Executive entities are a type of business organization that can be used as part of private wealth management and development. These entities carry out “executive functions,” defined in the Executive Entities Act, 2011 as “any powers and duties of an executive, administrative, supervisory, fiduciary and office holding nature” and management of assets. Essentially, this means that executive entities may act as trustees, as fiduciaries, or in other management capacities of other entities such as trusts or companies.
The Executive Entities Act requires only a few formalities to establish an executive entity, similar to forming a company or other business. Someone or some business acts as the entity founder, and there are officers or an executive entity council that carry out the entity's purpose, an executive agent, a registered office, and regular meetings of officers. The executive entity form provides limited liability to officers, council members, and agents, who are indemnified as long as they act in good faith and in the best interests of the executive entity.
Primarily, the executive entity provides a “bridge” between high-net-worth individuals and their wealth by helping these individuals structure and organize their wealth management needs. Executive entities can allow relatives, friends, or advisors of high-net-worth individuals to get involved in the business while allowing these individuals to closely tailor the entity's charter and bylaws. For example, the charter may include a lower or higher standard of care, depending on individual preference.
Further, executive entities provide even more freedom than traditional trusts and limited liability companies because executive entities do not really have ownership interests in the same manner. While executive entities can own assets used towards executive functions only or may hold trust assets, they may not buy and hold property or bonds in the same way that companies do. As a result, executive entities need no members, beneficiaries, or shareholders. This leads to privacy for the founder and flexibility in executive entity actions.
To learn more about executive entities, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.