Further Jersey Company Law Amendments

The last few years have seen the world of offshore finance

become increasingly competitive. This trend, together with the

generally gloomy outlook for global economic prospects, has made it

more important than ever that those charged with responsibility for

Jersey's financial sector strive to make sure that it maintains

its attractiveness for international investors. It is with this in

mind that, as part of its ongoing strategy to maintain and build

upon Jersey's position as a leading offshore financial centre,

the Jersey legislature is in the process of introducing a series of

company law amendments - Companies (Amendment) No. 10

(Jersey) Law 200- ("Amendment No. 10") and

Companies (Amendment) No. 3 (Jersey) Regulations

2009 ("Amendment No.3") (together "the


Amendment No. 10

The intention behind Amendment No. 10 is to clarify aspects of

the Companies (Jersey) Law 1991 (the

"Law") and to provide statutory guidance with regard to a

number of areas of uncertainty which had come to light since the

last round of company law amendments, which took place in 2008.

Amendment No. 10, which has recently been by the States of Jersey

subject to Privy Council approval, deals principally with the

following five main areas of company law - distributions, reduction

in capital, registered offices, special resolutions and company

conversions, and these revisions are set out in more detail below.


The Amendments provide a useful clarification of the rules

regarding distributions. These changes will permit, amongst other

things, a par value company to apply its share premium account in

the making of a distribution and a no par value company to apply

its stated capital account for any purpose for which a share

premium account is applied by a par value company.

In addition, Article 61 of the Law will be amended to clarify

the fact that a distribution in accordance with Article 115 of the

Law (which governs restrictions on distribution) will not be deemed

to be a reduction of capital for the purposes of Part 12 of the

Law, which deals with reductions of capital. A corresponding

amendment to Article 115 also sets out that a distribution that is

made in accordance with Article 115 will not be treated as a

reduction of capital for the purposes of Part 12 of the Law.

Overall, the intention is to make the distributions regime more

focused and to follow a solvency based approach.

Reduction in Capital

Further clarification has also been...

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