Amendment Tracking
Companies Act — Changes
Visual diff of amendments between annual revisions, with redlining.
Revision History — Select a period
Amendment Diff
2022 Revision → 2023 Revision
146 modified
Revision History — Select a period
s.1Short title
MODIFIEDThis Act may be cited as the Companies Act (2023 Revision) .
s.4Signature of Registrar
MODIFIED(1) Any document purporting to bear the signature of the Registrar or of an officer authorised in accordance with section 3(2) shall be deemed, until the contrary is proved, to have been duly given, made or issued by the authority of the Registrar. (2) In subsection (1) — “ signature ” includes a facsimile of a signature however reproduced and a digital signature. Companies Act (2023 Revision) Section 5 c Revised as at 31st December, 2022 Page 21
s.19Penalty for concealment of names of creditors
MODIFIEDA person who, being a director, manager, secretary or other officer of the company — (a) wilfully conceals the name of any creditor entitled to object to the reduction; (b) wilfully misrepresents the nature or amount of the debt or claim of any creditor; or (c) aids, abets or is privy to any such concealment or misrepresentation as aforesaid, commits an offence and is liable on summary conviction to a fine of five thousand dollars or to imprisonment for a term of one year, or to both. Companies Act (2023 Revision) Section 20 c Revised as at 31st December, 2022 Page 29
s.24Alteration of articles by special resolution
MODIFIED(1) Subject to this Act and to the conditions contained in its memorandum, a company may, by special resolution, alter or add to its articles. (2) Any alteration or addition so made in the articles shall, subject to this Law, be as valid as if originally contained therein, and be subject in like manner to alteration by special resolution. Section 25 Companies Act (2023 Revision) Page 30 Revised as at 31st December, 2022 c
s.51Notice of situation of registered office
MODIFIED(1) Notice of the situation of such registered office shall be given to the Registrar and recorded by that person and shall be published by Public Notice. Until such notice is given and published, the company shall not be deemed to have complied with this Act with respect to having a registered office. (2) Any member of the public shall be entitled to be informed by the Registrar, on request, of the location of the registered office of any company or exempted company registered under this Law. Section 52 Companies Act (2023 Revision) Page 54 Revised as at 31st December, 2022 c
s.57Meetings
MODIFIEDSubject to the memorandum and articles of association of the company, a meeting of — (a) members; (b) a class of members; Companies Act (2023 Revision) Section 58 c Revised as at 31st December, 2022 Page 57 (c) the board of directors; or (d) any committee of the directors, may be validly convened and business conducted, as provided by the articles of association, with only one such member or director being present in person or otherwise as may be provided by the articles of association. Provisions for Protection of Members
s.68Inspectors ’ report admissible as evidence
MODIFIEDThe report of any inspectors appointed under this Law, or any copy thereof certified and signed by the inspectors, shall be admissible in any legal proceeding as evidence of the opinion of the inspectors in relation to any matter contained in such report. Notices
s.69Returns, etc., to Registrar
MODIFIEDAny list, return, notice or information required by this Act to be made, given or supplied to the Registrar shall be authenticated by the signature of the secretary or manager or one of the directors of the company. Companies Act (2023 Revision) Section 70 c Revised as at 31st December, 2022 Page 61
s.74Security for costs in actions brought by limited companies
MODIFIEDWhere a company is plaintiff in any action, suit or other legal proceeding, any Judge having jurisdiction in the matter, if that person is satisfied that there is reason to believe that if the defendant is successful in that person’s defence the assets of the company will be insufficient to pay that person’s costs, may require sufficient security to be given for such costs, and may stay all proceedings until such security is given. Section 75 Companies Act (2023 Revision) Page 62 Revised as at 31st December, 2022 c
s.79Modification of section 49
MODIFIEDIn the event of a company being wound up, section 49 as respects the contribution to be required from any director or manager whose liability is unlimited by virtue of section 78 shall have effect subject to the following modifications — Companies Act (2023 Revision) Section 80 c Revised as at 31st December, 2022 Page 63 (a) subject as hereinafter contained, any such director, managing director or manager whether past or present shall, in addition to that person’s liability, if any, to contribute as an ordinary member, be liable to contribute as if that person were at the date of the commencement of such winding up a member of an unlimited company; (b) no contribution required from any past director or manager who has ceased to hold such office for a period of one year or upwards prior to the commencement of such winding up, shall exceed the amount, if any, which that person is liable to contribute as an ordinary member of the company; (c) no contribution required from any past director or manager in respect of any debt or liability of the company contracted after the time at which that person ceased to hold such office shall exceed the amount, if any, which that person is liable to contribute as an ordinary member of the company; and (d) subject to the regulations of the company, no contribution required from any director or manager shall exceed the amount, if any, which that person is liable to contribute as an ordinary member, unless the Court thinks it necessary to require such contribution in order to satisfy the debts and liabilities of the company and the costs, charges and expenses of the winding up. Association not for Profit 80. Circumstances in which a company may be registered without “limited” in its name 80 . (1) A company registered under this Act or an association applying to be registered under this Law, may in accordance with section 80A , apply to the Registrar to be designated as a company to which this section applies if the company or association — ( a ) was formed or is to be formed primarily for the promotion of charitable, philanthropic, religious, cultural, educational, social or fraternal purposes or objects, including, for the avoidance of doubt, a group of persons sharing a common profession or interest which, to the satisfaction of the Registrar, qualifies the company or association for registration under this section; and ( b ) has appli ed or intends to apply the profits, if any, or other income of the company or association primarily for the promotion of charitable, philanthropic, religious, cultural, educational, social or fraternal purposes or objects, including, for the avoidance of d oubt, a group of persons sharing a common profession or interest which, to the satisfaction of the Section 80 Companies Act (2023 Revision) Page 64 Revised as at 31st December, 2022 c Registrar, qualifies the company or association for registration under this section. ( 2 ) The Registrar shall only approve an application for designation unde r this section if the memorandum and articles of association of a company registered under this Act or an association being registered under this Act and applying for designation, contain language to the effect that — (a) the assets, profits, if any, and other income of the company or association applying for designation, shall be applied exclusively in the furtherance of the objects of the company or association; and (b) no portion of the assets and income of the company or association shall be distributed as profit or dividend directly or indirectly to the controllers, shareholders, owners or members of the company or association, unless such distribution is intended for the legitimate purpose of compensating a person for services to further the objects of the company or association or to pay the liabilities incurred on behalf of the company or association. ( 3 ) Pursuant to an application made under subsection (1), the Registrar may direct that a company registered under this Act or that an association being registered under this Law , be registered with limited liability without the addition of the word “Limited” or the abbreviation “Ltd.” to the company ’ s name and that upon registration shall enjoy all the privileges and be subject to all the obligations by this Act imposed on companies, except the obligations under this Act requiring a company — ( a ) to use the word “Limited” or the abbreviation “Ltd.” as any part of its name; ( b ) to send a list of its members to the Registra r; ( c ) to comply with the provisions of section s 51 or 55 or pay any fees pursuant to sectio n 199 ; or ( d ) to pay the fees prescribed by section s 26 , 41 and 169 . ( 4 ) The Registrar may impose any conditions that the Registrar thinks fit to impose on a company designated under this section and shall cause the conditions imposed to be inserted or endorsed on the memorandum or articles of association of the company or association being registered. ( 5 ) Where a company designated under this section is to be dissolved, the person who owns, controls or directs that company shall ensure that any assets of the company remaining after the satisfaction of all debts and liabilities of the company shall be transf erred to another company registered under this section or a non - profit organisation registered under the Non - Profit Organisations Act ( 2020 Revision ) which has similar objects. Companies Act (2023 Revision) Section 80A c Revised as at 31st December, 2022 Page 65 ( 6 ) For the purpose of this section “ non - profit organisation ” has the same mean ing as that assigned to these words in the Non - Profit Organisa tions Act ( 2020 Revision ) . 80A. Application for designation under section 80 80A .(1) An application for designation as a company under section 80 may be made to the Registrar by a company or an association to which section 80 refers and shall be — ( a ) made in the form specified by the Registrar; and ( b ) accompanied by the non - refundable application fee prescribed in Part 3A. ( 2 ) A company making an application under subsection (1) shall, at the time of making the application, file with the Registrar a list of the persons who own, control or direct the company. 80B. Obligations for companies designated under section 80 80B .A company designated pursuant to section 80 that is not registered pursuant to the Non-Profit Organisations Act (2020 Revision) shall — ( a ) file with the Registrar, in the form specified by the Registrar, an annual return confirming the objects and activities of the company; ( b ) in the manner specif ied by the Registrar, notify the Registrar of any change in — ( i ) the objects or activities of the company; or ( ii ) the address of the registered office or the location of the company, within thirty days of the date of the change; ( c ) maintain the proper b ooks of account for a minimum period of five years; ( d ) comply with any conditions imposed by the Registrar upon registration; ( e ) establish and maintain internal controls and systems appropriate for the company to identify conduct which may involve the financing of terrorism; ( f ) notify the Registrar, in the manner specified by the Registrar, of any change in the person who owns, controls or directs the company, within thirty days of the date of the change; and ( g ) pay the fee prescribed in Part 3A for a ny changes for which the Registrar is required to be notified pursuant to this section.
s.86Power to compromise with creditors and members
MODIFIED(1) Where a compromise or arrangement is proposed between a company and its creditors or any class of them, or between the company and its members or any class of them, the Court may, on the application of the company or of any creditor or member of the company, or of a restructuring officer appointed in respect of the company, or where a company is being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members of the company or class of members, as the case may be, to be summoned in such manner as the Court directs. (2) If a majority in number representing seventy-five per cent in value of the creditors or class of creditors, as the case may be, present and voting either in person or by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the Court, be binding on all the creditors or the class of creditors, as the case may be, and also on the company or, where a company is in the course of being wound up, on the liquidator and contributories of the company. (2A) If seventy-five per cent in value of the members or class of members, as the case may be, present and voting either in person or by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the Court, be binding on all the members or class of members, as the case may be, and also on the company or, where a company is in the course of being wound up, on the liquidator and contributories of the company. (3) An order made under subsection (2) or (2A) shall have no effect until a copy of the order has been delivered to the Registrar for registration, and a copy of every such order shall be annexed to every copy of the memorandum of association of the company issued after the order has been made, or, in the case of a company not having a memorandum, of every copy so issued of the instrument constituting or defining the constitution of the company. (4) If a company makes default in complying with subsection (3), the company and every officer of the company who is in default shall be liable to a fine of two dollars for each copy in respect of which default is made. Companies Act (2023 Revision) Section 87 c Revised as at 31st December, 2022 Page 71 (5) In this section the expression “ company ” means any company liable to be wound up under this Act and the expression “ arrangement ” includes a reorganisation of the share capital of the company by the consolidation of shares of different classes or by the division of shares into shares of different classes or by both those methods.
s.87Provisions for facilitating reconstruction and amalgamation of companies
MODIFIED(1) Where an application is made to the Court under section 86 for the sanctioning of a compromise or arrangement proposed between a company and any such persons as are specified in that section, and it is shown to the Court that the compromise or arrangement has been proposed for the purpose of or in connection with a scheme for the reconstruction of any company or companies or the amalgamation of any two or more companies, and that under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme (in this section referred to as “a transferor company”) is to be transferred to another company (in this section referred to as “the transferee com pany”) the Court, may either by the order sanctioning the compromise or arrangement or by any subsequent order make provision for — (a) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any transferor company; (b) the allotting or appropriation by the transferee company of any shares, debentures, policies, or other like interests in that company which under the compromise or arrangement are to be allotted or appropriated by that company to or for any person; (c) the continuation by or against the transferee company of any legal proceedings pending by or against any transferor company; (d) the dissolution, without winding up, of any transferor company; (e) the provisions to be made for any person who within such time and in such manner as the Court directs dissents from the compromise or arrangement; and (f) such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation is fully and effectively carried out. (2) Where an order under this section provides for the transfer of property or liabilities, that property shall, by virtue of the order, be transferred to and vest in, and those liabilities shall, by virtue of the order, be transferred to and become the liabilities of, the transferee company, and any such property shall, if the order so directs, be freed from any charge which is, by virtue of the compromise or arrangement, to cease to have effect (3) Where an order is made under this section, every company in relation to which the order is made shall cause a copy thereof to be delivered to the Registrar for Section 88 Companies Act (2023 Revision) Page 72 Revised as at 31st December, 2022 c registration within seven days after the making of the order, and if default is made in complying with this subsection, the company and every officer of the company who is in default shall be liable to a default fine. (4) In this section — “ property ” includes property, rights and powers of every description; “ liabilities ” includes duties; and “ transferee company ” means any company or body corporate established in the Islands or in any other jurisdiction.
s.88Power to acquire shares of dissentient shareholders
MODIFIED(1) Where a scheme or contract involving the transfer of shares or any class of shares in a company (in th is section referred to as “the transferor company”) to another company, whether a company within the meaning of this Act or not (in this section referred to as “the transferee company”) has, within four months after the making of the offer in that behalf by the transferee company, been approved by the holders of not less than ninety per cent in value of the shares affected, the transferee company may, at any time within two months after the expiration of the said four months, give notice in the prescribed manner to any dissenting shareholder that it desires to acquire that person’s shares, and where such notice is given the transferee company shall, unless on an application made by the dissenting shareholder within one month from the date on which the notice was given, the Court thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms on which under the scheme or contract the shares of the approving shareholders are to be transferred to the transferee company. (2) Where a notice has been given by the transferee company under this section and the Court has not, on an application made by the dissenting shareholder, ordered to the contrary, the transferee company shall, on the expiration of one month from the date on which the notice has been given or, if an application to the Court by the dissenting shareholder is then pending, after that application has been disposed of, transmit a copy of the notice to the transferor company and pay or transfer to the transferor company the amount or other consideration representing the price payable by the transferee company for the shares which by virtue of this section that company is entitled to acquire, and the transferor company shall thereupon register the transferee company as the holder of those shares. (3) Any sums received by the transferor company under this section shall be paid into a separate bank account, and any such sums and any other consideration so received shall be held by that company on trust for the several persons entitled to the shares in respect of which the said sum or other consideration were respectively received. Companies Act (2023 Revision) Section 89 c Revised as at 31st December, 2022 Page 73 (4) In this section — “ dissenting shareholder ” includes a shareholder who has not assented to the scheme or contract and any shareholder who has failed or refused to transfer that person’s shares to the transferee company, in accordance with the scheme or contract.
s.89Definitions
MODIFIEDIn this Part — “ company ” includes a foreign company in respect of which the Court has made a winding up order; “ contributory ” means — (a) every person liable by virtue of section 49 to contribute to the assets of a company in the event that it is wound up under this Law; and (b) every holder of fully paid up shares of a company; “ controller ” means a person appointed by the Authority pursuant to the regulatory laws to take control of a company; “ document ” includes any device by means of which information is recorded or stored; “ foreign company ” means any body corporate incorporated outside the Islands; “ foreign practitioner ” means a person who is qualified under the law of a foreign country to perform functions equivalent to those performed by official liquidators under this Act or by trustees in bankruptcy under the Bankruptcy Act (1997 Revision) ; “ limited partnership ” means an ordinary limited partnership registered in accordance with section 49 of the Partnership Act (2013 Revision) or an exempted limited partnership registered in accordance with section 9 of the Exempted Limited Partnership Act (2021 Revision) ; “ official liquidator ” means the liquidator of a company which is being wound up by order of the Court or under the supervision of the Court and includes a provisional liquidator; “ prescribed ” means prescribed by the Insolvency Rules Committee; Section 90 Companies Act (2023 Revision) Page 74 Revised as at 31st December, 2022 c “ professional service provider ” means a person who contracts to provide general managerial or administrative services to a company on an annual or continuing basis; “ qualified insolvency practitioner ” means a person holding the qualifications specified in the regulations made by the Insolvency Rules Committee under section 155 or such other qualifications as the Court considers appropriate for the conduct of the winding up of a company; “ Rules ” mean rules prescribed by the Insolvency Rules Committee; “ shadow director ” means, in re lation to a company, any person in accordance with whose directions or instructions the directors of the company are accustomed to act, but the person is not deemed to be a shadow director by reason only that the directors act on advice given by that person in a professional capacity; and “ winding up order ” includes an order that a voluntary winding up continue under the supervision of the Court and references to a company being wound up by the Court includes a company which is being wound up under the supervision of the Court.
s.91Provisions for facilitating reconstruction and amalgamation of companies
MODIFIED(1) Where an application is made to the Court under section 91I for the sanctioning of a compromise or arrangement proposed between a company and any such persons as are specified in that section, and it is shown to the Court that the compromise or arrangement has been proposed for the purpose of or in connection with a scheme for the reconstruction of any company or companies or the amalgamation of any two or more companies, and that under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme (in this section referred to as “ a transferor company ”) is to be transferred to another company (in this section referred to as “ the transferee company ”) the Court, may either by the order sanctioning the compromise or arrangement or by any subsequent order make provision for — (a) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any transferor company; (b) the allotting or appropriation by the transferee company of any shares, debentures, policies, or other like interests in that company which under the compromise or arrangement are to be allotted or appropriated by that company to or for any person; (c) the continuation by or against the transferee company of any legal proceedings pending by or against any transferor company; (d) the dissolution, without winding up, of any transferor company; (e) the provisions to be made for any person who within such time and in such manner as the Court directs dissents from the compromise or arrangement; and (f) such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation is fully and effectively carried out. (2) Where an order under this section provides for the transfer of property or liabilities, that property shall, by virtue of the order, be transferred to and vest in, and those liabilities shall, by virtue of the order, be transferred to and become the liabilities of, the transferee company, and any such property shall, if the order so directs, be freed from any charge which is, by virtue of the compromise or arrangement, to cease to have effect. (3) Where an order is made under this section, every company in relation to which the order is made shall cause a copy thereof to be delivered to the Registrar for registration within seven days after the making of the order, and if default is made in complying with this subsection, the company and every officer of the company who is in default shall be liable to a default fine. (4) In this section — “ property ” includes property, rights and powers of every description; Section 92 Companies Act (2023 Revision) Page 82 Revised as at 31st December, 2022 c “ liabilities ” includes duties; an d “ transferee company ” means any company or body corporate established in the Islands or in any other jurisdiction. Winding up by the Court
s.92Circumstances in which a company may be wound up by the Court
MODIFIEDA company may be wound up by the Court if — (a) the company has passed a special resolution requiring the company to be wound up by the Court; (b) the company does not commence its business within a year from its incorporation, or suspends its business for a whole year; (c) the period, if any, fixed for the duration of the company by the articles of association expires, or whenever the event, if any, occurs, upon the occurrence of which it is provided by the articles of association that the company is to be wound up; (d) the company is unable to pay its debts; or (e) the Court is of opinion that it is just and equitable that the company should be wound up.
s.94Application for winding up
MODIFIED(1) An application to the Court for the winding up of a company shall be by petition presented either by — (a) the company; Companies Act (2023 Revision) Section 95 c Revised as at 31st December, 2022 Page 83 (b) any creditor or creditors (including any contingent or prospective creditor or creditors); (c) any contributory or contributories; or (d) subject to subsection (4), the Authority pursuant to the regulatory laws. (2) Where expressly provided for in the articles of association of a company, the directors of a company incorporated before the commencement of this amending Act have the authority to — (a) present a winding up petition; or (b) where a winding up petition has been presented, apply for the appointment of a provisional liquidator, on behalf of the company without the sanction of a resolution passed at a general meeting. (2A) Subject to subsection (2B), the directors of a company incorporated after the commencement of this amending Act may present a winding up petition on behalf of the company on the grounds that the company is unable to pay its debts within the meaning of section 93 or where a winding up petition has been presented, applyon behalf of the company, for the appointment of a provisional liquidator. (2B) The articles of association of a company may expressly remove or modify the directors’ authority to present a winding up petition or apply for the appointment of a provisional liquidator on the company’s behalf. (3) A contributory is not entitled to present a winding up petition unless either — (a) the shares in respect of which that person is a contributory, or some of them, are partly paid; or (b) the shares in respect of which that person is a contributory, or some of them, either were — (i) originally allotted to that person, or have been held by that person, and registered in that person’s name for a period of at least six months immediately preceding the presentation of the winding up petition; or (ii) have devolved on that person through the death of a former holder. (4) A winding up petition may be presented by the Authority in respect of any company which is carrying on a regulated business in the Islands upon the grounds that it is not duly licensed or registered to do so under the regulatory laws or for any other reason as provided under the regulatory laws or any other law.
s.95Powers of the Court
MODIFIED(1) Upon hearing the winding up petition the Court may — (a) dismiss the petition; Section 96 Companies Act (2023 Revision) Page 84 Revised as at 31st December, 2022 c (b) adjourn the hearing conditionally or unconditionally; (c) make a provisional order; or (d) any other order that it thinks fit, but the Court shall not refuse to make a winding up order on the ground only that the company ’ s assets have been mortgaged or charged to an amount equal to or in excess of those assets or that the company has no assets. (2) The Court shall dismiss a winding up petition or adjourn the hearing of a winding up petition on the ground that the petitioner is contractually bound not to present a petition against the company. (3) If the petition is presented by members of the company as contributories on the ground that it is just and equitable that the company should be wound up, the Court shall have jurisdiction to make the following orders, as an alternative to a winding-up order, namely — (a) an order regulating the conduct of the company ’ s affairs in the future; (b) an order requiring the company to refrain from doing or continuing an act complained of by the petitioner or to do an act which the petitioner has complained it has omitted to do; (c) an order authorising civil proceedings to be brought in the name and on behalf of the company by the petitioner on such terms as the Court may direct; or (d) an order providing for the purchase of the shares of any members of the company by other members or by the company itself and, in the case of a purchase by the company itself, a reduction of the company ’ s capital accordingly. (4) Where an alternative order under subsection (3) requires the company not to make any, or any specified, alteration in the memorandum or articles of association, the company does not have power, without the leave of the Court, to make any such alteration in breach of that requirement. (5) Any alteration in a company ’ s memorandum or articles of association made by virtue of an alternative order under subsection (3) is of the same effect as if duly made by resolution of the company, and the provisions of this Act shall apply to the memorandum or articles of association as so altered accordingly. (6) A copy of an alternative order made under subsection (3) altering, or giving leave to alter, a company ’ s memorandum or articles of association shall be filed by the company with the Registrar within fourteen days of the making of the order.
s.96Power to stay or restrain proceedings
MODIFIEDAt any time after the presentation of a winding up petition and before a winding up order has been made, the company or any creditor or contributory may — Companies Act (2023 Revision) Section 97 c Revised as at 31st December, 2022 Page 85 (a) where any action or proceeding against the company, including a criminal proceeding, is pending in a summary court, the Court, the Court of Appeal or the Privy Council, apply to the court in which the action or proceeding is pending for a stay of proceedings therein; and (b) where any action or proceeding is pending against the company in a foreign court, apply to the Court for an injunction to restrain further proceedings therein, and the court to which application is made may, as the case may be, stay or restrain the proceedings accordingly on such terms as it thinks fit.
s.97Avoidance of attachments and stay of proceedings
MODIFIED(1) When a winding up order is made or a provisional liquidator is appointed, no suit, action or other proceedings, other than criminal proceedings, shall be proceeded with or commenced against the company except with the leave of the Court and subject to such terms as the Court may impose. (1A) Where a winding up order is made or a provisional liquidator is appointed in respect of a company, and there are criminal proceedings pending against the company in a summary court, the Court, the Court of Appeal or the Privy Council — (a) the company; (b) a creditor of the company; (c) a contributory of the company; or (d) subject to section 94(4), the Authority, in respect of any company which is carrying on regulated business, may apply to the court in which the proceedings are pending for a stay of the proceedings and the court to which the application is made, may stay the proceedings on such terms as it thinks fit. (2) When a winding up order has been made, any attachment, distress or execution put in force against the estate or effects of the company after the commencement of the winding up is void.
s.98Notice of winding up order
MODIFIEDWhen a winding up order is made, the liquidator shall — (a) file a copy of the winding up order with the Registrar; and (b) publish notice of the winding up in the Gazette and any newspaper in which the winding up petition was advertised. Section 99 Companies Act (2023 Revision) Page 86 Revised as at 31st December, 2022 c
s.100Commencement of winding up by the Court
MODIFIED(1) If, before the presentation of a petition for the winding up of a company by the Court — (a) a resolution has been passed by the company for voluntary winding up; (b) the period, if any, fixed for the duration of the company by the articles of association has expired; (c) the event upon the occurrence of which it is provided by the articles of association that the company is to be wound up has occurred; or (d) a restructuring officer has been appointed pursuant to section 91B or 91C and the order appointing the restructuring officer has not been discharged, the winding up of the company is deemed to have commenced at the time of passing of the relevant resolution or the expiry of the relevant period or the occurrence of the relevant event or the date of the presentation of the petition to appoint a restructuring officer pursuant to section 91B. (2) In any other circumstance not specified in subsection (1), the winding up of a company by the Court is deemed to commence at the time of the presentation of the petition for winding up.
s.101Company ’ s statement of affairs
MODIFIED(1) Where the Court has made a winding up order or appointed a provisional liquidator, the liquidator may require some or all of the persons mentioned in subsection (3) to prepare and submit to that person a statement in the prescribed form as to the affairs of the company. (2) The statement shall be verified by an affidavit sworn by the persons required to submit it and shall show — (a) particulars of the company ’ s assets and liabilities, including contingent and prospective liabilities; (b) the names and addresses of any persons having possession of the company ’ s assets; (c) the assets of the company held by those persons; (d) the names and addresses of the company ’ s creditors; (e) the securities held by those creditors; (f) the dates when the securities were respectively given; and (g) such further or other information that the liquidator may require. Companies Act (2023 Revision) Section 102 c Revised as at 31st December, 2022 Page 87 (3) The persons referred to in subsection (1) are — (a) persons who are or have been directors or officers of the company; (b) persons who are or have been professional service providers to the company; and (c) persons who are or have been employees of the company, during the period of one year immediately preceding the relevant date. (4) Where any persons are required under this section to submit a statement of affairs to the liquidator, they shall do so, subject to subsection (5), before the end of the period of twenty-one days beginning with the day after that on which the prescribed notice of the requirement is given to them by the liquidator. (5) The liquidator may release a person from an obligation imposed on that person under subsection (1) or, when giving the notice mentioned in subsection (4) or subsequently, the liquidator may extend the time for compliance; and if the liquidator refuses to extend the time for compliance, the Court may do so. (6) In this section — “ relevant date ” means — (a) in a case where a provisional liquidator is appointed, the date of that person’s appointment; and (b) in any other case, the commencement of the winding up. (7) A person who, without reasonable excuse, fails to comply with any obligation imposed under this section commits an offence and is liable on conviction to a fine of ten thousand dollars.
s.102Investigation by liquidator
MODIFIED(1) Where a winding up order is made by the Court, the liquidator shall be empowered to investigate — (a) if the company has failed, the causes of the failure; and (b) generally, the promotion, business, dealings and affairs of the company, and to make such report, if any, to the Court as that person thinks fit. (2) Subject to obtaining the directions of the Court, the liquidator shall have power to — (a) assist the Authority and the Royal Cayman Islands Police Service to investigate the conduct of persons referred to in section 101(3); and (b) institute and conduct a criminal prosecution of persons referred to in section 101(3). (3) Subject to obtaining the prior approval of the company ’ s creditors, if it is insolvent, or its contributories, if it is solvent, the directions given under Section 103 Companies Act (2023 Revision) Page 88 Revised as at 31st December, 2022 c subsection (2) may include a direction that the whole or part of the costs of investigation and prosecution be paid out of the assets of the company.
s.104Appointment and powers of provisional liquidator
MODIFIED(1) Subject to this section and any rules made under section 155 , the Court may, at any time after the presentation of a winding up petition but before the making of a winding up order, appoint a liquidator provisionally. (2) An application for the appointment of a provisional liquidator may be made under subsection (1) by a creditor or contributory of the company or, subject to subsection (6), the Authority, on the grounds that — (a) there is a prima facie case for making a winding up order; and (b) the appointment of a provisional liquidator is necessary in order to — (i) prevent the dissipation or misuse of the company ’ s assets; (ii) prevent the oppression of minority shareholders; or (iii) prevent mismanagement or misconduct on the part of the company ’ s directors. (3) An application for the appointment of a provisional liquidator may be made under subsection (1) by the company and on such an application the Court may appoint a provisional liquidator if it considers it appropriate to do so. (4) A provisional liquidator shall carry out only such functions as the Court may confer on that person and that person’s powers may be limited by the order appointing that person. (5) The remuneration of the provisional liquidator shall be fixed by the Court from time to time on that person’s application and the Court shall in fixing such remuneration act in accordance with rules made under section 155 . (6) An application for the appointment of a provisional liquidator may be presented by the Authority on the grounds under subsection (2), in respect of any company which is carrying on a regulated business in the Islands upon the grounds that it is not duly licensed or registered to do so under the regulatory laws or for any other reason as provided under the regulatory laws or any other law regardless of whether or not the Authority presented the winding up petition. Section 105 Companies Act (2023 Revision) Page 90 Revised as at 31st December, 2022 c
s.109Remuneration of official liquidators and restructuring officers
MODIFIED(1) The expenses properly incurred in the winding up, including the remuneration of the liquidator, are , subject to subsection (2), payable out of the company ’ s assets in priority to all other claims. Companies Act (2023 Revision) Section 110 c Revised as at 31st December, 2022 Page 91 (2) Where a company is wound up, the expenses properly incurred in any petition for a restructuring officer and during the term of appointment of the restructuring officer appointed — (a) under section 91B(3)(a); or (b) on an interim basis under section 91C(3), including the remuneration of the restructuring officer, are payable out o f the company’s assets in priority to all other claims. (3) There shall be paid to a restructuring officer, including a restructuring officer appointed on an interim basis, and the official liquidator, such remuneration, by way of percentage or otherwise, that the Court may direct acting in accordance with rules made under section 155. (4) If more than one restructuring officer, including a restructuring officer appointed on an interim basis, is appointed by the Court under section 91B or 91C, the remuneration paid under subsection (3) shall be distributed among the restructuring officers in such proportions as the Court may direct. (5) If more than one official liquidator is appointed by the Court when a company is wound up, the remuneration paid under subsection (3) shall be distributed among the official liquidators in such proportions as the Court may direct.
s.112Settlement of list of contributories
MODIFIED(1) The liquidator shall settle a list of contributories, if any, for which purpose that person shall have power to adjust the rights of contributories amongst themselves. Companies Act (2023 Revision) Section 113 c Revised as at 31st December, 2022 Page 93 (2) In the case of a solvent liquidation of a company which has issued redeemable shares at prices based upon its net asset value from time to time, the liquidator shall have power to settle and, if necessary rectify the company ’ s register of members, thereby adjusting the rights of members amongst themselves. (3) A contributory who is dissatisfied with the liquidator ’ s determination may appeal to the Court against such determination.
s.113Power to make calls
MODIFIED(1) The Court may, at any time after making a winding up order, and either before or after it has ascertained the sufficiency of the company ’ s assets, make calls on all or any of the contributories for the time being settled on the list of the contributories — (a) to the extent of their liability, for the payment of any money which the Court considers necessary to satisfy the company ’ s debts and liabilities and the expenses of winding up; and (b) to the adjustment of the rights of the contributories among themselves, and make an order for payment of any call so made. (2) In making a call the Court may take into consideration the probability that some of the contributories may partly or wholly fail to pay it.
s.115Meetings to ascertain wishes of creditors or contributories
MODIFIED(1) The Court shall, as to all matters relating to the winding up, have regard to wishes of the creditors or contributories and for that purpose it may direct reports to be prepared by the official liquidator and meetings of creditors or contributories to be summoned. (2) If it considers it necessary to do so, the Court may direct that separate meetings be held of different classes of creditors or contributories. Section 116 Companies Act (2023 Revision) Page 94 Revised as at 31st December, 2022 c (3) Subject to Rules made under section 155 , meetings may be requisitioned by creditors, if the company is insolvent, or by contributories if the company is solvent. (4) The votes of creditors and contributories shall be counted by reference to — (a) the value of their debts, in the case of creditors; (b) the number of votes, in the case of contributories whose shares carry voting rights under the articles of association of the company; and (c) the par value of all the shares held, in the case of contributories whose shares do not carry votes under the articles of association of the company and, where there are no par value shares, the net asset value of the company shown. Voluntary Winding up
s.116Circumstances in which a company may be wound up voluntarily
MODIFIEDA company incorporated and registered under this Act or an existing company may be wound up voluntarily — (a) when the period, if any, fixed for the duration of the company by its memorandum or articles of association expires; (b) if the event, if any, occurs, on the occurrence of which the memorandum or articles of association provide that the company is to be wound up; (c) if the company resolves by special resolution that it be wound up voluntarily; or (d) if the company in general meeting resolves by ordinary resolution that it be wound up voluntarily because it is unable to pay its debts.
s.117Commencement of winding up
MODIFIED(1) A voluntary winding up is deemed to commence — (a) at the time of the passing of the resolution for winding up; or (b) on the expiry of the period or the occurrence of the event specified in the company ’ s memorandum or articles of association, notwithstanding that a supervision order is subsequently made by the Court. (2) Subject to any contrary provision in its memorandum or articles of association, the voluntary winding up of an exempted limited duration company is taken to have commenced upon the expiry of a period of ninety days starting on — (a) the death, insanity, bankruptcy, dissolution, withdrawal, retirement or resignation of a member of the company; Companies Act (2023 Revision) Section 118 c Revised as at 31st December, 2022 Page 95 (b) the redemption, repurchase or cancellation of all the shares of a member of the company; or (c) the occurrence of any event which, under the memorandum or articles of association of the company, terminates the membership of a member of the company, unless there remain at least two members of the company and the company is continued in existence by the unanimous resolution of the remaining members pursuant to amended memorandum and articles of association adopted during that period of ninety days.
s.118Effect on business and status of the company
MODIFIED(1) In the case of a voluntary winding up, the company shall from the commencement of its winding up cease to carry on its business except so far as it may be beneficial for its winding up. (2) Notwithstanding anything to the contrary contained in the company ’ s articles of association, its corporate state and powers shall continue until the company is dissolved.
s.119Appointment of voluntary liquidator
MODIFIED(1) One or more liquidators shall be appointed for the purpose of winding up the company ’ s affairs and distributing its assets. (2) When the winding up has commenced in accordance with the company ’ s memorandum or articles of association upon the termination of a fixed period or the occurrence of an event — (a) the persons designated as liquidators in the memorandum or articles of association shall become such liquidators automatically from the commencement of the winding up; or (b) if no such person is designated in the memorandum or articles of association or the person designated is unable or unwilling to act, the directors shall convene a general meeting of the company for the purpose of appointing a liquidator. (3) Except in the case of a person designated as liquidator in the company ’ s memorandum or articles of association, the appointment of a voluntary liquidator shall take effect upon the filing of that person’s consent to act with the Registrar. (4) If a vacancy occurs by death, resignation or otherwise in the office of voluntary liquidator appointed by the company — (a) the company in a general meeting may fill the vacancy; or (b) the Court may fill the vacancy on the application of any contributory or creditor. Section 120 Companies Act (2023 Revision) Page 96 Revised as at 31st December, 2022 c (5) On the appointment of a voluntary liquidator all the powers of the directors cease, except so far as the company in a general meeting or the liquidator sanctions their continuance. (6) When two or more persons are appointed as voluntary liquidators jointly, they shall be authorised to act jointly and severally unless their powers are expressly limited by the resolution or articles of association under which they are appointed.
s.120Qualifications of voluntary liquidators
MODIFIEDAny person, including a director or officer of the company, may be appointed as its voluntary liquidator.
s.122Resignation of voluntary liquidator
MODIFIED(1) Where two or more persons are appointed as joint voluntary liquidators, they may resign by filing a notice of resignation with the Registrar, so long as at least one of them continues in office. (2) Except as provided in subsection (1), a voluntary liquidator wishing to resign shall — (a) prepare a report and accounts; and (b) convene a general meeting of the company for the purpose of accepting that person’s resignation and releasing that person from the performance of any further duties, and shall cease to hold office with effect from the date upon which the resolution is passed. (3) In the event that the company fails to pass a resolution accepting that person’s resignation, the voluntary liquidator may apply to the Court for an order that that person be released from the performance of any further duties. Companies Act (2023 Revision) Section 123 c Revised as at 31st December, 2022 Page 97
s.123Notice of voluntary winding up
MODIFIED(1) Within twenty-eight days of the commencement of a voluntary winding up, the liquidator or, in the absence of any liquidator, the directors shall — (a) file notice of the winding up with the Registrar; (b) file the liquidator ’ s consent to act with the Registrar; (c) file the director ’ s declaration of solvency with the Registrar (if the supervision of the court is not sought); (d) in the case of a company carrying on a regulated business, serve notice of the winding up upon the Authority; and (e) publish notice of the winding up in the Gazette. (2) A director or liquidator who fails to comply with this section commits an offence and is liable to a fine of ten thousand dollars.
s.125Avoidance of share transfers
MODIFIEDAny transfer of shares, not being a transfer with the sanction of the liquidator, and any alteration in the status of the company ’ s members made after the commencement of a voluntary winding up is void. Section 126 Companies Act (2023 Revision) Page 98 Revised as at 31st December, 2022 c
s.127Final meeting prior to dissolution
MODIFIED(1) As soon as the company ’ s affairs are fully wound up, the liquidator shall make a report and an account of the winding up showing how it has been conducted and how the company ’ s property has been disposed of and thereupon shall call a general meeting of the company for the purpose of laying before it the account and giving an explanation for it. (2) At least twenty-one days before the meeting the liquidator shall send a notice specifying the time, place and object of the meeting to each contributory in any manner authorised by the company ’ s articles of association and published in the Gazette. (3) The liquidator shall, no later than seven days after the meeting, make a return to the Registrar in the prescribed form specifying — (a) the date upon which the meeting was held; and (b) if a quorum was present, particulars of the resolutions, if any, passed at the meeting. (4) A liquidator who fails to call a general meeting of the company as required by subsection (1) or fails to make a return as required by subsection (3) commits an offence and is liable on conviction to a fine of ten thousand dollars.
s.128Effect of winding up on share capital of company limited by guarantee
MODIFIEDWhere a company limited by guarantee and having a capital divided into shares is being wound up voluntarily, any share capital that may not have been called upon shall be deemed to be an asset of the company, and to be a specialty debt due from each member to the company to the extent of any sums that may be unpaid on any shares held by that person, and payable at such time as may be appointed by the liquidator. Companies Act (2023 Revision) Section 129 c Revised as at 31st December, 2022 Page 99
s.130Expenses of voluntary winding up
MODIFIED(1) The expenses properly incurred in the winding up, including the remuneration of the liquidator, are payable out of the company ’ s assets in priority to all other claims. (2) The rate and amount of the liquidator ’ s remuneration shall be fixed and payment authorised by resolution of the company. (3) Each report and account laid before the company in general meetings by its liquidator shall contain all such information, including the rate at which the liquidator ’ s remuneration is calculated and particulars of the work done, as may be necessary to enable the members to determine what expenses have been properly incurred and what remuneration is properly payable to the liquidator. (4) If the company fails to approve the liquidator ’ s remuneration and expenses or the liquidator is dissatisfied with the decision of the company, that person may apply to the Court which shall fix the rate and amount of that person’s remuneration and expenses. Winding up subject to the supervision of the Court
s.131Application for supervision order
MODIFIEDWhen a resolution has been passed by a company to wind up voluntarily, the liquidator or any contributory or creditor may apply to the Court for an order for the continuation of the winding up under the supervision of the Court, notwithstanding that the declaration of solvency has been made in accordance with section 124 , on the grounds that — (a) the company is or is likely to become insolvent; or Section 132 Companies Act (2023 Revision) Page 100 Revised as at 31st December, 2022 c (b) the supervision of the Court will facilitate a more effective, economic or expeditious liquidation of the company in the interests of the contributories and creditors.
s.133Effect of supervision order
MODIFIEDA supervision order shall take effect for all purposes as if it was an order that the company be wound up by the Court except that — (a) the liquidation commenced in accordance with section 117 ; and (b) the prior actions of the voluntary liquidator shall be valid and binding upon the company and its official liquidator. Offences of fraud, etc.
s.134Fraud, etc. in anticipation of winding up
MODIFIED(1) Where a company is ordered to be wound up by the Court, or passes a resolution for voluntary winding up, any person, who is or was an officer, professional service provider, voluntary liquidator, restructuring officer or controller of the company and who, within the twelve months immediately preceding the commencement of the winding up, has — (a) concealed any part of the company ’ s property to the value of ten thousand dollars or more or concealed any debt due to or from the company; (b) removed any part of the company ’ s property to the value of ten thousand dollars or more; (c) concealed, destroyed, mutilated or falsified any documents affecting or relating to the company ’ s property or affairs; (d) made any false entry in any documents affecting or relating to the company ’ s property or affairs; (e) parted with, altered or made any omission in any document affecting or relating to the company ’ s property or affairs; or Companies Act (2023 Revision) Section 135 c Revised as at 31st December, 2022 Page 101 (f) pawned, pledged or disposed of any property of the company which has been obtained on credit and has not been paid for (unless the pawning, pledging or disposal was in the ordinary way of the company ’ s business), with intent to defraud the company ’ s creditors or contributories commits an offence and is liable on conviction to a fine and to imprisonment for five years. (2) In this section — “ officer ” includes a shadow director.
s.135Transactions in fraud of creditors
MODIFIEDWhere a company is ordered to be wound up by the Court or passes a resolution for voluntary winding up, any officer, restructuring officer, controller or professional service provider of the company who — (a) has made or caused to be made any gift or transfer of, or charge on, or has caused or connived at the levying of any execution against, the company ’ s property; or (b) has concealed or removed any part of the company ’ s property, with intent to defraud the company ’ s creditors or contributories commits an offence and is liable on conviction to a fine and to imprisonment for five years.
s.136Misconduct in course of winding up
MODIFIED(1) Where a company is being wound up, whether by the Court or voluntarily, a person who is or was a director, officer, restructuring officer, controller or professional service provider of the company and who — (a) does not to the best of that person’s knowledge and belief fully and truly discover to the liquidator — (i) all the company ’ s property (except such part as has been disposed of in the ordinary way of the company ’ s business); (ii) the date on which and manner in which the company ’ s property or any part thereof property was disposed of, if it was disposed of; (iii) the persons to whom any property was transferred, if it was disposed of; or (iv) the consideration paid for any property which was disposed of; (b) does not deliver up to the liquidator or does not deliver up in accordance with the directions of the liquidator any of the company ’ s property which is in that person’s custody or under that pe rson’s control, and which that person is required by law to deliver up; (c) does not deliver up to the liquidator or does not deliver up, in accordance with the directions of the liquidator, all documents in that person’s custody Section 137 Companies Act (2023 Revision) Page 102 Revised as at 31st December, 2022 c or under that person’s control which belong to the company and which that person is required by law to deliver up; (d) knows or believes that a false debt has been proved by any person in the winding up and fails to inform the liquidator of such knowledge or belief as soon as practicable; (e) prevents the production of any document affecting or relating to the company ’ s property or affairs; or (f) destroys, mutilates, alters or falsifies any books, papers or securities, or makes or is privy to the making of any false or fraudulent entry in any register, book of account or document belonging to the company, with intent to defraud the company ’ s creditors or contributories commits an offence and is liable on conviction to a fine of twenty five thousand dollars or to imprisonment for a term of five years, or to both. (2) In this section — “ officer ” includes a shadow director.
s.137Material omissions from statement relating to company ’ s affairs
MODIFIED(1) Where a company is being wound up, whether by the Court or voluntarily, a person who is or was a director, an officer, a manager, restructuring officer, controller or a professional service provider of the company, commits an offence if that person makes any material omission in any statement relating to the company ’ s affairs, with intent to defraud the company ’ s creditors or contributories. (2) A person who commits an offence under subsection (1) is liable on conviction to a fine of twenty-five thousand dollars or to imprisonment for a term of five years, or to both. (3) In this section — “ officer ” includes a shadow director. General provisions
s.138Getting in the company ’ s property
MODIFIED(1) Where any person has in that person’s possession any property or documents to which the company appears to be entitled, the Court may require that person to pay, transfer or deliver such property or documents to the official liquidator. (2) Where the official liquidator seizes or disposes of any property which that person reasonably believed belonged to the company, that person shall not be personally liable for any loss or damage caused to its true owner except in so far as such loss or damage is caused by that person’s own negligence. Companies Act (2023 Revision) Section 139 c Revised as at 31st December, 2022 Page 103
s.140Distribution of the company ’ s property
MODIFIED(1) Subject to subsection (2), the property of the company shall be applied in satisfaction of its liabilities pari passu and subject thereto shall be distributed amongst the members according to their rights and interests in the company. (2) The collection in and application of the property of the company referred to in subsection (1) is without prejudice to and after taking into account and giving effect to the rights of preferred and secured creditors and to any agreement between the company and any creditors that the claims of such creditors shall be subordinated or otherwise deferred to the claims of any other creditors and to any contractual rights of set-off or netting of claims between the company and any person or persons (including without limitation any bilateral or any multi-lateral set-off or netting arrangements between the company and any person or persons) and subject to any agreement between the company and any person or persons to waive or limit the same. (3) In the absence of any contractual right of set-off or non set-off, an account shall be taken of what is due from each party to the other in respect of their mutual dealings, and the sums due from one party shall be set-off against the sums due from the other. (4) Sums due from the company to another party shall not be included in the account taken under subsection (3) if that other party had notice at the time they became due that a petition for the winding up of the company was pending. (5) Only the balance, if any, of the account taken under subsection (3) shall be provable in the liquidation or, as the case may be, payable to the liquidator as part of the assets.
s.142Secured creditors
MODIFIED(1) Notwithstanding that a winding up order has been made, a creditor who has security over the whole or part of the assets of a company is entitled to enforce that person’s security without the leave of the Court and without reference to the liquidator. (2) Where the liquidator sells assets on behalf of a secured creditor, that person is entitled to deduct from the proceeds of sale a sum by way of remuneration equivalent to that which is or would be payable under section 109 .
s.144Effect of execution or attachment
MODIFIED(1) Where a creditor has issued execution against the goods or land of a company or has attached any debt due to it, and the company is subsequently wound up, that person is not entitled to retain the benefit of the execution or attachment against the liquidator unless that person has completed the execution or attachment before the commencement of the winding up. (2) Notwithstanding subsection (1) — (a) where a creditor has had notice of a meeting having been called at which a resolution for voluntary winding up is to be proposed, the date on which that person had notice is substituted for the purpose of subsection (1) for the date of commencement of the winding up; (b) a person who purchases in good faith under a sale by the bailiff any goods of a company on which execution has been levied in all cases acquires a good title to them against the liquidator; and Companies Act (2023 Revision) Section 145 c Revised as at 31st December, 2022 Page 105 (c) the rights conferred by subsection (1) on the liquidator may be set aside by the Court in favour of the creditor to such extent and subject to such terms as the Court thinks fit. (3) For the purposes of this Act — (a) an execution against goods is completed by seizure and sale; (b) an execution against securities is completed upon making a charging order absolute; (c) an attachment of a debt is completed by receipt of the debt; and (d) an execution against land is completed by the registration of a charging order.
s.145Voidable preference
MODIFIED(1) Every conveyance or transfer of property, or charge thereon, and every payment obligation and judicial proceeding, made, incurred, taken or suffered by any company in favour of any creditor at a time when the company is unable to pay its debts within the meaning of section 93 with a view to giving such creditor a preference over the other creditors shall be voidable upon the application of the company’s liquidator if made, incurred, taken or suffered within six months immediately preceding the commencement of a liquidation. (2) A payment made as aforesaid to a related party of the company shall be deemed to have been made with a view to giving such creditor a preference. (3) For the purposes of this section a creditor shall be treated as a “related party” if it has the ability to control the company or exercise significant influence over the company in making financial and operating decisions.
s.146Avoidance of dispositions made at an undervalue
MODIFIED(1) In this section and section 147 — (a) “ disposition ” has the meaning ascri bed in Part VI of the Trusts Act (2021 Revision) ; (b) “ intent to defraud ” means an intention to wilfully defeat an obligation owed to a creditor; (c) “ obligation ” means an obligation or liability (which includes a contingent liability) which existed on or prior to the date of the relevant disposition; (d) “ transferee ” means the person to whom a relevant disposition is made and shall include any successor in title; and (e) “ undervalue ” in relation to a disposition of a company’ s property means — (i) the provision of no consideration for the disposition; or Section 147 Companies Act (2023 Revision) Page 106 Revised as at 31st December, 2022 c (ii) a consideration for the disposition the value of which in money or monies worth is significantly less than the value of the property which is the subject of the disposition. (2) Every disposition of property made at an undervalue by or on behalf of a company with intent to defraud its creditors shall be voidable at the instance of its official liquidator. (3) The burden of establishing an intent to defraud for the purposes of this section shall be upon the official liquidator. (4) No action or proceedings shall be commenced by an official liquidator under this section more than six years after the date of the relevant disposition. (5) In the event that any disposition is set aside under this section, then if the Court is satisfied that the transferee has not acted in bad faith — (a) the transferee shall have a first and paramount charge over the property, the subject of the disposition, of an amount equal to the entire costs properly incurred by the transferee in the defence of the action or proceedings; and (b) the relevant disposition shall be set aside subject to the proper fees, costs, pre-existing rights, claims and interests of the transferee (and of any predecessor transferee who has not acted in bad faith).
s.148Supply of utilities
MODIFIED(1) If a request is made by or with the concurrence of the liquidator (including a provisional liquidator) or a restructuring officer for the giving, after the effective date, of any of the supplies mentioned in subsection (2), the supplier — (a) may make it a condition of the giving of the supply that the liquidator (including a provisional liquidator) or restructuring officer personally guarantees the payment of any charges in respect of the supply; but (b) shall not make it a condition of the giving of the supply, or do anything which has the effect of making it a condition of the giving of the supply, Companies Act (2023 Revision) Section 149 c Revised as at 31st December, 2022 Page 107 that any outstanding charges in respect of a supply given to the company before the effective date are paid. (2) The supplies referred to in subsection (1) are — (a) a supply of electricity; (b) a supply of water; and (c) a supply of telecommunication services. (3) In this section — “ effective date ” means — (a) the date on which the provisional liquidator was appointed; (b) the date on which the winding up order was made; or (c) the date on which the restructuring officer was appointed.
s.150Currency of the liquidation
MODIFIED(1) In the case of a solvent liquidation, a company ’ s creditors are entitled to receive payment of their debts in the currency of the obligation. (2) In the case of an insolvent liquidation, a company ’ s liabilities shall be translated into the functional currency of the company at the exchange rates ruling — (a) on the date of the commencement of the voluntary liquidation; or (b) on the day upon which the winding up order is made. Section 151 Companies Act (2023 Revision) Page 108 Revised as at 31st December, 2022 c (3) For the purposes of this section the functional currency of a company is the currency of the primary economic environment in which it operated as at the commencement of the liquidation. Dissolution of a Company
s.151Dissolution following voluntary winding up
MODIFIED(1) The Registrar shall, within three days of receiving a liquidator ’ s return under section 127(3), register such return. (2) Upon the expiration of three months from the registration of the return the company is deemed to be dissolved. (3) Notwithstanding subsection (2), the Court may, on the application of the liquidator or any other person who appears to the Court to be interested, make an order deferring the date at which the dissolution of the company is to take effect to such date as the Court thinks fit. (4) An application under this section shall not be made after the company is deemed to have been dissolved. (5) An order of the Court made under this section shall be registered with the Registrar within seven days of the date upon which it was made.
s.153Unclaimed dividends and undistributed assets
MODIFIED(1) Any unclaimed dividends or undistributed assets in the possession or control of the liquidator or former liquidator of a company shall be held by that person as trustee upon trust for the benefit of the contributories or creditors to whom such funds are owed. Companies Act (2023 Revision) Section 154 c Revised as at 31st December, 2022 Page 109 (2) At the end of one year after the dissolution of the company, the former liquidator shall transfer any funds or other assets held on trust by that person to the Minister charged with responsibility for Finance who shall manage them in accordance with Part VIII of the Public Management and Finance Act (2020 Revision) . Insolvency rules and regulations
s.154Insolvency Rules Committee
MODIFIED(1) There shall be established an Insolvency Rules Committee comprising — (a) the Chief Justice or other judge nominated by the Chief Justice in that person’s place who shall be chairperson; (b) the Attorney General or that person’s nominee; (c) two attorneys-at-law appointed by the Chief Justice on the recommendation of the Cayman Islands Legal Practitioners Association; (d) a qualified insolvency practitioner appointed by the Chief Justice upon the recommendation of the Cayman Islands Institute of Professional Accountants; (e) a person appointed by the Chief Justice who, in that person’s opinion, demonstrates a wide knowledge of law, finance, financial regulation or insolvency practice; and (f) a qualified insolvency practitioner appointed by the Chief Justice on the recommendation of the Recovery and Insolvency Specialists Association. (2) The quorum of the Insolvency Rules Committee shall be the chairperson and three other members of the Committee; and the chairperson shall have a casting vote.
s.155Powers of the Insolvency Rules Committee
MODIFIED(1) The Insolvency Rules Committee shall have power — (a) to make rules and prescribe forms for the purpose of giving effect to Parts IV, V and XVI; (b) to prescribe court fees to be paid in connection with — (i) applications under Part IV; (ii) winding up proceedings under Part V; and (iii) applications under Part XVI; and (c) to make rules for the purpose of specifying — (i) the qualifications which must be held by a person appointed to the office of official liquidator; Section 156 Companies Act (2023 Revision) Page 110 Revised as at 31st December, 2022 c (ii) persons who are disqualified from holding office as official liquidator either generally or in relation to a particular company which is not in liquidation before the court; (iii) the nature and scope of professional indemnity insurance, if any, required to be held by persons appointed to the office of official liquidators; and (iv) the nature and scope of security bonds, if any, required to be posted by persons appointed to the office of official liquidator. (2) The Insolvency Rules Committee, after consultation with the Authority and with any organisation representing insolvency practitioners in the Islands, shall make rules prescribing the rates of fees which may be charged by an official liquidator.
s.158Registrar to publish fact of company being struck off register
MODIFIEDThe Registrar shall immediately publish a Government Notice to the effect that the company in question has been struck off the register, the date on which it has been struck off and the reason therefor. Such notice shall be gazetted. Companies Act (2023 Revision) Section 159 c Revised as at 31st December, 2022 Page 111 159. Company, creditor or member may apply to court for company to be reinstated 159 . If a company or any member or creditor thereof feels aggrieved by the company having been struck off the register in accordance with this Law, the Court on the application of such company, member or creditor made within two years or such longer period not exceeding ten years as the Cabinet may allow of the date on which the company was so struck off, may, if satisfied that the company was, at the time of the striking off thereof, carrying on business or in operation, or otherwise, that it is just that the company be restored to the register, order the name of the company to be restored to the register, on payment by the company of a reinstatement fee equivalent to the original incorporation or registration fee and on such terms and conditions as to the Court may seem just, and thereupon the company shall be deemed to have continued in existence as if its name had not been struck off; and the Court may, by the same or any subsequent order, give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off.
s.163What companies may apply to be registered as exempted companies
MODIFIEDAny proposed company applying for registration under this Law, the objects of which are to be carried out mainly outside the Islands or pursuant to a licence to carry on business in the Islands to which section 174 refers, may apply to be registered as an exempted company. Section 164 Companies Act (2023 Revision) Page 112 Revised as at 31st December, 2022 c
s.167Repealed
MODIFIEDRepealed by section 3 of the Companies (Amendment) Act, 2016 [Law 3 of 2016] .
s.170Failure to comply with section 168 or 169
MODIFIEDAny exempted company which fails to comply with section 168 or 169 shall be deemed to be a defunct company and shall thereupon be dealt with as such under Part VI but without prejudice to its being registered again as though it were being registered for the first time.
s.174Prohibited enterprises
MODIFIED(1) An exempted company shall not carry on a trade or business in the Islands with any person, except in furtherance of the business of the exempted company carried on outside of the Islands, unless that exempted company holds a licence to carry on business in the Islands under any applicable law. (2) Nothing in this section shall be construed so as to prevent an exempted company effecting and concluding contracts in the Islands and exercising in the Islands all its powers necessary for the carrying on of its business outside the Islands. Section 175 Companies Act (2023 Revision) Page 114 Revised as at 31st December, 2022 c (3) An exempted company that holds a licence to carry on business in the Islands under any applicable law, shall from the date of issue of such licence, continue for all purposes as if incorporated and registered as an ordinary resident company under and subject to this Act the provisions of which shall apply to the company and to persons and matters associated with the company as if the company were incorporated and registered under this Act except as provided in section 7(1)(a), 8(1) and (4), 13(1)(a), 26(3), 30(3), 31(1), 41(2), 42, 50(2), 166 , 169 , 175 or 252(2).
s.175Prohibited sale of securities
MODIFIEDAn exempted company that is not listed on the Cayman Islands Stock Exchange is prohibited from making any invitation to the public in the Islands to subscribe for any of its securities.
s.179Registration as an exempted limited duration company
MODIFIED(1) The Registrar shall register as an exempted limited duration company an exempted company that has made application under section 178 if — (a) the company has at least two subscribers or two members; (b) where the company was not already registered as a company prior to the application — (i) the memorandum of association of the company limits the duration of the company to a period of thirty years or less; and (ii) the name of the company includes at its end “Limited Duration Company” or “LDC”; and (c) where the company was already registered as a company prior to the application — (i) the Registrar has been supplied, where the duration of the company is not already limited to a period of thirty years or less with a certified copy of a special resolution of the company altering its memorandum of association to limit the duration of the company to a period of thirty years or less; and (ii) the Registrar has been supplied, in accordance with section 31 , with a copy of a special resolution of the company changing its name to a name that includes at its end “Limited Duration Company” or “LDC”. (2) On registering an exempted company as an exempted limited duration company the Registrar shall — (a) in the case of a company referred to in paragraph (b) of subsection (1), certify in the certificate of incorporation issued in accordance with section 27(3) or the certificate of registration by way of continuation issued in accordance with section 201(1) that the company is registered as an exempted limited duration company; and (b) in the case of a company referred to in paragraph (c) of subsection (1), certify in the certificate of incorporation issued in accordance with section 31(2) that the company is registered as an exempted limited duration company stating the date of such registration. (3) A special resolution passed for the purpose of paragraph (c)(ii) of subsection (1) has no effect until the company is registered as an exempted limited duration company. Section 180 Companies Act (2023 Revision) Page 116 Revised as at 31st December, 2022 c
s.180Contents of articles of association
MODIFIED(1) The articles of association of an exempted limited duration company may provide that the transfer of any share or other interest of a member of the company requires the unanimous resolution of all the other members. (2) The articles of association of an exempted limited duration company may provide that the management of the company is vested in the members of the company either equally per capita or in proportion to their share or other ownership interest in the company or in such other manner as may be specified in the articles of association. (3) Where the articles of association of an exempted limited duration company contain the provision referred to in subsection (2), the members of the company are to be considered to be the directors of the company but with power, if so provided by the articles of association, to delegate the management to a board of directors.
s.181Cancellation of registration
MODIFIED(1) A company ceases to be an exempted limited duration company if — (a) the Registrar issues a certificate under section 207 on deregistration of the company; (b) the Registrar issues a certificate of incorporation in accordance with section 31(2) which records a change of name for the company that does not include at its end “Limited Duration Company” or “LDC”; or (c) the company passes a special resolution in accordance with section 10 to alter its memorandum of association to provide for a period of duration of the company that exceeds or is capable of exceeding thirty years, and in the case of paragraph (b) or (c), the company pays a deregistration fee of four hundred dollars. (2) On a company ceasing to be an exempted limited duration company — (a) the Registrar shall, where the company has ceased to be an exempted limited duration company by virtue of paragraph (b) or (c) of subsection (1), issue to the company a certificate of incorporation altered to meet the circumstances of the case; and (b) in all cases the certificate issued by virtue of section 179(2) ceases to have effect. (3) A special resolution passed for the purpose of paragraph (c) of subsection (1) has no effect until a certificate of incorporation is issued by the Registrar under paragraph (a) of subsection (2). Companies Act (2023 Revision) Section 182 c Revised as at 31st December, 2022 Page 117
s.182Electronic business by exempted limited duration companies
MODIFIEDNothing in this Act shall prohibit an exempted limited duration company from offering, by electronic means, and subsequently supplying, real or personal property, services or information from a place of business in the Islands or through an internet service provider or other electronic service provider located in the Islands. PART VIIIA - Special Economic Zone Companies 182A. Exempted company may apply to be registered as a special economic zone company 182A .(1) An exempted company that does not hold a licence to carry on business in the Islands to which section 174 refers may, at any time, apply to the Registrar to be registered as a special economic zone company. (2) An application may also be made under subsection (1) at the same time as an application is made — (a) to register a proposed company as an exempted company; (b) to re-register an ordinary non-resident company as an exempted company; or (c) to register a company by way of continuation as an exempted company. (3) An application under subsection (1) shall be accompanied by a fee which shall be equal to the lowest band of the annual fee payable by an exempted company under section 169(1) as specified in paragraph (a) of Part 4 of
s.184Documents, etc., to be delivered to Registrar by foreign companies
MODIFIED(1) Every foreign company shall, within one month after becoming a foreign company as defined in section 183 , deliver to the Registrar for registration the following — (a) a certified copy of the foreign company ’ s certificate of formation or incorporation, or the equivalent document issued by the relevant authority as evidence of its formation or incorporation; (b) a certificate of good standing issued by the relevant authority (or a certified copy thereof), or, if the relevant authority does not issue such certificates of good standing, a declaration signed by a director of the foreign company that the foreign company is in good standing with the relevant authority, in either case, dated no earlier than one month prior to the date of its delivery to the Registrar; (c) a certified copy of any charter, bye-laws or memorandum or articles of association or other constitutional document (howsoever called) of the foreign company that is required to be filed with the relevant authority under the laws of the relevant jurisdiction in connection with the incorporation or formation of the foreign company; (d) a list of its directors, containing such particulars with respect to the directors as are by this Act required to be contained with respect to directors in the register of the directors of a company; and (e) the names and addresses of some one or more than one person resident in the Islands authorised to accept on its behalf service of process and any notices required to be served on it, and shall pay to the Registrar the fee specified in Part 5 of
s.185Power of certain foreign companies to hold land
MODIFIED(1) An overseas company shall not have power to hold land in the Islands except where it is a foreign company which has delivered to the Registrar documents, particulars and fees specified in section 184 . (2) If an overseas company which is not a foreign company holds land in the Islands or if a foreign company ceases to carry on, or have a place of business in the Islands or ceases to be a foreign company or fails to comply with this Part, the Cabinet may, whenever it appears to it to be necessary in the public interest, order the overseas company to transfer any lands held by, vested in or belonging to it to a person capable of holding such lands and of being registered as proprietor thereof under the Registered Land Act (2018 Revision) . (3) If an overseas company fails to comply with an order under subsection (2), the Registrar may apply to the Court for an order that the land shall vest in the Minister charged with responsibility for Finance for the benefit of the Islands and be subject to the disposition of the Cabinet, and the Court may order accordingly. (4) An order under subsection (2), and any order or proceedings required by the Court to be served in respect of an application under subsection (3) shall be served by personal service on a person, if any, whose name and address has been delivered by the company to the Registrar under paragraph (e) of section 184(1): Provided that, in the event any such order or proceedings may not be served by such personal service, it or they may be served by — (a) personal service on the attorney holding a power of attorney whereunder that person is authorised to accept service of orders and proceedings of the Court; (b) sending it by registered post to the overseas company at its usual or last known postal address in the Islands; (c) leaving it at the last known place of business of the overseas company in the Islands; (d) publication in three consecutive issues of the Gazette; Companies Act (2023 Revision) Section 186 c Revised as at 31st December, 2022 Page 121 (e) publication in three consecutive issues of a newspaper published and circulating in the Islands; or (f) displaying it in a prominent position on the lands and causing it to be kept so displayed for one month. (5) In this section — “ hold land ” bears the meaning ascribed to that expression in section 32(3).
s.186Registration of foreign companies
MODIFIED(1) Upon compliance with section 184 , the Registrar shall issue a certificate under that person’s hand and seal of office that the foreign company is registered under this Law. (2) A certificate of registration of a foreign company issued under subsection (1) shall be conclusive evidence that compliance has been made with all requirements of this Act in respect of registration.
s.187Return to be delivered to Registrar where documents etc., altered
MODIFIEDIf, in the case of any foreign company, an alteration is made in or to any document or other information filed with the Registrar pursuant to section 184(1) (other than a document referred to in section 184(1)(b)) the foreign company shall, within thirty days after the date of such alteration, deliver to the Registrar for registration a return containing the particulars of the alteration. 188. Obligation to state name of foreign company, whether limited, and country where formed or incorporated 188 . Every foreign company shall — (a) in every prospectus inviting subscriptions for its shares or debentures in the Islands state the country in which the foreign company is formed or incorporated; (b) conspicuously exhibit on every place where it carries on business in the Islands the name of the foreign company and the country in which the foreign company is formed or incorporated; (c) cause the name of the foreign company and of the country in which it is formed or incorporated to be stated in legible characters on all bill heads, letter paper, notices, advertisements and other official publications; and (d) if the liability of the members of the foreign company is limited, cause notice of that fact to be stated in every such prospectus as aforesaid and on all bill heads, letter paper, notices, advertisements and other official publications in the Islands, and to be affixed on every place where it carries on its business in the Islands. Section 189 Companies Act (2023 Revision) Page 122 Revised as at 31st December, 2022 c
s.189Service on foreign company to which this Part applies
MODIFIEDAny process or notice required to be served on a foreign company shall be sufficiently served if addressed to any person whose name has been delivered to the Registrar under sections 184 or 187 and left at or sent by post to the address which has been so delivered: Provided that — (a) where any such foreign company makes default in delivering to the Registrar the name and address of a person resident in the Islands who is authorised to accept on behalf of the foreign company service of process or notices; or (b) if, at any time, all the persons whose names and addresses have been so delivered are dead or have ceased so to reside, or refuse to accept service on behalf of the company, or for any reason cannot be served, a document may be served on the foreign company by leaving it at or sending it by post to any place of business established by the foreign company in the Islands.
s.191Execution of deeds, etc.
MODIFIED(1) An overseas company may appoint and empower a person either generally or in respect of a specified matter, to execute deeds or instruments under seal on its behalf. (2) Any appointment under subsection (1) need not be made by deed or instrument under seal, but any person so appointed otherwise than by deed or instrument under seal shall not constitute the donee of a power under the Powers of Attorney Act (1996 Revision) (but without prejudice to the authority otherwise conferred upon them by the overseas company). (3) A deed or instrument under seal, signed by a person on behalf of an overseas company pursuant to authority conferred pursuant to subsection (1), shall be binding on that overseas company and shall have effect as if it were executed as such by the overseas company. Companies Act (2023 Revision) Section 192 c Revised as at 31st December, 2022 Page 123
s.193Penalties for failing to comply with this Part
MODIFIEDWhenever any foreign company fails to comply with any of the foregoing provisions of this Part, it and every officer or agent of it, commits an offence and is liable to a fine of one hundred dollars or, in the case of a continuing offence, a further fine of ten dollars for every day during which the default continues.
s.194Definitions in this Part
MODIFIED(1) In this Part — “ certified copies ” includes copies (whether in the form of an electronic record or otherwise) certified as true copies of the originals by — (a) the relevant authority; (b) a notary public in the relevant jurisdiction or in the Islands; or (c) a person qualified to practise law in the relevant jurisdiction or in the Islands, or (d) any other person acceptable to the Registrar; “ director ” i n relation to a foreign company, means any director, officer, member or other person (howsoever called) in whom the management of the foreign company is vested; “ electronic record ” has the same meaning as in Part I of the Electronic Transactions Act (2003 Revision) ; “ excluded share transfer or share registration office ” means a share transfer or share registration office provided within the Islands by a person licensed or registered to do so under the regulatory laws; “ place of business ” includes a share tr ansfer or share registration office (except an excluded share transfer or share registration office); “ relevant authority ” in respect of a foreign company, means the national, state or local government authority, registry or other body in the relevant jurisdiction that is responsible for forming or incorporating the foreign company; and Section 195 Companies Act (2023 Revision) Page 124 Revised as at 31st December, 2022 c “ relevant jurisdiction ” means the jurisdiction in which the foreign company has been formed or incorporated. (2) In this Part, an overseas company shall not be deemed to have established or to have commenced carrying on business within the Islands solely by reason of having an excluded share transfer or share registration office.
s.195Power of Registrar to prohibit sale
MODIFIEDThe Registrar may, at any time and from time to time, prohibit the sale of any shares or debentures of any foreign company in the Islands or any invitation in the Islands to subscribe for any shares or debentures of a foreign company, and in the event of any violation by a foreign company of such prohibition the foreign company and each of its directors and officers is liable on summary conviction to a fine of one thousand dollars and, in default of payment by any director or officer, to imprisonment for three months.
s.198Articles of association remain
MODIFIEDThe articles of association of an existing company shall, so far as the same are not contrary to any express provisions of this Law, remain in force until altered or rescinded. Companies Act (2023 Revision) Section 199 c Revised as at 31st December, 2022 Page 125
s.200Express fees
MODIFIED(1) The Registrar, on receipt of — (a) an application for registration under section 26 , 178 , 184 , 201 , 233, or 237 ; (b) an application for re-registration under section 210 ; (c) an application for the registration of a change of name under section 31 ; or (d) an application for any other certificate which the Registrar is authorised to provide under this Law, which is accompanied by an express fee of an amount specified in subsection (2), shall complete the transaction for which the application has been made by — (i) the end of the working day, where the application and all fees are received by 12 noon; or (ii) 12 noon on the following working day, where the application and all fees are received after 12 noon. (2) The express fee referred to in subsection (1) is — (a) for an application referred to in paragraph (a) or (b) of subsection (1)- $400; and Section 200A Companies Act (2023 Revision) Page 126 Revised as at 31st December, 2022 c (b) for an application referred to in paragraph (c) or (d) of subsection (1)- $100. 200A. Certificate of good standing 200A .(1) The Registrar may on application made by a company issue a certificate of good standing to a company that is in good standing in accordance with subsection (2). (2) A certificate of good standing is evidence of the fact that the company is in good standing on the date that the certificate of good standing is issued. (3) A company shall be deemed to be in good standing if all fees and penalties under this Act have been paid and the Registrar has no knowledge that the company is in default under this Law.
s.201Application for continuation
MODIFIED(1) A body corporate incorporated, registered or existing with limited liability and a share capital under the laws of any jurisdiction outside the Islands (which body corporate is in this Part referred to as a “registrant”) may apply to the Registrar to be registered by way of continuation as an exempted company limited by shares under this Law. (2) The Registrar shall register a registrant if — (a) the registrant is incorporated, registered or existing in a jurisdiction whose laws permit or do not prohibit the transfer of the registrant in the manner hereinafter provided in this Part (hereinafter in this section referred to as “a relevant jurisdiction”); (b) the registrant has paid to the Registrar a fee equal to the fee payable on the registration of an exempted company under section 26 ; (c) the registrant has delivered to the Registrar the documents listed in paragraphs (a) to (d) of section184(1) (in this Part referred to as “the charter documents”); (d) the name of the registrant is acceptable to the Registrar under section 30 or the registrant has undertaken to change the name to an acceptable name within sixty days of registration; (e) the registrant has filed with the Registrar notice of the address of its proposed registered office in the Islands; (f) the registrant has filed with the Registrar a declaration signed by a director of the registrant that the operations of the registrant will be conducted mainly outside the Islands; Companies Act (2023 Revision) Section 201 c Revised as at 31st December, 2022 Page 127 (g) no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the registrant in any jurisdiction; (h) no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the registrant, its affairs or its property or any part thereof; (i) no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the registrant are and continue to be suspended or restricted; (j) the registrant is able to pay its debts as they fall due; (k) the application for registration is bona fide and not intended to defraud existing creditors of the registrant; (l) the registrant has delivered to the Registrar an undertaking signed by a director of the registrant that notice of the transfer has been or will be given within twenty-one days to the secured creditors of the registrant; (m) any consent or approval to the transfer required by any contract or undertaking entered into or given by the registrant has been obtained, released or waived, as the case may be; (n) the transfer is permitted by and has been approved in accordance with the charter documents of the registrant; (o) the laws of the relevant jurisdiction with respect to transfer have been or will be complied with; (p) the registrant is constituted in a form or substantially a form which could have been incorporated as an exempted company limited by shares under this Law; (q) the registrant will, upon registration hereunder, cease to be incorporated, registered or exist under the laws of the relevant jurisdiction; (r) the registrant, if it is (or will when registered by way of continuation be) prohibited from carrying on its business in or from within the Islands unless licensed under any law, has applied for and obtained the requisite licence; and (s) the Registrar is not aware of any other reason why it would be against the public interest to register the registrant. (3) Paragraphs (g), (h), (i), (j), (k), (m), (n), (o) and (q) of subsection (2) shall be satisfied by filing with the Registrar a declaration or affidavit of a director of the registrant to the effect that, having made due enquiry, that person is of the opinion that the requirements of those paragraphs have been met, and which declaration or affidavit shall include a statement of the assets and liabilities of the registrant made up to the latest practicable date before making the declaration or affidavit. Section 201 Companies Act (2023 Revision) Page 128 Revised as at 31st December, 2022 c (4) A person who, being a director, makes a declaration or affidavit under subsection (3) without reasonable grounds therefor commits an offence and is liable on summary conviction to a fine of fifteen thousand dollars and to imprisonment for five years. (5) Without prejudice to Part IX, a registrant may apply to be provisionally registered by way of continuation as an exempted company limited by shares under this Law. (6) The Registrar shall provisionally register a registrant if — (a) the registrant complies with the requirements of paragraphs (a), (c), (e), (f), (g), (h), (i), (j) and (p) of subsection (2); and (b) the registrant has paid to the Registrar a fee of one thousand five hundred dollars. (7) Paragraphs (g), (h), (i), (j) and (p) of subsection (2) shall be satisfied by filing with the Registrar a declaration or affidavit of a director of the registrant to the effect that, having made due enquiry, that person is of the opinion that the requirements of those paragraphs have been met, and subsection (4) shall, mutatis mutandis apply with respect to such declaration or affidavit. (8) The Registrar shall register a registrant which is provisionally registered under this Part upon the requirements of paragraphs (b), (d), (k), (l), (m), (n), (o), (q), (r) and (s) of subsection (2) being met, as to which subsection (3) shall, mutatis mutandis , apply where relevant. (9) A registrant which is provisionally registered shall — (a) within sixty days after registration, deliver, to the Registrar details of any changes in the information required by paragraphs (c) and (e) of subsection (2); (b) file with the Registrar in January of each year following provisional registration, a declaration or affidavit in the form described in subsection (7); and (c) pay to the Registrar in January of each year following provisional registration, a fee of one thousand dollars. (10) A registrant which is provisionally registered and which fails to comply with paragraphs (b) and (c) of subsection (9) by 30th June in such year shall cease to be provisionally registered but without prejudice to being provisionally registered anew hereunder upon complying with the requirements of this Part. Companies Act (2023 Revision) Section 202 c Revised as at 31st December, 2022 Page 129
s.202Registration under this Part
MODIFIED(1) Upon registration of a registrant under this Part, the Registrar shall issue a certificate under that person’s hand and seal of office that the registrant is registered by way of continuation as an exempted company and specifying the date of such registration, and section 27(3) shall apply, mutatis mutandis , to such certificate. (2) The Registrar shall enter in the register of companies the date of registration of the registrant and, to the extent possible with respect to the registrant, particulars of the matters specified. (3) From the date of registration of the registrant it shall continue as a body corporate for all purposes as if incorporated and registered as an exempted company under and subject to this Act the provisions of which shall apply to the company and to persons and matters associated therewith as if such company were so incorporated and registered and such company shall have, but without limitation to the generality of the foregoing — (a) the capacity to perform all the functions of an exempted company; (b) the capacity to sue and to be sued; (c) perpetual succession; and (d) the power to acquire, hold and dispose of property, and the members of the company shall have such liability to contribute to the assets of the company in the event of its being wound up under this Act as is provided therein: Provided always that section 201 and this section shall not operate — (e) to create a new legal entity; (f) to prejudice or affect the identity or continuity of the registrant as previously constituted; (g) to affect the property of the registrant; (h) to affect any appointment made, resolution passed or any other act or thing done in relation to the registrant pursuant to a power conferred by any of the charter documents of the registrant or by the laws of the jurisdiction under which the registrant was previously incorporated, registered or existing; (i) except to the extent provided by or pursuant to this Part, to affect the rights, powers, authorities, functions and liabilities or obligations of the registrant or any other person; or (j) to render defective any legal proceedings by or against the registrant and any legal proceedings that could have been continued or commenced by or against the registrant before its registration hereunder may, Section 203 Companies Act (2023 Revision) Page 130 Revised as at 31st December, 2022 c notwithstanding the registration, be continued or commenced by or against the registrant after registration. (4) Upon provisional registration of a registrant under this Part the Registrar shall issue a certificate under that person’s hand and seal of office that the registrant is provisionally registered by way of continuation as an exempted company and specifying the date of such provisional registration. (5) The Registrar shall enter in a register maintained for the purpose the date of provisional registration and name of the registrant. (6) If a registrant which is provisionally registered under this Part is registered pursuant to section 201(2) it shall automatically cease to be provisionally registered and the Registrar shall cancel such provisional registration. (7) Subsection (3) shall not apply to a registrant which is provisionally registered unless and until it is registered under section 201(2), and nothing in this section shall be construed as enabling a registrant which is provisionally registered to carry on business within the Islands unless it complies with the requirements of Part IX.
s.203Amendment, etc., of charter documents
MODIFIED(1) A registrant shall, within ninety days of registration by special resolution passed in accordance with this Law, make such amendments, alterations, modifications, variations, deletions and additions (in this section referred to as “changes”), if any, to its charter documents as are necessary to ensure that they comply with the requirements of this Act as they relate to an exempted company. (2) Within ninety days of registration, the registrant — (a) may, instead of passing a special resolution making the changes required by subsection (1); or (b) shall, whether or not it has passed such a special resolution making, or purporting to make, such changes, if the Registrar so directs, apply to the Court for an order approving such changes and the Court, if satisfied that the changes (with such modifications, if any, as it considers appropriate) are necessary to ensure that the charter documents of the registrant comply with the requirements of this Law, may approve them accordingly and make such consequential orders as it thinks fit. Changes, when so approved, shall take effect as if they formed part of the charter documents. (3) A copy of the special resolution passed under subsection (1) or of the order of the Court made under subsection (2) shall be filed with and registered by the Registrar whose certificate of registration thereof shall be conclusive evidence that the charter documents comply with the requirements of this Law. Companies Act (2023 Revision) Section 204 c Revised as at 31st December, 2022 Page 131 (4) After registration of the registrant and until such time as the charter documents of the registrant are changed to comply with the requirements of this Act or to the extent they cannot be changed so to comply, this Act shall prevail. (5) The provisions of the charter documents of a registrant which would, if the company had been incorporated under this Law, have been required by this Act to be included in its memorandum of association shall be deemed to be the registered memorandum of association of the company and the provisions of the charter documents that do not by virtue of the foregoing constitute the registered memorandum of association shall be deemed to be the registered articles of association of the company, and the company and its members shall be bound thereby accordingly.
s.204Effect of registration under this Part on companies registered under Part IX
MODIFIEDWhere a registrant is also registered as a foreign company under Part IX it shall, upon registration under Part XII, automatically cease to be registered under Part IX and the Registrar shall cancel such registration.
s.205Notice of registration, etc., to be given in Gazette
MODIFIEDThe Registrar shall forthwith give notice in the Gazette of the registration of a registrant under this Part, the jurisdiction under whose laws the registrant was previously incorporated, registered or existing and the previous name of the registrant if different from the current name. 206. Deregistration of exempted companies including companies registered under this Part 206 . (1) An exempted company incorporated and registered with limited liability and a share capital under this Law, including a company registered by way of continuation under this Part, which proposes to be registered by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside the Islands (hereinafter called an “applicant”) may apply to the Registrar to be deregistered in the Islands. (2) The Registrar shall so deregister an applicant if — (a) the applicant proposes to be registered by way of continuation in a jurisdiction which permits or does not prohibit the transfer of the applicant in the manner provided in this part (hereinafter in this section referred to as “a relevant jurisdiction”); (b) the applicant has paid to the Registrar a fee equal to three times the annual fee that would have been payable pursuant to section 169 in the January immediately preceding the application for deregistration by an exempt company having the same registered capital as the applicant on the date of that application; Section 206 Companies Act (2023 Revision) Page 132 Revised as at 31st December, 2022 c (c) the applicant has filed with the Registrar notice of any proposed change in its name and of its proposed registered office or agent for service of process in the relevant jurisdiction; (d) no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the applicant in any jurisdiction; (e) no receiver, trustee or administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the applicant, its affairs or its property or any part thereof; (f) no scheme, order, compromise or other similar arrangement has been entered into or made whereby the rights of creditors of the applicant are and continue to be suspended or restricted; (g) the applicant is able to pay its debts as they fall due; (h) the application for deregistration is bona fide and not intended to defraud creditors of the applicant; (i) the applicant has delivered to the Registrar an undertaking signed by a director that notice of the transfer has been or will be given within twenty- one days to the secured creditors of the applicant; (j) any consent or approval to the transfer required by any contract or undertaking entered into or given by the applicant has been obtained, released or waived, as the case may be; (k) the transfer is permitted by and has been approved in accordance with the memorandum and articles of association of the applicant; (l) the laws of the relevant jurisdiction with respect to transfer have been or will be complied with; (m) the applicant, if licensed under the Banks and Trust Companies Act (2021 Revision) , or the Insurance Act, 2010 [Law 32 of 2010] or, if so previously licensed and in respect of which such licence shall have been suspended or revoked and not reinstated, has obtained consent of the Authority to the transfer; (n) the applicant will upon registration under the laws of the relevant jurisdiction continue as a body corporate limited by shares; and (o) the Registrar is not aware of any other reason why it would be against the public interest to deregister the applicant. (3) Paragraphs (d), (e), (f), (g), (h), (j), (k), (l) and (n) of subsection (2) shall be satisfied by filing with the Registrar a declaration or affidavit of a director of the applicant to the effect that, having made due enquiry, that person is of the opinion that the requirements of those paragraphs have been met and which declaration or affidavit shall include a statement of the assets and liabilities of Companies Act (2023 Revision) Section 207 c Revised as at 31st December, 2022 Page 133 the applicant made up to the latest practicable date before the making of the declaration or affidavit. (4) A person who, being a director, makes a declaration or affidavit under subsection (3) without reasonable grounds therefor commits an offence and is liable on summary conviction to a fine of fifteen thousand dollars and to imprisonment for five years.
s.207Certification of deregistration, etc.
MODIFIED(1) Upon deregistration of an applicant under this Part, the Registrar shall issue a certificate under that person’s hand and seal of office that the applicant has been deregistered as an exempted company and specifying the date of such deregistration. (2) The Registrar shall enter in the register of companies the date of deregistration of the applicant. (3) From the commencement of the date of deregistration the applicant shall cease to be a company for all purposes under this Act and shall continue as a company under the laws of the relevant jurisdiction: Provided always that this shall not operate — (a) to create a new legal entity; (b) to prejudice or affect the identity or continuity of the applicant as previously constituted; (c) to affect the property of the applicant; (d) to affect any appointment made, resolution passed or any other act or thing done in relation to the applicant pursuant to a power conferred by the memorandum and articles of association of the applicant or by the laws of the Islands; (e) except to the extent provided by or pursuant to this Part to affect the rights, powers, authorities, functions and liabilities or obligations of the applicant or any other person; or (f) to render defective any legal proceedings by or against the applicant, and any legal proceedings that could have been continued or commenced by or against the applicant before its deregistration hereunder may, notwithstanding the deregistration, be continued or commenced by or against the applicant after deregistration.
s.208Application of Part IX to deregistered companies
MODIFIEDPart IX shall, where relevant, apply to any company which is deregistered under this Part. Section 209 Companies Act (2023 Revision) Page 134 Revised as at 31st December, 2022 c
s.210Ordinary non-resident company may be re-registered as exempted company
MODIFIED(1) Subject to this section and section 211 , an ordinary non-resident company may be re-registered as an exempted company if — (a) the company passes a special resolution that it should be so re- registered; and (b) an application for re-registration is delivered to the Registrar together with the necessary documents. (2) Such special resolution shall — (a) make such alterations in the company ’ s memorandum of association as are necessary to bring it in substance and in form into conformity with the requirements of this Act with respect to the memorandum of association of an exempted company; and (b) make such alterations in the company ’ s articles of association as are requisite in the circumstances. (3) Such application shall be signed by a director of the company, and accompanied by — (a) a copy of the memorandum and articles as altered by the special resolution; and (b) a declaration by a director of the company that the operation of the company will be conducted mainly outside the Islands. (4) A special resolution that an ordinary non-resident company be re-registered as an exempted company may change the company ’ s name to any name by which an exempted company could be registered. (5) The application shall be accompanied by a re-registration fee equal to the fee payable on the registration of an exempted company under section 26 . Companies Act (2023 Revision) Section 211 c Revised as at 31st December, 2022 Page 135
s.211Effect of re-registration of ordinary non-resident company as an exempted company
MODIFIED(1) If, on an application under section 210 , the Registrar is satisfied that an ordinary non-resident company may be re-registered under that section as an exempted company, that person shall — (a) retain the application and other documents delivered to that person under the section; and (b) issue to the company a certificate of re-registration stating that the company has been re-registered as an exempted company. (2) Upon the issue to a company of a certificate of re-registration under this section — (a) the company, by virtue of the issue of that certificate, becomes an exempted company; and (b) any alterations in the memorandum and articles set out in the special resolution take effect accordingly: Provided that the foregoing shall not operate — (i) to create a new legal entity; (ii) to prejudice or affect the identity or continuity of the company; (iii) to affect the property of the company; (iv) to affect any appointment made, resolution passed or any other act or thing done in relation to the company pursuant to a power conferred by the memorandum and the articles of association of the company or by the laws of the Islands; (v) to affect the rights, powers, authorities, functions and liabilities or obligations of the company or any other person; or (vi) to render defective any legal proceedings by or against the company, and legal proceedings that could have been continued or commenced by or against the company before its re-registration hereunder may, notwithstanding the re-registration, be continued or commenced by or against the company after re-registration. (3) The certificate of re-registration is conclusive evidence — (a) that the requirements of this Act in respect of registration and of matters precedent and incidental thereto have been complied with; and (b) that the company is an exempted company. Section 212 Companies Act (2023 Revision) Page 136 Revised as at 31st December, 2022 c
s.212Definitions in this Part
MODIFIEDIn this Part — “ receiver ” means the person sp ecified in a receivership order for the purposes specified in section 224(3); “ receivership order ” means an order made under section 224(1); “ segregated portfolio company ” means an exempted company which is registered under section 213(1); “ segregated portfolio shares ” means shares issued under section 217(1); “ segregated portfolio share capital ” means the proceeds of the issue of segregated portfolio shares; and “ segregated portfolio share dividend ” means a dividend paid under section 217(3).
s.213Applications for registration
MODIFIED(1) Subject to subsection (2) and section 214 , any exempted company may apply to the Registrar to be registered as a segregated portfolio company. (2) Nothing in this Part shall derogate from the Authority ’ s powers to determine, where relevant, whether a segregated portfolio company is suitable to be licensed under the regulatory laws. (3) An application may also be made under subsection (1) at the same time as application is made — (a) to re-register an ordinary non-resident company as an exempted company; (b) to register a company by way of continuation as an exempted company; or (c) to register as an exempted limited duration company. (4) An application under subsection (1) shall, in addition to any other fee that may be payable, be accompanied by the fee specified in Part 7 of
s.214Conversions of existing companies
MODIFIED(1) Where an exempted company has been registered prior to an application under section 213(1) the company shall — (a) file with the Registrar a declaration made by at least two directors setting out an accurate statement — (i) of the assets and liabilities of the company as at a date within three months prior to the date of the declaration; (ii) of any transaction or event which, as at the date of the declaration, has occurred or is expected to occur between the date of the statement of assets and liabilities prepared pursuant to subparagraph (i) and the date of registration of the company as a segregated portfolio company which, if it had occurred before the date of the declaration, would have caused material changes to the assets and liabilities disclosed in the declaration; (iii) that the segregated portfolio company intends to operate, and the assets and liabilities which the company proposes to transfer to each of those segregated portfolios; (iv) that, on registration as a segregated portfolio company, the company and each segregated portfolio will be solvent; (v) that each creditor of the company has consented in writing to the transfer of assets and liabilities into segregated portfolios or alternatively that adequate notice has been given in accordance with subsection (2) to all creditors of the company and that ninety-five per cent by value of the creditors have consented to that transfer of assets and liabilities into segregated portfolios; (b) pass a special resolution authorising the transfer of assets and liabilities into segregated portfolios and attach a copy of such resolution to the declaration in subparagraph (a); and (c) where the company is licensed by the Authority under the regulatory laws, obtain the written consent of the Authority and attach a copy of such consent to the declaration referred to in paragraph (a). (2) For the purposes of subsection (1)(a)(v), adequate notice is given if notice in writing is sent to each creditor having a claim against the company exceeding one thousand dollars. Section 215 Companies Act (2023 Revision) Page 138 Revised as at 31st December, 2022 c (3) A director who makes a declaration under subsection (1)(a) without reasonable grounds or who knowingly makes a false declaration commits an offence and is liable on summary conviction to a fine of five thousand dollars or to imprisonment for one year. (4) For the avoidance of doubt, the provisions of the Fraudulent Dispositions Act (1996 Revision) shall not apply to an initial transfer of assets and liabilities into segregated portfolios pursuant to an application under section 213(1).
s.216Segregated portfolios
MODIFIED(1) A segregated portfolio company may create one or more segregated portfolios in order to segregate the assets and liabilities of the segregated portfolio company held within or on behalf of a segregated portfolio from the assets and liabilities of the segregated portfolio company held within or on behalf of any other segregated portfolio of the segregated portfolio company or the assets and liabilities of the segregated portfolio company which are not held within or on behalf of any segregated portfolio of the segregated portfolio company. (2) A segregated portfolio company shall be a single legal entity and any segregated portfolio of or within a segregated portfolio company shall not constitute a legal entity separate from the segregated portfolio company. (3) Each segregated portfolio shall be separately identified or designated and shall include in such identification or designation the words “Segregated Portfolio” or “SP” or “S.P.”.
s.217Shares and dividends
MODIFIED(1) A segregated portfolio company may create and issue shares in one or more classes or series (including different classes or series relating to the same segregated portfolio), the proceeds of the issue of which shall be included in the segregated portfolio assets of and accounted for in the segregated portfolio in respect of which the segregated portfolio shares are issued. (2) The proceeds of the issue of shares, other than segregated portfolio shares, shall be included in the segregated portfolio company ’ s general assets. (3) A segregated portfolio company may pay a dividend or other distribution in respect of segregated portfolio shares of any class or series and whether or not a dividend is declared on any other class or series of segregated portfolio shares or any other shares. (4) Segregated portfolio dividends or other distributions shall be paid on segregated portfolio shares by reference only to the accounts of and to and out of the Companies Act (2023 Revision) Section 218 c Revised as at 31st December, 2022 Page 139 segregated portfolio assets and liabilities of the segregated portfolio in respect of which the segregated portfolio shares were issued and otherwise in accordance with the rights of such shares.
s.218Company to act on behalf of portfolios
MODIFIED(1) Any act, matter, deed, agreement, contract, instrument under seal or other instrument or arrangement which is to be binding on or to enure to the benefit of a segregated portfolio shall be executed by the segregated portfolio company on behalf of such segregated portfolio which shall be identified or specified, and such execution shall specify that it is in the name of, or by, or for the account of, such segregated portfolio. (2) If a segregated portfolio company is in breach of subsection (1) the directors shall, forthwith upon becoming aware of the breach — (a) make any necessary enquiries to determine the correct segregated portfolio to which the relevant act, matter, deed, agreement, contract, instrument under seal or other instrument or arrangement should be attributed; (b) make the correct attribution; and (c) notify in writing all persons who are party to the act, matter, deed, agreement, contract, instrument under seal or other instrument or arrangement that was executed, or who may be adversely affected by any such attribution, of that attribution and the parties ’ rights under subsection (3). (3) Any person notified under subsection (2)(c) (or who should have been so notified) who objects to an attribution by the directors under subsection (2) may, within thirty days of receiving written notice under that subsection in the case of persons who received such notice, apply to the Court by petition for a re- attribution; and the Court may, upon hearing the petition and taking account of the intention of the parties and such other factors as are deemed relevant by it, order that the act, matter, deed, agreement, contract, instrument under seal or other instrument or arrangement be deemed to be attributable to a particular segregated portfolio or portfolios or to the general assets (if applicable in particular proportions or on a particular basis) and may make such ancillary orders as may be just and equitable in the case. (4) Any indemnity given by a segregated portfolio company in favour of a director in respect of a liability incurred by such director on behalf of a segregated portfolio shall only be enforceable against the assets of the segregated portfolio in respect of which such liability arose.
s.219Assets
MODIFIED(1) The assets of a segregated portfolio company shall be either segregated portfolio assets or general assets. Section 220 Companies Act (2023 Revision) Page 140 Revised as at 31st December, 2022 c (2) The segregated portfolio assets comprise the assets of the segregated portfolio company held within or on behalf of the segregated portfolios of the company. (3) The general assets of a segregated portfolio company comprise the assets of the company which are not segregated portfolio assets. (4) The assets of a segregated portfolio comprise — (a) assets representing the share capital and reserves attributable to the segregated portfolio; and (b) all other assets attributable to or held within the segregated portfolio. (5) In subsection (4) — “ reserves ” includes profits, retained earnings, capital reserves and share premiums. (6) It shall be the duty of the directors of a segregated portfolio company to establish and maintain (or cause to be established and maintained) procedures — (a) to segregate, and keep segregated, portfolio assets separate and separately identifiable from general assets; (b) to segregate, and keep segregated, portfolio assets of each segregated portfolio separate and separately identifiable from segregated portfolio assets of any other segregated portfolio; and (c) to ensure that assets and liabilities are not transferred between segregated portfolios or between a segregated portfolio and the general assets otherwise than at full value.
s.220Segregated portfolio assets
MODIFIEDSegregated portfolio assets — (a) shall only be available and used to meet liabilities to the creditors of the segregated portfolio company and holders of segregated portfolio shares who are creditors or holders of segregated portfolio shares in respect of that segregated portfolio and who shall thereby be entitled to have recourse to the segregated portfolio assets attributable to that segregated portfolio for such purposes; and (b) shall not be available or used to meet liabilities to, and shall be absolutely protected from, the creditors of the segregated portfolio company and holders of segregated portfolio shares who are not creditors or holders of segregated portfolio shares in respect of that segregated portfolio, and who accordingly shall not be entitled to have recourse to the segregated portfolio assets attributable to that segregated portfolio. Companies Act (2023 Revision) Section 221 c Revised as at 31st December, 2022 Page 141
s.221Segregation of liabilities
MODIFIED(1) Where a liability of a segregated portfolio company to a person arises from a matter, or is otherwise imposed, in respect of or attributable to a particular segregated portfolio — (a) such liability shall extend only to, and that person shall, in respect of that liability, be entitled to have recourse only to — (i) firstly, the segregated portfolio assets attributable to such segregated portfolio; and (ii) secondly, unless specifically prohibited by the articles of association, the segregated portfolio company ’ s general assets, to the extent that the segregated portfolio assets attributable to such segregated portfolio are insufficient to satisfy the liability, and to the extent that the segregated portfolio company ’ s general assets exceed any minimum capital amounts lawfully required by a regulatory body in the Islands; and (b) such liability shall not extend to, and that person shall not, in respect of that liability, be entitled to have recourse to the segregated portfolio assets attributable to any other segregated portfolio. (2) Where a liability of a segregated portfolio company to a person arises or is imposed otherwise than from a matter in respect of a particular segregated portfolio or portfolios, such liability shall extend only to, and that person shall, in respect of that liability, be entitled to have recourse only to, the company ’ s general assets.
s.223Winding-up of company
MODIFIED(1) Notwithstanding any statutory provision or rule of law to the contrary, in the winding-up of a segregated portfolio company, the liquidator — (a) shall deal with the company ’ s assets only in accordance with the procedures set out in section 219(6); and (b) in discharge of the claims of creditors of the segregated portfolio company and holders of segregated portfolio shares, shall apply the segregated portfolio company ’ s assets to those entitled to have recourse thereto under this Part. Section 224 Companies Act (2023 Revision) Page 142 Revised as at 31st December, 2022 c (2) Section 140 shall be modified so that it shall apply in relation to protected segregated portfolio companies in accordance with this Part and, in the event of any conflict between this Part and section 140 , this Part shall prevail.
s.224Receivership orders
MODIFIED(1) Subject to subsections (2) to (5), if in relation to a segregated portfolio company, the Court is satisfied — (a) that the segregated portfolio assets attributable to a particular segregated portfolio of the company (when account is taken of the company ’ s general assets, unless there are no creditors in respect of that segregated portfolio entitled to have recourse to the company ’ s general assets) are or are likely to be insufficient to discharge the claims of creditors in respect of that segregated portfolio; and (b) that the making of an order under this section would achieve the purposes set out in subsection (3), the Court may make a receivership order under this section in respect of that segregated portfolio. (2) A receivership order may be made in respect of one or more segregated portfolios. (3) A receivership order shall direct that the business and segregated portfolio assets of or attributable to a segregated portfolio shall be managed by a receiver specified in the order for the purposes of — (a) the orderly closing down of the business of or attributable to the segregated portfolio; and (b) the distribution of the segregated portfolio assets attributable to the segregated portfolio to those entitled to have recourse thereto. (4) A receivership order — (a) may not be made if the segregated portfolio company is in winding up; and (b) shall cease to be of effect upon commencement of the winding up of the segregated portfolio company, but without prejudice to prior acts of the receiver or that person’s agents. (5) No resolution for the voluntary winding up of a segregated portfolio company of which any segregated portfolio is subject to a receivership order shall be effective without leave of the Court.
s.225Applications for receivership orders
MODIFIED(1) An application for a receivership order in respect of a segregated portfolio of a segregated portfolio company may be made by — (a) the company; Companies Act (2023 Revision) Section 226 c Revised as at 31st December, 2022 Page 143 (b) the directors of the company; (c) any creditor of the company in respect of that segregated portfolio; (d) any holder of segregated portfolio shares in respect of that segregated portfolio; or (e) in respect of a company licensed under the regulatory laws, the Cayman Islands Monetary Authority where the segregated portfolio company is regulated by the Authority. (2) The Court, on hearing an application — (a) for a receivership order; or (b) for leave, pursuant to section 224(5), for a resolution for voluntary winding up, may make an interim order or adjourn the hearing, conditionally or unconditionally. (3) Notice of an application to the Court for a receivership order in respect of a segregated portfolio of a segregated portfolio company shall be served upon — (a) the company; (b) in respect of a company licensed under the regulatory laws, the Cayman Islands Monetary Authority; and (c) such other persons, if any, as the Court may direct, each of whom shall be given an opportunity of making representations to the Court before the order is made.
s.226Administration of receivership orders
MODIFIED(1) The receiver of a segregated portfolio — (a) may do all such things as may be necessary for the purposes set out in section 224(3); and (b) shall have all the functions and powers of the directors in respect of the business and segregated portfolio assets of or attributable to the segregated portfolio. (2) The receiver may, at any time, apply to the Court — (a) for directions as to the extent or exercise of any function or power; (b) for the receivership order to be discharged or varied; or (c) for an order as to any matter acting in the course of that person’s receivership. (3) In exercising that person’s functions and powers the receiver shall be deemed to act as the agent of the segregated portfolio company, and shall not incur personal liability except to the extent that that person is fraudulent, reckless, negligent, or acts in bad faith. Section 227 Companies Act (2023 Revision) Page 144 Revised as at 31st December, 2022 c (4) Any person dealing with the receiver in good faith is not concerned to enquire whether the receiver is acting within that person’s powers. (5) When an application has been made for, and during the period of operation of, a receivership order, no suit, action or other proceedings shall be instituted against the segregated portfolio company in relation to the segregated portfolio in respect of which the receivership order was made except by leave of the Court, which may be conditional or unconditional. (6) During the period of operation of a receivership order — (a) the functions and powers of the directors shall cease in respect of the business of or attributable to, and the segregated portfolio assets of or attributable to, the segregated portfolio in respect of which the order was made; and (b) the receiver of the segregated portfolio shall be entitled to be present at all meetings of the segregated portfolio company and to vote at such meetings, as if that person were a director of the segregated portfolio company, in respect of the general assets of the company, unless there are no creditors in respect of that segregated portfolio entitled to have recourse to the company ’ s general assets.
s.227Discharge of receivership orders
MODIFIED(1) The Court shall not discharge a receivership order unless it appears to the Court that the purpose for which the order was made has been achieved, substantially achieved or is incapable of achievement. (2) The Court, on hearing an application for the discharge or variation of a receivership order, may make any interim order or adjourn the hearing, conditionally or unconditionally. (3) Upon the Court discharging a receivership order in respect of a segregated portfolio of a segregated portfolio company on the ground that the purpose for which the order was made has been achieved or substantially achieved, the Court may direct that any payment made by the receiver to any creditor of the company in respect of that segregated portfolio shall be deemed full satisfaction of the liabilities of the company to that creditor in respect of that segregated portfolio, and the creditor ’ s claims against the company in respect of that segregated portfolio shall be thereby deemed extinguished.
s.228Remuneration of receiver
MODIFIEDThe remuneration of a receiver and any expenses properly incurred by that person shall be payable, in priority to all other claims, from the segregated portfolio assets attributable to the segregated portfolio in respect of which the receiver was appointed but not from any other assets of the segregated portfolio company. Companies Act (2023 Revision) Section 228A c Revised as at 31st December, 2022 Page 145 228A. Termination and re-instatement 228A .(1) Where a segregated portfolio has no segregated portfolio assets or liabilities of the segregated portfolio company attributable to it, the segregated portfolio company may by resolution of its directors (or such other authority as may be provided for in, and subject to the provisions of, its articles of association) terminate such segregated portfolio. (2) A segregated portfolio company may by resolution of its directors (or such other authority as may be provided for in, and subject to the provisions of, its articles of association) reinstate a segregated portfolio which has been terminated under subsection (1).
s.229Issue of bearer shares prohibited
MODIFIED(1) Notwithstanding any provision in this Act to the contrary, a company incorporated under this Act shall not issue bearer shares. (2) In relation to a company which has been struck off the companies register, subsection (1) applies to that company if the company is reinstated. (3) An order of the Court shall not permit a company which has been struck off the companies register to be reinstated with bearer shares in issue. (4) Bearer shares issued prior to the commencement of the Companies (Amendment) (No. 3) Act, 2020 [Act 60 of 2020] or issued contrary to subsection (1) shall be void.
s.231Repealed
MODIFIEDRepealed by section 5 of the Companies (Amendment) (No. 3) Act, 2020 [Act 60 of 2020]. Section 232 Companies Act (2023 Revision) Page 146 Revised as at 31st December, 2022 c
s.232Definitions in this Part
MODIFIEDIn this Part — “ consolidated company ” means the new company that result s from the consolidation of two or more constituent companies; “ consolidation ” means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies in the consolidated company; “ constituent company ” means a company that is participating in a merger or consolidation with one or more other companies; “ merger ” means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company; “ parent company ” means, with respect to another company, a company that holds issued shares that together represent at least ninety per cent of the votes at a general meeting of that other company; “ subsidiary company ” means, with respect to another company, a company of which that other company is the parent company; and “ surviving company ” means the sole remaining constituent company into which one or more other constituent companies are merged.
s.233Merger and consolidation
MODIFIED(1) Without prejudice to sections 86 and 87 , but subject to section 239A , two or more companies limited by shares and incorporated under this Law, may, subject to any express provisions to the contrary in the memorandum and articles of association of any of such companies, merge or consolidate in accordance with subsections (3) to (15). (2) Nothing in this Part shall derogate from the Authority ’ s powers in relation to any constituent company that is a licensee under the regulatory laws and that proposes to participate in a merger or consolidation, or from a constituent company ’ s obligations under the regulatory laws. (3) The directors of each constituent company that proposes to participate in a merger or consolidation shall on behalf of the constituent company of which they are directors approve a written plan of merger or consolidation. (4) The plan referred to in subsection (3) shall give particulars of the following matters — (a) the name of each constituent company and the name of the surviving or consolidated company; (b) the registered office of each constituent company; Companies Act (2023 Revision) Section 233 c Revised as at 31st December, 2022 Page 147 (c) in respect of each constituent company, the designation and number of each class of shares; (d) the date on which it is intended that the merger or consolidation is to take effect, if it is intended to take effect in accordance with section 234 , and not in accordance with subsection (13); (e) the terms and conditions of the proposed merger or consolidation, including where applicable, the manner and basis of converting shares in each constituent company into shares in the consolidated or surviving company or into other property as provided in subsection (5); (f) the rights and restrictions attaching to the shares in the consolidated or surviving company; (g) in respect of a merger, any proposed amendments to the memorandum of association and articles of association of the surviving company, or if none are proposed, a statement that the memorandum of association and articles of association of the surviving company immediately prior to merger shall be its memorandum of association and articles of association after the merger; (h) in respect of a consolidation, the proposed new memorandum of association and articles of association of the consolidated company; (i) any amount or benefit paid or payable to any director of a constituent company, a consolidated company or a surviving company consequent upon the merger or consolidation; (j) the name and address of any secured creditor of a constituent company and of the nature of the secured interest held; and (k) the names and addresses of the directors of the surviving or consolidated company. (5) Some or all of the shares whether of different classes or of the same class in each constituent company may be converted into or exchanged for different types of property (consisting of shares, debt obligations or other securities in the surviving company or consolidated company or any other corporate entity, or money or other property, or a combination thereof) as provided in the plan of merger or consolidation. (6) A plan of merger or consolidation shall be authorised by each constituent company by way of — (a) a special resolution of the members of each such constituent company; and (b) such other authorisation, if any, as may be specified in such constituent company ’ s articles of association. (7) Notwithstanding subsection (6)(a), if a parent company incorporated under this Act is seeking to merge with one or more of its subsidiary companies incorporated under this Law, a special resolution under that subsection of the Section 233 Companies Act (2023 Revision) Page 148 Revised as at 31st December, 2022 c members of such constituent companies is not required if a copy of the plan of merger is given to every member of each subsidiary company to be merged unless that member agrees otherwise. (8) The consent of each holder of a fixed or floating security interest of a constituent company in a proposed merger or consolidation shall be obtained but if such secured creditor does not grant that person’s consent then the Court may upon application of the constituent company that has issued the security waive the requirement for such consent upon such terms as to security to be issued by the consolidated or surviving company or otherwise as the Court considers reasonable. (9) After obtaining any authorisations and consents under subsections (6) and (8), the plan of merger or consolidation shall be signed by a director on behalf of each constituent company and filed with the Registrar together with, in relation to each constituent company — (a) a certificate of good standing; (b) a director ’ s declaration that the constituent company is, and the consolidated or surviving company will be, immediately after merger or consolidation, able to pay its debts as they fall due; (c) a director ’ s declaration that the merger or consolidation is bona fide and not intended to defraud unsecured creditors of the constituent companies; (d) a director ’ s declaration that — (i) no petition or other similar proceeding has been filed and remains outstanding, and that no order has been made or resolution adopted to wind up the company in any jurisdiction; (ii) no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the constituent company, its affairs, or its property or any part thereof; and (iii) no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the constituent company are, and continue to be, suspended or restricted; (e) a director ’ s declaration of the assets and liabilities of the constituent company made up to the latest practicable date before the making of the declaration; (f) in the case of a constituent company that is not a surviving company, a director ’ s declaration that the constituent company has retired from any fiduciary office held or will do so immediately prior to merger or consolidation; Companies Act (2023 Revision) Section 234 c Revised as at 31st December, 2022 Page 149 (g) an undertaking that a copy of the certificate of merger or consolidation under subsection (11) will be given to the members and creditors of the constituent company and that notification of the merger or consolidation will be published in the Gazette; and (h) a director ’ s declaration, where relevant, that the constituent company has complied with any applicable requirements under the regulatory laws. (10) A director ’ s declaration under subsection (9) shall be in writing, signed by, and shall include the full name and address of, the director making the declaration. (11) Upon payment of the applicable fees under this Act and upon the Registrar being satisfied that the requirements of subsection (9) in respect of the merger or consolidation have been complied with and that the name of the consolidated company complies with section 30 , the Registrar shall register the plan of merger or consolidation including any new or amended memorandum and articles of association and issue a certificate of merger or consolidation under that person’s hand and seal of office, and in the case of a consolidation section 27 shall apply in relation to the consolidated company. (12) A certificate of merger or consolidation issued by the Registrar shall be prima facie evidence of compliance with all requirements of this Act in respect of the merger or consolidation. (13) Subject to section 234 , a merger or consolidation shall be effective on the date the plan of merger or consolidation is registered by the Registrar. (14) A person who, being a director, makes a false declaration under subsection (9) commits an offence and is liable on summary conviction to a fine of twenty thousand dollars or to imprisonment for five years, or both. (15) In any proceedings for an offence under subsection (14) it shall be a defence for the person charged to prove that that person took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by that person or any person under that person’s control. (16) Any director ’ s declaration pursuant to this section may be given in the form of a declaration or an affidavit, as the director may determine.
s.235Termination or amendment
MODIFIED(1) A plan of merger or consolidation may contain a provision that at any time prior to the date that the plan becomes effective it may be — Section 236 Companies Act (2023 Revision) Page 150 Revised as at 31st December, 2022 c (a) terminated by the directors of any constituent company; or (b) amended by the directors of the constituent companies to — (i) change the name of the consolidated company; (ii) change the effective date of the merger or consolidation, provided that the new effective date complies with section 234 ; and (iii) effect any other changes to the plan as the plan may expressly authorise the directors to effect in their discretion. (2) If the plan of merger or consolidation is terminated or amended after it has been filed with the Registrar but before it has become effective, notice of termination or amendment of the plan shall be filed with the Registrar, and shall have effect on the date of registration by the Registrar after that person has satisfied that person’s self in accordance with section 233(11). (3) A copy of the notice under subsection (2) shall be sent to any person entitled to vote on, consent to or be notified of the plan of merger or consolidation in accordance with section 233 . (4) The notice of termination or amendment filed in accordance with subsection (2) shall identify the plan of merger or consolidation that is to be terminated or amended and shall state that the plan has been terminated or state the amendments made and in the former case, the Registrar shall issue a certificate of termination.
s.236Effect of merger or consolidation
MODIFIED(1) As soon as a merger or consolidation becomes effective — (a) in the case of a consolidation, the new memorandum of association and articles of association filed with the plan of consolidation shall immediately become the memorandum of association and articles of association of the consolidated company; (b) the rights, the property of every description including choses in action, and the business, undertaking, goodwill, benefits, immunities and privileges of each of the constituent companies, shall immediately vest in the surviving or consolidated company; and (c) subject to any specific arrangements entered into by the relevant parties, the surviving or consolidated company shall be liable for and subject, in the same manner as the constituent companies, to all mortgages, charges or security interests, and all contracts, obligations, claims, debts, and liabilities of each of the constituent companies. (2) Where a merger or consolidation occurs — (a) an existing claim, cause or proceeding, whether civil (including arbitration) or criminal pending at the time of the merger or consolidation by or against a constituent company, shall not be abated or discontinued Companies Act (2023 Revision) Section 237 c Revised as at 31st December, 2022 Page 151 by the merger or consolidation but shall be continued by or against the surviving or consolidated company; and (b) a conviction, judgment, ruling, order or claim, due or to become due, against a constituent company, shall not be released or impaired by the merger or consolidation, but shall apply to the surviving or consolidated company instead of to the constituent company. (3) Upon a merger or consolidation becoming effective, the Registrar shall strike off the register — (a) a constituent company that is not the surviving company in a merger; or (b) a constituent company that participates in a consolidation, and section 158 shall apply. (4) The cessation of a constituent company that participates in a consolidation or that is not the surviving company in a merger shall not be a winding up within Part V.
s.237Merger or consolidation with overseas company
MODIFIED(1) Subject to section 239A , one or more companies incorporated under this Act may merge or consolidate with one or more overseas companies in accordance with subsections (2) to (18). (2) Where the surviving or consolidated company is to be a company existing under this Law, in addition to compliance by each constituent company incorporated under this Act with section 233(3) to (10) the Registrar is required to be satisfied in respect of any constituent overseas company that — (a) the merger or consolidation is permitted or not prohibited by the constitutional documents of the constituent overseas company and by the laws of the jurisdiction in which the constituent overseas company is existing, and that those laws and any requirements of those constitutional documents have been or will be complied with; (b) no petition or other similar proceeding has been filed and remains outstanding, and no order has been made or resolution adopted to wind up or liquidate the constituent overseas company in the jurisdiction in which the constituent overseas company is existing; (c) no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the constituent overseas company, its affairs or its property or any part thereof; (d) no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the constituent overseas company are and continue to be suspended or restricted; Section 237 Companies Act (2023 Revision) Page 152 Revised as at 31st December, 2022 c (e) the constituent overseas company is able to pay its debts as they fall due and the merger or consolidation is bona fide and not intended to defraud unsecured creditors of the constituent overseas company; (f) in respect of the transfer of any security interest granted by the constituent overseas company to the surviving or consolidated company — (i) consent or approval to the transfer has been obtained, released or waived; (ii) the transfer is permitted by and has been approved in accordance with the constitutional documents of the constituent overseas company; and (iii) the laws of the jurisdiction of the constituent overseas company with respect to the transfer have been or will be complied with; (g) the constituent overseas company will, upon the merger or consolidation becoming effective, cease to be incorporated, registered or exist under the laws of the relevant foreign jurisdiction; and (h) there is no other reason why it would be against the public interest to permit the merger or consolidation. (3) Subsection (2)(a) to (g) shall be satisfied by filing with the Registrar a declaration of a director of the surviving or consolidated company to the effect that, having made due enquiry, that person is of the opinion that the requirements of those paragraphs have been met; and — (a) the declaration shall include a statement of the assets and liabilities of the constituent overseas company made up to the latest practicable date before making the declaration; and (b) a director of the surviving or consolidated company shall be deemed to have made due enquiry for the purposes of subsection (2)(a) to (g) and this subsection if such director has obtained from a director of the constituent overseas company a declaration that the requirements of subsection 2(a) to (g) have been met with respect to such constituent overseas company. (4) A person who, being a director, makes a false declaration under subsection (3) commits an offence and is liable on summary conviction to a fine of twenty thousand dollars or to imprisonment for five years, or both. (5) In any proceedings for an offence under subsection (4), it shall be a defence for the person charged to prove that that person took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by that person or any person under that person’s control. (6) Where the surviving or consolidated company is to be established under this Law, upon payment of the applicable fees under this Act and upon the Registrar being satisfied that the requirements of subsection (2) in respect of the merger or consolidation have been complied with and that the name of the consolidated Companies Act (2023 Revision) Section 237 c Revised as at 31st December, 2022 Page 153 company complies with section 30 , the Registrar shall register the plan of merger or consolidation including any new or amended memorandum and articles of association and issue a certificate of merger or consolidation under that person’s hand and seal of office, and in the case of a consolidation section 27 shall apply in relation to the consolidated company. (7) Where the surviving or consolidated company is to be an overseas company the Registrar is required to be satisfied, in addition to compliance with section 233(2) to (10) (excluding section 233(9)(g)), by each constituent company incorporated under this Law, that — (a) the merger or consolidation is permitted or not prohibited by the constitutional documents of the constituent overseas company and by the laws of the jurisdiction in which the constituent overseas company is existing, and that those laws and any requirements of those constitutional documents have been or will be complied with; (b) no petition or other similar proceeding has been filed and remains outstanding, and no order has been made or resolution adopted to wind up or liquidate the constituent overseas company in any jurisdiction; (c) no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the surviving company, its affairs or its property or any part thereof; (d) no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the surviving company are suspended or restricted; and (e) there are no reasons why it would be against the public interest to allow the merger or consolidation. (8) Subsection (7)(a) to (d) shall be satisfied by filing with the Registrar a declaration of a director of each constituent company incorporated under this Act to the effect that, having made due enquiry, that person is of the opinion that the requirements of those paragraphs have been met; and a director of each constituent company incorporated under this Act shall be deemed to have made due enquiry for the purposes of subsection (7)(a) to (d) and this subsection (8) if such director has obtained from a director of the constituent overseas company a declaration that the requirements of subsection (7)(a) to (d) have been met with respect to such constituent overseas company. (9) A person who, being a director, makes a false declaration under subsection (8) commits an offence and is liable on conviction to a fine of twenty thousand dollars or to imprisonment for five years, or both. (10) Where the surviving or consolidated company is to be an overseas company, the surviving or consolidated overseas company shall file with the Registrar — Section 237 Companies Act (2023 Revision) Page 154 Revised as at 31st December, 2022 c (a) an undertaking that it will promptly pay to the dissenting members of a constituent company incorporated under this Act the amount, if any, to which they are entitled under section 238 ; and (b) such evidence of the merger or consolidation from the jurisdiction of the surviving or consolidated overseas company as the Registrar considers acceptable, such evidence to include the effective date of the merger or consolidation. (11) The effect of a merger or consolidation where the surviving or consolidated company is to be an overseas company under this section is the same as in the case of a merger or consolidation under this Part if the surviving or consolidated company is incorporated or established under this Law, and all of the relevant provisions of this Part apply, except insofar as the laws of the jurisdiction of the surviving or consolidated overseas company otherwise provide. (12) For the purposes of this section — (a) any references in section 233 to the shares of any constituent company shall be deemed to include references to any other equity interests in such constituent company; (b) any references in section 233 to memoranda and articles of association shall be deemed to include references to the equivalent organisational documents of an overseas company; and (c) any reference in section 233 or this section to a director of a company shall be deemed to include a reference to any officer, member or other person (howsoever called) in whom the management of an overseas company is vested. (13) Where the surviving or consolidated company is to be an overseas company, upon payment of the applicable fees under this Act and upon the Registrar being satisfied that the requirements of subsections (7) and (10) have been complied with the Registrar shall, where the overseas company is the surviving or consolidated company, strike off constituent companies incorporated pursuant to this Act from the register and issue a certificate of strike off by way of merger or consolidation with an overseas company; and section 158 shall apply to the constituent companies so struck off. (14) A certificate of strike off by way of merger or consolidation with an overseas company issued by the Registrar shall be prima facie evidence of compliance with all requirements of this Act in respect of such merger or consolidation. (15) Subject to section 234 , a merger or consolidation shall be effective on the date the plan of merger or consolidation is registered by the Registrar. (16) The issuance of a certificate of merger or consolidation relating to the merger or consolidation of an overseas company registered under Part IX shall be deemed to constitute notice to the Registrar pursuant to section 192 . Companies Act (2023 Revision) Section 238 c Revised as at 31st December, 2022 Page 155 (17) Any declaration of a director pursuant to this section may be given in the form of a declaration or an affidavit, as the director may determine. (18) The Registrar shall submit a copy of the certificate of strike off by way of merger or consolidation issued under subsection (13) to the Authority.
s.238Rights of dissenters
MODIFIED(1) A member of a constituent company incorporated under this Act shall be entitled to payment of the fair value of that person’s shares upon dissenting from a merger or consolidation. (2) A member who desires to exercise that person’s entitlement under subsection (1) shall give to the constituent company, before the vote on the merger or consolidation, written objection to the action. (3) An objection under subsection (2) shall include a statement that the member proposes to demand payment for that person’s shares if the merger or consolidation is authorised by the vote. (4) Within twenty days immediately following the date on which the vote of members giving authorisation for the merger or consolidation is made, the constituent company shall give written notice of the authorisation to each member who made a written objection. (5) A member who elects to dissent shall, within twenty days immediately following the date on which the notice referred to in subsection (4) is given, give to the constituent company a written notice of that perso n’s decision to dissent, stating — (a) that person’s name and address; (b) the number and classes of shares in respect of which that person dissents; and (c) a demand for payment of the fair value of that person’s shares. (6) A member who dissents shall do so in respect of all shares that that person holds in the constituent company. (7) Upon the giving of a notice of dissent under subsection (5), the member to whom the notice relates shall cease to have any of the rights of a member except the right to be paid the fair value of that person’s shares and the rights referred to in subsections (12) and (16). (8) Within seven days immediately following the date of the expiration of the period specified in subsection (5), or within seven days immediately following the date on which the plan of merger or consolidation is filed, whichever is later, the constituent company, the surviving company or the consolidated company shall make a written offer to each dissenting member to purchase that person’s shares at a specified price that the company determines to be their fair value; and if, within thirty days immediately following the date on which the offer is made, Section 238 Companies Act (2023 Revision) Page 156 Revised as at 31st December, 2022 c the company making the offer and the dissenting member agree upon the price to be paid for that person’s shares, the company shall pay to the member the amount in money forthwith. (9) If the company and a dissenting member fail, within the period specified in subsection (8), to agree on the price to be paid for the shares owned by the member, within twenty days immediately following the date on which the period expires — (a) the company shall (and any dissenting member may) file a petition with the Court for a determination of the fair value of the shares of all dissenting members; and (b) the petition by the company shall be accompanied by a verified list containing the names and addresses of all members who have filed a notice under subsection (5) and with whom agreements as to the fair value of their shares have not been reached by the company. (10) A copy of any petition filed under subsection (9)(a) shall be served on the other party; and where a dissenting member has so filed, the company shall within ten days after such service file the verified list referred to in subsection (9)(b). (11) At the hearing of a petition, the Court shall determine the fair value of the shares of such dissenting members as it finds are involved, together with a fair rate of interest, if any, to be paid by the company upon the amount determined to be the fair value. (12) Any member whose name appears on the list filed by the company under subsection (9)(b) or (10) and who the Court finds are involved may participate fully in all proceedings until the determination of fair value is reached. (13) The order of the Court resulting from proceeding on the petition shall be enforceable in such manner as other orders of the Court are enforced, whether the company is incorporated under the laws of the Islands or not. (14) The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances; and upon application of a member, the Court may order all or a portion of the expenses incurred by any member in connection with the proceeding, including reasonable attorneys ’ fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares which are the subject of the proceeding. (15) Shares acquired by the company pursuant to this section shall be cancelled and, if they are shares of a surviving company, they shall be available for re-issue. (16) The enforcement by a member of that person’s entitlement under this section shall exclude the enforcement by the member of any right to which that person might otherwise be entitled by virtue of that person holding shares, except that this section shall not exclude the right of the member to institute proceedings to obtain relief on the ground that the merger or consolidation is void or unlawful. Companies Act (2023 Revision) Section 239 c Revised as at 31st December, 2022 Page 157
s.239Limitation on rights of dissenters
MODIFIED(1) No rights under section 238 shall be available in respect of the shares of any class for which an open market exists on a recognised stock exchange or recognised interdealer quotation system at the expiry date of the period allowed for written notice of an election to dissent under section 238(5), but this section shall not apply if the holders thereof are required by the terms of a plan of merger or consolidation pursuant to section 233 or 237 to accept for such shares anything except — (a) shares of a surviving or consolidated company, or depository receipts in respect thereof; (b) shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger or consolidation, are either listed on a national securities exchange or designated as a national market system security on a recognised interdealer quotation system or held of record by more than two thousand holders; (c) cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a) and (b); or (d) any combination of the shares, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a), (b) and (c). (2) Repealed by section 11 of the Companies (Amendment) (No. 2) Act, 2018 [Law 46 of 2018]. 239A. Prohibition on being a segregated portfolio company 239A . No constituent company incorporated under this Act or any consolidated company existing under this Act may be a segregated portfolio company.
s.240Definitions in this Part
MODIFIEDIn this Part — “ debtor ” means a foreign corporation or other foreign legal entit y subject to a foreign bankruptcy proceeding in the country in which it is incorporated or established; “ foreign bankruptcy proceeding ” includes proceedings for the purpose of reorganising or rehabilitating an insolvent debtor; and “ foreign representative ” means a trustee, liquidator or other official appointed in respect of a debtor for the purposes of a foreign bankruptcy proceeding. Section 241 Companies Act (2023 Revision) Page 158 Revised as at 31st December, 2022 c
s.241Ancillary orders
MODIFIED(1) Upon the application of a foreign representative the Court may make orders ancillary to a foreign bankruptcy proceeding for the purposes of — (a) recognising the right of a foreign representative to act in the Islands on behalf of or in the name of a debtor; (b) enjoining the commencement or staying the continuation of legal proceedings against a debtor; (c) staying the enforcement of any judgment against a debtor; (d) requiring a person in possession of information relating to the business or affairs of a debtor to be examined by and produce documents to its foreign representative; and (e) ordering the turnover to a foreign representative of any property belonging to a debtor. (2) An ancillary order may only be made under subsection (1)(d) against — (a) the debtor itself; or (b) a person who was or is a relevant person as defined in section 103(1).
s.242Criteria upon which the Court ’ s discretion shall be exercised
MODIFIED(1) In determining whether to make an ancillary order under section 241 , the Court shall be guided by matters which will best assure an economic and expeditious administration of the debtor ’ s estate, consistent with — (a) the just treatment of all holders of claims against or interests in a debtor ’ s estate wherever they may be domiciled; (b) the protection of claim holders in the Islands against prejudice and inconvenience in the processing of claims in the foreign bankruptcy proceeding; (c) the prevention of preferential or fraudulent dispositions of property comprised in the debtor ’ s estate; (d) the distribution of the debtor ’ s estate amongst creditors substantially in accordance with the order prescribed by Part V; (e) the recognition and enforcement of security interests created by the debtor; (f) the non-enforcement of foreign taxes, fines and penalties; and (g) comity. (2) In the case of a debtor which is registered under Part IX, the Court shall not make an ancillary order under section 241 without also considering whether it should make a winding up order under Part V in respect of its local branch. Companies Act (2023 Revision) Section 243 c Revised as at 31st December, 2022 Page 159
s.244Interpretation
MODIFIED(1) In this Part — “ beneficial owner ”, in relation to a company, has the meaning assigned by sections 247(3), (4) and (5); “ beneficial ownership register ” means a register of adequate, accurate and current beneficial ownership information maintained by a company pursuant to section 252 , containing the required particulars of registrable persons in relation to the company; “ competent authority ” means the Minister referred to in section 246(1) and includes the person designated by the Minister under that section; “ corporate services provider ” means an individual or legal entity that provides corporate services under the Companies Management Act (2021 Revision) , the Banks and Trust Companies Act (2021 Revision), the Insurance Act, 2010 [Law 32 of 2010] or any other regulatory law pursuant to which the individual or legal entity is licensed or permitted to provide registered office services; “ individual ” means a natural person; “ legal entity ” means a company, limited liability company or other body that is a legal person under the law by which it is governed; “ prescribed ” means prescribed by regulations made under sectio n 280 ; “ registered shareholder ” means a person who is named as a shareholder of a company or member of a company on the register of members of the company; “ registrable person ” means an individual or relevant legal entity that is a registrable person under section 251 ; Section 245 Companies Act (2023 Revision) Page 160 Revised as at 31st December, 2022 c “ regulatory law ” means a law defined as such in section 2 of the Monetary Authority Act (2020 Revision) , other than the Directors Registration and Licensing Act, 2014 [Law 10 of 2014] ; “ relevant interest ” means an interest that a person holds in a company consisting of — (a) shares or voting rights in the company; or (b) the right to appoint or remove a majority of the directors of the company; “ relevant legal entity ”, in relation to a company, has the meaning assigned by section 248(3); “ required particulars ” means particulars in respect of a registrable person required to be kept in a company ’ s beneficial ownership register pursuant to sections 253 and 254; “ restrictions notice ” means a notice issued under sectio n 265 ; and “ specified conditions ” means the conditions specified in sections 247(3), (4) and (5). (2) This Part is to be read and have effect as if each of the following were an individual, even if they are legal persons under the laws by which they are governed — (a) a corporation sole; (b) a government or government department of a country or territory or a part of a country or territory; (c) an international organisation whose members include two or more countries or territories (or their governments); (d) a local authority or local government body.
s.245Application
MODIFIED(1) This Part applies in respect of companies incorporated or registered by way of continuation under this Law, except a legal entity or subsidiary of one or more legal entities, any of which is — (a) listed on the Cayman Islands Stock Exchange or an approved stock exchange in
s.247Duty of companies to identify beneficial owners
MODIFIED(1) Companies to which this Part applies shall take reasonable steps to identify any individual who is a beneficial owner of the company. (2) For the purpose of identifying individuals who are beneficial owners under subsection (1), a company is entitled to rely, without further enquiry, on the response of a person to a notice in writing sent in good faith by the company, unless the company has reason to believe that the response is misleading or false. (3) An individual (“X”) is a beneficial owner of a company (“company Y”) if the individual meets one or more of the following conditions in relation to the company — (a) X must hold, directly or indirectly, twenty-five percent or more of the shares in company Y; (b) X must hold, directly or indirectly, twenty-five percent or more of the voting rights in company Y; (c) X must hold the right, directly or indirectly, to appoint or remove a majority of the board of directors of company Y. (4) If no individual meets the conditions in subsection (3), X is a beneficial owner of company Y if X has the absolute and unconditional legal right to exercise, or actually exercises, significant influence or control over company Y through the ownership structure or interests described in subsection (3), other than solely in the capacity of a director, professional advisor or professional manager. (5) If no individual meets the conditions in subsections (3) and (4) but the trustees of a trust (or the members of a partnership or other entity that, under the law by which it is governed is not a legal person) meet one of those conditions in relation to company Y in their capacity as such, X is a beneficial owner of company Y if X has the absolute and unconditional legal right to exercise, or actually exercises, significant influence or control over the activities of that trust (or partnership or other entity), other than solely in the capacity of a director, professional advisor or professional manager. Companies Act (2023 Revision) Section 248 c Revised as at 31st December, 2022 Page 163
s.249Duty of companies to give notice to registrable persons
MODIFIED(1) Subject to subsection (5), a company to which this Part applies shall give notice in writing to beneficial owners and relevant legal entities identified under sections 247 and 248 and to any person that it knows or has reasonable cause to believe is a registrable person in relation to it. (2) The notice shall require the persons to whom it is addressed, within one month of the date of receipt of the notice — (a) to state whether or not they are registrable persons, within the meaning of this Part; and (b) if they are registrable persons, to confirm or correct any required particulars that are included in the notice and supply any required particulars that are missing from the notice. (3) A company may also give notice in writing to a registered shareholder or a legal entity that the company knows or has reasonable cause to believe is a relevant legal entity in relation to that company (or would be a relevant legal entity if it were registered under this Law), if the company knows or has reasonable cause to believe that such shareholder or legal entity knows the identity of a registrable person. (4) A notice under subsection (3) may require the persons to whom it is addressed — (a) to state whether or not they know the identity of a registrable person or any person likely to have that knowledge; and (b) if so, within one month of receipt of the notice, to supply, at the expense of the company, any required particulars respecting such registrable persons that are within the addressee ’ s knowledge, and to state whether the particulars are being supplied with or without the knowledge of the person concerned. Section 250 Companies Act (2023 Revision) Page 164 Revised as at 31st December, 2022 c (5) A company is not required to give a notice to an individual or a relevant legal entity if — (a) the company knows that the individual or entity is not a registrable person; or (b) the company has already been informed of the individual ’ s or entity ’ s status as a registrable person in relation to it, and has received all the required particulars. (6) A person to whom a notice under this section is given is not required by that notice to disclose any information — (a) in respect of which a claim to legal professional privilege could be maintained in legal proceedings; or (b) that the person is prohibited by any law applicable in the Islands from disclosing.
s.250Duty of beneficial owners and relevant legal entities to supply information
MODIFIED(1) This section applies to a person if — (a) the person is a registrable person in respect to a company to which this Part applies; (b) the person knows the facts referred to in paragraph (a); (c) the person has no reason to believe that the person ’ s required particulars are stated in the company ’ s beneficial ownership register; (d) the person has not received a notice from the company under section 249 ; and (e) the circumstances described in paragraphs (a), (b), (c) and (d) have continued for a period of at least one month. (2) The person shall — (a) notify the company of the person ’ s status as a registrable person in relation to the company; (b) state the date, to the best of the person ’ s knowledge, on which the person acquired that status; and (c) give the company the required particulars. (3) The duty under subsection (2) must be complied with by the end of the period of one month beginning with the day on which the conditions in subsection (1)(a), (b) and (c) were first met with respect to the person.
s.251Individuals and relevant legal entities that are registrable persons
MODIFIED(1) The following are registrable persons in relation to a company — (a) an individual whom the company identifies pursuant to section 247 as a beneficial owner of the company; Companies Act (2023 Revision) Section 252 c Revised as at 31st December, 2022 Page 165 (b) a relevant legal entity identified by the company pursuant to section 248 that — (i) holds an interest in the company or meets one or more of the specified conditions directly in respect of that company; and (ii) through which any beneficial owner or relevant legal entity indirectly owns an interest in the company. (2) Whether a person holds an interest in a company or meets a specified condition in relation to the company directly or indirectly shall be determined in accordance with the Regulations. Establishing Beneficial Ownership Registers
s.252Duty to establish and maintain beneficial ownership register
MODIFIED(1) A company to which this Part applies by virtue of section 245(1) shall keep its beneficial ownership register at the company ’ s registered office. (2) A corporate services provider engaged for the provision of registered office services by — (a) an exempted company; (b) an ordinary non-resident company; or (c) a company registered to carry on a special economic zone business in a special economic zone under the Special Economic Zones Act (2017 Revision) , shall keep the beneficial ownership register of the company. (3) An ordinary resident company to which this Part applies may engage the Registrar to assist the company to establish and maintain its beneficial ownership register. (3A) Where an ordinary resident company does not engage the Registrar under subsection (3), the corporate services provider engaged by the ordinary resident company shall keep the beneficial ownership register of the ordinary resident company. (4) The Registrar may charge the prescribed fees for establishing and maintaining a beneficial ownership register on behalf of an ordinary resident company. (5) In this section — “ ordinary non-resident company ” means a company designated by the Financial Secretary as a non-resident company in accordance with section 2(3) of the Local Companies (Control) Act (2019 Revision) ; and Section 253 Companies Act (2023 Revision) Page 166 Revised as at 31st December, 2022 c “ ordinary resident company ” means a company which carries on business in the Islands in accordance with section 2(2) of the Local Companies (Control) Act (2019 Revision) .
s.253Role of corporate services provider and Registrar
MODIFIED(1) A company to which this Part applies shall provide in writing to a corporate services provider or to the Registrar, as the case may be, the required particulars of registrable persons in respect of that company, once those particulars have been confirmed. (1A) A company that is exempt from the application of this Part under section 245(1) shall provide in the prescribed manner to the corporate services provider or the Registrar, as the case may be — (a) written confirmation of the exemption — (i) identifying the paragraph under section 245(1) that provides for the exemption; and (ii) including the prescribed information about the regulated legal entity, regulated parent entity or approved person referred to in that paragraph; and (b) instructions to file the written confirmation with the competent authority. (2) The company referred to in subsection (1) shall instruct the corporate services provider or the Registrar, as the case may be, to enter the required particulars of registrable persons in the company ’ s beneficial ownership register in the prescribed form and manner, or if no registrable persons are identified to enter a nil return. (3) Particulars need not be entered concerning an individual or relevant legal entity that is not a registrable person. (4) For the purposes of this section, particulars are considered to have been confirmed if — (a) the company has reasonable grounds to believe that they were supplied or confirmed by the individual or entity to whom the particulars relate; (b) another person supplied or confirmed them to the company, and the company has reasonable grounds to believe that this was done with the knowledge of the individual or entity to whom the particulars relate; or (c) the particulars were included in a statement of initial significant control delivered to the Registrar by subscribers wishing to form a company.
s.254Required particulars
MODIFIED(1) The required particulars of an individual are — (a) full legal name; Companies Act (2023 Revision) Section 255 c Revised as at 31st December, 2022 Page 167 (b) residential address and, if different, an address for service of notices under this Law; (c) date of birth; (d) information identifying the individual from the individual’s unexpired and valid passport, driver’s licence or other government -issued document, including — (i) identifying number; (ii) country of issue; and (iii) date of issue and of expiry; and (e) the date on which the individual became or ceased to be a registrable person in relation to the company in question. (2) In the case of a person in relation to whom this Part has effect by virtue of section 244(2), the required particulars are — (a) name; (b) principal office; (c) the legal form of the person and the law by which the person is governed; and (d) the date on which the person became or ceased to be a registrable person in relation to the legal entity in question. (3) The required particulars of a relevant legal entity are — (a) corporate or firm name; (b) registered or principal office; (c) the legal form of the entity and the law by which it is governed; (d) if applicable, the register of companies in which it is entered and its registration number in that register; and (e) the date on which it became or ceased to be a registrable person in relation to the company in question.
s.255Duty of company to keep register up to date
MODIFIED(1) If a company to which this Part applies becomes aware of a relevant change with respect to a registrable person whose required particulars are stated in its beneficial ownership register, the company shall give notice to the registrable person, as soon as reasonably practicable after it learns of the change or first has reasonable cause to believe that the change has occurred, requesting confirmation of the change. (2) If the person to which a notice is sent under subsection (1) confirms the relevant change, the company shall record the details of the change and instruct the Section 256 Companies Act (2023 Revision) Page 168 Revised as at 31st December, 2022 c corporate services provider or the Registrar, as the case may be, to enter in the company ’ s beneficial ownership register in the prescribed form and manner — (a) the details of the relevant change confirmed by the company; (b) the date on which the change was made; and (c) whether there are further alterations to be made. (3) For the purposes of this section, a relevant change occurs if — (a) the registrable person ceases to be a registrable person in relation to the company; or (b) any other change occurs as a result of which the required particulars stated respecting the registrable person in the company ’ s beneficial ownership register are materially incorrect or incomplete. (4) A relevant change with respect to a registrable person is considered to have been confirmed if — (a) the company has given notice to the person requesting confirmation, within the period of one month from the date of the notice, of the relevant change, the date of the change and the required particulars included in the notice; and (b) the details, date and particulars of the change have been supplied or confirmed to the company by the registrable person, or by another person, with the knowledge of the registrable person.
s.256Consequences of failure to disclose beneficial ownership
MODIFIED(1) If a company ’ s corporate services provider or the Registrar, as the case may be, is of the opinion that the company has failed to comply with section 253 or 255 without reasonable excuse or has made a statement to them that is false, deceptive or misleading in respect of a material particular, the corporate services provider or the Registrar, as the case may be, shall give notice of their opinion to the company. (2) On receipt of a notice under subsection (1), the company shall provide the corporate services provider or the Registrar, as the case may be, with — (a) the missing particulars required under section 253 or 255 pertaining to registrable persons; and (b) a justification or correction respecting any statement identified in the notice. (3) If the company fails, due to the failure of a registrable person to comply with their obligations under this Law, to provide the missing particulars referred to in subsection (2)(a) within one month of receipt of the notice, the corporate services provider shall — Companies Act (2023 Revision) Section 257 c Revised as at 31st December, 2022 Page 169 (a) subject to section 265 , issue a restrictions notice to the registrable persons whose particulars are missing with regard to the shares or other relevant interest of such registrable persons in the company; and (b) send a copy of the notice to the competent authority within two weeks of issuing it. (4) A person to whom a restrictions notice is issued under this section may apply to the Grand Court to set aside any restriction imposed by the notice.
s.257Duty of other persons to update register
MODIFIED(1) This section applies to persons if — (a) they have stated that they are registrable persons, within the meaning of this Part, in response to a notice received under section 249 or they have reason to believe that their required particulars are stated in a company ’ s beneficial ownership register; (b) a relevant change, within the meaning of section 255(3), occurs with respect to the person; (c) they know of the change; (d) they have no knowledge that the beneficial ownership register has been altered to reflect the change; and (e) they have not received a notice from the company under section 255 by the end of the period of one month beginning with the day on which the change occurred. (2) A person to which this section applies shall — (a) notify the company of the relevant change; (b) state the date on which it occurred; and (c) give the company any information needed to update the company ’ s beneficial ownership register. (3) The duty under subsection (2) shall be complied with by the end of the period of one month beginning with the day on which the person discovered the relevant change.
s.259Power of the Grand Court to rectify beneficial ownership register
MODIFIED(1) If — Section 260 Companies Act (2023 Revision) Page 170 Revised as at 31st December, 2022 c (a) the name of any individual or relevant legal entity is, without sufficient cause, entered in or omitted from a company ’ s beneficial ownership register as a registrable person; or (b) default is made or unnecessary delay takes place in entering on a company ’ s beneficial ownership register the fact that the individual or relevant legal entity has ceased to be a registrable person, the person aggrieved, or any individual or relevant legal entity that is a registrable person in relation to the company, may apply to the Grand Court for rectification of the company ’ s beneficial ownership register. (2) The Grand Court may — (a) refuse the application; or (b) order rectification of the beneficial ownership register and payment by the company of any damages sustained by any person aggrieved. (3) On an application under this section, the Grand Court may decide any question — (a) as to whether the name of any person who is a party to the application should or should not be entered in or omitted from the company ’ s beneficial ownership register; and (b) that is necessary or expedient to be decided for rectification of the company ’ s beneficial ownership register. (4) If the Grand Court makes an order for rectification of a company ’ s beneficial ownership register against the company, it shall direct notice of the rectification to be given to the competent authority. Access to Beneficial Ownership Information
s.260Duty of competent authority to establish search platform
MODIFIED(1) The competent authority shall establish a search platform by means of which access may be provided to information on all beneficial ownership registers maintained on behalf of companies subject to this Part by corporate services providers or the Registrar. (2) The search platform must — (a) be secure and accessible only by the competent authority; (b) be able to search all company beneficial ownership information provided to the competent authority by corporate service providers or the Registrar by the name of an individual, legal entity or company; and (c) prevent communication to any person of the fact that a search is being made or has taken place, except where the competent authority expressly discloses such communication. Companies Act (2023 Revision) Section 261 c Revised as at 31st December, 2022 Page 171
s.261Duty of Registrar and corporate services providers
MODIFIED(1) A corporate services provider engaged by a company pursuant to section 252 , or the Registrar if so engaged, shall provide an information technology solution, either directly or through another corporate services provider, that enables the corporate services provider or Registrar, as the case may be — (a) to establish and maintain the company ’ s beneficial ownership register on its behalf; and (b) to provide the information on the beneficial ownership register to the competent authority by way of the search platform established pursuant to section 260 . (2) The corporate services provider shall regularly deposit beneficial ownership information received from the companies that have engaged the provider, in such place, in such manner and at such intervals as may be prescribed. (3) If default is made in complying with subsection (2), the corporate services provider and any officer of the corporate services provider who is in default — (a) shall incur a penalty of five hundred dollars; and (b) if the competent authority is satisfied that the default was knowingly or wilfully authorised or permitted, shall incur an additional penalty of one thousand dollars and a further penalty of one hundred dollars for every day during which the default continues.
s.262Limits on searches that may be executed
MODIFIED(1) The competent authority shall execute a search of a company ’ s beneficial ownership register by means of the search platform if formally requested to do so by a senior official designated by name or position by the Minister, representing one of the following bodies — (a) the financial intelligence unit, as defined in the Proceeds of Crime Act (2020 Revision) ; (b) the Financial Reporting Authority, as defined in the Proceeds of Crime Act (2020 Revision) ; (c) the Cayman Islands Monetary Authority; (ca) the Anti-Corruption Commission established under section 3 of the Anti- Corruption Act (2019 Revision) ; (d) the Tax Information Authority, designated under section 4 of the Tax Information Authority Act (2021Revision) ; and (e) any other body which is assigned responsibility for monitoring compliance with money laundering regulations under section 4(9) of the Proceeds of Crime Act (2020 Revision) . Section 263 Companies Act (2023 Revision) Page 172 Revised as at 31st December, 2022 c (2) Repealed by section 8(b) of the Companies (Amendment) Act, 2020 [Law 4 of 2020] . (3) The competent authority shall execute a search of a company ’ s beneficial ownership register by means of the search platform if formally requested to do so by the Financial Crime Unit of the Royal Cayman Islands Police Service if a senior official of the Unit certifies that the request for the search is in response to a request from a jurisdiction listed in
s.265Right to issue restrictions notice
MODIFIED(1) The corporate services provider of a company to which this Part applies may send a restrictions notice to a person who has a relevant interest in that company if, by the end of the period of one month beginning with the date of receipt of the notice — (a) a notice under section 249 or 255 was served on the person; (b) the person has not — (i) complied with the notice; or (ii) provided the company with a valid reason sufficient to justify the person ’ s failure to comply with the notice; and (c) the relevant interest is not subject to a security interest granted to a third party who is not affiliated with the person. (2) In deciding whether to send a restrictions notice, the corporate services provider shall have regard to the effect of the notice on the rights of persons in respect of the relevant interest, including third parties, persons with a security interest over the relevant interest, shareholders and other beneficial owners.
s.266Effect of restrictions notice
MODIFIED(1) The effect of a restrictions notice with respect to a relevant interest is as follows — (a) any transfer or agreement to transfer the interest is void; (b) no rights are exercisable in respect of the interest; (c) no shares may be issued in respect of the interest or in pursuance of an offer made to the interest-holder; (d) except in a liquidation, no payment may be made of sums due from the company in respect of the interest, whether in respect of capital or otherwise; and (e) other than in a liquidation, an agreement to transfer any of the following associated rights in relation to the relevant interest is void — Section 267 Companies Act (2023 Revision) Page 174 Revised as at 31st December, 2022 c (i) a right to be issued with any shares issued in respect of the relevant interest; or (ii) a right to receive payment of any sums due from the company in respect of the relevant interest. (2) This section does not apply to an agreement to transfer a relevant interest referred to in subsection (1)(a) or to an associated right referred to in subsection (1)(e), if the agreement results from the making of an order referred to in section 270(2)(b).
s.267Protection of third party rights
MODIFIED(1) The Grand Court may, on application by any person aggrieved, give a direction for the purpose of protecting the rights of third parties, persons with a security interest over the relevant interest, shareholders or other beneficial owners in respect of a relevant interest, if the Court is satisfied that a restrictions notice unfairly affects those rights. (2) An order under this section — (a) shall direct, subject to such terms as the Court thinks fit, that certain acts will not constitute a breach of the restrictions placed on the relevant interest by the restrictions notice; (b) shall specify the acts that will not constitute a breach of the restrictions; and (c) may confine the direction to cases where those acts are done by persons, or for purposes, described in the order.
s.268Breach of restrictions an offence
MODIFIED(1) A person commits an offence who, knowing that a relevant interest is subject to restrictions — (a) exercises or purports to exercise any right to dispose of the relevant interest; (b) exercises or purports to exercise any right to dispose of any right to be issued with the relevant interest; or (c) votes in respect of the relevant interest (whether as holder of the interest or as proxy) or appoints a proxy to vote in respect of the relevant interest. (2) A person who has a relevant interest that the person knows to be subject to restrictions commits an offence if the person — (a) knows a person to be entitled (apart from the restrictions) to vote in respect of the interest, whether as holder or as proxy; (b) does not know the person to be aware of the fact that the interest is subject to restrictions; and (c) fails to notify the person of that fact. Companies Act (2023 Revision) Section 269 c Revised as at 31st December, 2022 Page 175 (3) A person commits an offence if the person — (a) has a relevant interest that the person knows to be subject to restrictions or is entitled to an associated right; and (b) enters into an agreement that is void by virtue of section 266(1)(a) or (e). (4) A person who commits an offence under this section is liable on summary conviction to a fine of five thousand dollars. (5) No person commits an offence who contravenes subsections (1) to (3) in compliance with a direction of the Grand Court given under section 267 or 270 .
s.270Relaxation of restrictions
MODIFIED(1) A corporate services providerthat issues a restrictions notice, or any person aggrieved by such notice, may apply to the Grand Court for an order directing that the relevant interest cease to be subject to restrictions. (2) The Grand Court may only make an order under this section if — (a) the Court is satisfied that the information required by the notice served under section 249 or 255 has been disclosed to the company and no unfair advantage has accrued to any person as a result of the earlier failure to make that disclosure; or (b) the relevant interest is to be transferred for valuable consideration and the Court approves the transfer. (3) An order made by virtue of subsection (2)(b) may continue, in whole or in part, the restrictions mentioned in section 266(1)(c) and (d) so far as they relate to a right acquired or offer made before the transfer. (4) Where any restrictions continue in force by virtue of subsection (3) — (a) an application may be made under this section for an order directing that the relevant interest cease to be subject to those restrictions; and (b) subsection (2) does not apply in relation to the making of such an order.
s.271Orders for sale
MODIFIED(1) On application by a corporate services providerthat issues a restrictions notice, the Grand Court may order that the relevant interest subject to restrictions be sold, provided that the Court approves the sale. (2) A Court that makes an order under subsection (1) may make such further order relating to the sale or transfer of the interest as it thinks fit on application by — Section 272 Companies Act (2023 Revision) Page 176 Revised as at 31st December, 2022 c (a) the corporate services provider that issued the restrictions notice; (b) the person appointed in pursuance of the order to effect the sale; or (c) any person with an interest in the relevant interest. (3) On making an order under subsection (1) or (2), the Court may order that the applicant ’ s costs be paid from the proceeds of sale.
s.272Proceeds of sale of relevant interest
MODIFIED(1) If a relevant interest is sold pursuant to an order under section 271 , the proceeds of the sale, less the costs of the sale, must be paid into the Grand Court for the benefit of persons who are beneficially interested in the relevant interest. (2) A person who is beneficially interested in the relevant interest may apply to the Grand Court for the whole or part of those proceeds to be paid to that person. (3) On an application under subsection (2), the Court shall order the payment to the applicant of — (a) the whole of the proceeds of sale together with any interest on the proceeds; or (b) if another person was also beneficially interested in the relevant interest at the time of the sale, such proportion of the proceeds (and any interest) as the value of the applicant ’ s interest bears to the total value of the relevant interest. (4) Where the Court has ordered under section 271(3) that the costs of an applicant be paid from the proceeds of sale, the applicant is entitled to payment of those costs before any person receives any part of the proceeds under this section.
s.273Corporate services provider may withdraw restrictions notice
MODIFIEDA corporate services providerthat issues a restrictions notice to a person shall by notice withdraw the restrictions notice if — (a) it is satisfied that there is a valid reason sufficient to justify the person ’ s failure to comply with the notice served under section 249 or 255 ; (b) the notice served under section 249 or 255 is complied with; or (c) the corporate services providerdiscovers that the rights of a third party in respect of the relevant interest are being unfairly affected by the restrictions notice. Companies Act (2023 Revision) Section 274 c Revised as at 31st December, 2022 Page 177 Offences
s.275Failure to comply with notices
MODIFIED(1) A person to whom a notice under section 249 or 255 is addressed commits an offence if the person — (a) knowingly and wilfully fails to comply with the notice; or (b) in purported compliance with the notice — (i) makes a statement that the person knows to be false in a material particular; or (ii) recklessly makes a statement that is false in a material particular. (2) A person does not commit an offence under subsection (1)(a) if the person proves that the requirement to give information was frivolous or vexatious. (3) A person who commits an offence under this section is liable — (a) on conviction on indictment — (i) in the case of a first offence, to a fine of twenty-five thousand dollars; or (ii) in the case of a second or subsequent offence, to a fine of fifty thousand dollars or to imprisonment for a term of two years, or to both; or (b) on summary conviction to imprisonment for a term of twelve months or a fine of five thousand dollars, or to both.
s.276Failure to provide information
MODIFIED(1) A person commits an offence if the person — (a) knowingly and wilfully fails to comply with a duty under section 250 or 257 within the time required by that section; or Section 277 Companies Act (2023 Revision) Page 178 Revised as at 31st December, 2022 c (b) in purported compliance with such a duty — (i) makes a statement that the person knows to be false in a material particular; or (ii) recklessly makes a statement that is false in a material particular. (2) A person who commits an offence under this section is liable — (a) on conviction on indictment — (i) in the case of a first offence, to a fine of twenty-five thousand dollars; or (ii) in the case of a second or subsequent offence, to a fine of fifty thousand dollars or to imprisonment for a term of two years, or to both; or (b) on summary conviction to imprisonment for a term of twelve months or to a fine of five thousand dollars, or to both.
s.277Unlawful search or disclosure of beneficial ownership information
MODIFIEDA person who conducts a search of a company ’ s beneficial ownership register contrary to section 262(3), (3A) or (4) or discloses beneficial ownership information contrary to section 264 commits an offence and is liable on summary conviction to a fine of five thousand dollars or imprisonment for twelve months, or to both.
s.279Exemptions
MODIFIED(1) The competent authority, if satisfied, having regard to any undertaking given by an individual or a legal entity, that there are special reasons for an exemption from compliance with a notice or duty under this Part, may exempt — (a) the individual or legal entity from complying with a notice issued under section 249 or 255 ; (b) a company from taking steps to identify that individual or legal entity or give notice under section 249 or 255 to or with respect to them; Companies Act (2023 Revision) Section 279A c Revised as at 31st December, 2022 Page 179 (c) anyone from sending a notice or giving information pursuant to a notice under section 249(3); (d) the individual or legal entity from the duties imposed by sections 250 and 255 ; or (e) the individual or legal entity from being entered on a company ’ s beneficial ownership register as a registrable person in relation to any company. (2) The competent authority shall exercise the exemption powers in subsection (1) in accordance with the prescribed criteria. 279A. Request for additional information 279A .(1) The competent authority may request by notice in writing, additional information from a company or corporate services provider for the purposes of carrying out its functions under this Part. (2) A company or corporate services provider which receives a notice for information under subsection (1) shall comply with the notice within the period and in the manner specified in the request. (3) Repealed by section 8 of the Companies (Amendment) (No. 3) Act, 2020 [Act 60 of 2020] .
s.280Regulations
MODIFIED(1) The Cabinet may make regulations respecting anything required to carry out this Part or prescribing anything required to be prescribed under this Part, including regulations — (a) specifying criteria for the exercise of the competent authority ’ s exemption powers under section 279 ; (b) respecting the giving of notices under section 249 or 255 , including the form, content and manner of giving such notices; (c) to add to or remove from any of the lists of required particulars, including specifying the particulars required respecting the nature of control of a person referred to in section 254 over the company referred to in the particulars; (d) requiring additional matters to be noted in a company ’ s beneficial ownership register; (e) requiring the competent authority, the Registrar, a corporate services provider or a company to refrain from using or disclosing particulars of a prescribed kind from a company ’ s beneficial ownership register (or to refrain from doing so except in prescribed circumstances) where an application is made to the competent authority requesting them to refrain from so doing; Section 280 Companies Act (2023 Revision) Page 180 Revised as at 31st December, 2022 c (f) specifying the manner and form in which a company shall keep its beneficial ownership register; (g) setting the fees that the Registrar may charge for services pursuant to an engagement by a company under section 252 to establish and maintain the company ’ s beneficial ownership register; (h) respecting the procedure to be followed by corporate services providers issuing and withdrawing restrictions notices, including regulations providing for — (i) the form and content of restrictions notices, and the manner in which they must be given; (ii) the factors to be taken into account in deciding what counts as a reason sufficient to justify a person ’ s failure to comply with a notice issued under section 249 or 255 ; (iii) the effect of withdrawing a restrictions notice on matters that are pending with respect to the relevant interest when the notice is withdrawn; and (i) adding the name of any country or territory to
s.281Transitional provisions
MODIFIED(1) No prosecution may be commenced against a company for an offence under section 274, unless the act or omission that constituted the offence took place at least one year after the coming into force of that section in the Companies (Amendment) Act, 2017 [Law 2 of 2017] . (2) A company which is incorporated or registered after the date of the commencement of the Companies (Amendment) Act, 2019 [Law 10 of 2019] shall comply with section 40 as amended no later than three months after the date of the commencement of the Companies (Amendment) Act, 2019 [Law 10 of 2019] . (3) A company which is incorporated or registered at the date of the commencement of the Companies (Amendment) Act, 2019 [Law 10 of 2019] shall comply with section 40 as amended by the Companies (Amendment) Act, 2019 [Law 10 of 2019] no later than six months after the date of the commencement of the Companies (Amendment) Act, 2019 [Law 10 of 2019] . PART XVIIB – Administrative fines 281A. Registrar’s power to fine 281A .The Registrar has the power to impose an administrative fine on a person who breaches a provision of this Act that is specified in
s.283Regulations
MODIFIEDThe Cabinet may make regulations prescribing all matters that are required or permitted under this Act to be prescribed, or are necessary or convenient to be prescribed for giving effect to the purposes of this Law. Companies Act (2023 Revision)