Cayman Companies Law Amendment Refines Notification and Penalties Regime
The Companies (Amendment) Law 2015, which amends sections 55 and 56 of the Companies Law (2013 Revision) (the "Law"), was recently passed by the Cayman Islands Legislative Assembly. It is to come into effect on 2 November 2015 (the "Commencement Date").
A Cayman Islands company is required to maintain a register of directors and officers (the "Register"). The revised Law is a welcome amendment as it lessens certain burdens associated with maintaining the Register; namely, the revised Law (i) provides for a greater period of time within which a company must notify the Registrar of Companies (the "Registrar") of changes to its directors and officers, and (ii) introduces reduced, capped penalties where there is a failure to make such notifications within the specified statutory grace period. Additionally, the Registrar has announced that there will be a waiver period where no penalties are levied where a late notice filing is made from 1 September until the Commencement Date (the "Waiver Period").
Generally, other than upon incorporation, a company has been required to notify the Registrar of any changes to the information contained within the Register (including a change of the name of any director or officer) within 30 days. The revised Law amends the statutory grace period within which the Registrar must be notified of applicable director and officer details, with effect that a company must notify the Registrar of:
(a) upon incorporation, the first appointment of any director of officer within 60 days of that appointment; and
(b) thereafter, any changes in the information contained within the Register (including a change of the name of any director or officer) within 60 days of the change.
Late Filing Penalties
The revised Law also changes the existing penalty regime where a filing is made after the statutory grace period, with effect that:
(a) the penalty for any one breach will be reduced and capped at CI$500 (US$610);
(b) where there are multiple changes to the Register with respect to a single company, which occur within a 60 day period, then such breaches will be penalised as a single breach (capped at CI$500 (US$610)) if the Registrar is notified of such changes on the same day; and
(c) where there are changes to the Register with respect to a group of five or more companies (for example, subsequent to a change in control), then the aggregate penalty for all breaches shall not exceed CI$2,500 (US$3,049), with the penalty to be borne equally by each of the affected group companies.
The revised Law also provides that where the Registrar is satisfied that a breach of the applicable statutory provisions has been intentional, then the company and every director and officer who knowingly and wilfully authorised or permitted such default, will be subject to a separate and additional penalty payment.
Amnesty Waiver Period
The Registrar has announced that during the Waiver Period, no penalties will be levied on any company (or any director or officer) which makes a late notice filing in connection with any prior changes to such company's Register irrespective of when the changes being submitted were made or how many such changes are submitted. Further, any penalty notices which have been issued, but not paid, prior to commencement of the Waiver Period will be cancelled.