Marshall
Islands Table of Statutes
This
is a non-exhaustive list of the main Marshall
Islands statutes
affecting offshore and maritime business. Click
on the statute for further information.
Association
Law of the Republic of the Marshall Islands
1990
Maritime Act 1990
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Marshall Islands Corporate Forms
The
Marshall Islands Associations Law, adopted in
1990, is modeled on the corporate laws of the
states of Delaware and
New York,
and was modified to include all the necessary
characteristics of an offshore jurisdication,
such as bearer shares, facsimile filings, and
execution of documents without notary affidavits.
The
Associations Law includes the Business Corporations
Act, the Revised Partnership Act, the Limited
Partnership Act, and the Limited Liability Company
Act.
There
are no requirements in the Marshall
Islandsfor
annual returns or filings, and there is no public
register containing the names of directors or
shareholders.
In
1990, The Trust Company of the Marshall Islands,
Inc. and Marshall Islands Maritime & Corporate
Administrators, Inc., affiliates of US
corporation International Registries, Inc. (IRI),
entered into a legislatively endorsed joint
venture agreement with the Government of the
Republic of the Marshall
Islands to
administer its maritime and corporate programs.
Incorporation
and registration of Marshall
Islands non-resident
(i.e. offshore) companies or partnerships is
carried out through any of the world-wide offices
of International Registries, Inc. A Deputy Registrar
of Corporations is located at each one of IRI's
offices and can issue all necessary corporate
documentation.
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Marshall Islands Limited Liability Companies
In
1996, the Marshall
Islands enacted
a Limited Liability Company (LLC) Act. The
Marshall Islands
law was modeled after the Delaware LLC law in
the United States.
The LLC is a hybrid business entity which combines
the favorable elements of a corporation and
a partnership. Members are governed by an operating
agreement but have limited liability in the
same way as the shareholders of a corporation.
Unlike the limited partnership, however, where
the general partner remains personally liable
in the event of a business loss, the LLC allows
all members to contribute without risking personal
liability.
The
main documents forming and governing a LLC are
the Certificate of Formation, which establishes
the LLC, and the Operating Agreement which defines
the economic organization, management responsibilities
and other arrangements for members (or owners)
of the LLC.
LLC's
formed pursuant to the Marshall Islands LLC
Act must file a certificate of formation setting
forth:
- The
name of the LLC;
- The
name and address of the Registered Agent;
- If
the company is to have a specific date of
dissolution, the latest date on which the
limited liability company may dissolve;
and
- Any
other matters the members determine to include
therein.
Members
in a LLC are not required to participate in
the management of the entity; instead, they
may designate "managers" (who may
or may not be members) to manage the affairs
of the LLC. Members may also actively participate
in management without losing their limited liability.
Flexible management makes a LLC an excellent
vehicle for transactions requiring a considerable
degree of passive investment such as venture
capital projects, investment in real estate,
oil or technology, as well as research and development
of business.
The
LLC may be conveniently employed in the types
of parent-subsidiary arrangements inherent to
large corporations because any type of entity
may be a LLC member. In addition, the names
of members are not disclosed in the certificate
of formation, thereby preserving confidentiality.
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Marshall Islands Corporation
Marshall
Islands non-resident corporations are easy to
form and administer. If standard Articles of
Incorporation are used, a company may be formed
in one day. Legal
and financial professionals may start the incorporation
process for a Marshall Islands Corporation on-line.
Each
corporation may be organized in the US
style with a President, Secretary and Treasurer,
or in the UK
style with a Managing Director and Corporate
Secretary.
The
Articles of Incorporation may include special
provisions regarding the scope of activities
or the conduct of the affairs of the corporation.
There are also selected optional purpose and
power clauses for attorneys which may be included
in the Articles. The Marshall Islands Business
Corporations Act provides a list of other provisions
affecting corporate activity and administration
which may also be included.
Names
may be in any language as long as Roman characters
are used and any standard corporate suffix is
acceptable. The following words cannot be used
in the name of a Marshall
Islands corporation:
'TRUST', 'BANK', 'INSURANCE'. Terms such as
'Foundation', 'Charity' and others may be used
with the permission of the Registry. Two alternative
names for the corporation should be included
in the event that the first selection is not
available.
There
is no minimum number of directors or shareholders
for Marshall
Islands corporations.
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Marshall Islands Re-Domiciliation
Division
14 of the Marshall Islands Business Corporations
Act permits companies to transfer their domicile
into the Marshall
Islands. The
legal basis for redomiciliation was adapted
from Delaware
law. Upon redomiciliation, the original date
of incorporation and company existence remains
the same and is unaffected. Redomiciliation
is currently free of charge and the company
is not billed its first annual fee until one
year after the redomiciliation date.
The
Business Corporations Act allows a foreign corporation
to redomicile to the Marshall
Islands if
the "transfer of domicile is not expressly
prohibited under the laws of the foreign domicile".
Documentation
required for re-domiciliation is as follows:
-
Signed
Articles of Domestication (obtainable
from the Marshall Islands Registry through
International Registries, Inc. offices);
-
new
Marshall Islands Articles of Incorporation;
-
a
photocopy of the company's Articles of
Incorporation or Articles of Association
from the previous jurisdiction, and any
amendments to those Articles of Incorporation
or Articles of Association; and
-
a
document providing evidence of corporate
existence, such as a Certificate of Good
Standing.
It
is also possible to merge a foreign corporations
with either a Marshall
Islands corporation
or a Marshall Islands Limited Liability Company.
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Marshall Islands Partnership and Limited Partnership
A
partnership is formed pursuant to the Marshall
Islands Revised Partnership Act (the “Act”)
when two or more persons agree to carry on as
co-owners a business for profit and file a Certificate
of Partnership Existence pursuant to section
29 of the Act. A Certificate of Partnership
Existence includes the following information:
-
The
name of the partnership;
-
The
name and address of the Registered Agent
in the Marshall
Islands
and a statement that the partnership’s
Registered Agent is to be its agent upon
whom process against it may be served;
-
A
statement that the partnership will file
a Certificate of Cancellation upon the
dissolution and completion of winding
up of the partnership; and
-
Any
other matter the partnership wishes to
list, including, but not limited to, the
names of the partners authorized to execute
an instrument transferring real property
held in the name of the partnership and
the authority, or limitations on the authority,
of some or all of the partners to enter
into other transactions on behalf of the
partnership.
One
original acknowledged Certificate of Partnership
Existence must be executed by at least one partner
or by one or more authorized persons and submitted
with two duplicate copies. Photocopies are acceptable
as duplicate copies provided the signatures
are legible. Each signature shall be over the
individual’s printed name and title and may
be a facsimile.
Limited
partnerships are formed pursuant to the Limited
Partnership Act (the “Act”). In a limited partnership,
there must be at least one general partner with
an unlimited number of limited partners. Limited
partners are protected by limited liability.
A limited partnership must file a Certificate
of Limited Partnership, which includes the following
information:
-
The
name of the partnership;
-
The
name and address of the Registered Agent
in the Marshall
Islands
and a statement that the partnership’s
Registered Agent is to be its agent upon
whom process against it may be served;
-
The
name and address of any general partners;
and
-
Any
other matter that the limited partnership
wishes to list
Marshall Islands Foreign Maritime
Entity
Non-Marshall
Islands
entities may apply for registration as a foreign
maritime entity under the provisions of section
119 of the Marshall Islands Business Corporations
Act for the purpose of owning and operating
vessels under the Marshall Islands Flag. The
following information must be included in the
application:
-
The
name of the entity;
-
The
legal character or nature of the entity;
-
The
jurisdiction and date of its creation;
-
A
statement that the entity has the power
to own or operate a vessel;
-
A
statement that the entity has the capacity
to sue and be sued in its own name;
-
The
address of the principal place of business
of the entity and, if such place is not
in the jurisdiction of the creation of
the entity, either the address of its
place of business or the name and address
of its lawful fiduciary or legal representative
within the jurisdiction of the creation
of the entity;
-
The
full name(s) and address(es) of the person(s)
vested under law with management of the
entity at the time of the application;
-
The
name and address within the Republic of
the entity’s Registered Agent and a statement
that the Registered Agent is to be its
agent upon whom process against it may
be served; and
-
The
title(s), or if other than an officer
of the entity, the basis of the authority
of the person(s) executing the document.
Each
application must be accompanied by the following
documentation:
-
A
certified copy of the articles, charter
or other document upon which existence
of the entity is based, issued by the
appropriate governmental agency, and any
relevant amendments thereto; and
-
Evidence
of the entity’s current existence either
by a government document (e.g., Certificate
of Good Standing) or if government certificate
is not possible, by certification of an
attorney of the jurisdiction that in his/her
knowledge the entity has a current legal
existence.
Note: All documents in a foreign language
must be translated into English and certified
by a qualified translator.
The
application should be prepared with one original,
signed and acknowledged copy and two duplicate
copies. Photocopies are acceptable as duplicate
copies provided the signatures are legible.
Applications shall be executed by signing above
the printed name and title of the signatory.
Applications
may be acknowledged either before a notary public
or by the person signing the instrument under
penalty of perjury pursuant to section 5 of
the Business Corporations Act.
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