Minimize or avoid 2023 fees by liquidating your entity in good time
Still need your Cayman entity? You can minimize or avoid some 2023 fees by liquidating your entity in good time.
How much can be saved?
For non-CIMA Regulated Entities, 2023 Registrar of Companies fees can be avoided if a Voluntary Liquidator has held the entity’s final general meeting before 31 January 2023. For a Limited Partnership, the final dissolution notice must be filed by this date.
Under updated Rules recently issued by CIMA, the License under Termination (LUT) and License under Liquidation (LUL) status options have been removed and regulated funds must file all applicable deregistration requirements at one time prior to end of the calendar year to avoid the following year’s annual CIMA License Fee. Regulated funds will therefore remain fully registered with CIMA and liable to pay full annual fees until the complete deregistration application has been submitted following the final distribution to investors and the completion of the final audit. The content of the deregistration requirements has not changed substantially under the updated Rules.
Stub period audit waivers may be granted by CIMA (on payment of a fee) in a number of limited circumstances.
CIMA’s Rule on the Cancellation of a License or Certificate of Registration of Regulated Mutual Funds means that funds must apply for de-registration on the earlier of (a) 21 days from the date they cease to carry on business or (b) 31 December of the year the fund ceases to carry on business. Failure to do so is a breach under the amended regulations, attracting administrative fines of between US$6,000 to US$25,000 depending on how quickly the breach is remedied.
What do I need to do?
It is possible to complete a straightforward Voluntary Liquidation (i.e. where the entity has no assets and no liabilities and is de-registered with CIMA) in approximately 60-90 days, so in order to save or avoid 2022 fees, you should commence the process as soon as possible. Should you require this service, please get in touch with your usual IMS contact.
We can assist and provide voluntary liquidation services where we can act as an Independent Voluntary Liquidator and prepare all statutory documentation as part of our process for a fixed fee (barring extraordinary issues).
Instead of a voluntary liquidation, entities can be struck off the Register of Companies/Partnerships. Strike offs are more cost-effective and can be quickly completed. The disadvantage is that the company/partnership could be resurrected at any time within the period of ten years after the date it was struck off. This option is therefore not considered suitable for entities which have traded or had outside investors.
IMS is one of the longest established company management firms in the Cayman Islands. IMS is licensed by the Cayman Islands Monetary Authority to provide independent directors, company management and incorporation, mutual fund administration, captive insurance and trust services. For more information about our services, please contact us.
Disclaimer: this publication does not constitute legal or professional advice and should not be relied on as such.