Foundation Companies Act (2025 Revision)

Summary

This is the consolidated, in-force text of the Cayman Islands Foundation Companies Act (2025 Revision), which sets out the legal framework for a special type of company - the "foundation company" - that combines company law features with trust/foundation-like characteristics (e.g., no member ownership of profits, use for holding assets, succession planning). It applies to any company that the Registrar of Companies declares to be a foundation company, and otherwise applies the general Companies Act (2025 Revision) to such companies as modified by Schedule 1.

• Formation and ongoing requirements: The Act sets requirements a company must meet to become and remain a foundation company: limited by shares or guarantee, specific memorandum provisions, a qualified-person secretary, and a prohibition on dividends/distributions to members.
• Governance: It governs the foundation company's constitution, bylaws, membership/supervisor structure, registered office, and management.
• Secretarial and record-keeping duties: It imposes company-secretarial and record-keeping duties, such as maintaining a register of supervisors, and restricts distributions of assets that would render the company unable to pay debts.
• Beneficial ownership: It confirms that the Beneficial Ownership Transparency Act, 2023 applies to foundation companies.
• Part 5 - Court powers: Part 5 gives the Grand Court supervisory powers over constitutional problems and governance breakdowns.
• Part 6 - Offences and regulations: Part 6 covers offences and regulation-making powers.
• Schedule 2 - Model constitution: Schedule 2 provides a model constitution that foundation companies may adopt in whole or in part.

The document is primarily a consolidated statute for practitioners structuring or administering foundation companies in the Cayman Islands, rather than a circulars-style notice; it does not itself announce new policy but reflects the law as currently in force (revised as at 31 December 2024, published 30 January 2025).

Key obligations

• A foundation company must at all times have a secretary who is a qualified person (licensed to provide company management services) and must maintain its registered office at that secretary's business address.
• A foundation company must keep at its registered office a register of its supervisors recording names, addresses, appointment dates and cessation dates, and must update this register within sixty days of any change in supervisors.
• A foundation company must, within fifteen days of an alteration to its memorandum, give the Registrar a copy of the resolution or document effecting the alteration together with the prescribed fee; late filings after fifteen days incur a penalty of ten dollars per day.
• A foundation company must not dispose of assets if doing so would leave it unable to pay its debts as they fall due (a 'prohibited distribution'); recipients with actual knowledge of such a prohibited distribution are liable to repay the amount or value received.
• Directors, officers and delegates with duties or powers under a foundation company's constitution must comply with applicable bylaws so far as possible and consistent with the constitution and the law.
• Directors must give interested persons reports, accounts, information and explanations concerning the foundation company's business, affairs and directors' duties/powers as required by ordinary resolution or written request.
• The Beneficial Ownership Transparency Act, 2023 applies to foundation companies, requiring compliance with its beneficial ownership requirements.
• Directors/managers who knowingly and wilfully authorise or permit a contravention of the register-of-supervisors requirement or a prohibited distribution commit an offence and are liable to specified fines (and, for prohibited distributions, imprisonment).

Applies to

foundation companies, qualified persons (licensed company managers), directors, officers, members and supervisors of foundation companies

Deadlines

• fifteen days: A foundation company must give the Registrar a copy of a resolution or document altering its memorandum, with the prescribed fee, within fifteen days of the alteration; late filings incur a $10/day penalty.
• sixty days: A foundation company must update its register of supervisors within sixty days of any change in its supervisors.