Meaning
Statutory rules in the Cayman Islands demand that a transfer of shares in a company be registered in the register of members to transfer legal title. Under the Cayman Companies Act Section 46, a share is personal property and is transferable in the manner provided by the company’s articles. This ensures that legal title does not pass merely by contract, but requires the official registration.
Registry Entry
The registrar of the company updates the register of members upon receipt of a valid transfer instrument. This step under the Cayman Companies Act Section 46 is necessary for establishing voting and dividend rights. Without it, the transferee cannot vote.
Board Powers
Directors can refuse to register a transfer if the articles of association grant them such discretion. The Cayman Companies Act Section 46 does not override these articles, meaning that board approval remains a primary gatekeeper for share transfers.
Shareholder Remedies
If the company fails to register a transfer, the aggrieved party must seek court intervention to compel registration. Courts use the Cayman Companies Act Section 46 alongside other provisions to assess whether the registration has been unreasonably delayed or refused. This ensures that the register remains an accurate record.
