LIBERIA: TYPES OF COMPANY

Liberia Formation

Liberian corporations, registered business companies, LLC’s, limited partnerships, foundations and not-for-profit corporations are easily formed under the Liberian Associations Law.

Non-resident Liberian entities are not liable for Liberian tax, unless beneficially owned by a person liable to taxation in Liberia, but cannot trade within Liberia or own real estate in Liberia, and cannot undertake banking, insurance, insurance broking or mutual fund business anywhere. Directors, officers, managers, etc. can be any nationality and the entity can be managed from any jurisdiction.

The Liberian Registry is operated by LISCR, LLC (Liberian International Ship and Corporate Registry) as agent of the Minister of Foreign Affairs of the Republic of Liberia.

Liberian entities can be formed on the same day that formation instructions are received, by email or fax, in either Liberian Corporate Registry offices of LISCR in Vienna, Virginia (corporate@liscr.com) or Zurich, Switzerland (info@liscr.ch).

Formation is currently completed only in these two locations but modern technology means that the actual formation documents can be available the day of formation in either of those locations or London, Piraeus, Greece or Hong Kong.

Unless collection from the LISCR office in one of the above locations is requested, formation documents are sent by courier. There may be an additional courier charge ($40 from the US to locations outside of the US, $25 from Switzerland to locations outside of Switzerland). Confirmation of incorporation/registration is sent by email or fax.

If requested, scanned copies of formation documents can be sent at the time of formation to the instructing party (or, on that person’s instructions, elsewhere).

At the time of writing, the cost of formation of most Liberian entities is $713.50, which includes the first year’s annual registration tax and annual fee to the registered agent in Liberia. In the case of a corporation or registered business company this includes the capitalisation tax on either 500 shares at no par value or authorised capital of $50,000 with shares of par value. If the authorised capital exceeds this amount, additional capitalisation tax is payable and will be calculated at the time of incorporation. Thereafter annual tax and fees of $450 in total are due on the anniversary date of formation, and annual invoices are sent in advance of that date. Different formation and annual charges apply to limited partnerships and foreign maritime entities (see below).

Formation instructions will be accepted from any professional user of offshore corporations (including ship managers, manning agents, ship owners, etc., as well as company and trust managers, lawyers, accountants, investment companies, etc.). In general, The LISCR Trust Company, as registered agent is precluded by due diligence requirements from accepting instructions from individuals not engaged professionally in company management or acting as a professional advisor.

A name-checking service is available and names can be reserved. New shelf entities are no longer provided because of the speed of formation, but LISCR does hold a list of available names from which a choice can be made.

Aged shelf corporations are available.

Every name must include a suffix appropriate to the type of entity, but, as with the name, it can be in any language so long as it is in Roman characters. There are special provisions to enable a name to be recorded in Chinese characters also and for the corporation to trade using the name in Chinese. A name may not be the same as or too similar to an existing name, and there are restrictions on using names which may mislead or imply a connection with or the patronage of the Government of Liberia.

A Liberian entity is permitted to have as its objects any purpose not specifically precluded by the law (e.g., a foundation may not trade, but may own the shares of trading organisation). Corporations frequesntly have as the objects clause a provision authorising the corporation to do anything permitted by the Business Corporation Act, so could carry on any business which does not require a licence from a Government authority in Liberia, in practice precluding only banking, insurance, mutual funds, and gaming. Standard formation documents are available, or custom documents can be used, either by the addition of provisions to the standard documents or by submitting custom documents (subject to compliance with the statutory requirements). Regular clients of the Registry deposit custom documents with the Registry to speed formation.

To facilitate same-day incorporation, The LISCR Trust Company acts as subscriber to the formation documents, for example in the case of a corporation, the Articles of Incorporation, Registration Certificate, etc. Formation documents include the transfer of subscription from each LISCR subscriber.

It is also possible for formation documents to be prepared, subscribed legalized and filed by the person requesting the formation.

On request and at no additional fee, staff of the registered agent will conduct organisation meetings, adopt bylaws, appoint directors, etc., for a corporation or registered business company as instructed in the request.

One shareholder and one director are required for a corporation or registered business company. One person can hold all the officerships of a corporation; the same person cannot be the sole director and the secretary of a registered business company. There must be at least one general and one limited partner for a limited partnership. One member and one manager are sufficient for an LLC. Detailed information about requirements for a foundation and a not-for-profit corporation can be obtained from LISCR.

Corporations and registered business companies can be formed with registered and/or bearer shares, or a combination of both and with the facility to change from one to the other. There is no requirement to file the partnership agreement for a limited partnership, the operating/management agreement for an LLC or the statutes of a foundation. In the case of a limited partnership and a foundation an abstract of some of the terms is filed.

Foreign maritime entities are legal entities established in another jurisdiction, which for the purpose of owning a ship registered under the Liberia flag, register in Liberia and become a Liberian entity, as well as retaining the underlying entity in the place of original formation. So, for example a German limited partnership may register as an FME. The partnership continues in Germany (and any change in the information about the partnership filed as part of the FME registration must be notified and the registration amended), but the legal entity which owns the ship will be the FME. An FME is permitted to have as its object only the owning and operating of a Liberia flagged ship.

Formation/registration instructions, specifying the information needed to form/register each type of nonresident legal entity permitted by Liberian law, are available from LISCR.

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Liberia Post Formation Filing Requirements

Post-formation there are minimal filing requirements, confined to matters that affect the status of the formation document (e.g., Amendment to the Articles, merger, introduction of a new limited partner, etc).

Beneficial ownership does not have to be disclosed to the authorities.

For a corporation or registered business company, articles of amendment, merger, consolidation, conversion, re-domiciliation and dissolution take effect only when filed. Model documents are available from LISCR, with detailed instructions and filing fees.

There is no requirement for a Liberian corporation to file the names of directors or officers (Liberian corporations, based on US law, require officers to be appointed) or to file information about issued capital or shareholders.

There is a facility to make voluntary filings of directors (certificate of election), officers (certificate of incumbency), minutes, affidavits, bylaws and powers of attorney, where this is required by the corporation, for example to facilitate the opening of bank accounts. Again model documents and instructions are available from LISCR.

Filing requirements for a registered business company include directors, secretary and shareholders, with a requirement to file changes within 30 days and an annual filing (included in the arrangements for payment of the annual tax and fee of $450, at the time of writing).

There is no requirement to file accounts for any type of Liberian entity. The normal books of record of a legal entity and financial records should be maintained to reflect the entity’s financial status and to satisfy the obligation to disclose information to, for example, the shareholders. The records can be maintained in any location selected by the directors/managers and can be in paper or maintained electronically.

Filing requirements for limited partnerships, LLCs and foundations can be obtained from LISCR, along with model documents and instructions.

A duplicate copy of every filed document, stamped by the Minister of Foreign Affairs as Registrar of Corporations, is provided to the corporation.

Certificates of goodstanding and certified copies of filed documents are available, both to the entity and to a third party. In the case of a corporation or a registered business company, the corporation or company may request an extended certificate of goodstanding, to include information specified by the corporation/company and which has been the filed with the Registrar (e.g., the names of directors, in the case of a corporation, by way of a voluntary filing of a certificate of election).

An entity which has been dissolved or which has been struck-off can generally be reinstated, on filing of the necessary indemnities and payment of all outstanding fees and any penalty fees (in the case of striking-off).

All documents filed must be in the English language (or if not in English be accompanied by a certified translation, but both the English and the ‘foreign’ version are filed documents and can be used as official extracts from the Registry) and be properly executed (notarised and apostiled or legalised by a Liberian consul or Special Agent of the Bureau of Maritime Affairs (available at every LISCR office)

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Liberia Registered Agent and Address of Record

Every non-resident entity formed or registered under the Liberian Associations Law is statutorily required to retain The LISCR Trust Company as registered agent in Liberia. The annual fees included the registered agent charges. The registered agent is available for the service of process in Liberia and forwards any mail addressed to a Liberian entity sent to its offices.

As well as public filing with the Minister of Foreign Affairs as Registrar (undertaken by the registered agent), documents can be deposited with the registered agent. The registered agent then issues a certificate recording the information contained in the document deposited. At the time of writing, there is a $200 fee payable to the registered agent. Model forms and instructions can be obtained from LISCR.

The annual cost of maintaining a Liberian entity (other than a limited partnership or a foreign maritime entity - both $500 - and a not-for-profit corporation - $300) is $450 (at the time of writing), which includes the annual registration tax of $150 and the registered agent’s annual fee of $300. Annual fees are due on the anniversary of formation (or registration in the case of a limited partnership, an LLC, re-domiciled corporation or company, etc.) and are invoiced to the address of record in respect of the entity, as supplied to the registered agent at the time of incorporation, or subsequently in the event of a change of address.

The person requesting the formation of a Liberian entity is normally responsible for payment of the formation fee and in the Registry’s records will be the address of record (billing address) for the entity to which all future annual invoices will be mailed, unless the address of record notifies LISCR of a change.

The address of record is regarded as confidential and is retained exclusively in the records of The LISCR Trust Company, as registered agent. The billing address is not available to any third parties. The address of record is used for mailing annual invoices, legal notices and other correspondence from the registered agent. The registered agent usually accepts instructions in respect of an entity only from the address of record. Service of process, if any is received by the registered agent on behalf of an entity, will be sent to the address of record.

LISCR provides practical assistance in all issues of filing and in the general management of Liberian entities, and, although it is not able to provide legal advice or opinions, maintains a list of lawyers licensed in Liberia and able to provide opinions in a timely fashion.

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