The Delaware Connection
When asked, one would be hard pressed to find any connection between Delaware and the Marshall Islands. The State of Delaware is halfway around the world from the Marshall Islands and the climates are polar opposite. However,there is one very close bond they share. The Marshall Islands modeled its corporate and limited liability company (LLC) acts after Delaware. There are several advantages for the Marshall Islands modeling its laws after Delaware. First, professionals familiar with Delaware law will easily be able to adapt to Marshall Islands law when forming a corporation or LLC. Second, by following Delaware, the Marshall Islands is one of the most flexible and modern jurisdictions in the world. For example, the Marshall Islands permits redomiciliation, only requires one director, and allows corporations to serve as directors and officers. Finally, stability of law is provided because the answer to most complex legal issues have already been resolved. The Business Corporations Act and LLC Act holds that its provisions, when required, are to be constructed under the terms of Delaware law. Therefore, if a legal determination is required on a corporate or LLC issue that has not been settled in the Marshall Islands, a review of Delaware law, which is well documented, will provide the answer. A review of the formation and filing requirements of both jurisdictions are below:
Formation of International Business Corporation
Corporations are quickly and easily formed at low cost and are simple to maintain and administer. Upon instruction, a company can be formed in one day. Corporate documents are delivered by courier within two-three days. Ready-made shelf companies are available for immediate purchase. The following should be provided to Momentum Tulloss Services in order to form a corporation:
- Choose a corporate name: Include two alternative names in the event that the first selection is unavailable. Any standard corporate suffix is acceptable.
- Share structure: Shares may be issued in registered and/or bearer form. A standard formation provides for 500 registered and/or bearer shares without par value.
Marshall Islands (RMI) business entities may only be formed by a professional. With the exception of a franchise tax report, RMI filing requirements are identical to that of Delaware. RMI does not require the names of the beneficial owners of a corporation to be identified in any public records.
Formation of Limited Liability Company
Limited Liability Company (LLC) are also easily formed. The main documents forming and governing LLCs are the Certificate of Formation and the Operating Agreement. The Certificate of Formation establishes the LLC and the Operating Agreement defines the economic organization, management responsibilities and other arrangements for members (or owners) of the LLC. Only a Certificate of Formation is required to be filed.
Shares
Shares may be in registered or bearer form. The names of the owners of the registered shares are not reported to the RMI.