A Cayman Islands company can be dissolved by the appointment of a liquidator or it can be dissolved without such appointment if the company is struck off the register as a result of an application to the Registrar of Companies for the purpose.
Voluntary liquidation
In circumstances where the company has been active and has substantial assets and liabilities, it is normal and recommended for the company to be liquidated.
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In The Matter of Padma Fund L.P. [FSD 201 of 2021] (RJP), the Cayman Grand Court held that the Cayman Court does not have jurisdiction to order the winding up of a Cayman exempted limited partnership (“ELP”) on the basis of a creditor’s petition for the winding up of the ELP. The Court ruled that the correct procedure for a creditor to follow is to commence proceedings against the general partner of the ELP for an unpaid debt.
Voluntary liquidations generally
Commencing the voluntary winding-up of a mutual fund is deceptively easy but, as soon as it is contemplated, the Fund Manager's role and responsibilities change in subtle but very important ways.
Voluntary liquidations generally
There are two principal routes to voluntarily dissolving a Cayman Islands company after the conclusion of its operations. Dissolution can be achieved either through (i) voluntary liquidation, or (ii) a strike-off. The dissolution will mean that the company is removed from the Register maintained by the Registrar of Companies in the Cayman Islands and cease to exist ultimately.
Voluntary liquidations generally
As the conclusion of 2019 approaches, clients should give some thought to whether or not they have Cayman entities which they are no longer using and wish to liquidate prior to the end of 2019 in order to, among other things, avoid annual government registration fees due in January 2020. A voluntary liquidator of a Cayman company or exempted limited partnership (ELP) is required to hold the final general meeting for that company or file the final dissolution notice for that ELP on or before 31 January 2020.