Unlike an agreement of Delaware LLC, an agreement of Cayman LLC must be written and subject to the cayman islands law. The effective date of the Cayman LLC agreement must be taken into account after the date of execution by the parties and is considered effective only on the day of registration of Cairo LLC. Parties to a Cayman LLC agreement may agree among themselves that the agreement will enter into force earlier, but third parties do not. Like a Delaware LLC agreement, a Cayman LLC agreement is not subject to the Registrar or made available to the public. The duty to act in « good faith » in Section 26 (4) of the LLC is a new legal obligation and not an existing common law obligation. The concept of « good faith and fair trade » in Delaware law is an unspoken contractual obligation. Delaware law authorizes an LLC agreement to restrict, restrict or exclude liability for breach and breach, as long as such a breach does not constitute a violation of bad faith against the tacit bona fides and fair trade contract. However, the English common law in force in the Cayman Islands does not recognize any general tacit duty in good faith in contracts, so the term « good faith » is probably interpreted differently by the Cayman Courts, in accordance with Section 26, paragraph 4. There must be at least one member of a Cayman LLC and it may be managed by some or all of its members or managers (see below for the investment fund position registered under the Mutual Funds Act). Unlike the default position of a Delaware LLC, where the majority of members act in deritier, the default position according to Cayman LLC is that the management of a Cayman LLC transfers the majority of the majority of all its members to its members who act majoritily. A Cayman LLC may terminate this position and most legal default positions by adopting appropriate provisions in its limited liability company or enterprise agreement (LLC agreement). Limited Liability Companies Law, 2016 (LLC Law), introduced a new limited liability company (Cayman LLC) in June 2016.
Since then, an increasing number of LC Caymans and a few have been transferred to the Cayman Islands to pursue by other jurisdictions. According to the Cayman Islands Registrar`s records, 391 LLCs were formed between July 1, 2016 and May 19, 2017 and 16 others were subsequently transferred from other jurisdictions. Cayman LLC has so far proven to be attractive to partner companies and other interest rate distribution vehicles. Cayman LLC has the advantage of being a separate limited liability company (such as a cayman islands exempt business), but not having maintained capital restrictions applicable to tax-exempt businesses, and therefore has more flexibility in the distribution of income and capital through the terms of the LLC agreement. For the same reason, cayman SCSs are also attractive to management companies.