CAYMAN ISLANDS Law and Practice Contributed by: Daniel Lee, Sophia Scott, Kimberly Robinson and James Turner, Maples Group
3.4 Management Structures Companies
Country-by-Country Reporting) (the ”Action 13 Report”). The CbCR Regulations largely imple - ment the model legislation (the “OECD Model Legislation”) published pursuant to the Action 13 Report. The CbCR Regulations apply to any constituent entity (“Constituent Entity”) that is ”resident in the Islands” and that forms part of a multination - al enterprise group (“MNE Group”) for the pur - poses of the CbCR Regulations and the related Guidance Notes issued by the Cayman Islands Department for International Tax Cooperation (DITC). A Constituent Entity will be resident in the Islands if it is incorporated or established in the Cayman Islands, has a place of effective management in the Cayman Islands or is subject to financial supervision in the Cayman Islands. An MNE Group is broadly defined as a collection of two or more enterprises required to prepare consolidated financial statements under appli - cable accounting principles (or would be so required if equity interests in any of the enter - prises were publicly traded) that (i) includes two or more enterprises that are “tax resident” in at least two different jurisdictions or includes an enterprise that is tax resident in one jurisdiction and is subject to tax via a permanent establish - ment in another jurisdiction and (ii) had a total consolidated group revenue of at least USD850 million in the preceding fiscal year. Any Constituent Entity that is resident in the Cayman Islands and that forms part of an MNE Group will be required to make a notification to the DITC and, if the entity is the “Ultimate Parent Entity” or ”Surrogate Parent Entity” of the MNE Group pursuant to the CbCR Regulations, it will also be required to file a country-by-country report with the DITC in a standard form based on the OECD Model Legislation.
Companies are generally managed by a board of directors responsible for the overall manage - ment and decision-making of the company. Subject to the provision of the memorandum and articles of association for the company, the board of directors: (i) may be appointed by the shareholders and the existing board of directors can appoint additional or replacement directors; (ii) can delegate certain powers to committees or individual directors; and (iii) may also appoint officers, such as a vice-president, secretary or chief executive officer, to handle the day-to-day operations of the company. The approval of the company’s shareholders is required for certain matters, including: • changing the company name; • amending the memorandum and articles of association; • approving a merger or consolidation in rela - tion to the company; • altering the company’s share capital; • approving a transfer by way of continuation to another jurisdiction; and • winding up the company on a voluntary basis. The process by which the board of directors holds board meetings (eg, notice, quorum) will be set out in the articles of association of the company and generally decisions are made by way of a simple majority of the directors present at a meeting. The articles also typically provide that the board may take action by way of a unan - imous written resolution of the directors in lieu of a meeting, which is considered effective on the date the last director signs.
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