In The Know: Cayman Islands Voluntary Liquidations Deadlines and Dates
Entities based in the Cayman Islands considering a voluntary liquidation can avoid additional regulatory costs associated with annual filing and reporting requirements by starting the process at the earliest possible opportunity, well in advance of the 31 January 2024 government deadline.
What deadlines do companies need to consider for Cayman Islands Voluntary Liquidations?
The deadline for the last regularly scheduled gazette issue of 2023, which will allow us to comply with our statutory obligations and meet the 31 January 2024 government deadline, is 15 December 2023 (based on a nil balance sheet liquidation with no regulatory issues). This is the latest date that voting shareholders/members/general partners can pass the appropriate resolutions, without incurring additional advertising costs.
What are the CIMA requirements to liquidate an entity before 31 December 2023?
Both mutual and private funds must have completed their final audit, settlement of final holdback payments to investors and submission of the Fund Annual Return to CIMA prior to submitting their formal deregistration application before
31 December 2023.
What happens if a fund has been granted an audit exemption?
When a fund qualifies and has been granted an audit exemption under section 5.4.6 of the Regulatory Policy (below):
- Exemption from Audit Requirements for a Regulated Mutual Fund
- Exemption from Audit Requirements for a Private Fund
A fund may submit a voluntary liquidator’s enhanced report pursuant to section 6.1.5 of the Regulatory Policies. This will cover the period since the last financial year end for which an audit has been filed. In particular, this could be a useful option for those funds required to perform a final stub audit before deregistration documents can be filed with CIMA.
What are some key considerations for companies that may need a 2023 dissolution date?
When determining the timing of your voluntary liquidation include:
- The payment of final distributions to investors;
- Filing of final audit financial statements with the Cayman Islands Monetary Authority; and
- Any further reporting to the Cayman Islands Tax Authority.
Timeline for Cayman Islands Voluntary Liquidations
| No | Action | Narrative | Timing |
|---|---|---|---|
| 1 | Proposal Document | To be issued detailing our proposed scope of service and remuneration. | Pre-Appointment |
| 2 | Engagement Letter | To be signed in agreement with the proposal document. | Pre-Appointment |
| 3 | Directors Resolution | To be passed recommending the voluntary liquidation to all voting shareholders. | Pre-Appointment |
| 4 | Declaration of Solvency | To be signed by all directors. | Pre-Appointment |
| 5 | Shareholders Resolution | To be passed by all voting shareholders | Day 1 |
VOLUNTARY LIQUIDATION COMMENCES ON PASSING OF SHAREHOLDER RESOLUTION
| 6 | Notice of Winding Up | To be filed with the Registrar of Companies. | Day 1 – 28 |
| 7 | Consent to Act | To be filed with the Registrar of Companies. | Day 1 – 28 |
| 8 | Declaration of Solvency | To be filed with the Registrar of Companies. | Day 1 – 28 |
| 9 | Appointment Letters | To be circulated to all directors, voting shareholders and known service providers. | Day 1 – 28 |
GAZETTE ADVERTISEMENT: 28 DAYS AFTER THE PASSING OF THE SHAREHOLDER RESOLUTION
| 10 | Gazette: Notice of Voluntary Winding Up | To publish notice within 28 days after the passing of the shareholders resolution. This notice will provide a 21-days notice period to creditors for submission of any claims. | Day 1 – 28 |
| 11 | Final Report & Accounts | To be issued in advance of the final meeting. | 21-days prior to final meeting |
| 12 | Gazette: Notice of Final Meeting | To publish notice 21 days in advance of the final meeting. This notice period can run concurrently with the notice of winding up | 21-days prior to final meeting |
FINAL MEETING
| 14 | Final Return | To be filed with the Registrar of Companies. | 7 days after final meeting |
| 15 | Dissolution | The company will no longer incur annual fees from the filing of the final return and upon the expiration of 3 months, the company will be deemed to be dissolved. | 3 months |
To learn more about the Cayman Islands voluntary liquidations process, reach out to the R&H Restructuring team. We are a multidisciplinary group that have a diverse range of experience and specialist skills with innovative approaches.
