Companies Winding Up Rules (2023 Consolidation)
Summary
The procedural framework for company liquidations and restructuring in the Cayman Islands.
Sources
Companies_Winding_Up_Rules_(2023_Consolidation).pdf
Last Updated
2026-04-27
The Companies Winding Up Rules provide detailed procedures for the winding up of companies under the companies-act-2025. They cover both compulsory (court-ordered) and voluntary liquidations, as well as the appointment of restructuring officers.
Key Provisions
- Restructuring Moratorium: Order 1A establishes the process for a company to petition for the appointment of a restructuring officer. This triggers an automatic stay on unsecured creditor proceedings, allowing the company breathing room to propose a compromise or arrangement.
- Insolvency Procedures: Details the use of a statutory demand (a 21-day formal notice to pay a debt). Failure to comply allows a creditor to present a winding-up petition. Petitions can also be presented by the company, its contributories (shareholders), or cima (for regulated entities).
- Types of Liquidators:
- Provisional Liquidator: Appointed to protect assets prior to the hearing of a winding-up petition.
- Official Liquidator: Appointed by the Court upon making a winding-up order to manage an insolvent liquidation. Must be a qualified insolvency practitioner.
- Voluntary Liquidator: Appointed by the directors/members for a solvent liquidation. If the company is later found to be insolvent, a supervision order must be sought.
- Creditor Proofs and Claims: Creditors must submit formal proofs of debt. Secured creditors have specific rights regarding their security, while unsecured creditors rank equally (pari passu) in the distribution of assets.
- Liquidation Committees: In insolvent liquidations, a committee of 3 to 6 creditors is formed to consult with and oversee the official liquidator. In solvent liquidations under court supervision, a committee of contributories is formed.
- Order of Priority: Order 20 sets out the strict priority for the payment of expenses from the company's assets, prioritizing the costs of the petition, the liquidator's remuneration, and other necessary disbursements.
- International Protocols: Order 21 facilitates cross-border insolvency by allowing official liquidators to enter into international protocols with foreign officeholders to coordinate concurrent proceedings.