The Cayman Islands' Companies Amendment Law, 2019 ("Amendment Law"), came into effect 8 August 2019 (apart from Section 5).
Within the amendments, the following important details must be noted:
1. Additional information is now required for Register of Members
In addition to the standard information, a statement detailing the shares held by each member of the company is necessary, should say the company has a capital divided into shares. This statement must explicitly:
List out each share by its number (if it comes with one),
Confirm the amount paid or agreed to be considered as paid on the shares of each member,
Confirm the number and category of shares held by each member, and
Specify whether each relevant category of shares held by a member carries voting rights under the articles of association of the company and if so, if such voting rights are conditional.
2. Filing deadline for notification of changes to Register of Directors and Officers brought forward
Companies are now required to notify the Cayman Registrar of Companies of any change to their register of directors and officers within 30 days of the change.
3. Penalty for failure to maintain or establish Beneficial Ownership (BO) register increased
Any company which fails to comply with Beneficial Ownership Regime obligations ('BOR regime'):
First offense: remains unchanged at US$30,500.
Second and/or subsequent offense: increased to US$122,000.
Third offense: the company will risk being struck off.
As for individuals or entities that fail to comply with relevant BOR regime notices:
First offense: incurs a penalty of US$30,500.
Second and/or subsequent offense: US$61,000 and/or two years of imprisonment.
Likewise, individuals or entities that fail to provide the required beneficial ownership information will incur a penalty of US$61,000 and/or two years of imprisonment.
Do penalties apply for non-compliance with points 1 and 2?
Yes, penalties apply for both cases. If the required statement for the Register of Members is not provided, the entity which has not complied, and every director or manager of the company who has willfully authorized or permitted such a default, a penalty of US$6,100 will be imposed.
For non-compliance in filing changes to the Register of Directors in a timely manner:
The company must pay a penalty of US$610. Furthermore, if the Registrar determines that any non-compliance in the said case has been willfully and knowingly authorized or permitted:
Another penalty of US$1,220 will be imposed on the company.
A penalty of US$1,220 will be imposed on every director and officer of such company.
A penalty of US$122 will be imposed for every day until the non-compliance is addressed.
In addition, please note that the Registrar will make it possible in the future for a company's list of current directors to be available for inspection by any member of the public upon payment of a fee. There are no restrictions on who can make such inquiries, and such persons may include both Cayman residents and non-residents.
Please note that the registered agent can offer independent directors, including in the Cayman Islands.
Considering the high penalties for non-compliance with the Amendment Law, we strongly urge you to provide the necessary information in a timely matter, to avoid issues in the future.
Should you have any questions, please contact us at contact@viss.com.hk for more information.
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