In 2018, the Limited Liability Companies Law was passed by the States introducing the new corporate entities, which are viewed as a blend of companies and partnerships.
Like traditional companies, LLCs provide a ‘separate legal personality’ that protects shareholders and directors from legal action. But, like partnerships, they are easier to set up and subject to less regulation.
External Relations Minister Ian Gorst, who has political responsibility for financial services, has lodged a proposition making some adjustments to the initial laws.
The move comes following discussions between a working group for the laws, Jersey Finance and the Jersey Financial Services Commission.
The report accompanying the proposition says: ‘This draft amending law clarifies certain existing provisions of the LLC Law and aims to ensure that the Jersey LLC is an attractive and familiar product to the target market, while still operating within Jersey’s well-respected regulatory framework and in line with international standards.’
LLCs were introduced in Jersey to help attract business from the US, which is a target market for the finance industry and where similar structures already exist.
Alistair Horn, a partner at law firm Mourant, said: ‘I would call an LLC a hybrid vehicle. It gives you the separate legal personality like you would get with a company or a body corporate.
‘But LLCs aren’t subject to the same companies law, so are subject to less rules and have much more flexibility, like a partnership.’
Mr Horn said that it ‘made sense’ for Jersey to introduce corporate structures that potential clients in the US would already be familiar with.
‘In the US, LLCs are the go-to structures for people to set up and the US is a market Jersey is trying to get more exposure to,’ he said.
‘Jersey Finance has already set up an office there to promote the Island and it makes sense to create something the US market is used to using.
‘It wouldn’t make sense to attract business here and then for them to turn around and say I don’t like working with Jersey companies or Jersey trusts.’
He added: ‘A Jersey LLC won’t be identical to an American LLC, but it will be similar, and will be more attractive to a US adviser, investor or promoter.
‘The latest proposition is making some tweaks to finalise Jersey LLCs. I know that they have had a working group looking at this.’
The proposition is due to be debated by the States on 12 May.
