Cayman Islands: Companies Law Update
The Companies (Amendment) Law 2015 has recently been approved by the Legislative Assembly of the Cayman Islands and will come into effect on the 2nd November 2015. The new law introduces revised time periods for the filing of notices with the Registrar of Companies, with reduced penalties and a two month amnesty period.
1. Notice periods:
A. On the registration of a company, the time period to file the Register of Directors and Officers with the Registrar of Companies has been reduced from the present 90 days to 60 days.
B. Any subsequent changes to the Register of Directors and Officers must be filed with the Registrar of Companies in 60 days, a significant increase to the present time limit of 30 days.
2. Penalties and Wilful Default:
A company that fails to file notices within the new time limits will be liable to a maximum fine of CI$500 (approximately US$610) regardless of the number of changes. Should a director or officer fail to meet the filing deadline in respect of appointment to five or more companies, a cap has been introduced to limit the maximum fine to CI$2,500 (approximately US$3,050). The fine will be assigned equally to each of the defaulting companies.
The amended law will halve current maximum fine of CI$1,000 and do away with the current further daily fine of CI$100 (to a maximum of CI$1,500).
However, in cases where the Registrar considers there has been a wilful default by a company that knowingly failed to meet the obligations under the Companies Act, that company shall be liable to a fine of CI$1,000 (US$1,220) and every director and officer to whom the breach relates shall be personally subject to a fine of CI$1,000, plus a daily penalty of CI$100 until the default is remedied.
There is a waiver period that will last until 30th October 2015. During this time the Registrar will not impose any fines or late filing fees on the late filing of notices of change to the Register of Directors and Officers. The amnesty generously applies to all late filings regardless of when the filing should have been made and regardless of the number of changes being made. Further, unpaid penalty notices issued before the start of the waiver period are cancelled.
Companies that currently are not in compliance with their filing obligations should take advantage of this opportunity to regularise the position. We recommend that companies and their directors and officers should check that all filings are accurate and up to date and any changes that have been overlooked in the past are now notified. When the amnesty is over, the Registrar has already indicated, that all penalties will be strictly enforced.