There are two ways a Cayman Islands (‘Cayman’) exempt company’s existence can come to an end. It can be liquidated or it can be struck off the register of companies by the Cayman Companies Registrar.
If a company is no longer carrying on business or has ceased operations if may be struck off the register however termination in this way leaves the risk that, for a period of up to ten years after the strike-off, creditors, shareholders or other claimants can revive the struck-off company. They can do this by applying to the courts to obtain satisfaction of their claims (under s.159 of the Law). Furthermore, s.160 of the Law states unequivocally that:
“the striking off the register of any company under this Law shall not affect the liability, if any, of any director, manager, officer or member (i.e., a shareholder) of the company, and such liability shall continue and may be enforced as if the company had not been dissolved.”
A formal winding up of the company (liquidation) ensures that the liability of all officers, directors and other stakeholders to creditors and other claimants of the company is finalised.