Directors and Managers of Cayman Islands companies take note of recent amendments
Recent revisions to the Cayman Islands Companies Law and Limited Liability Companies Law (LLC Law) affect Cayman Islands companies in the following ways:
- any appointment or resignation of a director/manager must now be filed with the Cayman Islands Registrar of Companies within 30 days
- the register of members for a company limited by shares must now clearly record whether or not shares have voting rights (and if they are conditional)
- the penalties for failing to establish or maintain a beneficial ownership register or failing to comply with, or provide information required by, notices have significantly increased
- the Registrar of Companies will now provide any information lawfully requested from it by Cayman Islands regulatory and financial crime authorities
- the names of the current directors/managers of a company will be made available for inspection by the Registrar of Companies at a future date
When will the names of the current directors / managers be made available and how?
The provisions relating to making names of the current directors / managers of a Cayman Islands company available through an online portal is not yet in force and requires a further order of government to come into force at a future date. Our expectation is that this will be managed through an online portal made available on the Registrar’s website. A fee of CI$50 will be payable in order to inspect the list.
When do I need to update the register of members to reflect voting rights?
Companies incorporated or registered on or before 8 August 2019 have until 7 February 2020 to ensure their register of members is updated. Companies incorporated or registered after 8 August 2019 have until 7 November 2019 to update their register of members.
How do I arrange for the register of members to be updated to reflect voting rights?
Harneys Fiduciary will be contacting all relevant registered office clients to request the information needed to update their register of members to reflect the voting rights. For a typical company limited by shares with a single class of shares, all shares will have voting rights and that is the information that will be required to be noted on the register. For investment funds, many of which will issue a single class of voting shares to its investment manager and will issue non-voting shares to its investors, that is the information that will be required to be shown on the register. Funds should contact their fund administrator to ensure that this is being done.
What are the penalties for failing to update the register of members?
Failure to record the proper and correct information in the register of members can incur a penalty of CI$5,000 for both the company and any director or manager who knowingly and wilfully authorises or permits such default.
What are the penalties for breaching the beneficial ownership requirements of these laws?
A company that knowingly and willfully fails to comply with the beneficial ownership register requirements (for example by not providing details of its beneficial owners on its register) is liable on conviction of a first offence to a fine of CI$25,000 and on conviction of a second offence to a fine of CI$100,000. Where a company is convicted of a third offence the company may be struck off the register of companies by the Cayman Islands Court.
A failure to comply with notices or provide information under the beneficial ownership regime incurs a penalty of CI$25,000 for conviction of a first offence and CI$50,000 and/or imprisonment for two years for conviction of a second offence.
For further information about any of these recent changes please contact your usual Harneys representative.