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Our corporate services team are passionate about what they do for our clients. In this new series of exclusive soundbites we share quick explanations and tips on frequently asked questions or sometimes misunderstood issues surrounding the best practice administration of Cayman entities. Our team are bursting with ideas and tips to simplify the way in which we work with clients and the processes behind keeping their Cayman Islands entities in tip-top shape.
In this edition, we explain how and why the Registrar of Companies (ROC) may strike off a company, and what to do in those circumstances if you wish to reinstate it.
In what circumstances can a company become struck off?
Under section 156 of the Companies Law (2016 Revision) (the law), the Registrar may strike a company off the Register of Companies if it has reasonable cause to believe that the company is not carrying on business or is not in operation. The most common reason for the strike off of a company is failure of the company to pay its annual statutory fees. Alternatively, a company may request to be struck off.
Can a company be reinstated?
In the event that a company is struck off voluntarily or by the Registrar, an application may be made to the Grand Court of the Cayman Islands (the Court) under section 159 of the law by the company, a shareholder or a creditor of the company, for an Order that the company be restored to the Register. The application may be made at any time within two years of the date on which the company was struck off or, with the permission of the Governor in Council, at any future period not exceeding ten years from that date.
How do you go about restoring a company to the Register?
Below is a summary of the steps to be taken to restore a company to the Register. Intertrust (or your corporate services administrator) can assist you in completing this process:
- The Registrar of Companies will need to be contacted by email requesting confirmation of the amount in fees, penalties and restoration costs that are payable. It usually takes three to five working days for the Registrar to respond.
- If the company has been struck off for more than two years, a letter must be written to the Governor in Cabinet requesting confirmation that they have no objection to restoration of the company to the Register.
- The Registered Office will draft an application to restore company in accordance with s 159 of the Companies Law and O.102, r.17 of the Grand Court Rules.
- Draft a supporting affidavit to be sworn by a company director or the member seeking restoration, which sets out the grounds for reinstatement. For full details of the requirements, see 102, r.17(2) of The Cayman Islands Grand Court Rules 1995 (Revised Edition).
- The application, sworn affidavit and Order are filed with the Clerk of the Court.
- Following step five, the Clerk of the Court will determine the application on paper without the need for a hearing. If the Clerk is satisfied with the application and the evidence as filed, the Order will be made confirming the restoration subject to the conditions that the fees are paid as stated in the Registrar’s letter and that a notice of the new registered office is filed with the Registrar of Companies.
- In the final step, notice of the restoration will be published in the Gazette and the process is complete.
If you have any questions about the contents of this briefing, speak to your usual Intertrust relationship contact or one of our experts below.
We want to hear from you
If you have a particular question or wish to understand more about a specific process in the Cayman Islands, simply reach out to one of us and we will do our best to address your concerns directly or in a future edition of Admin Tip Hero.