All companies incorporated in the Cayman Islands are subject to the continuing obligations prescribed by the Companies Law (Revised) of the Cayman Islands. In addition, those companies which are regulated by the Cayman Islands Monetary Authority, such as banks, mutual funds, mutual fund administrators, insurance companies, insurance managers, trust companies and others are subject to additional requirements.
This client guide is intended as a general summary of some of the ongoing obligations of Cayman Islands companies and is not intended to be comprehensive in scope.
The company’s name must be on display at the registered office.
Changes in directors or officers
The Articles of Association of the company (the Articles) provide for the mechanism to appoint and remove directors. To effect a resignation a letter of resignation signed by the director should normally be sent to the registered office. Appointments are made in accordance with the Articles and commonly require either a resolution of the remaining directors or the shareholders to be passed approving the appointment. Copies of any resolutions and resignation letters should be included in the minute book and the register of directors and officers must be updated and filed with the Registrar.
The “minute book” containing the company’s principal corporate documents is generally maintained at the registered office. The minute book should contain the following items; those marked with an asterisk are required to be or, by convention, are normally held at the registered office in the Cayman Islands:
- The Certificate of Incorporation*;
- The Memorandum and Articles of Association*;
- The minutes of directors and shareholders meetings and any documents referred to in the minutes;
- Written resolutions of the directors and shareholders;
- The annual return*;
- The letters and resolutions relating to the resignations and appointments of directors and officers*;
- Copies of share certificates issued and the share certificate stubs*;
- Share transfer forms;
- Financial statements, if prepared;
- The tax exemption certificate*;
- The register of directors and officers*;
- The register of members of the company;
- The register of mortgages and charges*.
Books of account
All companies must keep proper books of account but these need not be kept at the registered office. The books of account must give a true and fair view of the state of the company’s affairs and explain its transactions. Accounts do not need to be audited by law unless the company conducts a regulated activity.
New shares are issued in accordance with the provisions of the Articles, and usually require approval by resolution of the directors.
If existing shares in issue are transferred, a share transfer instrument must be signed and a copy placed in the minute book. The old share certificates should be returned to the registered office for cancellation and for the issue of new certificates. The directors will normally be required to pass a resolution approving the transfer and issuing of a new share certificate, subject to any restrictions on transfer or other special provisions contained in the Articles of Association.
The Registrar of Companies is required to be notified by the following circumstances:
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Other filings are required in other circumstances such as a capital reduction or the winding up of the Company. Filings with the Registrar are not a matter of public record.
A Company may, but is not required to, have a common seal which is usually kept at the registered office. Where there are documents to be sealed outside the Cayman Islands the Company’s common seal may be used or, alternatively, a facsimile seal can be obtained for use overseas. Such facsimile seal may, but is not required to, state on its face the district territory or place where it is to be used.
An exempted company (unless required by the Articles) is not obliged to hold an annual general meeting or an annual meeting of directors. If they are to be held voluntarily the Articles of Association of the company will set out the procedure.
Notice of all meetings of shareholders, directors or of any committee of the directors should be give to all those entitled to attend and vote at the meetings. The Articles of Association will set out the period of notice required and procedure.
An annual return must be submitted to the Cayman Islands Government in January of the year following incorporation and in each January thereafter together with the appropriate filing fee. Returns filed after March 30th will incur a penalty fee. If Harneys provides the registered office, we will attend to the completion and filing of the annual returns.
The Companies Law provides that where the Registrar has reasonable cause to believe that a company is not carrying on business or is not in operation, the Registrar may strike the company from the Register. The company will thereupon be dissolved and its assets will vest in the Cayman Islands Government. Non-payment of the annual Government fee is the most common cause of striking off in this manner.
SIBL Excluded Persons
Companies which have registered with the Cayman Islands Monetary Authority (CIMA) as “Excluded Persons” under the Securities and Investment Business Law and who want to continue to rely on their Excluded Person status under that law, must file before 31 January of each year a Form SIBL (AD) together with the applicable fee.
Mutual Fund registered with CIMA
Funds registered with CIMA must pay the applicable annual registration fee to CIMA by 15 January each year. If not paid by then the fund will be liable to the CIMA for the fee plus a penalty which will accrue on the 15th of every month that the outstanding amount remains due. In addition funds must file annual audited accounts with CIMA within 6 months of each financial year end and also arrange for their auditors to complete and return a report setting out certain key statistical data and other information on the fund.
Segregated Portfolio Companies (SPCs)
An exempted company registered as an SPC must, on an annual basis, file with the Companies Registry an annual fee (based on its share capital) with its annual return and identify the portfolio it has created. At the same time an SPC must pay certain additional fees based on the number of portfolios that it has created.