Important Updates to Cayman Islands Companies Law - September 2019
A number of amendment laws have been passed by the Cayman Islands Government to strengthen Cayman's anti-money laundering and counter-financing of terrorism regime. Published on 8 August 2019, the laws are intended to help address certain recommended actions in Cayman's legislative framework identified by the Caribbean Financial Action Task Force in its evaluation report published in March 2019.
The Companies (Amendment) Law, 2019, the Limited Liability Companies (Amendment) Law, 2019 and the Limited Liability Partnerships Law (Amendment) Law, 2019 each amend their respective principal laws to enact changes to the filing, maintenance and availability of information in respect of such Cayman entities.
The amendments are similar for each type of entity and we summarise below the amendments as they relate to Cayman companies:
- The Cayman Islands Registrar of Companies (Registrar) shall be obliged to provide information to other regulatory bodies such as the Anti-Corruption Commission, Cayman Islands Monetary Authority, Financial Crimes Unit of the Royal Cayman Islands Police Service, Financial Reporting Authority, Tax Information Authority and any other competent authority (Regulatory Authorities) upon request from such regulatory body.
- Voting rights in respect of each shareholder must be recorded in the register of members of a company. Companies incorporated after 8 August 2019 have three months and companies incorporated on or prior to 8 August 2019 have six months to comply with this aspect of the law. Directors of existing Cayman companies will need to review each class of their shares to update their registers of members as appropriate.
- The period for filing changes to the register of directors of the company with the Registrar has been reduced from 60 days to 30 days. The penalties for a breach of this obligation remain unchanged and, accordingly, are generally capped at CI$500/US$610 in the absence of a knowing and willful breach.
- The penalties for failure to establish or maintain a beneficial ownership register have been increased to CI$25,000/US$31,000 for a first offence, CI$100,000/US$122,000 for a second offence and ability for strike off by direction of the court for a third offence. Failure to comply with any notice or to provide information under the beneficial ownership legislation will, on conviction, incur a fine of CI$25,000/US$31,000 for a first offence and CIS$50,000/US$61,000 (or two years' imprisonment or both) for a second or subsequent offence.
In addition to the amendments noted above, there is one further significant amendment in the Companies (Amendment) Law, 2019 that is not yet in force. This amendment requires the Registrar to make available the names of the directors and alternate directors of a Cayman company on payment of a fee of CI$50/US$61. Further information will be provided once the implementation date for this amendment is known.
For further information in respect of these changes, please do not hesitate to contact your usual Trident Trust representative or our Cayman Islands Corporate Team with any questions you may have.