The Companies (Amendment No. 6) (Jersey) Law 2002
The Companies (Amendment No. 6) (Jersey) Law 2002 came into force on 1 September 2002 with the primary objective of providing practical enhancements to the existing legislation, the most significant of which are set out below.
No Par Value Companies
Companies may now be incorporated with shares that do not have a par value and the par value shares in existing companies may be converted to no par value shares, but not have both types of shares, thus simplifying the mechanics of redemption and repurchase of shares. No par value companies will have a stated capital account and on the conversion of shares with a par value, the existing share capital account and share premium account (if any) will be amalgamated into a stated capital account.
Guarantee Companies
This is a new concept for Jersey. The members will guarantee the liabilities of the company up to specified amount and the amounts guaranteed will only become payable on an insolvent winding up; if the company is successful the members will not be required to make a contribution to the company. The company will maintain the flexibility of a limited liability company and will be a separate legal entity.
This type of company may suit professional, research or trade associations who receive their funding from donations, subscriptions, fees and endowments.
A further refinement is the ability to have both guarantor members and shareholders and this type of company is known as a Hybrid company (see below).
Hybrid Companies
This type of company has both guarantor members and shareholders and may be structured so that it is treated in the client’s home jurisdiction as a company, a partnership or a trust. The company’s articles may be written in the form of a trust giving the shareholders legal ownership of the company and the guarantor members beneficial ownership thereby providing many of the features of a trust whilst retaining the features of a company. This type of arrangement may be advantageous for use in jurisdictions which do not recognise trusts.
Single Member Companies
Companies may be incorporated with a single subscriber and operate with a single shareholder.
Redomiciliation
Foreign companies may now be redomiciled in Jersey provided the laws of the jurisdiction in which it is incorporated embody migration provisions and must cease to be incorporated in its country of origin on incorporation in Jersey. Companies incorporated in Jersey may now be redomiciled to other jurisdictions which have reciprocal redomiciliation provisions and will cease to be registered in Jersey on migration.
If you wish to incorporate a company in Jersey or take advantage of the enhancements set out above we would recommend that you first take appropriate taxation and legal advice.