 680.09What section 53 achieves
  10. ¶ 690Duration, Accumulation and the Instrument Checklist
    1. 690.01No rule against perpetuities
    2. 690.02Duration in practice
    3. 690.03Accumulation
    4. 690.04Failure and lapse
    5. 690.05Sequence of creation
    6. 690.06Instrument checklist
    7. 690.07Closing documents

Chapter 7Trustees: Qualification, Powers, Duties, Liability and Removal

  1. ¶ 701Overview
    1. 701.01Scope of the chapter
    2. 701.02The statutory method
    3. 701.03Features peculiar to Nevis
    4. 701.04Licensing and regulation
    5. 701.05Related chapters
  2. ¶ 710Who May Be Trustee
    1. 710.01The general definition
    2. 710.02The qualifying-trustee requirement
    3. 710.03Why the requirement matters
    4. 710.04Residence of the trustee and the non-residence condition
    5. 710.05Number of trustees
    6. 710.06Corporate and entity trustees
    7. 710.07Settlor, beneficiary and protector as trustee
    8. 710.08Foreign co-trustees
  3. ¶ 720The Licensing Overlay
    1. 720.01Two statutes
    2. 720.02What is trust business
    3. 720.03Eligibility and conditions
    4. 720.04Entities that may qualify as trustee but may not be licensed
    5. 720.05Private trust companies
    6. 720.06Protectors for reward
    7. 720.07Regulation of the trustee's conduct
  4. ¶ 730Appointment, Retirement and Removal
    1. 730.01The deed first
    2. 730.02The protector's power to remove and appoint
    3. 730.03The statutory chain of appointment
    4. 730.04The Court's powers
    5. 730.05Removal by the Court
    6. 730.06Retirement
    7. 730.07Automatic cessation
    8. 730.08Filing with the registrar
    9. 730.09Case discussion: In re Corona Trust
  5. ¶ 740The Trustee's Powers
    1. 740.01Sources of power
    2. 740.02Investment: the restrictive default
    3. 740.03Protector-directed investment
    4. 740.04Distribution powers
    5. 740.05Payment of taxes
    6. 740.06Combination and division
    7. 740.07Change of governing law
    8. 740.08Delegation
    9. 740.09Holding companies and underlying entities
  6. ¶ 750The Trustee's Duties
    1. 750.01The general law and the deed
    2. 750.02Duty to carry out the trust
    3. 750.03Loyalty
    4. 750.04Care
    5. 750.05Proper exercise of discretions
    6. 750.06Impartiality
    7. 750.07Accounts
    8. 750.08Information and disclosure to beneficiaries
    9. 750.09Confidentiality
  7. ¶ 760Exoneration, Indemnity and Directed Trustees
    1. 760.01The statutory floor
    2. 760.02What the deed may exclude
    3. 760.03Armitage v. Nurse
    4. 760.04Case discussion: Spread Trustee Co. v. Hutcheson
    5. 760.05Directed trustees
    6. 760.06Relief by beneficiaries
    7. 760.07Relief by the Court
    8. 760.08Impounding a beneficiary's interest
    9. 760.09Drafting the exoneration clause
  8. ¶ 770Liability for Breach and Remedies
    1. 770.01The measure of liability
    2. 770.02Set-off, co-trustees and joint liability
    3. 770.03Equitable compensation
    4. 770.04Constructive trusts and tracing
    5. 770.05The two-year limitation
    6. 770.06The bar on interference with trust property
    7. 770.07Costs and privacy
  9. ¶ 780The Trustee Under Pressure
    1. 780.01The problem
    2. 780.02The duress direction
    3. 780.03Automatic cessation of office
    4. 780.04How section 38 works in practice
    5. 780.05Requests from the settlor
    6. 780.06Duress clauses in the deed
    7. 780.07Applications for directions
    8. 780.08The four categories
    9. 780.09When to apply
  10. ¶ 790Records, Filings, Remuneration and a Checklist
    1. 790.01Registration duties
    2. 790.02Records
    3. 790.03Remuneration
    4. 790.04Ministerial powers
    5. 790.05Planning Note
    6. 790.06Checklist for a Nevis trustee

Chapter 8Beneficiaries and Their Interests: Discretionary, Protective and Spendthrift Trusts

  1. ¶ 801Overview
    1. 801.01Scope of the chapter
    2. 801.02Where the chapter sits
    3. 801.03The statutory scheme in outline
    4. 801.04The two themes of the chapter
    5. 801.05Terminology
    6. 801.06No Nevis authority
  2. ¶ 810Who May Be a Beneficiary
    1. 810.01The statutory definition
    2. 810.02Why the wide definition matters
    3. 810.03Identification: section 34(1)
    4. 810.04The non-residence condition
    5. 810.05"At all times."
    6. 810.06Settlor and trustee as beneficiaries
    7. 810.07Entities as beneficiaries
    8. 810.08The foundation gap
    9. 810.09Unborn and unascertained beneficiaries
  3. ¶ 820The Nature of a Beneficiary's Interest: Fixed and Discretionary
    1. 820.01The statutory word "interest."
    2. 820.02Fixed interests under the general law
    3. 820.03Discretionary interests under the general law
    4. 820.04Gartside v. Inland Revenue Commissioners: the case
    5. 820.05The closed class: Re Smith
    6. 820.06Objects of powers
    7. 820.07Mixed interests
  4. ¶ 830Discretionary Interests and the Beneficiary's Creditors
    1. 830.01Section 9 in outline
    2. 830.02A "mere expectancy."
    3. 830.03"Including the settlor."
    4. 830.04No compulsion and no interference
    5. 830.05Payments to third parties and direct payment of expenses
    6. 830.06Section 9(8): the reach of "discretion."
    7. 830.07"Unless the trust deed provides explicitly otherwise."
    8. 830.08The section 26 carve-out
    9. 830.09General powers of appointment: section 11
    10. 830.10The settlor's power of revocation: section 12
  5. ¶ 840Protective and Spendthrift Trusts
    1. 840.01The general law
    2. 840.02Section 6(1): three permitted forms
    3. 840.03The statutory protective trust: section 6(2)
    4. 840.04Comparison with the English statutory form
    5. 840.05The determining event
    6. 840.06The self-settled protective trust: section 6(4)
    7. 840.07Protective drafting beyond section 6
  6. ¶ 850Letters of Wishes, Information and Confidentiality
    1. 850.01The settlor's wishes
    2. 850.02Letters of wishes and asset protection
    3. 850.03Breakspear v. Ackland: the case
    4. 850.04The Ordinance: section 40(1)
    5. 850.05The limits of section 40
    6. 850.06Accounts: section 42
    7. 850.07Confidentiality: the Confidential Relationships Act
    8. 850.08What the Act does and does not do to beneficiaries
  7. ¶ 860Saunders v. Vautier, Accumulation and Termination
    1. 860.01The rule
    2. 860.02Why the rule matters to an asset-protection trust
    3. 860.03Duration and accumulation: section 5
    4. 860.04The heading of section 16
    5. 860.05Termination under the deed and the Ordinance
  8. ¶ 870Adding, Excluding and Conditioning Beneficiaries; Class Gifts; Disclaimer
    1. 870.01Section 34(2): addition and exclusion
    2. 870.02Who holds the power
    3. 870.03The nature of the power
    4. 870.04Suspension
    5. 870.05Conditions and the "fundamental rights" proviso: section 34(3)
    6. 870.06No-contest clauses
    7. 870.07Class gifts and closing the class
    8. 870.08Disclaimer: section 35
    9. 870.09Combination and division
  9. ¶ 880Matrimonial, Heirship and Community-Property Claims Against Beneficial Interests
    1. 880.01The problem
    2. 880.02Validity: sections 31 and 54
    3. 880.03Foreign judgments: section 30
    4. 880.04Community property and tenancy by the entireties: section 62
    5. 880.05The English matrimonial approach
    6. 880.06Charman v. Charman: the case
    7. 880.07Whaley v. Whaley and Thomas v. Thomas
    8. 880.08The Nevis trustee's position
    9. 880.09Powers as property: Clayton and Webb
  10. ¶ 890The Beneficiary's Remedies and a Drafting Checklist
    1. 890.01Applications to the Court: section 24
    2. 890.02Remedies for breach
    3. 890.03Relief and indemnity by beneficiaries
    4. 890.04Time limits
    5. 890.05The beneficiary when the trust is attacked
    6. 890.06A drafting checklist
    7. 890.07Summary

Chapter 9Protectors, Reserved Powers and Settlor Control

  1. ¶ 901Overview
    1. 901.01Scope of the chapter
    2. 901.02Plan
    3. 901.03Relation to other chapters
    4. 901.04Why the protector matters in Nevis
    5. 901.05Key terms
  2. ¶ 910The Office of Protector
    1. 910.01Origins
    2. 910.02The statutory definition
    3. 910.03The functional rule in section 10(1)
    4. 910.04What the protector is not
    5. 910.05Protectors of purpose trusts
    6. 910.06The Nevis approach compared
    7. 910.07What the comparison shows
  3. ¶ 920The Protector's Powers
    1. 920.01Three sources
    2. 920.02The default power over trustees
    3. 920.03Powers a deed may add
    4. 920.04Statutory functions elsewhere in the Ordinance
    5. 920.05Directive and consent powers distinguished
    6. 920.06Multiple protectors
    7. 920.07Delegation
    8. 920.08Powers the protector does not have
  4. ¶ 930Fiduciary or Personal
    1. 930.01The question
    2. 930.02The Nevis default
    3. 930.03"Subject to the terms of the international trust."
    4. 930.04The general law: a question of construction
    5. 930.05Declarations that powers are personal
    6. 930.06Why the characterization matters to the beneficiaries
    7. 930.07Why the characterization matters to creditors
    8. 930.08Partial characterization
  5. ¶ 940The Scope of a Consent Power: The Narrow and Wider Roles
    1. 940.01The question
    2. 940.02The divergent first decisions
    3. 940.03Information
    4. 940.04Case discussion: A v. C
    5. 940.05Authority of A v. C in Nevis
    6. 940.06Deadlock
    7. 940.07Choosing the role in the deed
  6. ¶ 950Supervision, Appointment and Removal of the Protector
    1. 950.01Appointment under the deed
    2. 950.02Appointment by the Court
    3. 950.03Removal under the deed
    4. 950.04Removal by the Court
    5. 950.05Case discussion: In re Corona Trust
    6. 950.06Automatic cessation under section 38(2)
    7. 950.07Retirement
  7. ¶ 960Settlor Control Through the Protector Office
    1. 960.01The settlor's wish for control
    2. 960.02What the Ordinance permits
    3. 960.03Validity in Nevis is one question; control abroad is another
    4. 960.04Case discussion: FTC v. Affordable Media, LLC
    5. 960.05The settlor as protector: the risks summarised
    6. 960.06The independent protector
    7. 960.07Powers short of the office
  8. ¶ 970The Protector Under Pressure
    1. 970.01The protector's exposure
    2. 970.02The statutory duress direction and its proviso
    3. 970.03Negative and affirmative powers
    4. 970.04Automatic cessation and its limits
    5. 970.05Contractual duress provisions
    6. 970.06Acting under pressure: what a protector should do
    7. 970.07Removing the settlor as beneficiary under pressure
  9. ¶ 980Licensing, Remuneration and Liability
    1. 980.01Acting as protector is licensable trust business
    2. 980.02Who needs a licence
    3. 980.03Remuneration
    4. 980.04Standard of care and exoneration
    5. 980.05Indemnity and insurance
    6. 980.06Records
    7. 980.07Protector companies
  10. ¶ 990Drafting Protector Provisions and a Checklist
    1. 990.01Start from the purpose
    2. 990.02The decisions the deed must make
    3. 990.03A model provision
    4. 990.04Drafting choices in the model
    5. 990.05Checklist

Chapter 10Purpose Trusts and Charitable Trusts

  1. ¶ 1001Overview
    1. 1001.01Scope of the chapter
    2. 1001.02Where the chapter sits
    3. 1001.03Why purpose trusts matter in practice
    4. 1001.04The Nevis position in summary
    5. 1001.05Terminology
    6. 1001.06Plan of the chapter
  2. ¶ 1010The Beneficiary Principle at General Law
    1. 1010.01Why the general law matters in Nevis
    2. 1010.02The principle stated
    3. 1010.03Morice v. Bishop of Durham: the case
    4. 1010.04Re Astor's Settlement Trusts: the case
    5. 1010.05The anomalous exceptions
    6. 1010.06The perpetuity link
    7. 1010.07Unincorporated associations
  3. ¶ 1020Trusts for Purposes That Benefit Persons
    1. 1020.01The narrower reading of the principle
    2. 1020.02Re Denley's Trust Deed: the case
    3. 1020.03The limits of Denley
    4. 1020.04Why Denley does not help the modern offshore purpose trust
    5. 1020.05Denley trusts under the Ordinance
    6. 1020.06Quistclose and similar arrangements
  4. ¶ 1030The Nevis Non-Charitable Purpose Trust: Section 8
    1. 1030.01The text
    2. 1030.02The supporting definitions
    3. 1030.03"Specific."
    4. 1030.04"Reasonable."
    5. 1030.05"Capable of fulfillment."
    6. 1030.06Not immoral, unlawful or contrary to public policy
    7. 1030.07The protector condition
    8. 1030.08Registration and the non-residence condition
    9. 1030.09Duration and trustees
  5. ¶ 1040Enforcement: The Protector, the Minister and the Court
    1. 1040.01The enforcing protector's duty
    2. 1040.02The protector's powers
    3. 1040.03Independence
    4. 1040.04The Minister's appointing power
    5. 1040.05The Court's powers
    6. 1040.06Who enforces against the protector
    7. 1040.07The protector under foreign pressure
    8. 1040.08Licensing of the protector
  6. ¶ 1050Commercial and Family Uses
    1. 1050.01The common feature
    2. 1050.02Orphan vehicles in financings
    3. 1050.03Drafting the orphan purpose
    4. 1050.04Private trust company shares
    5. 1050.05The shareholding purpose trust's governance
    6. 1050.06Family companies and long-term holding
    7. 1050.07Holding an LLC interest
    8. 1050.08Limits of the device
  7. ¶ 1060Charitable Trusts
    1. 1060.01The statutory definition
    2. 1060.02The general-law background
    3. 1060.03Commissioners for Special Purposes of Income Tax v. Pemsel: the case
    4. 1060.04The six heads applied
    5. 1060.05Public benefit
    6. 1060.06Oppenheim v. Tobacco Securities Trust Co.: the case
    7. 1060.07The Non-Government Organisations Act
    8. 1060.08Privileges of a charitable trust under the Ordinance
    9. 1060.09Charitable remainder trusts
    10. 1060.10U.S. tax on gifts to a Nevis charitable trust
  8. ¶ 1070Failure, Cy-Près and Variation
    1. 1070.01Three provisions
    2. 1070.02Section 13: property returns to the settlor
    3. 1070.03Section 25: invalidity in whole or part
    4. 1070.04Section 14(1): cy-près
    5. 1070.05Section 14(2) and (3): variation
    6. 1070.06Initial and subsequent failure
    7. 1070.07Variation of a non-charitable purpose trust
    8. 1070.08Distribution on termination
  9. ¶ 1080Mixed Trusts and Alternatives
    1. 1080.01Mixed trusts
    2. 1080.02Powers to apply for purposes
    3. 1080.03Belize and Jersey
    4. 1080.04The Cayman STAR trust
    5. 1080.05The British Virgin Islands VISTA trust
    6. 1080.06The multiform foundation
    7. 1080.07Choosing between a purpose trust and a foundation
  10. ¶ 1090Drafting a Nevis Purpose Trust
    1. 1090.01The purpose clause
    2. 1090.02The enforcement clause
    3. 1090.03The default clause
    4. 1090.04The amendment clause
    5. 1090.05Charitable trusts
    6. 1090.06Checklist
    7. 1090.07Summary

Chapter 11Variation, Migration, Change of Governing Law and Termination

  1. ¶ 1101Overview
    1. 1101.01Scope of the chapter
    2. 1101.02The statutory provisions
    3. 1101.03What the Ordinance does not contain
    4. 1101.04Relation to other chapters
    5. 1101.05Plan
  2. ¶ 1110The Means of Change
    1. 1110.01Five sources of power
    2. 1110.02The deed is the primary source
    3. 1110.03Who should hold the power
    4. 1110.04Variation distinguished from breach
  3. ¶ 1120Express Powers to Vary and Amend
    1. 1120.01Kinds of power
    2. 1120.02Construction
    3. 1120.03Powers held by the settlor
    4. 1120.04Powers held by the trustee
    5. 1120.05Powers exercisable with the protector's consent
    6. 1120.06Fraud on a power
    7. 1120.07Excessive exercise
    8. 1120.08Entrenched provisions
    9. 1120.09Form and records
  4. ¶ 1130Variation by the Court
    1. 1130.01Section 24
    2. 1130.02A declaration as to the variation
    3. 1130.03The inherent jurisdiction
    4. 1130.04The federal Trusts Act and section 107
    5. 1130.05Consent of the beneficiaries
    6. 1130.06Approval of a trustee's decision
    7. 1130.07Case discussion: In re Corona Trust
    8. 1130.08Administrative powers
    9. 1130.09Section 24(4)
    10. 1130.10Procedure
  5. ¶ 1140Resettlement, Decanting, Combination and Division
    1. 1140.01Resettlement under a dispositive power
    2. 1140.02Pilkington v. IRC
    3. 1140.03The Nevis position on duration
    4. 1140.04The objects of the power
    5. 1140.05Combination and division under section 39
    6. 1140.06Uses of section 39
    7. 1140.07Retroactive severance
  6. ¶ 1150Changing the Governing Law
    1. 1150.01The statutory permission
    2. 1150.02What a change of law changes
    3. 1150.03A change to Nevis law
    4. 1150.04A change from Nevis law
    5. 1150.05Recognition by the other law
    6. 1150.06Severable aspects
    7. 1150.07The Court's jurisdiction
    8. 1150.08Comparators
  7. ¶ 1160Migrating a Trust to Nevis
    1. 1160.01Why trusts move to Nevis
    2. 1160.02The steps
    3. 1160.03The order of registration
    4. 1160.04Relation back under section 50(5)
    5. 1160.05What section 50(5) does not do
    6. 1160.06Migration after a claim has arisen
    7. 1160.07Trusts migrating from the United States
    8. 1160.08Case discussion: Re Weston's Settlements
    9. 1160.09Trusts migrating from other offshore jurisdictions
  8. ¶ 1170Migrating Away from Nevis
    1. 1170.01Reasons for leaving
    2. 1170.02The power and the protection
    3. 1170.03Leaving the register
    4. 1170.04What the trust leaves behind
    5. 1170.05Flight and duress provisions
    6. 1170.06How foreign courts treat flight
    7. 1170.07United States tax and automatic migration
    8. 1170.08The trustee's decision under pressure
  9. ¶ 1180Termination
    1. 1180.01Duration
    2. 1180.02Termination under the deed
    3. 1180.03Failure and lapse
    4. 1180.04Termination by the beneficiaries
    5. 1180.05Revocation by the settlor
    6. 1180.06Termination by the Court
    7. 1180.07Notice to the registrar
    8. 1180.08Records after termination
  10. ¶ 1190Drafting: Model Provisions and a Checklist
    1. 1190.01Drafting for change
    2. 1190.02A power of amendment
    3. 1190.03A power to change the proper law
    4. 1190.04A duress provision
    5. 1190.05Termination and default provisions
    6. 1190.06Checklist

Part III: Limited Liability Companies

Chapter 12The Nevis Limited Liability Company Ordinance: The 2017 Ordinance, Formation and Foreign LLCs

  1. ¶ 1201Overview
    1. 1201.01Scope of the chapter
    2. 1201.02The statute and its citation
    3. 1201.03The Ordinance's place among the Nevis statutes
    4. 1201.04What the planner needs from this chapter
    5. 1201.05Plan of the chapter
  2. ¶ 1210From the 1995 Ordinance to the 2017 Ordinance
    1. 1210.01The first statute
    2. 1210.02The 2017 Ordinance
    3. 1210.03The savings provisions
    4. 1210.04Effect on companies formed before 2018
    5. 1210.05The amending Ordinances
    6. 1210.06Section numbers old and new
    7. 1210.07Comment
    8. 1210.08The Advisory Committee
  3. ¶ 1220Construction, Application and Definitions
    1. 1220.01The construction clause
    2. 1220.02"Similar laws in other jurisdictions"
    3. 1220.03Companies doing business in the Federation
    4. 1220.04Key definitions
    5. 1220.05Notices
    6. 1220.06Case discussion: SM Life Ventures LLC v. Morrice
  4. ¶ 1230The LLC as a Legal Person
    1. 1230.01Separate personality
    2. 1230.02Members and managers as parties
    3. 1230.03The liability shield
    4. 1230.04Formalities
    5. 1230.05The shield before a foreign court
    6. 1230.06Purposes
    7. 1230.07Professional services
    8. 1230.08Powers
    9. 1230.09Duration
  5. ¶ 1240Formation
    1. 1240.01Who may form
    2. 1240.02The Articles of Organisation
    3. 1240.03What the Articles do not contain
    4. 1240.04Member-managed or manager-managed
    5. 1240.05Filing
    6. 1240.06Effect of filing
    7. 1240.07Signing and acknowledgement
    8. 1240.08Refusal
    9. 1240.09Correcting a filed instrument
    10. 1240.10Amending and restating the Articles
    11. 1240.11The operating agreement at formation
  6. ¶ 1250Names, the Registered Agent, the Registered Office and Service of Process
    1. 1250.01The suffix
    2. 1250.02Distinctiveness
    3. 1250.03Prohibited and restricted words
    4. 1250.04Non-Latin names
    5. 1250.05Reservation
    6. 1250.06The registered agent
    7. 1250.07The agent's central role
    8. 1250.08Resignation and change of agent
    9. 1250.09Service of process
    10. 1250.10Where there is no agent
    11. 1250.11Removal for want of an agent
  7. ¶ 1260Members at Formation: Admission, the Single-Member LLC, Classes and Series
    1. 1260.01A company without members
    2. 1260.02Admission of the first member
    3. 1260.03Admission without contribution
    4. 1260.04The single-member LLC
    5. 1260.05Default rules that matter to a single-member company
    6. 1260.06Classes and series of interests
    7. 1260.07Series are not segregated cells
    8. 1260.08The member's interest as property
  8. ¶ 1270Records, Registers, the Public File and Confidentiality
    1. 1270.01Three bodies of information
    2. 1270.02Books and records
    3. 1270.03Documents to be kept (2023)
    4. 1270.04Basic information (2025)
    5. 1270.05Reading section 67A
    6. 1270.06The public file
    7. 1270.07Certificates
    8. 1270.08Members' right to information
    9. 1270.09Confidentiality
    10. 1270.10Failure to keep records
  9. ¶ 1280Annual Fees, Removal from the Register and Restoration
    1. 1280.01The annual fee
    2. 1280.02The 2025 fee schedule
    3. 1280.03Penalties
    4. 1280.04Removal from the register
    5. 1280.05Restoration
    6. 1280.06The effect of removal
    7. 1280.07The restoration statement and pending litigation
    8. 1280.08Tax status in outline
  10. ¶ 1290Foreign LLCs: Transfer of Domicile, Departure and Emergency Transfer
    1. 1290.01Foreign LLCs in the Ordinance
    2. 1290.02The right to transfer in
    3. 1290.03The application
    4. 1290.04The certificate and continuity
    5. 1290.05Which law governs
    6. 1290.06No transfer of operations
    7. 1290.07Departure from Nevis
    8. 1290.08The 2025 change to the consent to service
    9. 1290.09Effective date of departure
    10. 1290.10Emergency transfer into Nevis
    11. 1290.11Uses of the emergency procedure
    12. 1290.12Formation checklist

Chapter 13Members, Managers and the Operating Agreement

  1. ¶ 1301Overview
    1. 1301.01Scope of the chapter
    2. 1301.02The statutory method
    3. 1301.03Where the defaults come from
    4. 1301.04The only Nevis decision
    5. 1301.05Organization
  2. ¶ 1310The Operating Agreement
    1. 1310.01Definition
    2. 1310.02The agreement and the Articles
    3. 1310.03Consequences of the hierarchy
    4. 1310.04Who must agree
    5. 1310.05Form
    6. 1310.06Amendment
    7. 1310.07Enforcement
    8. 1310.08The company as party
  3. ¶ 1320Freedom of Contract and the Mandatory Rules
    1. 1320.01The principle
    2. 1320.02Identifying a mandatory rule
    3. 1320.03The rules the agreement cannot vary
    4. 1320.04The inspection right
    5. 1320.05Rules that protect third parties
    6. 1320.06Judicial dissolution
    7. 1320.07The default rules
  4. ¶ 1330Admission of Members; Classes and Series of Interests
    1. 1330.01Routes to membership
    2. 1330.02Admission after formation
    3. 1330.03When admission takes effect
    4. 1330.04Membership without contribution
    5. 1330.05The member's interest
    6. 1330.06Classes and series
    7. 1330.07Redeemable interests
    8. 1330.08Classes and governance
    9. 1330.09Pre-emption and dilution
  5. ¶ 1340Member-Managed and Manager-Managed Companies
    1. 1340.01The default: management by the members
    2. 1340.02Vesting management in managers
    3. 1340.03The definition of manager
    4. 1340.04Qualifications, alternates and titles
    5. 1340.05The Nevis management presumption
    6. 1340.06The manager's power to sell the assets
    7. 1340.07Removal and replacement of managers
  6. ¶ 1350Authority and Agency
    1. 1350.01Two questions
    2. 1350.02Members as agents
    3. 1350.03Managers as agents
    4. 1350.04The structure of the rule
    5. 1350.05Comparison with Delaware and the uniform act
    6. 1350.06What counts as notice
    7. 1350.07Members binding a manager-managed company by contract
    8. 1350.08Officers
    9. 1350.09Ratification
  7. ¶ 1360Voting, Meetings and Written Consents
    1. 1360.01Scope of the voting rule
    2. 1360.02The default measure: capital contributions
    3. 1360.03Varying the measure
    4. 1360.04Decisions of managers
    5. 1360.05Meetings
    6. 1360.06Written consents
    7. 1360.07Electronic signatures
    8. 1360.08Case discussion: SM Life Ventures LLC v. Morrice
  8. ¶ 1370Contributions, Allocations and Distributions
    1. 1370.01Forms of contribution
    2. 1370.02Enforceability of promises to contribute
    3. 1370.03Remedies for default and compromise
    4. 1370.04Allocations of profit and loss
    5. 1370.05Distributions: the default sharing rule
    6. 1370.06No statutory solvency limit
    7. 1370.07No withdrawal of capital
    8. 1370.08Payment on termination of an interest
    9. 1370.09Calls and tax payments
    10. 1370.10Distributions on winding up
  9. ¶ 1380Information Rights, the Liability Shield and Members' Remedies
    1. 1380.01The member's right to information
    2. 1380.02Proper purpose
    3. 1380.03The manager's right and the power to withhold
    4. 1380.04The liability shield
    5. 1380.05Liabilities members do owe
    6. 1380.06The remedies of a dissatisfied member
    7. 1380.07Derivative claims
    8. 1380.08No oppression or buy-out remedy
  10. ¶ 1390Drafting the Operating Agreement
    1. 1390.01Approach
    2. 1390.02Management and voting
    3. 1390.03The company as a party; amendment
    4. 1390.04Distributions and solvency
    5. 1390.05Exit
    6. 1390.06Checklist

Chapter 14Fiduciary Duties, Exculpation and Indemnification

  1. ¶ 1401Overview
    1. 1401.01The subject
    2. 1401.02Why the subject matters in Nevis
    3. 1401.03The Ordinance compared
    4. 1401.04The sources of law
    5. 1401.05Plan of the chapter
  2. ¶ 1410What the Ordinance Says and Does Not Say
    1. 1410.01The standard of care
    2. 1410.02Conflicted transactions
    3. 1410.03Indemnification and insurance
    4. 1410.04The only use of the word "fiduciary"
    5. 1410.05What the Ordinance omits
    6. 1410.06Other provisions that bear on duties
    7. 1410.07Comment
  3. ¶ 1420Who Owes Duties, and to Whom
    1. 1420.01Managers
    2. 1420.02Members of a member-managed company
    3. 1420.03Members of a manager-managed company
    4. 1420.04Officers and other agents
    5. 1420.05To whom the duties are owed: SM Life Ventures
    6. 1420.06Controlling members
    7. 1420.07Corporate managers and trustee members
  4. ¶ 1430Loyalty: The No-Conflict and No-Profit Rules
    1. 1430.01The source of the duty
    2. 1430.02Two rules
    3. 1430.03"May possibly conflict"
    4. 1430.04Case discussion: Regal (Hastings) Ltd v. Gulliver
    5. 1430.05Case discussion: Bhullar v. Bhullar
    6. 1430.06Competition
    7. 1430.07Remuneration and use of company property
    8. 1430.08Remedies for breach of loyalty
  5. ¶ 1440Good Faith, Disclosure and the Interests of Creditors
    1. 1440.01Good faith in the Ordinance
    2. 1440.02Good faith as the core of loyalty
    3. 1440.03Case discussion: Item Software (UK) Ltd v. Fassihi
    4. 1440.04Withholding information from members
    5. 1440.05Proper purposes
    6. 1440.06The interests of creditors
    7. 1440.07Application to holding structures
  6. ¶ 1450The Statutory Standard of Care
    1. 1450.01The text
    2. 1450.02Ordinary prudence as the measure
    3. 1450.03Reliance
    4. 1450.04Business decisions
    5. 1450.05Delegation and supervision
    6. 1450.06Professional and nominee managers
    7. 1450.07Members who are not managers
  7. ¶ 1460Modifying Duties by the Operating Agreement
    1. 1460.01The question
    2. 1460.02The statutory standard is mandatory
    3. 1460.03What the agreement may do with the standard of care
    4. 1460.04The duty of loyalty may be shaped by consent
    5. 1460.05The limits of advance consent
    6. 1460.06The American models compared
    7. 1460.07Implied terms in the operating agreement
    8. 1460.08Case discussion: Auriga Capital Corp. v. Gatz Properties, LLC
  8. ¶ 1470Conflicts and Related-Party Transactions
    1. 1470.01The rule at general law
    2. 1470.02Section 65
    3. 1470.03Comparison with the corporation statute
    4. 1470.04What section 65 does not do
    5. 1470.05Who gives the approval
    6. 1470.06Transactions with the trust that owns the LLC
  9. ¶ 1480Exculpation, Indemnification, Advancement and Insurance
    1. 1480.01Three techniques
    2. 1480.02The power to indemnify
    3. 1480.03Claims by the company itself
    4. 1480.04The negligence bar
    5. 1480.05Mandatory indemnification
    6. 1480.06Advancement
    7. 1480.07Insurance
    8. 1480.08Exculpation
    9. 1480.09A defensible exculpation clause
    10. 1480.10Indemnity of officers and agents
  10. ¶ 1490Enforcement, Remedies and Drafting
    1. 1490.01The company as claimant
    2. 1490.02The rule in Foss v. Harbottle
    3. 1490.03Derivative claims for a Nevis LLC
    4. 1490.04Personal claims by members
    5. 1490.05Remedies
    6. 1490.06Judicial dissolution as a remedy
    7. 1490.07Model provisions
    8. 1490.08Checklist
    9. 1490.09Summary

Chapter 15The Charging Order: Section 60, the Exclusive Remedy and Tax Payments

  1. ¶ 1501Overview
    1. 1501.01Scope of the chapter
    2. 1501.02Plan of the chapter
    3. 1501.03Relation to other chapters
    4. 1501.04The point of the chapter
    5. 1501.05Terms
  2. ¶ 1510Origins and the Nevis Order
    1. 1510.01The partnership origin
    2. 1510.02The purpose of the rule
    3. 1510.03The application
    4. 1510.04"A court of competent jurisdiction."
    5. 1510.05What the order gives the creditor
    6. 1510.06The statutory definition of distribution
    7. 1510.07The member's interest as the property charged
    8. 1510.08Exemption laws
    9. 1510.09The absence of Nevis decisions
  3. ¶ 1520The Exclusive Remedy
    1. 1520.01The sole remedy
    2. 1520.02The remedies excluded
    3. 1520.03The company's property
    4. 1520.04Not a lien
    5. 1520.05Not an assignee
    6. 1520.06The member keeps the member's rights
    7. 1520.07No interference with management
    8. 1520.08Foreign orders
    9. 1520.09What section 60 does not bar
  4. ¶ 1530Obtaining the Order in Nevis
    1. 1530.01The creditor's route
    2. 1530.02A judgment the Nevis court will act on
    3. 1530.03The bond
    4. 1530.04Scope of the bond requirement
    5. 1530.05Fines, penalties and punitive damages
    6. 1530.06No interim relief against the company
    7. 1530.07Redemption
    8. 1530.08Discharge
    9. 1530.09The creditor's information
    10. 1530.10Comment
  5. ¶ 1540Three Years, Non-Renewable
    1. 1540.01The rule
    2. 1540.02The effect
    3. 1540.03When the period begins
    4. 1540.04"Non-renewable."
    5. 1540.05A renewed foreign judgment
    6. 1540.06The manager's conduct during the period
    7. 1540.07Retention of income
    8. 1540.08Settlement leverage
    9. 1540.09Comment
  6. ¶ 1550Distributions Under a Charge, Capital Calls and Payments Outside the Order
    1. 1550.01The manager's decision
    2. 1550.02Mandatory distributions
    3. 1550.03Suspension and the charged member
    4. 1550.04Capital calls
    5. 1550.05Payments in another capacity
    6. 1550.06Disguised distributions
    7. 1550.07Loans to the member
    8. 1550.08The member's other remedies against the company
    9. 1550.09The trustee-member
  7. ¶ 1560Paying Members' Taxes: Section 60(18)
    1. 1560.01The problem
    2. 1560.02The American statutes
    3. 1560.03Payment to the taxing authority under the American statutes
    4. 1560.04The Nevis statute
    5. 1560.05The elements
    6. 1560.06The consideration clause
    7. 1560.07Interpretive questions
    8. 1560.08The member's position
    9. 1560.09Phantom income and the creditor
    10. 1560.10Federal tax consequences
    11. 1560.11Payments required by law
    12. 1560.12Recognition by an American court
    13. 1560.13The Cook Islands proposal
  8. ¶ 1570The Single-Member LLC and the Member's Bankruptcy
    1. 1570.01The single-member company under section 60
    2. 1570.02The default rules on bankruptcy
    3. 1570.03A manager-managed company
    4. 1570.04The trustee in bankruptcy as judgment creditor
    5. 1570.05The American bankruptcy court
    6. 1570.06Multi-member companies in bankruptcy
    7. 1570.07Second members
    8. 1570.08Drafting around the default rules
  9. ¶ 1580Comparisons and the View from Foreign Courts
    1. 1580.01Three questions
    2. 1580.02Delaware
    3. 1580.03Wyoming
    4. 1580.04Florida
    5. 1580.05The uniform act
    6. 1580.06The Cook Islands
    7. 1580.07Belize
    8. 1580.08Attacks on separateness
    9. 1580.09Courts acting on the member
    10. 1580.10Foreign LLC interests in American courts
  10. ¶ 1590Drafting and a Checklist
    1. 1590.01The drafting task
    2. 1590.02Distributions
    3. 1590.03Tax payments under section 60(18)
    4. 1590.04Capital calls
    5. 1590.05Continuity
    6. 1590.06Management and residence
    7. 1590.07Conduct after a charging order
    8. 1590.08Checklist
    9. 1590.09Comment

Chapter 16Transfers, Withdrawal, Dissolution, Mergers, Continuation and Conversion

  1. ¶ 1601Overview
    1. 1601.01Scope of the chapter
    2. 1601.02The statutory text
    3. 1601.03The organizing idea
    4. 1601.04The single-member company
    5. 1601.05Relation to other chapters
    6. 1601.06No Nevis case law on most of the provisions
  2. ¶ 1610The Member's Interest and Its Assignment
    1. 1610.01The interest as personal property
    2. 1610.02What the interest contains
    3. 1610.03Assignability as the default
    4. 1610.04The assignee's rights
    5. 1610.05Allocations to an assignee
    6. 1610.06Admission of the assignee as a member
    7. 1610.07The assignor's continuing liability
    8. 1610.08Restrictions in the operating agreement
    9. 1610.09The policy of the default
    10. 1610.10Pledges and security interests
    11. 1610.11Classes, series and redemption
    12. 1610.12Effect of assignment on the company
  3. ¶ 1620Death, Incapacity, Bankruptcy and Dissolution of a Member
    1. 1620.01The termination events
    2. 1620.02Death
    3. 1620.03Incapacity
    4. 1620.04Bankruptcy
    5. 1620.05Dissolution of a member that is an entity
    6. 1620.06Effect on the company: section 74(1)(c)
    7. 1620.07The member-managed single-member company
    8. 1620.08The manager-managed single-member company
    9. 1620.09Trusts as members
    10. 1620.10Drafting a successor-member provision
    11. 1620.11Multi-member companies
  4. ¶ 1630Resignation, Withdrawal, Expulsion, Redemption and the Payout Rule
    1. 1630.01Resignation
    2. 1630.02Comparison with Delaware
    3. 1630.03Withdrawal of capital in breach
    4. 1630.04Expulsion
    5. 1630.05Forfeiture provisions
    6. 1630.06The payout rule of section 58
    7. 1630.07Buy-sell provisions
    8. 1630.08Redemption at the company's option
    9. 1630.09Summary of the termination events
  5. ¶ 1640Events of Dissolution
    1. 1640.01The four events
    2. 1640.02Events specified in the agreement
    3. 1640.03Written consent of the members
    4. 1640.04Death, bankruptcy or dissolution of a member
    5. 1640.05Judicial dissolution
    6. 1640.06Removal from the register is not dissolution
    7. 1640.07Effect of the 2022 changes
    8. 1640.08Dissolution is not termination
    9. 1640.09Revocation of dissolution
    10. 1640.10Comparison with Delaware and the uniform act
  6. ¶ 1650Judicial Dissolution
    1. 1650.01The statute
    2. 1650.02Standing
    3. 1650.03The ground
    4. 1650.04Case discussion: SM Life Ventures LLC v. Morrice
    5. 1650.05The Delaware decisions on deadlock
    6. 1650.06Waiver of the right to apply
    7. 1650.07No alternative remedies
    8. 1650.08Procedure and consequences
  7. ¶ 1660Winding Up, Claims and Distribution
    1. 1660.01Continuation for winding up
    2. 1660.02The end of the company
    3. 1660.03Who winds up
    4. 1660.04Authority after dissolution
    5. 1660.05Articles of Dissolution
    6. 1660.06Court supervision
    7. 1660.07Notice to creditors
    8. 1660.08The bar
    9. 1660.09Where the notice is published
    10. 1660.10Distribution of assets
    11. 1660.11Members as creditors
    12. 1660.12Adequate provision for creditors
    13. 1660.13In specie distributions
    14. 1660.14Tax claims
    15. 1660.15Winding up a company held in trust
  8. ¶ 1670Mergers, Consolidations, Asset Sales and Dissenters' Rights
    1. 1670.01The statutory scheme after 2022
    2. 1670.02Domestic mergers and consolidations
    3. 1670.03The approval required
    4. 1670.04Effect of a merger or consolidation
    5. 1670.05Short-form merger of a subsidiary
    6. 1670.06Cross-border mergers and consolidations
    7. 1670.07Uses of the cross-border merger
    8. 1670.08Sales of all or substantially all the assets: section 72C
    9. 1670.09Section 54 and section 72C
    10. 1670.10Who may dissent
    11. 1670.11The procedure
    12. 1670.12Exclusivity
    13. 1670.13Points of construction
    14. 1670.14Summary
  9. ¶ 1680Conversion and Transfer of Domicile
    1. 1680.01Conversion of a corporation into an LLC
    2. 1680.02Effect of conversion
    3. 1680.03Conversion of an LLC into a corporation
    4. 1680.04What the Ordinance does not provide
    5. 1680.05Transfer of domicile into Nevis
    6. 1680.06What redomiciliation does and does not do
    7. 1680.07Members' interests after redomiciliation
    8. 1680.08Departure from Nevis
    9. 1680.09Jurisdiction after departure
    10. 1680.10Approval of departure
    11. 1680.11Emergency transfers
    12. 1680.12Planning a migration out of Nevis
  10. ¶ 1690United States Tax Effects in Outline, and a Drafting Checklist
    1. 1690.01Scope
    2. 1690.02Classification governs everything
    3. 1690.03Transfers, death and withdrawal
    4. 1690.04Change of domicile
    5. 1690.05Conversions and changes of classification
    6. 1690.06Mergers
    7. 1690.07Dissolution and liquidation
    8. 1690.08Comment
    9. 1690.09Drafting checklist

Chapter 17Nevis LLCs in International Structures and U.S. Entity Classification

  1. ¶ 1701Overview
    1. 1701.01Scope of the chapter
    2. 1701.02Plan
    3. 1701.03Relationship to other chapters
    4. 1701.04Two classifications, independently made
  2. ¶ 1710The Nevis LLC as a Cross-Border Vehicle
    1. 1710.01What the owner is buying
    2. 1710.02The protective provisions
    3. 1710.03Mobility
    4. 1710.04Status under the trust Ordinance
    5. 1710.05What the Ordinance does not do
  3. ¶ 1720The Company's Position Under Federation Tax Law After 2021
    1. 1720.01The former exemption
    2. 1720.02The sunset
    3. 1720.03Why the exemption ended
    4. 1720.04The present rule: residence and source
    5. 1720.05Incorporation does not determine residence
    6. 1720.06Taxable presence of a non-resident
    7. 1720.07Economic substance
    8. 1720.08Practical consequences
  4. ¶ 1730U.S. Entity Classification of a Nevis LLC
    1. 1730.01The framework
    2. 1730.02Not a per se corporation
    3. 1730.03The default rule for foreign eligible entities
    4. 1730.04Applying the default to a Nevis LLC
    5. 1730.05Relevance
    6. 1730.06The election
    7. 1730.07Timing
    8. 1730.08A late election is a change
    9. 1730.09Relief
    10. 1730.10Case discussion: Littriello v. United States
    11. 1730.11After Loper Bright
  5. ¶ 1740Choosing a Classification
    1. 1740.01The three choices
    2. 1740.02The American individual holding investments
    3. 1740.03The American owner of an operating business abroad
    4. 1740.04The non-American owner
    5. 1740.05Mixed ownership
    6. 1740.06The home country's view
    7. 1740.07Transfers of domicile
  6. ¶ 1750U.S. Reporting in Outline
    1. 1750.01Why reporting drives the choice
    2. 1750.02The election and its attachment
    3. 1750.03The association
    4. 1750.04The disregarded entity
    5. 1750.05The partnership
    6. 1750.06The trust-owned company
  7. ¶ 1760The Trust-Owned LLC
    1. 1760.01The structure
    2. 1760.02Why use both
    3. 1760.03Status under the two Ordinances
    4. 1760.04Who manages the company
    5. 1760.05The settlor as manager
    6. 1760.06American tax of the structure
    7. 1760.07Section 60(18) in a trust-owned company
    8. 1760.08Records and decisions
  8. ¶ 1770Holding Companies, Joint Ventures, Funds and Foundations
    1. 1770.01The holding company
    2. 1770.02American real estate
    3. 1770.03Joint ventures
    4. 1770.04Investment vehicles
    5. 1770.05The LLC with a multiform foundation
    6. 1770.06The two-company structure
  9. ¶ 1780FATCA, the CRS, Beneficial Ownership and Banking
    1. 1780.01A third classification
    2. 1780.02The investment entity
    3. 1780.03Consequences of each classification
    4. 1780.04Classification is independent of income tax
    5. 1780.05Federation reporting
    6. 1780.06American beneficial-ownership reporting
    7. 1780.07Banks and service providers
  10. ¶ 1790Drafting and a Checklist
    1. 1790.01The drafting task
    2. 1790.02Classification
    3. 1790.03Authority to elect
    4. 1790.04Management and residence
    5. 1790.05Purpose of the provision
    6. 1790.06Tax payments in a trust-owned company
    7. 1790.07Purpose of the provision
    8. 1790.08Information
    9. 1790.09Checklist

Part IV: Multiform Foundations

Chapter 18The Multiform Foundations Ordinance: Nature, Formation and the Choice of Form

  1. ¶ 1801Overview
    1. 1801.01Scope of the chapter
    2. 1801.02Plan of the chapter
    3. 1801.03Relation to other chapters
    4. 1801.04The point of the chapter
    5. 1801.05Terminology
  2. ¶ 1810Origins of the Ordinance
    1. 1810.01Enactment
    2. 1810.02Commencement
    3. 1810.03The 2011 amendment and the Revised Edition
    4. 1810.04The 2005 Regulations
    5. 1810.05Later fee and filing regulations
    6. 1810.06Use
    7. 1810.07The regulator's description
    8. 1810.08No reported decisions
  3. ¶ 1820The Nature of a Multiform Foundation
    1. 1820.01A separate legal entity
    2. 1820.02A body corporate
    3. 1820.03Residence and domicile
    4. 1820.04The foundation owns its property
    5. 1820.05Ownership in a trust foundation
    6. 1820.06A foundation without owners or members
    7. 1820.07Nevis law governs establishment
    8. 1820.08The limits of section 5(6)
    9. 1820.09Legal capacity
  4. ¶ 1830The Multiform
    1. 1830.01Meaning
    2. 1830.02Designation on registration
    3. 1830.03The forms available
    4. 1830.04The trust form
    5. 1830.05The company and limited liability company forms
    6. 1830.06The partnership form
    7. 1830.07The ordinary foundation
    8. 1830.08"Mutatis mutandis" and its limits
    9. 1830.09Choosing a law other than the default
    10. 1830.10The Registrar's control
    11. 1830.11Changing the form
    12. 1830.12Why the form matters
  5. ¶ 1840Subscribers, Promoters and Subscriptions
    1. 1840.01The subscriber
    2. 1840.02The promoter
    3. 1840.03What a subscription is
    4. 1840.04The effect of subscription
    5. 1840.05Undertakings to subscribe
    6. 1840.06Property the subscriber does not own
    7. 1840.07Foundations established by will
    8. 1840.08Will foundations in practice
    9. 1840.09Subscribers as beneficiaries and officers
  6. ¶ 1850Purposes and Objects
    1. 1850.01Any purpose
    2. 1850.02No beneficiary required
    3. 1850.03Who enforces a purpose
    4. 1850.04Public policy
    5. 1850.05Commercial purposes
    6. 1850.06Restricted activities
    7. 1850.07Charitable purposes
    8. 1850.08Mixed purposes
    9. 1850.09Drafting the purpose clause
  7. ¶ 1860Formation and Registration
    1. 1860.01The steps
    2. 1860.02The memorandum of establishment
    3. 1860.03The registration statement
    4. 1860.04The by-laws and their confidentiality
    5. 1860.05Execution: "legally acknowledged"
    6. 1860.06Names
    7. 1860.07Change of name
    8. 1860.08Registration and the certificate
    9. 1860.09Amending the constitution
    10. 1860.10The default amendment rule and absolute beneficiaries
    11. 1860.11Changes of proper law
  8. ¶ 1870Organs, Beneficiaries, Confidentiality and Creditors in Outline
    1. 1870.01The required persons
    2. 1870.02The management board
    3. 1870.03The secretary
    4. 1870.04The registered agent and office
    5. 1870.05The supervisory board
    6. 1870.06Beneficiaries
    7. 1870.07A foundation as beneficiary of a Nevis trust
    8. 1870.08Confidentiality
    9. 1870.09The creditor provisions in outline
    10. 1870.10The difference in the time limits
  9. ¶ 1880Migration, Conversion, Dissolution, Tax and Annual Compliance
    1. 1880.01Mobility
    2. 1880.02Continuance and transformation into Nevis
    3. 1880.03Effect of continuance
    4. 1880.04Discontinuance out of Nevis
    5. 1880.05Conversion, consolidation and merger
    6. 1880.06Dissolution
    7. 1880.07Insolvency as a ground of dissolution
    8. 1880.08Dissolution by the Registrar and revival
    9. 1880.09Tax status
    10. 1880.10The tax resident foundation
    11. 1880.11The annual return
    12. 1880.12Fees
    13. 1880.13Records and filings
  10. ¶ 1890Choosing the Form
    1. 1890.01Two choices
    2. 1890.02Civil-law foundations
    3. 1890.03Common-law foundation statutes
    4. 1890.04Control and foreign courts
    5. 1890.05Foundation or international trust
    6. 1890.06United States tax classification
    7. 1890.07Choosing the stated form
    8. 1890.08Foundation or LLC
    9. 1890.09Formation checklist

Chapter 19Foundation Governance: The Management Board, the Supervisory Board, Beneficiaries and Records

  1. ¶ 1901Overview
    1. 1901.01The subject of the chapter
    2. 1901.02The Ordinance's own vocabulary
    3. 1901.03Why governance carries the weight
    4. 1901.04The statutory floor and the constitution
    5. 1901.05Relation to other chapters
    6. 1901.06Plan of the chapter
  2. ¶ 1910The Architecture of Governance and the Effect of the Stated Multiform
    1. 1910.01The organs
    2. 1910.02The "officer" and the shadow manager
    3. 1910.03The two kinds of resolution
    4. 1910.04The stated multiform and its effect on governance
    5. 1910.05Table of the mapping
    6. 1910.06The proper law of the by-laws
    7. 1910.07Where management and control lie
    8. 1910.08The default by-laws
  3. ¶ 1920The Management Board: Composition, Qualification, Appointment and Removal
    1. 1920.01Size and voting
    2. 1920.02Qualification
    3. 1920.03The second disqualification in practice
    4. 1920.04First members and later appointments
    5. 1920.05The default appointment model
    6. 1920.06Tenure and its end
    7. 1920.07The appointment is personal
    8. 1920.08Court appointment
    9. 1920.09The secretary
    10. 1920.10The registered agent and registered office
    11. 1920.11Licensing of professional board members
  4. ¶ 1930Powers, Authority and Proceedings of the Management Board
    1. 1930.01The general mandate
    2. 1930.02Capacity and the constitution
    3. 1930.03Protection of third parties
    4. 1930.04Ratification of acts beyond power
    5. 1930.05Directions from the court
    6. 1930.06Delegation: alternates and agents
    7. 1930.07Meetings
    8. 1930.08The annual meeting and outside participants
    9. 1930.09Written resolutions
    10. 1930.10Requisitions
    11. 1930.11Execution of documents and seals
    12. 1930.12Name requirements and personal liability
  5. ¶ 1940Duties, Conflicts, Liability, Indemnity and Relief
    1. 1940.01The statutory duties
    2. 1940.02The standard of care
    3. 1940.03Loyalty and the general law
    4. 1940.04Duties owed to the foundation alone
    5. 1940.05Declaration of interests
    6. 1940.06Contracts with management-board members
    7. 1940.07Exoneration clauses
    8. 1940.08Indemnity
    9. 1940.09Insurance
    10. 1940.10Relief by the court
    11. 1940.11Remuneration
  6. ¶ 1950The Supervisory Board
    1. 1950.01An optional organ
    2. 1950.02Membership and proceedings
    3. 1950.03The statutory functions
    4. 1950.04Rights to information and attendance
    5. 1950.05The supervisory board of a trust foundation
    6. 1950.06Fiduciary or personal
    7. 1950.07Liability of the supervisory board
    8. 1950.08Court appointment and the end of the board
    9. 1950.09Comparison with other foundation statutes
  7. ¶ 1960The Founder and Subscribers: Reserved Rights and Control
    1. 1960.01The subscriber's position
    2. 1960.02Statutory rights of subscribers
    3. 1960.03Rights reserved in the by-laws
    4. 1960.04The default-by-law position
    5. 1960.05Reserved rights and the Nevis firewall
    6. 1960.06Case discussion: National Crime Agency v. Baker
    7. 1960.07The founder as supervisory board
    8. 1960.08Founder control and tax classification
  8. ¶ 1970Beneficiaries: Entitlement, Information, Meetings, Alienation and Forfeiture
    1. 1970.01Who is a beneficiary
    2. 1970.02Beneficial entitlement and absolute beneficiaries
    3. 1970.03The nature of a discretionary beneficiary's position
    4. 1970.04Designation, addition and exclusion
    5. 1970.05Information rights
    6. 1970.06Limiting information rights by the constitution
    7. 1970.07Restrictions on alienation, protective provisions and forfeiture
    8. 1970.08Comparison with other foundation statutes
  9. ¶ 1980Records, Accounts, Confidentiality, Investigation and the Court
    1. 1980.01The register of officers
    2. 1980.02The register of beneficiaries and record of subscribers
    3. 1980.03Minutes and the form of records
    4. 1980.04Books of account and audit
    5. 1980.05Confidentiality
    6. 1980.06Regulatory investigation
    7. 1980.07The court's supervisory powers
    8. 1980.08The remedy for default
    9. 1980.09No reported decisions
  10. ¶ 1990Drafting the Governance Provisions and a Checklist
    1. 1990.01Approach
    2. 1990.02Model provision: appointment and removal of the management board
    3. 1990.03Model provision: the supervisory board
    4. 1990.04Model provision: conflicts
    5. 1990.05Model provision: information and records
    6. 1990.06Model provision: forfeiture with carve-outs
    7. 1990.07Drafting checklist

Chapter 20Foundations in Planning: Succession, Forced Heirship, Foundations as Trustee and Conversion Between Forms

  1. ¶ 2001Overview
    1. 2001.01Scope of the chapter
    2. 2001.02The planning premise
    3. 2001.03The comparison that matters
    4. 2001.04No reported decisions
    5. 2001.05Companion volumes
  2. ¶ 2010The Foundation as a Succession Vehicle
    1. 2010.01Why a foundation avoids probate
    2. 2010.02What remains in the estate
    3. 2010.03Foundations established by will
    4. 2010.04The limits of the will foundation
    5. 2010.05Continuity of governance after the founder's death
    6. 2010.06Letters of wishes
    7. 2010.07No Nevis death duties
    8. 2010.08Comparison with the international trust
  3. ¶ 2020Forced Heirship and Personal-Relationship Claims: Section 46
    1. 2020.01The problem
    2. 2020.02The text of section 46
    3. 2020.03Heirship rights
    4. 2020.04Personal-relationship claims
    5. 2020.05What section 46 does
    6. 2020.06What section 46 does not do
    7. 2020.07Designing within the limits
    8. 2020.08Restriction on alienation and forfeiture
  4. ¶ 2030Creditor Protection Compared with the International Trust
    1. 2030.01Purpose of the comparison
    2. 2030.02The founder's creditors: the common core
    3. 2030.03The founder's creditors: the differences
    4. 2030.04The bond: amount and reach
    5. 2030.05Beneficiaries' creditors
    6. 2030.06The foundation's own creditors
    7. 2030.07Foreign judgments and foreign law
    8. 2030.08Summary
  5. ¶ 2040The Foundation as Trustee
    1. 2040.01Two different arrangements
    2. 2040.02Qualification as trustee of an international trust
    3. 2040.03The licensing overlay
    4. 2040.04The foundation as a private trust company
    5. 2040.05Liability and the separation of property
    6. 2040.06The protector and the supervisory board
    7. 2040.07Purpose trust foundations without a protector
    8. 2040.08Choosing between a foundation trustee and a licensed trustee
  6. ¶ 2050The Foundation as Beneficiary and as Holder of LLC Interests
    1. 2050.01A foundation as beneficiary of a trust
    2. 2050.02The non-resident gap
    3. 2050.03Working around the gap
    4. 2050.04The foundation as holder of LLC interests
    5. 2050.05The foundation as manager
    6. 2050.06Avoiding dissolution of a single-member LLC
    7. 2050.07The company foundation of LLC form
  7. ¶ 2060Changing the Stated Form
    1. 2060.01The power
    2. 2060.02Procedure
    3. 2060.03Continuity
    4. 2060.04The Registrar's control
    5. 2060.05One form at a time, and the unclassified alternative
    6. 2060.06Uses of the power
    7. 2060.07Effect on the creditor provisions
    8. 2060.08Effect abroad
  8. ¶ 2070Conversion, Consolidation, Merger and Continuance
    1. 2070.01The routes
    2. 2070.02Definitions
    3. 2070.03Conversion: the plan
    4. 2070.04Conversion: the constitution and the filing
    5. 2070.05Conversion: effect
    6. 2070.06Conversion and creditors
    7. 2070.07Converting a trust
    8. 2070.08Consolidation and merger
    9. 2070.09Continuance and transformation into Nevis
    10. 2070.10Discontinuance out of Nevis
  9. ¶ 2080Privacy, Control and Classification Abroad
    1. 2080.01The public register
    2. 2080.02What can be kept confidential
    3. 2080.03Control and how foreign courts read it
    4. 2080.04Reducing the founder's control
    5. 2080.05Information exchange
    6. 2080.06United States tax classification
  10. ¶ 2090Worked Structures, Model Provisions and a Checklist
    1. 2090.01Three structures
    2. 2090.02Model provision: succession of reserved powers
    3. 2090.03Model provision: forfeiture on challenge
    4. 2090.04Model provision: restriction on alienation and event of duress
    5. 2090.05Planning checklist

Part V: Creditor Protection and Litigation

Chapter 21Fraudulent Dispositions: The Standard of Proof, Limitation Periods and the Solvency Inquiry

  1. ¶ 2101Overview
    1. 2101.01Scope of the chapter
    2. 2101.02The design in one sentence
    3. 2101.03Why the chapter matters
    4. 2101.04Plan of the chapter
    5. 2101.05Terms
    6. 2101.06No reported Nevis decision
  2. ¶ 2110The English Background and Its Displacement
    1. 2110.01The inherited rule
    2. 2110.02How intent was proved
    3. 2110.03Voluntary settlements
    4. 2110.04The modern English rule
    5. 2110.05The Ordinance's displacement
    6. 2110.06What the displacement leaves
  3. ¶ 2120Section 26 Element by Element
    1. 2120.01The text
    2. 2120.02Who is a creditor
    3. 2120.03The creditor must prove the underlying claim
    4. 2120.04Principal intent to defraud that creditor
    5. 2120.05Intent by or on behalf of the settlor
    6. 2120.06The insolvency element
    7. 2120.07What does not prove intent
    8. 2120.08The powers and benefits referred to
    9. 2120.09The exclusive remedy
    10. 2120.10Joinder of all claims and parties
  4. ¶ 2130The Standard and Burden of Proof
    1. 2130.01The criminal standard in a civil claim
    2. 2130.02To what the standard applies
    3. 2130.03The burden
    4. 2130.04The regulator's description
    5. 2130.05Why the standard matters in practice
    6. 2130.06Evidence in Nevis
    7. 2130.07The standard compared
  5. ¶ 2140Accrual, the One-Year Rule and the Two-Year Limitation
    1. 2140.01Three time rules
    2. 2140.02When a cause of action accrues
    3. 2140.03Why the definition matters
    4. 2140.04The rule's origin
    5. 2140.05The one-year rule and its paradox
    6. 2140.06Does section 50 apply to a section 26 claim?
    7. 2140.07The affidavit condition
    8. 2140.08Claims by prior owners
    9. 2140.09Trusts that migrate to Nevis
  6. ¶ 2150The Solvency Inquiry
    1. 2150.01The question asked
    2. 2150.02The valuation rule
    3. 2150.03The safe harbor answers intent as well as effect
    4. 2150.04What property counts
    5. 2150.05Valuing the claim
    6. 2150.06One creditor at a time
    7. 2150.07The timing of the test
  7. ¶ 2160The Remedy and Its Limits
    1. 2160.01Not avoidance but liability
    2. 2160.02The measure of liability
    3. 2160.03Recovery limited to the property or its proceeds
    4. 2160.04Sections 27 and 28
    5. 2160.05Reconciling the provisions
    6. 2160.06Costs
  8. ¶ 2170Parallel Regimes: LLCs and Foundations
    1. 2170.01Three statutes, one design
    2. 2170.02The LLC periods
    3. 2170.03The member's interest counts
    4. 2170.04Dispositions out of the LLC
    5. 2170.05Other LLC rules
    6. 2170.06The foundation rule
    7. 2170.07Two transfers, two rules
  9. ¶ 2180Comparisons and the View from Foreign Courts
    1. 2180.01Three Commonwealth designs
    2. 2180.02The Cook Islands
    3. 2180.03Belize
    4. 2180.04Comparing the designs
    5. 2180.05The view from the settlor's home court
    6. 2180.06Two analyses, opposite results
    7. 2180.07How the Nevis court has treated a foreign avoidance claim
    8. 2180.08English-law jurisdictions
  10. ¶ 2190Planning: Funding, Documentation and a Checklist
    1. 2190.01The lesson of the chapter
    2. 2190.02Fund before claims arise
    3. 2190.03Document solvency at the time
    4. 2190.04Record the dates
    5. 2190.05Document the purpose
    6. 2190.06Structure the transfers
    7. 2190.07Keep the settlor's powers modest
    8. 2190.08The trustee's response to a claim

Chapter 22The Creditor's Bond and Other Conditions on Suit

  1. ¶ 2201Overview
    1. 2201.01The subject of the chapter
    2. 2201.02Three bonds, three scopes
    3. 2201.03Why the conditions matter
    4. 2201.04The state of the authorities
    5. 2201.05Relation to other chapters
    6. 2201.06Plan of the chapter
  2. ¶ 2210Purpose and History of the Bonds
    1. 2210.01The stated purpose
    2. 2210.02The practical purpose
    3. 2210.03The trust bond's history
    4. 2210.04Currency
    5. 2210.05The 2020 Bill
    6. 2210.06The company bond's history
    7. 2210.07The foundation bond's history
    8. 2210.08Bonds and the jurisdiction's reputation
  3. ¶ 2220The Trust Bond: Section 61 Element by Element
    1. 2220.01The text
    2. 2220.02"Every creditor."
    3. 2220.03"Before bringing any action or proceeding."
    4. 2220.04"Against any trust property governed by this Ordinance."
    5. 2220.05"Deposit with the Permanent Secretary in the Ministry of Finance."
    6. 2220.06"A bond ... from a financial institution in Nevis."
    7. 2220.07"In the sum of $270,000.00."
    8. 2220.08"For securing the payment of all costs."
    9. 2220.09The link to section 50(3)
    10. 2220.10Consequences for interim relief
    11. 2220.11Release and calling of the bond
  4. ¶ 2230Who Must Post the Bond and Which Proceedings It Governs
    1. 2230.01The breadth of "creditor."
    2. 2230.02Family claimants
    3. 2230.03Beneficiaries
    4. 2230.04Trustees in bankruptcy and liquidators
    5. 2230.05Case discussion: SEC v. Brennan
    6. 2230.06Governments and criminal proceedings
    7. 2230.07Recognition of foreign judgments
    8. 2230.08Trusts migrated to Nevis
    9. 2230.09Lapse of registration
  5. ¶ 2240The Company Bond, the Foundation Bond and the Three Compared
    1. 2240.01The company bond: text
    2. 2240.02Who is bound
    3. 2240.03Which proceedings
    4. 2240.04Fraudulent-disposition claims under section 61
    5. 2240.05The amount
    6. 2240.06Procedure for fixing the company bond
    7. 2240.07The foundation bond: text and scope
    8. 2240.08The foundation bond's other features
    9. 2240.09The three bonds compared
    10. 2240.10Layered structures
  6. ¶ 2250Other Statutory Conditions on Suit
    1. 2250.01The commencement periods
    2. 2250.02The affidavit
    3. 2250.03The affidavit's effect
    4. 2250.04The joinder rule
    5. 2250.05The foundations Ordinance's short period
    6. 2250.06Hearings in camera
    7. 2250.07Immunity of the administration
    8. 2250.08Foreign judgments and relitigation
  7. ¶ 2260Security for Costs Under the Civil Procedure Rules and the Costs Regime
    1. 2260.01The general power
    2. 2260.02The conditions
    3. 2260.03The general power alongside the statutory bonds
    4. 2260.04Enforcing security
    5. 2260.05Costs follow the event
    6. 2260.06Prescribed costs
    7. 2260.07The bond measured against prescribed costs
    8. 2260.08Costs from the trust fund
  8. ¶ 2270Access to Court and the Constitution
    1. 2270.01The constitutional guarantee
    2. 2270.02No decision
    3. 2270.03The argument against the bond
    4. 2270.04The argument for the bond
    5. 2270.05Weighing the arguments
    6. 2270.06Hearings in camera and the Constitution
  9. ¶ 2280The Comparative Position
    1. 2280.01The Cook Islands
    2. 2280.02Belize
    3. 2280.03The United States
    4. 2280.04Nevis among the three
  10. ¶ 2290Practice for Creditors, Trustees and Planners; a Checklist
    1. 2290.01For the creditor: sequence
    2. 2290.02For the creditor: interim relief
    3. 2290.03For the creditor: whether to sue at all
    4. 2290.04For the trustee
    5. 2290.05For the planner
    6. 2290.06Records that make the conditions work
    7. 2290.07Checklist

Chapter 23Foreign Judgments and Firewall Provisions

  1. ¶ 2301Overview
    1. 2301.01Scope of the chapter
    2. 2301.02The term "firewall."
    3. 2301.03Where the chapter fits
    4. 2301.04The answer in brief
    5. 2301.05The state of the authorities
    6. 2301.06Plan of the chapter
  2. ¶ 2310How a Foreign Judgment Reaches Nevis: The Routes
    1. 2310.01Four routes
    2. 2310.02Registration
    3. 2310.03The common-law action
    4. 2310.04Recognition without enforcement
    5. 2310.05Recognition of foreign officeholders
    6. 2310.06Arbitral awards
    7. 2310.07The statutory overlay
    8. 2310.08Federal and Nevis law
  3. ¶ 2320The Federal Registration Statutes and CPR Part 74
    1. 2320.01Two statutes
    2. 2320.02REJA: the United Kingdom and the Commonwealth
    3. 2320.03REJA: grounds for refusal
    4. 2320.04FJREA: foreign countries giving reciprocal treatment
    5. 2320.05FJREA: setting registration aside
    6. 2320.06Retaliation
    7. 2320.07Procedure: CPR Part 74
    8. 2320.08The United States
    9. 2320.09Effect on the entity statutes
  4. ¶ 2330The Common-Law Action on a Foreign Judgment
    1. 2330.01The basis of the action
    2. 2330.02International jurisdiction: the Dicey Rule
    3. 2330.03What the Rule leaves out
    4. 2330.04Submission
    5. 2330.05Final and conclusive, for a fixed sum
    6. 2330.06Defences: fraud
    7. 2330.07Defences: natural justice and public policy
    8. 2330.08Defences: penal and revenue laws
    9. 2330.09Case discussion: Rubin v. Eurofinance SA
    10. 2330.10What the common law gives the creditor
  5. ¶ 2340The Trust Firewall
    1. 2340.01The text of section 30
    2. 2340.02The override
    3. 2340.03The persons and property protected
    4. 2340.04Condition (i): law inconsistent with the Ordinance
    5. 2340.05Condition (ii): matters governed by the law of the Federation
    6. 2340.06The missing conjunction
    7. 2340.07Exclusion of foreign laws: section 31
    8. 2340.08The limit: property not owned by the settlor
    9. 2340.09Bankruptcy: section 52
    10. 2340.10Heirship and personal relationships: section 54
    11. 2340.11The Statute of Elizabeth
    12. 2340.12The procedural backstops
  6. ¶ 2350The LLC and Foundation Firewalls
    1. 2350.01Two patterns
    2. 2350.02The member's interest: section 60(7)
    3. 2350.03"Foreign domicile."
    4. 2350.04Foreign orders affecting management: section 60(12) and (14)
    5. 2350.05Formation and transfers: section 61
    6. 2350.06The LLC choice-of-law firewall: section 61(17)
    7. 2350.07What the LLC provisions do not cover
    8. 2350.08The foundation firewall: section 110
    9. 2350.09"A jurisdiction other than Nevis."
    10. 2350.10The foundation choice-of-law firewall: section 46
    11. 2350.11Layered structures
  7. ¶ 2360Matrimonial, Heirship and Community-Property Claims
    1. 2360.01The claimants
    2. 2360.02The Nevis answer: sections 31 and 54
    3. 2360.03"Personal relationship" and "heirship rights."
    4. 2360.04Matrimonial orders abroad
    5. 2360.05Community property: section 62
    6. 2360.06Opting out
    7. 2360.07Heirs
    8. 2360.08Support and maintenance
  8. ¶ 2370Foreign Insolvency, Receivers, Arbitral Awards and Criminal Orders
    1. 2370.01The insolvency representative as creditor
    2. 2370.02No Model Law
    3. 2370.03Recognition at common law
    4. 2370.04Case discussion: Millennium Financial Ltd. v. McNamara
    5. 2370.05Cambridge Gas
    6. 2370.06Bankruptcy of the settlor and the trustee's position
    7. 2370.07Arbitral awards: the position
    8. 2370.08Awards and the firewall
    9. 2370.09Criminal and regulatory orders
  9. ¶ 2380Giving Effect to Foreign Orders Through Directions
    1. 2380.01The trustee's dilemma
    2. 2380.02The Nevis power
    3. 2380.03Directions are not enforcement
    4. 2380.04Case discussion: In re B Trust and In re IMK Family Trust
    5. 2380.05When directions are useful
    6. 2380.06When directions should not be sought
    7. 2380.07Trustee succession under section 38
  10. ¶ 2390The Firewalls Compared and a Planning Checklist
    1. 2390.01The common design
    2. 2390.02The Cook Islands
    3. 2390.03Belize
    4. 2390.04Jersey
    5. 2390.05The British Virgin Islands
    6. 2390.06What the firewalls do not do
    7. 2390.07Design principles
    8. 2390.08Checklist
    9. 2390.09Summary

Chapter 24Litigating in Nevis: Procedure, Injunctions, Freezing Orders and Disclosure

  1. ¶ 2401Overview
    1. 2401.01Scope of the chapter
    2. 2401.02Three layers of law
    3. 2401.03Who litigates in Nevis
    4. 2401.04The creditor's problem in one paragraph
    5. 2401.05Plan of the chapter
    6. 2401.06Absence of decided cases
  2. ¶ 2410Starting Proceedings in the Nevis Circuit
    1. 2410.01The forms of originating process
    2. 2410.02Applications under Part 11
    3. 2410.03Issuing without a statement of claim
    4. 2410.04Time for acknowledgment and defence
    5. 2410.05The statutory preconditions
    6. 2410.06Hearing in private
    7. 2410.07Representation and electronic filing
  3. ¶ 2420Service Within and Out of the Jurisdiction
    1. 2420.01Service on a Nevis trustee, LLC or foundation
    2. 2420.02The parties who are abroad
    3. 2420.03The gateways most used in Nevis litigation
    4. 2420.04The certificate and the defendant's challenge
    5. 2420.05Methods of service abroad
    6. 2420.06Service of interim orders
  4. ¶ 2430Interim Injunctions and Freezing Orders Under Part 17
    1. 2430.01The list of interim remedies
    2. 2430.02The freezing order
    3. 2430.03Timing
    4. 2430.04Evidence and the without-notice application
    5. 2430.05The procedure for injunctions and freezing orders
    6. 2430.06Ancillary information orders
    7. 2430.07Interim injunctions other than freezing orders
  5. ¶ 2440The Statutory Bars on Interim Relief Against Nevis Structures
    1. 2440.01The pattern
    2. 2440.02The trust Ordinance: section 24(4)
    3. 2440.03What section 24(4) prevents
    4. 2440.04What section 24(4) leaves untouched
    5. 2440.05The LLC Ordinance: section 60(14)
    6. 2440.06A freezing order against the member
    7. 2440.07The Multiform Foundations Ordinance
    8. 2440.08The consequence for foundations
  6. ¶ 2450Relief in Aid of Foreign Proceedings and the Chabra Jurisdiction
    1. 2450.01The problem
    2. 2450.02Case discussion: Broad Idea International Ltd. v. Convoy Collateral Ltd.: facts and proceedings
    3. 2450.03Broad Idea: the holdings
    4. 2450.04Broad Idea: the lessons for Nevis
    5. 2450.05The 2023 Rules respond
    6. 2450.06The Chabra jurisdiction
  7. ¶ 2460Disclosure: Norwich Pharmacal, Bankers Trust, Part 28 and the Confidentiality Statutes
    1. 2460.01Why disclosure matters in Nevis
    2. 2460.02The Norwich Pharmacal jurisdiction
    3. 2460.03Norwich Pharmacal relief in the Eastern Caribbean
    4. 2460.04Bankers Trust orders
    5. 2460.05The usual respondents in Nevis
    6. 2460.06The Confidential Relationships Act
    7. 2460.07Court orders and the Act
    8. 2460.08Disclosure by parties under Part 28
    9. 2460.09Collateral use
    10. 2460.10Evidence for foreign courts
  8. ¶ 2470Receivers, Enforcement and Trustees' Applications
    1. 2470.01The enforcement Parts
    2. 2470.02Enforcement against the structures
    3. 2470.03Receivers
    4. 2470.04Case discussion: Millennium Financial Ltd. v. McNamara
    5. 2470.05No creditor's winding up of a company under the 1984 corporations Ordinance
    6. 2470.06Applications by trustees
    7. 2470.07Directions when the trustee is sued
  9. ¶ 2480Costs, Security, Settlement and Appeals
    1. 2480.01The loser pays
    2. 2480.02How costs are quantified
    3. 2480.03Security for costs
    4. 2480.04Settlement and judicial settlement conferences
    5. 2480.05Interlocutory appeals
    6. 2480.06Further appeal
  10. ¶ 2490Practice: Timeline and a Litigation Checklist
    1. 2490.01A typical sequence
    2. 2490.02The creditor's checklist
    3. 2490.03The trustee's or company's checklist

Chapter 25Nevis Structures Before Foreign Courts: Contempt, Repatriation Orders and Bankruptcy

  1. ¶ 2501Overview
    1. 2501.01The subject of the chapter
    2. 2501.02Why the foreign court matters most
    3. 2501.03The settled position
    4. 2501.04What Nevis adds
    5. 2501.05The Nevis cases
    6. 2501.06Relation to other chapters
    7. 2501.07Plan of the chapter
  2. ¶ 2510Who the Foreign Court Can Reach
    1. 2510.01Acting on the person
    2. 2510.02The settlor
    3. 2510.03The protector
    4. 2510.04The Nevis trustee
    5. 2510.05The trustee as a party and section 38
    6. 2510.06Submission
    7. 2510.07The member and manager of a Nevis company
    8. 2510.08Assets in the forum
  3. ¶ 2520Repatriation and Turnover Orders
    1. 2520.01Sources of authority
    2. 2520.02Judgment enforcement
    3. 2520.03Bankruptcy
    4. 2520.04Government enforcement
    5. 2520.05Criminal forfeiture and mutual assistance
    6. 2520.06Repatriation and the automatic stay: the Nevis trust in Brennan
    7. 2520.07Case discussion: SEC v. Brennan, 230 F.3d 65 (2d Cir. 2000)
    8. 2520.08Family courts
    9. 2520.09Forms of order
  4. ¶ 2530Civil Contempt and the Impossibility Defense
    1. 2530.01The power and the distinction
    2. 2530.02A repatriation order is the paradigm
    3. 2530.03Inability as a defense
    4. 2530.04The heightened burden in asset-protection cases
    5. 2530.05Self-created impossibility
    6. 2530.06Case discussion: FTC v. Affordable Media, LLC, 179 F.3d 1228 (9th Cir. 1999)
    7. 2530.07Case discussion: Lawrence v. Goldberg (In re Lawrence), 279 F.3d 1294 (11th Cir. 2002)
    8. 2530.08The other reported cases
    9. 2530.09When the trust predates the claim
  5. ¶ 2540Sections 16 and 38 and Duress Clauses Before Foreign Courts
    1. 2540.01Three layers of protection
    2. 2540.02Section 16 and its proviso
    3. 2540.03The proviso and the protector
    4. 2540.04Section 38 before the foreign court
    5. 2540.05Contractual duress clauses
    6. 2540.06Flight, migration and exclusion after the claim
    7. 2540.07The Nevis court's directions as evidence
  6. ¶ 2550Duration of Confinement, Release and Criminal Contempt
    1. 2550.01The governing principle
    2. 2550.02The realistic-possibility standard
    3. 2550.03No fixed limit
    4. 2550.04Case discussion: Armstrong v. Guccione, 470 F.3d 89 (2d Cir. 2006)
    5. 2550.05The habeas standard
    6. 2550.06Release does not end the matter
    7. 2550.07Leaving the forum
  7. ¶ 2560Bankruptcy I: The Estate, Section 541(c)(2) and Section 548(e)
    1. 2560.01Why bankruptcy is different
    2. 2560.02The estate includes Nevis interests
    3. 2560.03Retained powers pass to the trustee
    4. 2560.04The spendthrift exclusion
    5. 2560.05Case discussion: Sattin v. Brooks (In re Brooks), 217 B.R. 98 (Bankr. D. Conn. 1998)
    6. 2560.06Portnoy and Huber
    7. 2560.07Section 548(e)
    8. 2560.08Case discussion: Battley v. Mortensen (In re Mortensen), No. A09-00565-DMD, Adv. No. A09-90036-DMD (Bankr. D. Alaska May 26, 2011)
  8. ¶ 2570Bankruptcy II: Discharge, Criminal Exposure and Cross-Border Insolvency
    1. 2570.01The discharge as leverage
    2. 2570.02Continuing concealment
    3. 2570.03Case discussion: Marine Midland Bank v. Portnoy (In re Portnoy), 201 B.R. 685 (Bankr. S.D.N.Y. 1996)
    4. 2570.04Disclosure
    5. 2570.05Criminal exposure: the sequel to Brennan
    6. 2570.06Cross-border insolvency: recognition in Nevis
    7. 2570.07Chapter 15 runs both ways: Condor
    8. 2570.08Centre of main interests
  9. ¶ 2580English and Commonwealth Courts
    1. 2580.01Why the English position matters
    2. 2580.02Receivers over powers
    3. 2580.03The rules and the standard of proof
    4. 2580.04Fixed terms
    5. 2580.05Impossibility in English law
    6. 2580.06Proving ability to pay
    7. 2580.07Nevis's own contempt law
  10. ¶ 2590Planning, the Trustee's Response and a Checklist
    1. 2590.01The two questions
    2. 2590.02Funding early
    3. 2590.03Case discussion: FTC v. Rensin (In re Rensin), 597 B.R. 177 (Bankr. S.D. Fla. 2018); Mehdipour v. Rensin (In re Rensin), 600 B.R. 870 (Bankr. S.D. Fla. 2019)
    4. 2590.04Powers and offices
    5. 2590.05Assets and records
    6. 2590.06Conduct after a claim
    7. 2590.07The planner's position
    8. 2590.08The Nevis trustee's response
    9. 2590.09Checklist

Part VI: Tax, Reporting and AML

Chapter 26Nevis Taxation and Exempt Status

  1. ¶ 2601Overview
    1. 2601.01Scope of the chapter
    2. 2601.02The position in summary
    3. 2601.03Two questions for every structure
    4. 2601.04What changed in 2018–2021
    5. 2601.05Method and sources
  2. ¶ 2610The Architecture: Federal and Nevis Taxing Powers
    1. 2610.01The constitutional division
    2. 2610.02The taxes Nevis may not impose
    3. 2610.03The federal statutes
    4. 2610.04Nevis's share of the corporate tax
    5. 2610.05The Nevis exemptions against this background
    6. 2610.06Where each tax sits
    7. 2610.07The practical consequence
  3. ¶ 2620The Income Tax Act: Charge, Persons, Rates, Trustees and Withholding
    1. 2620.01The charge
    2. 2620.02No tax on persons other than companies since 1980
    3. 2620.03Which entities are "companies."
    4. 2620.04The corporate rate
    5. 2620.05Trustees as taxpayers
    6. 2620.06How the trustee rules interact with section 3(3)
    7. 2620.07Settlor-retained trusts
    8. 2620.08Withholding on payments to non-residents
    9. 2620.09Anti-avoidance
  4. ¶ 2630Residence and Taxable Presence
    1. 2630.01Why residence decides the case
    2. 2630.02No statutory definition
    3. 2630.03Case discussion: De Beers Consolidated Mines Ltd. v. Howe
    4. 2630.04The Department's statement of the test
    5. 2630.05Legal seat and secretarial services
    6. 2630.06Treaty tie-breakers
    7. 2630.07Taxable presence of a non-resident: the Business Enterprise
    8. 2630.08Service providers are not agents
    9. 2630.09Trusts and foundations
  5. ¶ 2640The Exemption Provisions of the Nevis Ordinances
    1. 2640.01Four provisions, two outcomes
    2. 2640.02The trust Ordinance
    3. 2640.03The trust exemption was not part of the 2018 reforms
    4. 2640.04The foundations Ordinance
    5. 2640.05"Any tax in Nevis."
    6. 2640.06The corporation and LLC Ordinances
    7. 2640.07Spent but still printed
    8. 2640.08The competence question
  6. ¶ 2650The International Reviews: Listing, Abolition and Grandfathering
    1. 2650.01Two processes
    2. 2650.02The identified regime
    3. 2650.03The listing and the move to Annex II
    4. 2650.04The amendments
    5. 2650.05Grandfathering and the CIT-101 return
    6. 2650.06The sequence
    7. 2650.07Present status
    8. 2650.08No economic substance statute
    9. 2650.09Information-exchange ratings
  7. ¶ 2660The Present Position by Vehicle
    1. 2660.01A sequence of questions
    2. 2660.02The international trust
    3. 2660.03The Nevis LLC managed abroad
    4. 2660.04The Nevis business corporation
    5. 2660.05The multiform foundation
    6. 2660.06The tax resident foundation
    7. 2660.07Entities formed elsewhere and managed in Nevis
    8. 2660.08Summary
  8. ¶ 2670Land, Stamp Duty, Indirect Taxes and Local Activity
    1. 2670.01Why land is different
    2. 2670.02The Aliens Land Holding Regulation Act
    3. 2670.03Entities as aliens
    4. 2670.04Shares held in trust for aliens
    5. 2670.05Stamp duty
    6. 2670.06Value added tax and customs
    7. 2670.07Nevis land rates
    8. 2670.08Local employment and services
  9. ¶ 2680Residents, Citizens by Investment and Service Providers
    1. 2680.01Clients who live in the Federation
    2. 2680.02Citizens by investment under the trust Ordinance
    3. 2680.03The tax position of service providers
    4. 2680.04The provider as representative taxpayer
    5. 2680.05Death of a non-resident client
  10. ¶ 2690Planning Implications and a Checklist
    1. 2690.01The exemption is rarely the reason
    2. 2690.02Keep management outside the Federation unless residence is intended
    3. 2690.03Keep Federation land out of international trusts
    4. 2690.04Check the foundation safe harbours
    5. 2690.05Confirm before relying on a Nevis exemption against federal tax
    6. 2690.06Treat pre-2019 entities with care
    7. 2690.07Do not overstate the international status
    8. 2690.08Checklist

Chapter 27Information Exchange: Tax Information Exchange Agreements, FATCA and the Common Reporting Standard

  1. ¶ 2701Overview
    1. 2701.01Scope of the chapter
    2. 2701.02Why the subject belongs in a treatise on Nevis structures
    3. 2701.03Three channels compared
    4. 2701.04The financial institution question
    5. 2701.05Limits of the chapter
    6. 2701.06Terms
  2. ¶ 2710The Legal Architecture
    1. 2710.01Federal law throughout
    2. 2710.02The Exchange Act
    3. 2710.03The Convention
    4. 2710.04The CRS Act and Regulations
    5. 2710.05The FATCA agreement and Act
    6. 2710.06The competent authority in practice
    7. 2710.07The instruments in one place
    8. 2710.08Spontaneous exchange
  3. ¶ 2720Exchange on Request: The Network and the Act's Procedure
    1. 2720.01The network
    2. 2720.02The standard: foreseeable relevance
    3. 2720.03What "information" includes
    4. 2720.04Receiving and testing a request
    5. 2720.05Two routes to the information
    6. 2720.06Testimony and searches
    7. 2720.07Confidentiality gives way
    8. 2720.08Privilege
    9. 2720.09Use of the information
  4. ¶ 2730The Person Concerned: Notification, Confidentiality and Practice
    1. 2730.01The notification rule
    2. 2730.02Written submissions only
    3. 2730.03Waiver of notice in practice
    4. 2730.04Confidentiality of the request
    5. 2730.05Challenging a request
    6. 2730.06The Global Forum's findings
    7. 2730.07Case discussion: the direct demand
  5. ¶ 2740FATCA: The Model 1B Agreement and Its Implementation
    1. 2740.01The American statute in outline
    2. 2740.02A non-reciprocal Model 1 agreement
    3. 2740.03Treatment of Federation institutions
    4. 2740.04Reporting in the Federation
    5. 2740.05Due diligence thresholds
    6. 2740.06The United States does not reciprocate
    7. 2740.07Relationship to the settlor's own reporting
  6. ¶ 2750Classifying Nevis Trusts, LLCs and Foundations Under FATCA
    1. 2750.01The first question
    2. 2750.02The investment entity
    3. 2750.03Trusts
    4. 2750.04The trustee-documented trust
    5. 2750.05Equity interests in a trust
    6. 2750.06Sponsored entities and the owner-documented FFI
    7. 2750.07LLCs and foundations
    8. 2750.08The passive non-financial entity
    9. 2750.09The classifications compared
  7. ¶ 2760The Common Reporting Standard: The Act and Regulations
    1. 2760.01How the Standard is made law
    2. 2760.02Which institutions report
    3. 2760.03The wider approach
    4. 2760.04Dates and thresholds
    5. 2760.05Self-certification for entity accounts
    6. 2760.06Reporting, nil returns and records
    7. 2760.07Penalties and appeals
    8. 2760.08The United States and the Standard
    9. 2760.09Anti-avoidance
  8. ¶ 2770Trusts and Foundations Under the CRS: Controlling Persons and Equity Interests
    1. 2770.01Two routes to the same persons
    2. 2770.02Equity interests in a trust that is a financial institution
    3. 2770.03Controlling persons of a trust that is a passive NFE
    4. 2770.04The Department's guidance on trusts
    5. 2770.05Foundations
    6. 2770.06LLCs in a chain
    7. 2770.07What is not reported
  9. ¶ 2780Confidentiality Statutes, Data Protection and New Standards
    1. 2780.01The Confidential Relationships Act
    2. 2780.02The statutory overrides
    3. 2780.03What the confidentiality statutes still do
    4. 2780.04Data protection
    5. 2780.05The amended Standard and the Crypto-Asset Reporting Framework
    6. 2780.06Beneficial ownership
  10. ¶ 2790Planning and a Compliance Checklist
    1. 2790.01Transparency as a design assumption
    2. 2790.02Every role is reported
    3. 2790.03United States clients
    4. 2790.04Non-American clients
    5. 2790.05Change of residence
    6. 2790.06Model provision
    7. 2790.07Commentary on the model provision
    8. 2790.08Checklist

Chapter 28Anti-Money Laundering, Beneficial Ownership and Due Diligence

  1. ¶ 2801Overview
    1. 2801.01The subject of the chapter
    2. 2801.02Federal law applied in Nevis
    3. 2801.03The instruments
    4. 2801.04What the regime means for a client
    5. 2801.05Confidentiality and transparency
    6. 2801.06Method
  2. ¶ 2810The Legal Framework
    1. 2810.01The Proceeds of Crime and Asset Recovery Act 2020
    2. 2810.02The earlier statute and its regulations
    3. 2810.03The Industry Standards Regulations
    4. 2810.04Terrorist and proliferation financing
    5. 2810.05The institutions
    6. 2810.06The Financial Intelligence Unit's powers
    7. 2810.07Administrative penalties since 2026
    8. 2810.08Federal and Nevis instruments together
  3. ¶ 2820Who Is Regulated
    1. 2820.01Two categories
    2. 2820.02Schedule 6
    3. 2820.03The professional trustee
    4. 2820.04The private or unpaid trustee
    5. 2820.05Protectors
    6. 2820.06Independent legal professionals
    7. 2820.07The 2026 Regulations
    8. 2820.08The client is not regulated
  4. ¶ 2830Customer Due Diligence and Beneficial Ownership
    1. 2830.01The identification procedures
    2. 2830.02A risk-based duty
    3. 2830.03Who is a beneficial owner
    4. 2830.04No twenty-five percent rule
    5. 2830.05Trusts
    6. 2830.06The trustee's own diligence on assets
    7. 2830.07Limited liability companies
    8. 2830.08Corporations and the end of bearer shares
    9. 2830.09Foundations
    10. 2830.10Ongoing due diligence
    11. 2830.11When due diligence cannot be completed
  5. ¶ 2840Enhanced Due Diligence, Politically Exposed Persons and Source of Wealth
    1. 2840.01When enhanced measures apply
    2. 2840.02Most Nevis structures are non-face-to-face
    3. 2840.03Politically exposed persons
    4. 2840.04The enhanced measures for politically exposed persons
    5. 2840.05Source of funds and source of wealth
    6. 2840.06High-risk countries and counter-measures
    7. 2840.07Sanctions and screening
    8. 2840.08The structure as a risk factor
    9. 2840.09Asset protection and suspicion
    10. 2840.10Citizenship by investment
  6. ¶ 2850Reliance on Introducers and Intermediaries; Record Keeping
    1. 2850.01Introducers and intermediaries distinguished
    2. 2850.02Conditions of reliance
    3. 2850.03Adequate assurance
    4. 2850.04Liability stays with the Nevis provider
    5. 2850.05Professional service clients
    6. 2850.06What must be kept
    7. 2850.07How long
    8. 2850.08Penalties for record failures
    9. 2850.09Change of provider
  7. ¶ 2860Where Beneficial-Ownership Information Sits
    1. 2860.01The Nevis model
    2. 2860.02What the trust register shows
    3. 2860.03Companies
    4. 2860.04Corporations
    5. 2860.05Foundations
    6. 2860.06Access by the authorities
    7. 2860.07The evaluators' view
    8. 2860.08Exchange with other countries
    9. 2860.09Comparison: the United States and the European Union
  8. ¶ 2870Suspicious Transaction Reporting, Consent and Tipping Off
    1. 2870.01Criminal property
    2. 2870.02The three principal offences
    3. 2870.03The authorised disclosure defence
    4. 2870.04The consent regime
    5. 2870.05The duty to disclose
    6. 2870.06Timing under the Regulations
    7. 2870.07Protection for the reporter
    8. 2870.08Tipping off
    9. 2870.09Case discussion: K Ltd v. National Westminster Bank
    10. 2870.10Case discussion: Shah v. HSBC Private Bank
    11. 2870.11Applying the regime to Nevis trustees
  9. ¶ 2880Enforcement, Penalties and International Evaluation
    1. 2880.01Criminal penalties
    2. 2880.02Administrative penalties
    3. 2880.03Regulatory action
    4. 2880.04Recovery of criminal property
    5. 2880.05The NCCT listing and its end
    6. 2880.06The fourth-round evaluation
    7. 2880.07Follow-up and re-ratings
    8. 2880.08Lists and correspondent banks
  10. ¶ 2890Practice: Onboarding a Nevis Structure and a Checklist
    1. 2890.01Sequence
    2. 2890.02The persons
    3. 2890.03The purpose and the structure chart
    4. 2890.04Source of funds and wealth
    5. 2890.05Pending claims
    6. 2890.06Tax
    7. 2890.07After formation
    8. 2890.08When the provider stops
    9. 2890.09Checklist

Chapter 29U.S. Tax and Reporting for Nevis Trusts, LLCs and Foundations

  1. ¶ 2901Overview
    1. 2901.01Scope
    2. 2901.02Why the chapter matters to Nevis planning
    3. 2901.03The three questions
    4. 2901.04The typical structures
    5. 2901.05Sources and currency
    6. 2901.06Persons who are "United States persons."
  2. ¶ 2910Is the Nevis Trust Foreign? The Court and Control Tests
    1. 2910.01The statutory definition
    2. 2910.02The court test
    3. 2910.03Flight and duress provisions
    4. 2910.04The control test
    5. 2910.05Protectors
    6. 2910.06Inadvertent changes of residence
    7. 2910.07Why foreign status is the starting point
  3. ¶ 2920The U.S. Settlor: Grantor-Trust Status, Sections 677 and 679, and Section 684
    1. 2920.01The grantor-trust rules
    2. 2920.02Section 677 and the self-settled Nevis trust
    3. 2920.03Section 679: foreign trusts with American beneficiaries
    4. 2920.04Section 679 in practice
    5. 2920.05Loans and the use of trust property
    6. 2920.06Section 684: gain on transfers to foreign trusts
    7. 2920.07The trust as a grantor trust: consequences for the deed
    8. 2920.08Migrating an American trust to Nevis
    9. 2920.09Automatic migration provisions in American trusts
  4. ¶ 2930Foreign Settlors and U.S. Beneficiaries: Section 672(f), Distributions, Throwback and Loans
    1. 2930.01Foreign grantors
    2. 2930.02Foreign grantor trusts
    3. 2930.03Distributions from foreign nongrantor trusts
    4. 2930.04Throwback and the interest charge
    5. 2930.05Loans and use of property
    6. 2930.06The settlor's death: the second phase
    7. 2930.07Domestication
    8. 2930.08Immigrants and the five-year rule
  5. ¶ 2940Forms 3520 and 3520-A and the Section 6677 Penalties
    1. 2940.01The structure of section 6048
    2. 2940.02Reportable events
    3. 2940.03The owner's obligations and Form 3520-A
    4. 2940.04The United States agent
    5. 2940.05Beneficiaries' obligations
    6. 2940.06Foreign gifts
    7. 2940.07Due dates
    8. 2940.08Annual statements
    9. 2940.09The trustee's duty to provide information
    10. 2940.10The section 6677 penalties
    11. 2940.11Case discussion: Wilson v. United States, 6 F.4th 432 (2d Cir. 2021)
  6. ¶ 2950Nevis LLCs: Reporting Driven by Classification
    1. 2950.01Classification decides the returns
    2. 2950.02The disregarded Nevis LLC
    3. 2950.03The Nevis LLC classified as a partnership
    4. 2950.04The Nevis LLC that remains a corporation
    5. 2950.05Choosing the classification for a trust-owned LLC
    6. 2950.06Section 60(18) payments of members' tax
    7. 2950.07After the settlor's death
    8. 2950.08Foreign owners of American LLCs
  7. ¶ 2960Multiform Foundations: Trust or Business Entity
    1. 2960.01No special rule
    2. 2960.02Case discussion: Rost v. United States, 44 F.4th 294 (5th Cir. 2022)
    3. 2960.03Applying Rost to the multiform foundation
    4. 2960.04Consequences of trust classification
    5. 2960.05Consequences of entity classification
    6. 2960.06Foundations for foreign families
  8. ¶ 2970Accounts and Assets: FBAR, Form 8938 and PFICs
    1. 2970.01The FBAR obligation
    2. 2970.02Financial interest through a Nevis trust or LLC
    3. 2970.03What is a foreign financial account
    4. 2970.04Signature authority, managers and protectors
    5. 2970.05Due date and penalties
    6. 2970.06Case discussion: Bittner v. United States, 598 U.S. 85 (2023)
    7. 2970.07Form 8938
    8. 2970.08Form 8938 and Nevis structures
    9. 2970.09Passive foreign investment companies
  9. ¶ 2980Gift, Estate and Expatriation Taxes
    1. 2980.01Income tax and transfer tax are separate questions
    2. 2980.02Gift completeness
    3. 2980.03Creditor access and the Nevis protections
    4. 2980.04Estate inclusion: sections 2036 and 2038
    5. 2980.05Discretion, tax reimbursement and implied understandings
    6. 2980.06Case discussion: Estate of Paxton v. Commissioner, 86 T.C. 785 (1986)
    7. 2980.07Choosing inclusion or exclusion
    8. 2980.08Nonresident alien settlors and situs
    9. 2980.09Gifts by nonresident aliens
    10. 2980.10Expatriation
  10. ¶ 2990Penalties, Limitations, Remediation and a Checklist
    1. 2990.01The penalties together
    2. 2990.02The open limitations period
    3. 2990.03Reasonable cause
    4. 2990.04First-time abatement
    5. 2990.05Contesting a penalty
    6. 2990.06Remediation
    7. 2990.07Returns by structure
    8. 2990.08Allocating responsibility
    9. 2990.09Checklist

Part VII: Planning and Forms

Chapter 30Designing a Nevis Structure: Trust, LLC and Foundation Combinations and a Drafting Guide

  1. ¶ 3001Overview
    1. 3001.01Scope of the chapter
    2. 3001.02Method
    3. 3001.03Plan of the chapter
    4. 3001.04The three statutes compared
    5. 3001.05What the table shows
    6. 3001.06The limits of design
  2. ¶ 3010Design Principles: Timing, Solvency, Control and Documentation
    1. 3010.01Five principles
    2. 3010.02Timing
    3. 3010.03Funding in response to a claim
    4. 3010.04Solvency
    5. 3010.05Control and protection
    6. 3010.06The settlor's own court
    7. 3010.07Documentation
    8. 3010.08Compliance as protection
    9. 3010.09Tax and reporting first
  3. ¶ 3020Structure 1: An International Trust Holding a Nevis LLC
    1. 3020.01The structure
    2. 3020.02Why two layers
    3. 3020.03The order of the steps
    4. 3020.04The documents
    5. 3020.05What may not go in
    6. 3020.06Tax and reporting
    7. 3020.07Failure points
  4. ¶ 3030Structure 2: A Foundation Holding a Nevis LLC
    1. 3030.01The structure
    2. 3030.02What the foundation adds
    3. 3030.03What the foundation gives up
    4. 3030.04The order of the steps
    5. 3030.05Governance choices
    6. 3030.06Tax and reporting
    7. 3030.07Failure points
  5. ¶ 3040Structure 3: The Foundation as Trustee, and the Trust Foundation
    1. 3040.01Two arrangements
    2. 3040.02The foundation as trustee: qualification
    3. 3040.03The licensing limit
    4. 3040.04The private trust company function
    5. 3040.05Keeping the property apart
    6. 3040.06The protector
    7. 3040.07The trust foundation as purpose vehicle
    8. 3040.08The foundation as beneficiary: a trap
    9. 3040.09Failure points
  6. ¶ 3050Structure 4: The Single-Member LLC for a United States Person
    1. 3050.01The structure
    2. 3050.02What section 60 gives
    3. 3050.03Florida
    4. 3050.04The weakness: the default rules
    5. 3050.05The successor-member provision
    6. 3050.06The client's bankruptcy
    7. 3050.07A second member
    8. 3050.08Tax and reporting
    9. 3050.09Failure points
  7. ¶ 3060Structure 5: Migrating an Existing Trust to Nevis
    1. 3060.01The structure
    2. 3060.02Migration and resettlement compared
    3. 3060.03The steps
    4. 3060.04The limits of relation back
    5. 3060.05Migration after a claim
    6. 3060.06Trusts migrating from the United States
    7. 3060.07Foreign law cannot invalidate
    8. 3060.08The LLC on migration
    9. 3060.09Failure points
  8. ¶ 3070Structure 6: Layering Nevis with the Cook Islands and Belize
    1. 3070.01Why combine jurisdictions
    2. 3070.02The rules compared
    3. 3070.03A Cook Islands trust owning a Nevis LLC
    4. 3070.04A Nevis trust owning a Cook Islands or Belize LLC
    5. 3070.05A foreign foundation as beneficiary
    6. 3070.06Mobility between the three
    7. 3070.07Costs and administration
    8. 3070.08Failure points
  9. ¶ 3080Drafting Guide: The Trust Deed, the Operating Agreement and the Foundation's Constitution
    1. 3080.01How to use the guide
    2. 3080.02Drafting order
    3. 3080.03The trust deed
    4. 3080.04Points on the trust deed
    5. 3080.05The operating agreement
    6. 3080.06Points on the operating agreement
    7. 3080.07The foundation's constitution
    8. 3080.08Points on the foundation documents
    9. 3080.09Letters of wishes and side documents
  10. ¶ 3090Implementation Checklist and Maintenance Calendar
    1. 3090.01The master checklist
    2. 3090.02The maintenance calendar
    3. 3090.03Annual review
    4. 3090.04When a claim arrives

Appendices

Appendix AForm of International Exempt Trust Deed

  1. ¶ A01Introduction and Use of the Form
    1. A01.01Purpose
    2. A01.02How the form is built
    3. A01.03Conventions
    4. A01.04The assumed facts
    5. A01.05Order of signing and funding
    6. A01.06Registration before funding
    7. A01.07What the form does not contain
  2. ¶ A10The Deed
    1. A10.01Parties and recitals
    2. A10.02Clause 1: definitions and interpretation
    3. A10.03Clause 2: name, declaration and proper law
    4. A10.04Clause 3: the Trust Fund and its funding
    5. A10.05Clause 4: the Beneficiaries
    6. A10.06Clause 5: the discretionary trusts
    7. A10.07Clause 6: the protective provisions
    8. A10.08Clause 7: the Trust Period and the default trusts
    9. A10.09Clause 8: the Trustee's powers
    10. A10.10Clause 9: the Trustees
    11. A10.11Clause 10: the Protector
    12. A10.12Clause 11: the Settlor
    13. A10.13Clause 12: the Event of Duress
    14. A10.14Clause 13: change of the Proper Law and migration
    15. A10.15Clause 14: amendment
    16. A10.16Clause 15: division and combination
    17. A10.17Clause 16: validity and foreign law
    18. A10.18Clause 17: confidentiality and disclosure
    19. A10.19Clause 18: liability and indemnity of the Trustee
    20. A10.20Clause 19: remuneration
    21. A10.21Clause 20: records, accounts and registration
    22. A10.22Clause 21: termination
    23. A10.23Clause 22: general provisions and execution
  3. ¶ A20Commentary
    1. A20.01Scope of the commentary
    2. A20.02Clauses 1 and 4: the non-residence condition
    3. A20.03Clause 4.6: the foundation gap
    4. A20.04Clause 2: the proper law
    5. A20.05Clause 3: funding
    6. A20.06Clauses 4 and 5: the settlor as beneficiary
    7. A20.07Clause 5.4: early termination
    8. A20.08Clause 6: protective provisions
    9. A20.09Clause 7: the Trust Period and the default gift
    10. A20.10Clause 8: investment and underlying companies
    11. A20.11Clause 9: the trustees
    12. A20.12Clause 10: the protector
    13. A20.13Clause 11: the settlor
    14. A20.14Clause 12: duress
    15. A20.15Clause 13: change of law
    16. A20.16Clauses 14 and 15: amendment, division and the fraud-on-a-power rule
    17. A20.17Clause 16: foreign judgments and heirship
    18. A20.18Clause 17: confidentiality
    19. A20.19Clause 18: liability
    20. A20.20Clause 20: renewal
  4. ¶ A30Schedules
    1. A30.01The schedules
    2. A30.02Schedule 1: the initial Trust Fund
    3. A30.03Schedule 2: summary of the beneficial provisions
    4. A30.04Schedule 3: letter of wishes
    5. A30.05Schedule 4: Protector's acceptance
    6. A30.06Schedule 5: Trustee's acceptance and confirmation
    7. A30.07Schedule 6: particulars for registration
    8. A30.08What the register shows

Appendix BForm of Nevis LLC Operating Agreement (Single-Member and Multi-Member)

  1. ¶ B01Overview
    1. B01.01Purpose of the appendix
    2. B01.02How the forms were built
    3. B01.03The operating agreement under the Ordinance
    4. B01.04The Articles must match
    5. B01.05Choices in brackets
    6. B01.06The default rules the forms displace
    7. B01.07Rules the forms cannot change
    8. B01.08United States tax
  2. ¶ B10Form 1: Single-Member Operating Agreement
    1. B10.01Use of the form
    2. B10.02Title, date and parties
    3. B10.03Article 1: Definitions and interpretation
    4. B10.04Article 2: The Company
    5. B10.05Article 3: The Member and the Interest
    6. B10.06Article 4: Capital
    7. B10.07Article 5: Management
    8. B10.08Article 6: Duties, liability and indemnity
    9. B10.09Article 7: Distributions and tax payments
    10. B10.10Article 8: Charging orders and creditors
    11. B10.11Article 9: Continuity
    12. B10.12Article 10: Records, information and confidentiality
    13. B10.13Article 11: Tax classification
    14. B10.14Article 12: Transfers, dissolution and winding up
    15. B10.15Article 13: General provisions
    16. B10.16Execution
  3. ¶ B20Form 2: Multi-Member Operating Agreement
    1. B20.01Use of the form
    2. B20.02Articles taken from Form 1
    3. B20.03Title and parties
    4. B20.04Article 3: Members and Units
    5. B20.05Article 4: Capital, accounts and allocations
    6. B20.06Article 5: Management and voting
    7. B20.07Article 6: Duties, opportunities and related parties
    8. B20.08Article 7: Distributions and tax payments
    9. B20.09Article 9: Continuity and the death or bankruptcy of a Member
    10. B20.10Article 12: Transfers, exit, dissolution and winding up
    11. B20.11Article 13: Amendment
    12. B20.12Execution
  4. ¶ B30Commentary
    1. B30.01How to read the commentary
    2. B30.02Parties and recitals
    3. B30.03Where the member is a foundation
    4. B30.04Article 1: interpretation
    5. B30.05Article 2: the company
    6. B30.06Article 3: members
    7. B30.07Article 4: capital
    8. B30.08Allocations and the partnership audit regime
    9. B30.09Article 5: management
    10. B30.10The sale of all or substantially all the assets
    11. B30.11The Event of Compulsion
    12. B30.12Article 6: duties
    13. B30.13Limitation of liability and indemnity
    14. B30.14Article 7: distributions
    15. B30.15The tax-payment clause
    16. B30.16Article 8: charging orders
    17. B30.17Article 9: continuity
    18. B30.18Article 10: records and confidentiality
    19. B30.19Article 11: tax classification
    20. B30.20Article 12: transfers, exit and dissolution
    21. B30.21Dissolution, dissenters and judicial dissolution
    22. B30.22Article 13: governing law, forum and amendment
    23. B30.23Checklist before execution
  5. ¶ B40Schedules
    1. B40.01The schedules
    2. B40.02Schedule 1: Members, Units and contributions
    3. B40.03Schedule 2: The Manager's functions, the Assumed Tax Rate and insurance
    4. B40.04Schedule 3: Successors
    5. B40.05Schedule 4: Acceptance by Manager
    6. B40.06Schedule 5: Joinder
    7. B40.07Schedule 6: Written consent of the Member under section 72C

Appendix CForm of Multiform Foundation Charter and Regulations

  1. ¶ C01Introduction and Use of the Form
    1. C01.01Purpose
    2. C01.02How the form is built
    3. C01.03Conventions
    4. C01.04The assumed facts
    5. C01.05Why an ordinary foundation
    6. C01.06What is public and what is not
    7. C01.07Order of establishment and funding
    8. C01.08Registration before funding
    9. C01.09What the form does not contain
  2. ¶ C10The Memorandum of Establishment
    1. C10.01Function of the memorandum
    2. C10.02The founder
    3. C10.03The purpose
    4. C10.04The stated multiform
    5. C10.05Period and revocability
    6. C10.06Proper law of the by-laws
    7. C10.07The by-laws and the default by-laws
    8. C10.08Amendment
  3. ¶ C20The By-laws
    1. C20.01Structure of the by-laws
    2. C20.02Part I: general
    3. C20.03Part II: the Founder
    4. C20.04Part III: beneficiaries
    5. C20.05Part IV: the management board
    6. C20.06Part V: the supervisory board
    7. C20.07Part VI: duties, conflicts and liability
    8. C20.08Part VII: protective provisions
    9. C20.09Part VIII: subscriptions, records and compliance
    10. C20.10Part IX: amendment, change of form and dissolution
  4. ¶ C30Commentary
    1. C30.01Approach
    2. C30.02Defaults displaced
    3. C30.03Article 3 and the promoter
    4. C30.04Article 4 and the charitable fallback
    5. C30.05Article 8 and irrevocability
    6. C30.06By-law 4(2): the underlying LLC
    7. C30.07By-law 4(3): land in the Federation
    8. C30.08By-laws 5 and 6: the Founder's powers
    9. C30.09By-law 8 and the Founder as Beneficiary
    10. C30.10By-law 8(3): a foundation as beneficiary of a trust
    11. C30.11By-law 12: information
    12. C30.12By-laws 13 to 16: the management board
    13. C30.13By-laws 20 to 22: the supervisory board
    14. C30.14By-law 27: exoneration
    15. C30.15By-laws 29 to 31: the protective provisions
    16. C30.16By-laws 33 and 34: subscriptions
    17. C30.17By-law 36: confidentiality and exchange
    18. C30.18By-law 37: the annual return
    19. C30.19By-laws 38 to 40: amendment, change of form and dissolution
  5. ¶ C40Schedules
    1. C40.01The schedules
    2. C40.02Schedule 1: the initial subscription
    3. C40.03Schedule 2: designation of beneficiaries
    4. C40.04Schedule 3: letter of wishes
    5. C40.05Schedule 4: acceptances of office
    6. C40.06Schedule 5: nomination of Successor Founder
    7. C40.07Schedule 6: the registration statement
    8. C40.08Execution and filing

Appendix DRegistration, Filing and Annual-Compliance Checklists

  1. ¶ D01How to Use the Checklists
    1. D01.01Purpose
    2. D01.02Arrangement
    3. D01.03Fees and currencies
    4. D01.04What the checklists do not do
  2. ¶ D10Forming and Registering an International Trust
    1. D10.01The sequence
    2. D10.02The application
    3. D10.03What the register shows
    4. D10.04Fees
    5. D10.05A trust moving to Nevis
  3. ¶ D20Forming a Nevis LLC
    1. D20.01The sequence
    2. D20.02Signing and acknowledgement
    3. D20.03Records the company must keep
    4. D20.04Fees
  4. ¶ D30Forming a Multiform Foundation
    1. D30.01The sequence
    2. D30.02Names
    3. D30.03What becomes public
    4. D30.04Fees
    5. D30.05Filing periods after formation
  5. ¶ D40Annual Compliance, Removal and Restoration
    1. D40.01The annual cycle
    2. D40.02The foundation's deadline
    3. D40.03Continuing obligations
    4. D40.04Removal, lapse and restoration
  6. ¶ D50Anti-Money-Laundering and Onboarding Documents
    1. D50.01Who asks and why
    2. D50.02The onboarding file
    3. D50.03How long the records are kept
  7. ¶ D60Tax and Information-Reporting Calendar
    1. D60.01Two sets of obligations
    2. D60.02Federation reporting
    3. D60.03United States reporting
  8. ¶ D70Change Events
    1. D70.01Changes of office-holders
    2. D70.02Changes to the constitution
    3. D70.03Migration, conversion and merger
    4. D70.04Dissolution of an LLC
  9. ¶ D80Master Maintenance Calendar
    1. D80.01One calendar for the structure
    2. D80.02Setting up the calendar

Appendix EComparative Table: Nevis, the Cook Islands and Belize

  1. ¶ E01How to Use the Tables
    1. E01.01Purpose
    2. E01.02Sources
    3. E01.03Citation
    4. E01.04Proposals
  2. ¶ E10Legal System, Courts and Regulators
    1. E10.01The three systems
  3. ¶ E20Trusts
    1. E20.01Common ground
    2. E20.02The protector
  4. ¶ E30Creditor Protection
    1. E30.01Two models
    2. E30.02The bond
  5. ¶ E40LLCs
    1. E40.01The charging order
    2. E40.02Tax payments
  6. ¶ E50Foundations
    1. E50.01Different designs
  7. ¶ E60Tax, Information Exchange and Beneficial Ownership
    1. E60.01Exemptions and transparency
  8. ¶ E70Notes on the Cells
    1. E70.01Cells marked "Not examined here."
    2. E70.02Belize section 7(6)(c)
    3. E70.03Cook Islands proposals
    4. E70.04Untested Nevis readings
    5. E70.05Currency and dates