All discussions about directors duties in jersey begin with article 74 of the companies law. Directors duties cayman islands law reform commission. The law applies to each class of director whether or not the director is resident in cayman. There is no statutory codification in the cayman islands of the general. All directors are bound by their fiduciary duty and the duty of care and skill. Cayman law represents businesses and individuals from all around the globe in the cayman islands. Looking to the west for answers gautam sundaresh cyril amarchand mangaldas follow this and additional works at.
This codified standard applies in addition to, and not in substitution of the common law duties of a director. Articles 74, 75 and 76 of the companies law and the customary law. The law is designed to enable the cayman islands monetary authority cima to, amongst other things, approve or deny applicants for registration or licensing as directors and retain detailed information on directors for the purposes of both assisting overseas regulatory authorities and carrying out its own regulatory functions. Duties of directors of cayman companies dillon eustace.
Alric lindsay is a cayman islands corporatefunds lawyer and an independent fund director approved by the cayman islands monetary authority and licensed under the directors registration and licensing law. In general, this means that directors must act in the interests of all members collectively. This quick guide provides an overview of some of the main duties of directors of cayman islands companies. A quick guide to directors duties in the cayman islands. Thus, the revised rules on directors duties are backed up by.
The information contained in this guide is provided for the general interest of our readers, but is not intended to constitute legal advice. The business and affairs of every corporation organized under this chapter shall be managed by or under the direction of a board of directors. This memorandum provides a summary of duties and liabilities of directors of companies incorporated under the laws of the cayman islands. The common law duties of directors at common law a director owes two types of duty to the company. Directors duties and liabilities under cayman islands law. There can also be a breach of this duty by causing a company to enter into risky transactions without any prospect of producing. The duties of directors and by extension other company officers are not codified under the law of the cayman islands. Directors duties in the cayman islands and the weavering macro judgment a directors duties in the cayman islands 8. Duties of directors of companies in financial difficulties. In addition, in 2014, cima promulgated the directors registration and licensing law, which sets registration obligations for directors of most cayman hedge funds and licensing. Duties of a director under british virgin islands law. A guide to directors responsibilities under the companies. Insolvency and directors duties in the cayman islands. The 2006 act has changed this and, for the first time, directors duties are now codified, in an attempt to provide clarity and certainty, although the common law is still relevant.
Memorandum or articles of association registered office directors and officers name of the company. Clear media is listed on the mainboard of the stock exchange of hong kong and is the largest operator of bus shelter advertising panels in china. This memorandum provides a summary of the duties and liabilities of a director of a company incorporated under the laws of the cayman islands. A breach of these duties can lead to personal liability and possible disqualificationfrom being able to act as a director or being involved in the management of the company for a specified period. In addition to the general duties derived from the common law, certain duties are to be found in cayman islands statutes, principally the companies law. The utility regulation and competition law, 2016 7 cayman islands law 49 of 2016. The following copies of various laws and regulations are provided for informational purposes only. Duties of directors of companies in the cayman islands are determined by cayman common law and statute and are summarised below. Principle 6 duty not to enter into transactions in which the directors have an interest except in compliance with the requirements of the law. The duties and liabilities of the directors of a company under cayman islands law arise from.
The situation is governed by the companies law of the cayman islands the companies law and the common law so far as it has not been amended by statutory provision. It is not intended to be an exhaustive statement of the law in this area but merely to be of some guidance to persons who act as directors of such companies. Fiduciary duties of directors during corporate failure in india. Please see our guide to directors duties and companyobligations under cayman islands law for. Duties of directors of jersey companies offshore law firm. Cayman it is not intended to be exhaustive but merely to provide brief details and information which we hope will be of use to our clients. Under cayman islands law, directors have certain duties, as agents of a company, of care, diligence and skill and also a fiduciary duty to act in the best interests of the company. In fact, the body of case law dealing with the directors fiduciary duty and the duty of care and skill remains applicable. A director of a company has certain duties where he has a material.
Some of the common law principles are incorporated in statute and legal precedents. Duties and obligations of a director of a cayman islands fund. Duties of directors under cayman islands law, our directors have a fiduciary duty to the company to act in good faith in their dealings with or on behalf of our company and exercise their powers and fulfill the duties of their office honestly and loyally. These duties are essentially to act in good faith to the company and the duty not to make secret profits. It is also important to consider whether the same duties and obligations apply to other members of the management structure. A director of a company must not allow personal interests to conflict with the interests of the company. The laws and regulations have been categorised alphabetically to help you find them more easily. Particular circumstances or transactions should be the subject of specific legal advice given on the.
We recommend that our clients seek legal advice in the cayman islands on their specific issues before taking action. Acting as a director of a cayman islands company ogier. The purpose of this guide is to provide an overview of the powers, duties and obligations of a director of an exempted company fund incorporated under the companies law of the cayman islands. Razaak busari deputy head of insurance, cayman islands monetary authority michael gibbs president, kensington management group, ltd. Under the companies law, officers are broadly subject to the same duties as those imposed on a director. Cayman islands company law is primarily codified in the companies law 2018 revision and the limited liability companies law, 2016, and to a lesser extent in the securities and investment business law 2015 revision. Duties of a director under the law of the cayman islands i introduction set out below is a summary of the duties imposed by the law of the cayman islands upon a director of a cayman islands company and a description of the standard a director is obliged to meet in the proper discharge of those duties. The duties of directors in company law are to act in the best interest of a company and its shareholders within the bounds of the law. Th ere is a divergence of approach to their powers to do so across the off shore jurisdictions. Duties of directors of companies in the cayman islands are determined by cayman. Walkers cayman duties and liabilities of directors. Th eir duties may sometimes lead them to need to seek the winding up of the company.
Cayman in addition to certain statutory obligations, directors are subject to equitable and common law duties, including to. The statement of guidance for regulated mutual funds published by the cayman islands monetary authority cima is also instructive for directors of cayman islands mutual funds. In both the cayman islands and the bvi, directors duties are based on a mix of english common law, statute and regulatory guidance. The cayman islands is a leading offshore financial centre also known as a tax haven, and financial services forms a significant part of the economy of the. It deals in cayman broad terms with the requirements of islands law. Duties and liability in cayman islands law duties and liabilities of directors of companies in the cayman islands are determined by legislation in the companies law revised and by the common law from which precedents are established. General duties of directors duties of directors director tools duty in relation to the approval of financial statements centro case and board approval of statements issued by a company james hardie cases.
The new edition features all important developments in the law including the small business, enterprise and employment act 2015 which improves transparency including requiring directors to be natural persons unless. A companys wellbeing rests on the shoulders of its directors. Jul 25, 2019 duties of directors of companies in the cayman islands are determined by cayman common law and statute and are summarised below. Directors duties and obligations under cayman islands law. Common law duties applicable to directors are generally varied under the terms of the articles of association of a cayman company including provision for delegation of directors powers to service. Some of the common law principles are incorporated in statute and legal precedents evolve over time as new cases are tried before the grand court, court. Nick hoffman and grainne king, 02 november 2018 in the cayman islands, where there is no specific law on directors duties, its common for company articles of association or service contracts to limit or exclude directors liability or indemnity. These duties are generally owed to the cayman company but can in certain circumstances be owed directly to the companys shareholders or creditors. The firm is led by chris narborough, who has over 25 years experience in the jurisdiction as an attorney, and has been involved in many of its highest profile and successful projects. Change in definition of beneficial ownership as highlighted in our previous bulletin here certain cayman islands companies are required to establish and maintain a register. Cayman islands law essentially imports the appropriate principles of english common law prior to the enactment of the companies act 2006 of the united kingdom, which have been substantially confirmed by decisions of the courts of the cayman islands.
In the case of the directors of many cayman islands companies, the law of other jurisdictions, e. Under english common law, which has been followed in the cayman islands, directors owe fiduciary duties to the company. This is a sample resolution to be adopted by the board of directors of a corporation appointing officers for the corporation. It has long been established that a director owes both common law and fiduciary duties to the company for whom he acts. The companies law and continuing requirements of a cayman islands company the companies law. A director owes fiduciary duties to the company and will act as an agent of the company. Cayman law cayman law mediation corporate secretary. Responsibilities of officers and directors under texas and. A guide to directors responsibilities under the companies act 2006. The cayman islands attracted global attention as a result of the weavering macro fixed income fund limited in liquidation vs. Directors duties and obligations under cayman islands law harneys.
This is a new edition of the established authority on the law relating to directors of companies incorporated under the uk companies acts. Duties and obligations of a director of a cayman islands. Although the case law has developed the nature and content of these duties by reference to directors, the principles should, in practice, be regarded as being of equal application to any officer of the company authorised to act on its behalf. Duties no income, corporation, capital gains taxation in the cayman islands 20year tax exemption annual return and fee to the registrar of companies certain changes to be filed with the registrar.
The judges largely obiter comments regarding directors duties and the steps to be taken to discharge those duties in a cayman investment fund context were of particular note. Duties of directors of cayman companies cayman islands. Both of these duties shall be examined in more detail below. In the cayman islands the primary source from which directors duties emanate is the common law. A director of a corporate fund owes the same duties to the fund as a director of any other cayman islands. We are experienced in all types of international and crossborder transactions covering a broad range of sectors with a particular focus on both contentious and noncontentious corporate and finance law, investment funds, private equity. Duties of a director under the law of the cayman islands. Cayman islands directors registration and licensing law. Weavering litigation cayman hedge fund directors duties. From a cayman law standpoint, there is no substantial difference between the core duties of an executive director and non executive director.
A summary of duties and liabilities of directors of companies incorporated under the laws of the cayman islands. The concepts of a company and corporate governance. Fiduciary duties an individual director must act in good faith in their dealings with or on behalf of the company and exercise the powers and fulfil the duties of the office honestly. Under the common law, directors owe fiduciary duties and certain duties of skill and care. This requires that in exercising the directors powers and discharging duties a director shall. Duties and responsibilities of captive board presented by. Stuarts walker hersant humphries cayman islands cayman islands. Law and practice cayman islands 5 campbells advises on cayman islands and british virgin islands law, and has offices in cayman head office, the bvi and hk. A companys directors are the persons to whom the law looks to manage the affairs of a company on behalf of its owners. The group acts for local and overseas insolvency professionals, creditors, investors, directors and other professional service providers in connection with all. Dec 01, 2016 the purpose of this guide is to provide an overview of the powers, duties and obligations of a director of an exempted company fund incorporated under the companies law of the cayman islands.
Directors are often caught between the interests of creditors and shareholders. Of principal significance was the judges statement of the highlevel supervisory duty that directors of cayman investment funds owed, and the practical and. Duties and liabilities of directors of australian companies. Duties and liabilities of directors of companies in the cayman islands are determined by legislation in the companies law revised and by the common law from which precedents are established. Directors duties and obligations under cayman islands law there is no statutory codification in the cayman islands of the general duties, obligations and liabilities owed by directors to cayman islands exempted companies and the duties are based on a combination of english common law, statute and regulatory guidance. Nov 09, 2016 the cayman directors registration and licensing law drll requires that all prospective directors of a cayman islands regulated corporate mutual fund be registered or licensed with the cayman. Walkers advises on the laws of bermuda, the british virgin islands bvi, the cayman islands, guernsey, ireland and jersey channel islands. The cayman islands courts would regard the decisions of the english courts in relation to the duties and liabilities of a director as highly persuasive. Alric also acts as voluntary liquidator to cayman islands entities.
Cayman islands duties and liabilities of directors walkers global. The cayman approach to corporate governance corporate. Directors registration and licensing law publication. Directors duties may also be confined by the companys constitutional documents, namely its articles of association. This is so even in the case of small private companies.