Cayman Islands-based companies that might be considering a year-end voluntary liquidation can benefit from early planning to alleviate stress and provide for on-time filing as the firm approaches the end of its life cycle. The right team and guidance can help make the wind-down process straightforward.
Beginning the year-end Cayman Islands liquidation process months in advance of deadlines can help companies avoid additional regulatory costs and lessen any burdens associated with annual filing / reporting requirements. In addition to immediate cost-savings, companies can avoid other filings and any fees that might arise out of having a stub year.
Deadlines companies need to consider for Cayman Islands voluntary liquidations
Companies that are seeking to dissolve before 31 December 2024 need to begin the liquidation process before 30 August 2024, though we recommend that companies with cases that have the potential to be more complicated begin the voluntary liquidation process well in advance of that date.
It is also suggested that funds registered with the Cayman Islands Monetary Authority ("CIMA") under the auspices of the Mutual Funds Act (As Revised) or the Private Funds Act (As Revised) ("Funds") begin their dissolutions proceedings before the 30 August 2024 deadline so that the company is dissolved by the end of the year. This is to ensure that the final audited financial statements have been filed with CIMA before 30 August 2024 allowing the voluntary liquidation to commence in time.
Considerations for companies concerning the Cayman Islands Administrative Funds Regime
Filing with CIMA in a timely manner is a must. 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 ends business.
Failure to comply may incur an administrative fine from CIMA of up to CI$5,000 (US$6,000). In most cases, funds looking to de-register from CIMA will need to undergo a final audit for the period of either:
- from the date of the last financial year-end to the date of final distributions to investors; or
- from the date of the last financial year-end to the date of the final net asset value calculation, with the subsequent events note confirming that final distributions have been made to investors.
We recommend that Funds that are seeking to wind down business during the second half of 2024 begin the process early to allow plenty of time to meet year-end deadlines and ensure a streamlined liquidations process.
Considerations for entities concerning the Cayman Islands Administrative Funds Regime
To learn more about the Cayman Islands voluntary liquidations
process, reach out to the Maples Group's voluntary liquidations
team. The group has deep experience in handing the dissolution of
corporates, investment funds and structured finance vehicles. Get
further information and read more on our guide to liquidations and dissolutions. Our legal
guides with information on preparing your entities for liquidation
and the statutory process, Voluntary Dissolution and Winding Up of a Cayman
Islands Exempted Limited Partnership, may also be helpful
references as your company embarks on this process.
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.