An Isle of Man Limited Liability Company is one incorporated pursuant to the Limited Liability Companies Act 1996.
A Limited Liability Company is required to have a registered agent (who is suitably qualified) resident in the Isle of Man and is administered by its members (as with a Partnership), rather than a Board of Directors. Such companies may undertake any lawful activity, trade or business in and from the Isle of Man, except:
- a banking business within the meaning of section 1(1)(a) of the Banking Act 1975;
- any insurance business within the meaning of section 34 of the Insurance Act 1986;
- any investment business within the meaning of the Investment Business Act 1991; and
- such other business as may be prescribed.
A Limited Liability Company is formed by two or more persons registering a company's Articles of Organisation and simultaneously, entering into an Operating Agreement.
The Articles of Organisation address, inter alia:
- name of the Limited Liability Company;
- identity of its members;
- capital introduced by each member;
- principles governing the admission of new members;
- ability of surviving members to continue the business in the event of a person ceasing to be a member as a result of death, resignation or otherwise;
- repayment of capital to members;
- the name of the registered agent; and
- whether the members are permitted to appoint a manager to assist with the running and day-to-day administration of the company.
Unlike the Articles of Organisation, the Operating Agreement is not a public document and deals with the internal governance of the Limited Liability Company and the rights of the members amongst themselves. Although a few matters must be dealt with as required by the Limited Liability Companies Act 1996, the Operating Agreement is largely drafted to suit the members.
For Isle of Man Income Tax purposes, a Limited Liability Company is taxed as a partnership, and, if owned by non-resident members and having no Isle of Man source income, can be exempt from all Isle of Man direct taxation. |