Voluntary Liquidations & Strike Offs
Still need your fund entity? You can minimize or avoid 2022 fees by liquidating the entity in good time.
How much can be saved?
For non-CIMA Registered Entities, 2022 Registrar of Companies fees can be avoided if a Voluntary Liquidator has held the entity’s final general meeting before 31 January 2022. For a Limited Partnership, the final dissolution notice must be filed by this date.
For CIMA Registered Funds, provided the fund files notices with CIMA for the fund to be placed into ‘License Under Liquidation’ by 31 December 2021, the 2022 annual CIMA license fee ($3,500 per entity) can be avoided.
Funds which have a status of ‘Licence Under Termination’ but which have not yet filed all of the deregistration documents with CIMA (including completion of the final stub period audit) will be required to pay half fees for 2022.
CIMA will require submission of the audited financial statements from the date of the last financial year (for which audited statements have been filed) either to the date the fund ceased to carry on business in or from the Islands or to the date of commencement of winding up where a third party liquidator(s) have been appointed. If no third-party liquidator(s) have been appointed, the audit must cover to the date of final distribution or to the date that the final NAV was calculated, with subsequent events notes to confirm that the final distribution has been paid to investors.
Stub period audit waivers may be granted by CIMA (on payment of a fee) in a number of limited circumstances (contact us for more details).
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.
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).
We can also assist with the CIMA de-registration process if required.
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.