Section 5Part 1 — Preliminary
Provisions to be complied with by local companies
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For the purpose of section 4(1)(a) a local company or an exempted company that is carrying on business in the Islands is complying with this section if —
it is Caymanian controlled;
at least sixty per cent of its shares are beneficially owned by Caymanians; and
at least sixty per cent of its directors are Caymanians.
If, for reasons beyond its control, more than sixty per cent of the shares in a local company or an exempted company to which this section applies cease to be beneficially owned by Caymanians, the company shall be taken to be complying with this section until —
a director becomes aware of the cessation; or
a director should, with reasonable diligence, have become aware of the cessation,
whichever is the sooner, and shall then continue to be taken to be complying with this section if —
the directors immediately act in accordance with subsection (3); and
the period mentioned in subsection (4) has not expired.
For the purpose of subsection (2)(i), the directors must serve written notice on the person who is not a Caymanian and whose beneficial ownership of shares in the company results in the percentage of shares in the company owned by Caymanians falling below sixty percent requiring that person to divest themselves of at least so many of those shares as will result in at least sixty percent of the shares in the company being beneficially owned by Caymanians.
The period referred to in subsection (2)(ii) is —
the period of three years starting on the date of the service of the notice under subsection (3); or
such longer period as the Board allows.
A local company which immediately before the fifteenth day of October, 1992 was deemed not to be in breach of clause 2(1) of the Schedule (since repealed), by virtue of the proviso thereto is deemed to comply with subsection 1(b) until the end of the period that would have applied had said Schedule not been repealed.
Cross References
- Section 4 of Local Companies Control Actexternal
Section 4(1)(a)