Cayman Islands-based companies considering a 2024 year-end voluntary liquidation should plan early to avoid stress and ensure timely filing as the firm nears the end of its lifecycle.
Preparing for the liquidations process months in advance can help companies avoid extra regulatory costs and lessen the burdens associated with annual filing and reporting requirements. At Stuarts, our liquidation experts can offer guidance to help simplify the wind-down process.
Key Deadlines for Voluntary Liquidations
Companies aiming to dissolve by 31 December 2024 must start the members voluntary liquidation process before 30 August 2024. For potentially more complex cases, it is advisable to begin the voluntary liquidation process well before this date.
Funds registered with the Cayman Islands Monetary Authority (CIMA) under the Mutual Funds Act (As Revised) or the Private Funds Act (As Revised) should also begin dissolution proceedings before the 30 August 2024 deadline to ensure the company is dissolved by year-end. This guarantees that final audited financial statements are filed with CIMA before 30 August 2024, allowing the voluntary liquidation to commence in time.
Cayman Islands Administrative Funds Regime Considerations
Timely filing with CIMA is essential. A Fund must file an application to cancel its CIMA Licence or Certificate of Registration no later than 21 days from the date the Fund ceases business. Non-compliance may result in an administrative fine of up to CI$5,000 (US$6,000). Funds seeking to de-register from CIMA typically need a final audit covering either:
- The period from the last financial year-end to the date of final distributions to investors; or
- The period from the last financial year-end to the date of the final net asset value calculation, with a subsequent events note confirming final distributions to investors.
Funds intending to wind down during the second half of 2024 should start the process early to meet year-end deadlines and ensure a smooth liquidation process.
Contentious Issues Arising from the Liquidation Process
The wind-down process of a company can often cause contentious issues to arise. Our Litigation and Dispute Resolution department have extensive experience advising clients in an insolvency context and on their associated duties to both creditors and shareholders. We regularly advise Shareholders on the several options available to them under Cayman Islands law where they consider that their rights have been infringed, and regularly advise on disputes between shareholders, acting on behalf of both majority and minority shareholders.
We also regularly advise clients on a broader range of commercial disputes, including claims arising out of contracts, professional negligence, and attorneys' duties, with particular expertise in advising on issues of jurisdiction and choice of law.
Additional Information and Guidance
For more details on the Cayman Islands voluntary liquidations process, contact a member of the Stuarts Team or view our article on Voluntary Liquidation of a Company in the Cayman Islands. Our Cayman liquidation attorneys have extensive experience handling the dissolution of investment funds, corporations and structured finance vehicles as well as providing dispute resolution for contentious issues that may arise. Additional information on liquidation and dissolution procedures in the Cayman Islands can be found in our Guidance Notes, "Winding Up a Cayman Islands Companies" and "Winding Up a Cayman Islands Partnership" which may be helpful as you begin the liquidation process.
Originally published by 10 July 2024
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.