Jersey Companies
The formation, regulation and administration of Jersey companies is governed by the Companies (Jersey) Law 1991 (the “Companies Law”) largely influenced by the English statute, the Companies Act 1985. The Companies Law provides for various forms of companies, different tax regimes, easy transfer of ownership, merger and acquisition and re-domiciliation.
Recent changes to the Companies Law have allowed for the formation of different types of company. A list of the different types of company with a brief description of them is included at the end of this article.
Prior to incorporation, an application of the proposed name of the company is made to the Registrar of Companies for formal approval and reservation. Names must not be identical or too similar with existing companies (including UK companies) or potentially offensive or misleading as to the company’s intended activities.
The Memorandum of Association is the constitution of a company stating its name, its authorised share capital (if appropriate) and the company’s objects (if required). The Companies Law has a standard table of articles of association that can be adopted or amended to suit.
The Registrar of Companies requires (on a confidential basis) the disclosure of the identity of all beneficial owners including the anticipated introduction of further beneficial owners. If shares are to be held on trust, the names of the trust and trustees and the name and address of the settlor of the trust must also be disclosed. In certain circumstances the Registrar of Companies is willing to relax disclosure requirements in certain circumstances.
A company must have a registered office which serves as its official address for service and communication. This address must be notified to the Registrar of Companies on incorporation.
Directors do not need to be resident in Jersey, but a register of directors must be maintained at the registered office. The directors must appoint a secretary. A secretary can be an individual or a company, but a sole director cannot also be a secretary.
Types of Companies
As stated above, the Companies Law recognises various types of company. These are:
Par Value Company
Equivalent to a limited liability company with its shares having a nominal value and being redeemable only out of distributable profits with a reduction of its share capital requiring the sanction of the court.
No Par Value Company
A no par value company issues shares without having an expressed nominal value and any proceeds of issued shares are credited to a stated capital account.
Guarantee Company
A guarantee company only has guarantee members who are obliged on winding up to contribute to the company’s assets, subject to an agreed limited. Such companies are tax driven providing advantages in certain jurisdictions where payments will be treated as capital gains rather than income.
Single Member Companies
Single member companies are designed to make the management of such companies easier and ensure that sole-traders limit their exposure to liability.
Unlimited Companies
The shareholders of such companies hold unlimited shares and upon winding up, the shareholders have unlimited liability to contribute to the assets of the company.
Limited Life Companies
As the name suggests, these companies exist only for a limited period and specific provisions in its memorandum or articles association set out how and when the company will cease to exist.