INTRODUCTION
Under Section 175 of the Companies Law (as amended) (the "Law"), the Registrar may strike a company off the Register of Companies if he has reasonable cause to believe that the company is not carrying on business or is not in operation. The usual reason why the Registrar would strike a company off is the failure of the company to pay annual statutory fees. Alternatively, a company itself may request that it be struck off.
In the event that a company is struck off voluntarily or by the Registrar, an application may be made to the Grand Court under Section 178 of the Law by the company, a shareholder or a creditor of the company, for an Order that the company be restored to the Register. The application may be made at any time within two years of the date on which the company was struck off or, with the permission of the Governor in Council, at any future period not exceeding ten years from that date.
OUTLINE OF THE BASIC PROCEDURE FOR RESTORATION
- In the event that more than two years have elapsed since
the date on which the company was struck off, a letter must
be obtained from the Governor in Council confirming that
there is no objection to the restoration.
- In every case, a letter must be obtained from the
Registrar of Companies, confirming that the Registrar has no
objection to the restoration of the company. That letter will
set out what fees are payable as a condition of the
restoration. The Registrar will also usually state in the
letter that the Registered Office of the company once
restored, has to be at a licensed professional corporate
service provider.
- The application to the Court can then be made. The
application must be supported by an affidavit sworn by an
authorised representative of the applicant. (In the event
that the company itself is the applicant, a director of the
company would usually swear the affidavit). The affidavit is
required to prove the following facts:
- the company's registration number and date of
registration, with copies of the certificate of
incorporation and memorandum and articles of association
exhibited;
- the date on which the company was struck off, with a
copy of the notice confirming that the company has been
struck off exhibited;
- if more than two years have elapsed, that the Governor
in Cabinet has no objection to the restoration, with a copy
of the letter confirming that lack of objection
exhibited;
- that the Registrar of Companies has no objection to the
restoration, with a copy of the letter confirming that lack
of objection exhibited;
- the amount of the reinstatement fee payable and the
amount of any outstanding annual fees as confirmed in the
letter from the Registrar ((d) above);
- the address where the registered office will be located
assuming the restoration is ordered and, in the event that
a professional service provider is to provide registered
office services, that the professional service provider has
agreed to do so; and
- the reason why the restoration has been applied for
(such as that the company was carrying on business or in
operation or has assets and is thereby aggrieved by the
striking off).
- The application, sworn affidavit and draft Order are
filed with the Clerk of the Court.
- Usually, the Clerk of the Court will determine the
application on paper without the need for a hearing. If the
Clerk is satisfied with the application and the evidence as
filed, the Order will be made confirming the restoration
subject to the conditions that the fees are paid as stated in
the Registrar's letter and that a notice of the new
registered office is filed with the Registrar of
Companies.
- If the Clerk is not satisfied with the application, he
may order that further evidence be filed, that the
application be served on the Registrar of Companies, that an
oral hearing take place before a judge or he may dismiss the
application.
- Once the Order is made, it has to be advertised in the
Cayman Islands Gazette.
TIMEFRAME
The Clerk of the Court will usually consider and determine an application within a week of it being filed. However, time will be required to be allowed for the following:
- obtaining the letter(s) of no objection from the
Registrar of Companies and (if required) the Governor;
- collating the relevant documents that must be exhibited
to the affidavit; and
- having the affidavit sworn, particularly if the deponent
is a person overseas. (The original affidavit must be filed
with the application).
There is little consistency or guidance that can be offered in relation to the time that might be taken for (1) above. Ordinarily the Registrar will respond to a request within no more than two weeks. Obtaining a letter from the Governor in Cabinet could take longer.
Clearly, if the Clerk of the Court does not grant the Order on the application and requires further evidence, service on the Registrar or a hearing before a judge, the timeframe will be extended depending on what is required.
COSTS
The costs involved include:
- the restoration fee (equal to the original incorporation
or registration fee);
- any unpaid/outstanding annual fees;
- the filing fees at Court (currently a total of US$305.00
for the application, affidavit and Order); and
- the advertisement fee payable to the Cayman Islands
Gazette (approximately US$100.00).
Walkers' charges for carrying out all of the preparation work (including obtaining relevant letters and collating documentation, drafting the application, affidavit and Order, filing the application and dealing with advertisement) are usually no more than US$5,000.00, depending on the work involved and subject also to the Court requiring additional evidence, a hearing or other steps/conditions to be complied with.
|
Cayman Islands Wayne Panton, Partner London David Whittome, Partner Jersey Heather Bestwick, Partner |
British Virgin Islands Jack Boldarin, Partner Hong Kong Philip Millward, Partner Dubai Rod Palmer, Partner
|
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
