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
Amendments").
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.
Distributions
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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