The shareholders in a Company in the Cayman Islands
have limited liability, up to the amount they have invested in the company. When an individual becomes a shareholder, he will provide his personal information to be included in a special register, however, there is no requirement for public disclosure, and thus the identities of the Cayman Islands shareholders are protected.
Investors who are interested in setting up a Cayman Islands Company
benefit from all of the advantages offered by this jurisdiction, including low requirements for company incorporation and management. The shareholders have rights and obligations as per their types of shares or as otherwise specified in the Articles of Association.
Facts about shareholders in the Cayman Islands
The rights of the shareholders
, as well as their liabilities, are generally defined in the respective company’s Articles of Association and its Memorandum. Another source for the treatment and the rights of shareholders is the general law applicable in this jurisdiction, most commonly the Companies Law. One of our agents who specialize in Cayman Islands incorporation
can give investors more details as per the existing laws that apply to shareholders according to the type of company and in general.
Some of the main issues regarding shareholders in the Cayman Islands include the following:
Residency: there is no requirement for the shareholders to be Cayman residents.
Shareholder’s register: this is a document that can be kept at another location, not the registered office, and it is not public.
Shareholder meetings: the rules for Cayman Islands companies do not require that the shareholders arrange for an annual meeting.
Minimum number: the Cayman Islands incorporation process is a simple one and the company can be registered with only one shareholder.
The rights of shareholders in the Cayman Islands
The main rights of company shareholders in the Cayman Islands are summarized below:
• Voting rights: in general, each member has one vote, unless otherwise specified in the Articles of Association.
• Notification period: a five-day notice is usually the norm when summoning a general shareholder’s meeting.
• Special approval: shareholders are entitled, in some conditions, to offer special approval for example for the alteration of the Articles of Association.
• Special inspection: the shareholder may, under certain conditions, request the appointment of an inspector who will examine the company’s situation.
Shareholders act in their own name and in their own behalf in the event if a wring that is done against them by another shareholder or by the company. When a shareholder takes action against the company, the remedies against the company are usually limited to a declaration of injunction. As far as minority shareholders are concerned, when they are not satisfied with the manner in which the company is run, they can, in some cases, seek court relief. In practice, however, the general rule is that the court does not interfere with the management of the company. An exception to this rule can be the situation in which the act that the shareholders complain of is illegal and cannot be ratified by the majority.
In some situations, a shareholder may choose to enforce not a personal right but a claim on behalf of the company. Shareholders may bring a derivative action against directors who are found guilty of having breached their fiduciary duties to the company.
Company shareholders in the Cayman Islands may address the court through a formal complaint when the company is run in an oppressive manner or in a manner that is prejudicial to all or part of the shareholders. Examples of such situations can include fraud, illegality, disagreements in the company management that is a deadlock, the mismanagement of the company’s funds. In some cases, when the court agrees that there has been an oppression, it may order the company to be wound-up.
One of our Cayman Islands company formation agents can provide more details on the personal actions of the shareholders.
The shareholder rights described herein are not exhaustive and investors are advised to seek personalized assistance and advice for particular shareholder matters when running a company in the Cayman Islands.
Our team of agents who specialize in the Cayman Islands exempted company
, as well as other legal entities and general incorporation issues, can offer complete assistance and guidance when opening a company. Shareholders and directors can request our services for dealing with specific issues.
The Cayman Islands is a popular destination for company formation, as shown in the statistics issued by the General Registry:
- 1,125 companies registered in April 2019;
- 920 exempt companies registered in April 2019;
- 67 foreign companies registered in April 2019;
- 16,326 companies registered in 2018.
for complete information about the conditions for opening and managing a company in the Cayman Islands.