A foundation company is a separate Legal entity which may be formed by any person (the “founder”) for any lawful object, which need not be beneficial to other persons, provided it falls within the wide parameters permitted by the legislation (Foundation Companies Law, Companies Law, etc.). Its constitutive documents are its memorandum and articles of association.
It should be noted that the Foundations Law is not a stand-alone statute: effectively, it operates as an addition to the Companies Law which will apply to all Cayman Foundations with necessary modifications.
An existing Cayman company may be converted to a Cayman Foundation, or an entirely new Cayman Foundation may be created. Such companies must be limited by shares or by guarantee, but can be established with or without share capital. Foundations are prohibited from paying dividends or other distributions of profits or assets to its members or proposed members.
The secretary of the Foundation Company must be a “qualified person” meaning a person who is licensed or permitted by the Companies Management Law (2003 Revision) to provide company management services in the Islands.
Its constitution must provide, directly or by reference to its articles, for the disposal of any surplus assets the company may have on winding-up.
The most convenient way to incorporate this type of company in the Cayman Islands is to engage one of the professional firms licensed for this purpose. These firms can provide such services as: registered office; nominee shareholders; directors and other officers; and management of the company on the instruction of the beneficial owner(s)