A company no longer carrying on business may apply to the Registrar to be struck off. A creditor or shareholder who objects to the company being struck off may, for a period of up to 10 years following the date the company was struck off, apply to the court for the company to be reinstated.
The strike off provisions provide a convenient, simpler alternative to a winding up, avoiding the need for the appointment of a liquidator; but the reinstatement provisions mean that a strike off is a less certain method of dissolving an exempted company. For this reason, strike off tends to be appropriate only where a company has not operated, or has operated only as a pass through vehicle without having had any external shareholders or without having incurred any liabilities to third parties.
Where the company has been active and has, or has had, substantial assets and liabilities a voluntary liquidation pursuant to the Companies Law would generally be the appropriate procedure to wind down. The voluntary winding up must be approved by the appropriate majority required for a special resolution of the shareholders as set out in the Articles, typically a two thirds majority of the shareholders present at a general meeting or alternatively, if permitted by the Articles, by a resolution in writing signed by all of the members entitled to vote. A copy of the special resolution is filed with the Registrar and notice of the winding up and appointment of the liquidator is published in the Cayman Islands Gazette. The Companies Law contains provisions for the application and distribution of the exempted company’s assets on winding-up and following distribution to creditors any surplus shall be distributed to shareholders in accordance with the Articles. Once the affairs of the company are fully wound up, the liquidator is required to advertise the final general meeting of the company, which is to be held not less than one month after the date the notice is published, for the purposes of explaining the final accounts of the liquidation. The liquidator will prepare a return relating to the final meeting in the prescribed form which is filed with the Registrar. The exempted company will be deemed to be dissolved three months from the date of the filing of the return.