These briefing notes have been designed as a supplement to Mourant Ozannes' client guide in relation to the Companies (Jersey)
Law 1991 and subordinate legislation (the Law) to identify provisions in the Law likely to be of general relevance to administrators.
These notes cannot be a substitute for reading the Law since specific provisions may have relevance to particular cases, and the company administrator should be aware of all of its provisions for that reason. However, for the purpose of these briefing notes it is assumed that the company administrator is
not responsible for ensuring that the company and its directors comply with the Law in all respects other than purely administrative matters, or for advising the directors as to matters requiring their consideration and meriting their attention under the Law.
Certain provisions of the Law referred to in these briefing notes are applicable only to public companies. A separate client guide in relation to the distinction between public and private companies is available to clients of Mourant Ozannes.
References in these briefing notes to "the Registrar" are to the Registrar of Companies whose office is currently at: Jersey Financial Services Commission, PO Box 267, 14-18 Castle Street, St Helier, Jersey JE4 8TP.
Review register of members to determine whether the company is public or private (Articles 16, 17 and 17A).
Check register of members and beneficial ownership of shares to ensure that
no subsidiary of the company is also a shareholder of the company (Article 26).
Consider whether shares need to be numbered (Article 34).
Give notice to the Registrar as to where the register of members is kept unless at the registered office of the company (Article 44).
Establish form of share certificate approved for use on allotments and transfers unless the company is exempted, for example as a
collective investment fund, under subordinate legislation (Article 50).
Name and registered office
Ensure that company stationery and documents to be issued by the company conform to the provisions of Article 69 and 70.
Make available minutes of meetings of shareholders (or any class of shareholders) for inspection at the registered office of the company (Article 99).
Directors and secretary
Consider the directors of the company (Article 73):
- A public company is required to have at least two directors.
- A private company is required to have at least one director who should not also be the secretary.
- A Jersey company (but no other body corporate) may be a director provided that it is registered to do so under the Financial Services (Jersey) Law 1998 and the corporate director does not itself have any corporate directors.
- Minors, interdicts and disqualified persons may not be directors.
Disclosure of directors' interests is required (this could include an interest in the provider of administrative services) (Articles 75 and 76). Ensure that the company has a secretary in office:
- A sole director cannot also be the secretary.
- A body corporate cannot act as the secretary of the company where there is only one director of the company who is also the sole director of the body corporate secretary.
- In the case of a public company the secretary must be duly qualified (Article 82).
Prepare the register of directors and secretary (Article 83).
Review agreement for the provision of administrative services: indemnities in any such agreement with the company itself in respect of officers provided to the company may be void (Article 77).
Public companies and companies where the articles of association or a shareholders
resolution require it must appoint an auditor qualified to so act (Article 113).
Part 16 of the Law should be reviewed in relation to the preparation of accounts. Accounts must be completed to a date not more than 18 months from the date of a company's most recent profit and loss account.
When the accounting records of a public company are held outside the Island certain summarised information must be held within the Island and updated on a regular basis (Article 104(2)).
Life of the company
Check the Memorandum of the company in order to see whether it has a specified life and if so make a diary note. Procedures for winding up must be commenced in accordance with Part 21 of the Law.
Articles of Association
Certain provisions in Articles of Association may be made void or overridden by the Law, for example:
- Indemnities to officers (Article 77).
- Notice provisions (including short notice provisions (Articles 90 and 91).
- Provision requiring a proxy to be deposited more than 48 hours before a meeting (Article 96(4)).
- Certain provisions excluding the right to demand a poll or making ineffective a demand for a poll Article (97(1)).
Other points of note for administrators Memorandum and Articles Of Association Where a company adopts in whole or in part
the Standard Table (Article 6), a copy of the
relevant "Standard Table" should always be kept with the company's records.
If the Standard Table is not disapplied in Articles of par value companies (excluding those with unlimited or guarantor members), then where the adopted Articles are silent of any matters which the Standard Table covers, the provisions of the Standard Table will apply (Article 6).
It is an offence to fail to supply a copy of the Memorandum and Articles of Association of a company at the request of a member (Article
12) and any copy so supplied should have attached to it copies of all resolutions required to be filed under Article 100.
Transfer of shares
Care should be taken on receipt of any request for the transfer of shares:
- A public company must always have two members (save where it is a wholly owned subsidiary) (Article 27).
- In certain circumstances a private company could become treated as a public company (Article 17 and Article 17A).
- A transfer of shares in a company to a subsidiary of that company is void (Article 26 and Article 2 as to the definition of "holding company" and "subsidiary").
- Minors and interdicts cannot become members (except by transmission of shares on the death of a registered member) (Article 28).
- There must be an instrument in writing before a transfer can take place (Article 42).
- Where a requested transfer is refused, notification must be given to the transferor and transferee within two months (Article 42).
- Advice should be sought in respect of any request for "certificated transfers" (Article 43).
- A transfer made without the sanction of a liquidator after the commencement of a winding up is void (Article 159(3)) unless pursuant to an enforcement of a security
interest created under the Security Interests (Jersey) Law 2012 (Article 159(5)).
Register of members
The register of members must be available for inspection by members (and others on payment of fees) during business hours (Article 45).
Copies of the register of members of public companies and their subsidiaries should not be provided except in accordance with Articles 45 and 46.
No notice of trusts may be entered on the register of members (Article 48).
Public companies may maintain overseas branch registers.
Where the Articles of Association of a company do not lay down procedures in respect of the variation of share class rights, Article 52 will apply.
Applications to the Court objecting to a variation of rights attaching to a class of shares must be made within 28 days of consents or resolutions approving a variation (Article 53).
Public companies allotting shares with special rights or varying such rights must notify the Registrar where the rights are not clearly set out in full in the Memorandum or Articles
of Association. The Registrar must also be notified of the name of each class of shares (Article 54).
The annual return of information in relation to the company as at 1 January in each year must be filed before the end of February (Article 71(1) and Article 6 of the Companies (General Provisions) (Jersey) Order 2002).
The annual return of public companies must show the information on the register of directors of the company (Article 71(1)(e)).
The annual return need not identify persons having less than one percent of shares or of a class of shares but, if full details are not given, must identify how many members hold less than one per cent of the issued share capital each (Article 71(1)(a) and (b)).
Late filing fees for failure to file the annual return in accordance with the Law are payable pursuant to Article 201(2) and the current late filing fee is:
- £100 if the accounts are delivered more than seven months but not more than nine months after the end of the financial period to which they relate or;
- £200 if the accounts are delivered more than nine months after the end of the financial period to which they relate.
Annual general meetings
A private company is only required to hold annual general meetings if:
- a provision made in its articles of association after 1 August 2014 requires annual general meetings to be held; or
- a provision made in its articles of association before 1 August 2014 requires annual general meetings to be held and such provision is confirmed by special resolution after 1 August 2014.
In essence, a private company has therefore to "opt-in" to the holding of annual general meetings after 1 August 2014 (being the date when amendments to the Law relating to annual general meetings came into force).
A public company is required to hold annual general meetings.
All members of a public or private company may agree to dispense with the holding of annual general meetings but a member may still call for an annual general meeting (Article 87).
The first annual general meeting (if required) must be held within 18 months of the date of incorporation (Article 87(2)).
Annual general meetings are not required to be held in Jersey.
Not more than 18 months (in the case of a public company) and 22 months (in the case of a private company which is required to hold annual general meetings) should elapse between annual general meetings (Article 87(3)).
Meetings - procedures
Notices of meetings should be given in accordance with Articles 90 and 91.
Notices of meetings should be given to auditors (Article 113B (5)).
Articles may require longer notice of meetings and a higher percentage of agreement to short notice than are stated as minima by the Law, but may not allow for shorter periods of
notice or a lower percentage of agreement to short notice (Articles 90 and 91).
Provisions of the Law lay down rules as to votes and meetings which are applicable where there are no relevant provisions in the Articles of Association of a company.
A proxy may speak at a meeting of the members of a private company and the Articles of Association of a company may permit a proxy to vote on a show of hands as well as on a poll (Article 96(1)).
It is an offence not to include information in relation to the right to appoint proxies in notices of meetings (Article 96(3)).
As least 14 days' notice of the extraordinary general meeting at which a special resolution is to be proposed is generally required (Article 90(2)).
If the company intends to invite shareholders to appoint a nominated proxy then in general that invitation must be made to all shareholders (Article 96).
Minutes must be kept of all directors', members', class, creditors' and committee meetings and the names of directors present at any of these should be recorded. The minutes of each meeting should be signed by the chairman of the meeting as evidence of proceedings (Article 98).
Minutes of meetings of members (including members of a class) must be held available for inspection by members, who on satisfaction of certain simple conditions may also ask
for copies which should be collected at the registered office of the Company (Article 99).
The following types of resolution must be filed with the Registrar within 21 days of being passed (Article 100).
- Special resolutions.
- Resolutions (or agreements) agreed to by all members of the company which, if not so agreed, would have been of no effect unless they had been passed as special resolutions.
- Resolutions (or agreements) agreed to by all members of a class of shares
which, if not so agreed, would not have been effective unless they had been passed or agreed to by some specific majority or in some particular manner, and all resolutions or agreements which
effectively bind all of the members of any class though not agreed to by all those members.
Resolutions passed at adjourned meetings carry the date of the adjourned meeting (Article 101).
Accounts and auditors
Accounting records must be available for inspection by officers and the secretary of the company (Article 104(1)).
Accounting records must, in general, be kept for ten years (Article 104(4)).
In the case of a public company, accounts must be prepared, audited and laid before a general meeting (having been audited) within seven months of the company's financial
year end. In the case of a private company accounts must be prepared, audited (if required) and laid before an annual general meeting (if required) within ten months of its financial year end (Article 105). If a public company has dispensed with annual general
meetings or a private company is not required to hold an annual general meeting, there is no requirement to lay accounts before the annual general meeting, but members are entitled to copies of such accounts on request.
Shareholders will be entitled to apply to receive copies of the accounts (with auditor's report where the accounts are audited) (Article 107).
The accounts and auditor's report of a public company must be delivered to the Registrar (in English) within seven months of the company's financial year end (Article 108).
Auditors (where required) must be appointed at every annual general meeting to hold office until the next annual general meeting (Article 113(3)), save that if a company has dispensed with the holding of annual general meetings, an auditor will continue in office so long as the agreement to dispense with the annual general meeting remains in force or the company in general meeting resolves that the appointment of the auditor be brought to an end (Article 113(5)).
Auditors have a right of access at all times to company records and may seek information from officers and the secretary. It is an offence to provide false or misleading information to auditors (Article 113C).
There are four classifications of winding up, the procedures to be followed in each case being set out in part 21 of the Law.
Where a company is in liquidation, all papers, letters and documents in which the name
of the company appears must state that the company is in liquidation (Article 191).
There are provisions as to how the records of a company which has been wound up may be disposed of (Article 194).
Filing and records
Regulations may be published with regard to the form of documents required to
be delivered to the Registrar until which time documents will have to be in a form acceptable to the Registrar (Articles 199 and 200). Specimen forms may be available from the Registrar's office.
Where the Law does not make specific provision as to the execution and signature of a document to be delivered to the Registrar
it should be signed by an officer (director or liquidator) of the company, or the secretary (Article 200(4)).
An administrator charged with keeping the records of a company should review Article 206 as to the form and safekeeping of those records.
Administrators may be accessories and abettors to and of offences committed under the Law (Article 216).
Fees which are payable by or in relation to companies pursuant to Article 201 are set out in the Notice of Fees document which is published by the Jersey Financial Services Commission on its website.
Most of the Law is not currently applicable to non-Jersey companies under administration in the Island, but there is provision to make further regulations applicable to such companies (Article 195).
References in the Law to "companies" are references to companies incorporated in Jersey.
References in the Law to "external companies" are references to bodies corporate that are incorporated outside Jersey.
James Hill, Partner, Jersey
+44 1534 676 145
Robert Hickling, Partner, Jersey
+44 1534 676 361