Laura Oseland – Nelsons

About Laura Oseland

Laura specializes in corporate governance, corporate / asset acquisitions and disposals and funding arrangements that include various corporate and partnership structures. Laura has a passion for governance, structuring, sustainability, and the environment.

Liquidating a Solvent Company in the Cayman Islands

June 2024 A solvent Cayman Islands company may be dissolved in one of two ways (i) by voluntary liquidation; or (ii) strike off. Under the Companies Act (as revised) (Companies Act), a Cayman company is regarded as solvent if it can pay its debts as they fall due in the ordinary course of business. This is particularly important in relation to voluntary liquidation. If during the voluntary liquidation or after the process is complete, the relevant company was not solvent, the directors may face harsh consequences, including fines and imprisonment. Strike-off In certain circumstances, the directors of a company may apply to the Registrar of Companies (Registrar) to have the company struck off the Company Register of the Cayman Islands. This procedure is only appropriate where the company: is not conducting any business and ideally have never operated; and has no (or only nominal) assets and liabilities. Although the procedure to strike off a company is more straight forward and less expensive than a voluntary liquidation, a struck- off company may face potential issues in the future. Such issues include, but are not limited to: any aggrieved creditor or shareholder applying to court to have a struck-off company reinstated within two years of the date of its strike-off (or up to 10 years if the Cabinet of the Cayman Islands allows) as permitted under the Companies Act. As a result, a strike- off does not ensure the end of the company's life. to reinstate the company, it will need to pay annual fees and penalties for the period from strike-off to reinstatement. as a result of reinstatement, the court has the power to award damages to any person to return them to the position they [...]

2024: What to Expect from the Cayman Beneficial Ownership Regime

The Cayman Islands will be implementing enhancements to the beneficial ownership regime currently in place during the course of 2024. The Beneficial Ownership Transparency Act 2023 (Act) was passed by the Cayman Islands Parliament on 23 November 2023. The Act is not yet effective, and we will keep you updated as to the implementation process over the course of 2024. The key aim of the Act is to pull together the various rules relating to beneficial ownership currently split between several laws and regulations for specific types of entities, into a single piece of unified legislation. At present, the beneficial ownership provisions for companies, limited liability partnerships (LLPs) and limited liability companies (LLCs) are set out respectively in the Companies Act 2023 (Revised) (Companies Act), the Limited Liability Partnership Act (2023 Revision) and the Limited Liability Companies Act (2023 Revision). The Act will consolidate, and therefore simplify the beneficial ownership regime to ensure a consistent approach to the treatment of in-scope entities. The current beneficial ownership regime applies to companies incorporated under the Companies Act, LLCs and LLPs. The Act will extend the regime to foundation companies, limited partnerships and exempted limited partnerships. The expansion of the regime to these entities will be in stages and will give the in-scope entities time to assess their obligations and, where required, to adhere with their obligations to establish a register of beneficial ownership. The Act amends the definition of “beneficial owner” so that it is more aligned with the definition under the Cayman Islands Anti-Money Laundering Regulations (the AML Regulations), save that the relevant percentage for determining “control” will remain at 25% or more (not 10% or more, which is the threshold under the current AML Regulations). [...]

Corporate Governance Update: Cayman Islands Regulated Funds

April 2024 A year since the introduction of the updated regulatory measures by CIMA on corporate governance for regulated entities. How are the rules and guidance being implemented by funds? The Cayman Islands Monetary Authority (CIMA) released updated regulatory measures in April 2023 in relation to the rule on corporate governance for regulated entities (Rule) and associated statement of guidance for mutual funds and private funds (Guidance). The Rule has been effective since 14 October 2023. The Rule introduced numerous changes to the previous corporate governance obligations for regulated entities and extends to private funds, which was not previously included. The Rule creates binding requirements on all entities regulated by CIMA. A breach of a Rule could lead to the issuance of a fine or enforcement action taken by CIMA. What is the purpose of the Rule and the Guidance? Pursuant to the Rule, the governing body (i.e. the board of directors, general partner or managing members depending on the entity structure) of a regulated entity (Governing Body) must establish, implement, and maintain a corporate governance framework which provides for sound management oversight and protects the legitimate interests of relevant stakeholders. The Guidance is expected to assist the Governing Body of mutual funds and private funds with interpreting the Rule for implementation in a fund context. How are funds implementing the Rule and Guidance? Funds are implementing a corporate governance manual by pulling together all their operational policies and procedures into one clear and simplified manual that cover the requirements outlined in the paragraph headed ‘What are the required Governance measures?’ below. Even though the minimum requirement for funds is for the Governing Body to meet on an annual basis, we have been assisting [...]