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Limited Liability Companies
The Cook Islands enacted the Cook Islands Limited Liability Companies Act in 2008. Demand from US advisors and clients for an alternative to a domestic Delaware LLC prompted the legislation. The legislation provides for certainty on many issues and includes unique asset protection features. In general, LLCs are treated as separate entities for legal purposes but as pass-through entities for taxation purposes in the US.
Under Cook Islands LLC law:
- Single member LLCs are permitted.
- LLCs are not subject to Cook Islands tax.
- Manager of the LLC may be a corporate entity and does not have to be a Member.
- Annual Accounts are not required.
- Member and Manager information is known only by the trustee company registering the entity.
- Creditors are limited to a charging order remedy.
- Non-recognition of foreign judgments by Cook Islands courts.
- Redomiciliation into and out of the Cook Islands by an existing LLC is permitted.
While LLCs may be used on their own, Cook Islands LLCs are often used in conjunction with an international trust. An international trust is settled and then the trust forms an LLC. This structure serves as the basis of a comprehensive wealth management or corporate structure while allowing clients flexibility.