Published 17th September 2007, 11:37am

Government is proposing radical changes to the Companies Law, aimed at simplifying it and making the provisions more suitable to the needs of the Cayman Islands.

A bill to repeal and replace part five of the Companies Law in order to reform the legislation relating to the winding up of companies was published as Supplement No. 1 of Gazette No. 18, dated 3 September, 2007.

The bill, which may be debated today (17 September) in the Legislative Assembly, reflects the Law Reform Commission's 2005 recommendations, which were based mainly on a four-year private sector review of Cayman's corporate insolvency law.

Included in the Commission's recommendations were:

• repealing and replacing the existing law relating to corporate insolvency, noting that it was unduly complex and out of date;
• establishing an Insolvency Rules Committee for formulating insolvency rules which meet the needs of the Cayman Islands financial services industry, given that the practice of applying foreign insolvency rules to the Islands does not work satisfactorily;
• codifying and incorporating into a new part of the Principal Law international cooperation with respect to insolvency matters, given that the basis of cross-border cooperation relative to insolvency matters depends largely upon judicial practice.