Cayman companies should consider commencing the termination process now to ensure sufficient time to complete the process before 2025 Economic Substance reporting requirements, 2025 Government fees and, for funds, 2025 annual registration fees with the Cayman Islands Monetary Authority (“CIMA”) and 2025 FATCA and/or CRS reporting become required the (“2025 fees and reporting requirements”).

While some companies prefer to dissolve operations by being struck off the register, the risk of striking off is that for a period of up to ten years after the strike-off, creditors, shareholders or other claimants can revive the struck-off company by applying to the courts in order to obtain satisfaction of its claims. 

Furthermore, the Companies Act states unequivocally that “the striking off the register of any company under this Act shall not affect the liability, if any, of any director, manager, officer or member (i.e., a shareholder) of the company, and such liability shall continue and may be enforced as if the company had not been dissolved.” Dissolutions by way of strike-off are, however, less costly and a simpler process.

Companies wishing to clear their obligations in 2024 should have hopefully already reached out and commenced their dissolution process, whether it be by means of strike off or voluntary liquidation.

For funds exempt from the requirements of Economic Substance, the final dissolution date must be by or before 31 December. Voluntary liquidation of Cayman companies should likely have already commenced to ensure CIMA deregistration and liquidation prior to 31 December and to avoid 2025 fees.

Initiating a voluntary liquidation earlier in the year allows the company to minimize expenses and ensure filing obligations do not linger long after the company is dissolved.

Contact Rainier Crouse of Bolder Corporate Services (Cayman) Limited at rainier.crouse@boldergroup.com or (345) 769-1618 to discuss the options available in terms of strike-off or voluntary liquidation of your solvent Cayman company.

This memorandum is not intended to be exhaustive but merely highlights some of the more important features involved in winding up a solvent Cayman Islands company pursuant to the Companies Act (Revised) (the “Companies Act”). For the purposes of this article, we will only be addressing exempted companies limited by shares that are solvent.  Exempted companies that are limited by duration or by an event occurring of which the memorandum or articles of association provide for such winding up or that are unable to pay its debts as they fall due are beyond the scope of this article.