Voluntary Termination of a Cayman Islands Company

Under the Cayman Islands Companies Act (Revised), there are two principal routes to voluntarily terminate a company’s existence:

1. Voluntary Liquidation
2. Striking Off

Each process has distinct procedural requirements, timelines and implications.

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Voluntary Liquidation

Voluntary liquidation is generally the suggested where a company has been conducting business on a regular basis or has assets, liabilities and / or creditors. For solvent companies, it offers a clean, orderly exit that protects directors and shareholders while ensuring statutory compliance.

Key steps:

• Clearing of assets and liabilities, closure of bank accounts and termination of agreements.
• Shareholder Resolution – Subject to the company’s articles of association, a special resolution is passed to wind up the company. The winding up is deemed to commence upon passing the resolution, at which point the company must cease business except as necessary for the liquidation.
• Declaration of Solvency – Directors sign the prescribed form confirming the company’s solvency.
• Appointment of Liquidator – One or more liquidators are appointed to wind up the company’s affairs and distribute any assets. A director or officer may serve as liquidator.
• Regulatory Filings – Within 28 days of commencement, the liquidator must:
  • File notice of winding up, consent to act and the declaration of solvency with the Cayman Registrar of Companies (the Registrar).
  • Publish notice of winding up in the Cayman Gazette.
    The liquidator’s appointment takes effect upon filing consent with the Registrar, at which point directors’ powers cease.
• Winding Up – The liquidator settles any creditor claims and final dividends.
• Final Meeting – Notice of the final general meeting must be published in the Gazette at least 21 days in advance. The meeting is typically attended by proxy.
• Completion – Notice of completion is filed with the Registrar within seven (7) days of the final meeting.

Timeline: Typically 3–4 months from commencement, though complex cases may take up to a year.

Key takeaways:

Liquidation results in a secure, creditor‑protected closure of a company, although the process comes with increased complexity, cost and length of time compared to striking off.

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Striking Off

Striking off is a simpler, less costly method suited to companies that are inactive, asset-free, liability-free and ideally without a trading history.

Process:

• Application – The company requests the Registrar to strike it off the Register of Companies, supported by:
  • A shareholder resolution requesting strike off.
  • A director’s affidavit confirming no assets or liabilities.
• Registrar’s Action – If satisfied the company is not carrying on business, the Registrar strikes it off and publishes a notice in the Cayman Gazette stating the date and reason for dissolution.

Key considerations:

• Reinstatement – A member or creditor may apply to Court for reinstatement within two (2) years (extendable to 10 years with the Governor in Council’s approval). Reinstatement requires proof the company was operational at the time of strike off or that reinstatement is otherwise just. Fees equivalent to the original incorporation fee apply, and the Court may award damages to restore parties to their pre–strike off position.
• Liabilities – Striking off does not extinguish the liabilities of directors, officers or members.
• Undischarged Assets – Any assets remaining at strike off automatically vest in the Financial Secretary for the benefit of the Cayman Islands.
• When not to use – If the company has been actively trading or holds assets/liabilities that have not been discharged, liquidation is the recommended route.

Choosing the Right Termination Route 

While both voluntary liquidation and striking off achieve the same ultimate result — bringing a company’s existence to an end — the processes differ in formality, cost, and suitability. The table below provides a side‑by‑side comparison to help determine the most appropriate option based on a company’s circumstances.

Aspect	Voluntary Liquidation	Striking Off
Best suited for	Companies that are solvent and have a trading history / have been active.	Dormant companies with no assets, liabilities, or trading history.
Governing law	Cayman Islands Companies Act (Revised) – voluntary winding up provisions.	Cayman Islands Companies Act (Revised) – Registrar’s powers to strike off.
Initiation	Special resolution of shareholders.	Shareholder resolution plus director’s affidavit confirming no assets/liabilities.
Key filings	Declaration of solvency; notice of winding up; liquidator’s consent to act; final return.	Application to Registrar with required supporting documents.
Public notice	Notices in the Cayman Gazette (commencement and final meeting).	Registrar publishes strike‑off notice in Cayman Gazette.
Role of liquidator	Required – appointed to settle affairs, pay creditors, distribute assets.	Not applicable – no liquidator appointed.
Effect on directors	Directors’ powers cease upon liquidator’s appointment.	Directors remain in office until dissolution; liabilities may still attach.
Liability after dissolution	Extinguished once liquidation is complete.	Continues for directors, officers, members.
Reinstatement	Not applicable – company must re‑incorporate if needed.	Possible within 2 years (extendable to 10) by Court order, fees apply.
Undisposed assets	Distributed by liquidator before dissolution.	Vest in the Financial Secretary on dissolution.
Typical timeline	3–4 months (can extend to 12 months).	Around 10 business days.
Cost	Moderate– enquire here  to get a fee estimate.	Low – enquire here to get a fee estimate.
When preferable	Where formal closure, creditor protection, and finality are important.	For cost‑effective removal of inactive, asset‑free companies.

How Marbury Can Assist 

Whether you opt for voluntary liquidation or striking off, ensuring the process is handled efficiently and in full compliance with Cayman Islands requirements is essential. Marbury’s experienced company secretarial and administration team provides end‑to‑end support — from preparing resolutions and statutory filings to liaising with the Registrar and guiding you through each procedural step. Our focus is on delivering a smooth, timely closure while safeguarding your compliance and minimising risk, allowing you to move forward with confidence.

Contact your usual Marbury relationship manager or info@marburys.com for more information and to discuss your options.