Skip to main content Skip to accessibility
This website is not compatible with your web browser. You should install a newer browser. If you live in Jersey and need help upgrading call the States of Jersey web team on 440099.
Government of Jerseygov.je

Information and public services for the Island of Jersey

L'înformâtion et les sèrvices publyis pouor I'Île dé Jèrri

Companies (Amendment No. 11) (Jersey) Law 201-

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

  • demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision

  • providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made 28 March 2014:

Decision Reference:   MD-C-2014-0059

Decision Summary Title :

Draft Companies (Amendment No. 11) (Jersey) Law 201-

 

Date of Decision Summary:

28 March 2014

Decision Summary Author:

 

Director,

Finance Industry Development

Decision Summary:

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title :

Draft Companies (Amendment No. 11) (Jersey) Law 201-

 

Date of Written Report:

28 March 2014

Written Report Author:

Director,

Finance Industry Development

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Subject: Approval of the draft Companies (Amendment No. 11) (Jersey) Law 201- for lodging.

Decision(s): The Minister approved the draft Companies (Amendment No. 11) (Jersey) Law 201- for lodging and directed that the documents should be lodged au Greffe for debate by the States at the earliest opportunity.

Reason(s) for Decision: This amendment to the Companies (Jersey) Law 1991 has been prepared in order to confirm and strengthen the competitiveness and standing of the Jersey company, a vehicle used both for local business and as one of the key tools of the international finance industry’.  It includes amendments suggested by the Jersey Financial Services Commission as well as those suggested by industry.  The steering group as well as external independent experts agree with the policy proposed and encapsulated in the draft.

Resource Implications: There are no resource implications as a result of this decision.

Action required: That the documents be lodged au Greffe for debate by the States at the earliest opportunity.

Signature:

 

 

 

 

Position:

 

 

 

Chief Minister of Jersey

Date Signed:

 

 

Date of Decision (If different from Date Signed):

 

 

Hide report
Companies (Amendment No. 11) (Jersey) Law 201-

Report on Draft Companies (Amendment No. 11) (Jersey) Law 201-

 

Introduction and Recommendation

 

  1. A draft amendment (the “Draft Law”) to the Companies (Jersey) Law 1991 (the “Principal Law”) has been prepared and is ready to be lodged. For the reasons set out in this paper, it is recommended that the Chief Minister signs a Decision Summary to signify his agreement to the lodging this law, agrees to adopt the Report to the Law, signs the Human Rights statement of compatibility, and requests that this Draft Law is set down for debate for the sitting of the States on 13th May 2014.

 

Overview

 

  1. Industry and the Jersey Financial Services Commission proposed changes to the Principal Law in order to confirm and strengthen the competitiveness and standing of the Jersey company, a vehicle used both for local business and as one of the key tools of the international finance industry’.

 

  1. A Green Paper consulted on 34 separate proposals for amendment. Some of the proposals were of a substantive nature and invited detailed responses to specific questions. Other proposals were of a relatively minor nature designed to clarify certain matters or ensure parity with connected legislation.

 

  1. The Green Paper was made available on the internet and in paper form. The consultation period closed on 17 February 2012.  A summary of the responses received during the consultation period was published on 5 February 2013 (the “Summary of Responses”). This was presented to the States on 11 February 2013.

 

  1. In the Summary of Responses the Government identified a number of matters on which it wished to consult further with interested parties. The outcome of that further consultation was summarized in a supplemental response paper, which was published in December 2013 (the “Supplemental Response Paper”) and a closed consultation took place which closed on 31 January 2013.  Following the consultation process, a Draft Law was prepared.

 

  1. This Draft Law has the support of industry, having been agreed by the steering group who reviewed a near final draft, as well as the JFSC having no objection to the contents, subject to the provision stated regarding Article 18.  It should also be noted that Article 17 was added at the most recent steering group meeting following a suggestion by the JFSC and not objected to by those present.

 

  1. The Law Officer’s Department has opined that the Draft Law is compatible with the European Convention on Human Rights and that a statement of compatibility may be made.

 

 

 

The provisions

 

  1. The Draft Law would bring in a number of separate changes of which the main changes will be highlighted.  The reference in each heading to a proposed amendment is to the number of the proposal set out in the Green Paper.

 

Article 2 of the Draft Law (Proposed amendment no. 1)

 

  1. The definition of a prospectus is defined in Article 1 of the Principal Law.  The amendment confers a power on the Minister to make an Order amending this definition so that it would be possible to introduce new exemptions to the detailed rules relating to prospectuses in the future so that those rules no longer apply to offers of securities to certain categories of sophisticated investors.  No change will be made without further consultation with the Jersey Financial Services Commission (the “Commission”) and interested parties about the precise scope of the proposed exemptions as part of the next round of company law amendments. 

 

Article 3 of the Draft Law (Proposed amendment no. 2)

 

  1. The purpose of this amendment was to clarify the meaning of different parts of the Principal Law. As currently worded, Article 17(2) provides that any private company whose securities have been admitted to trading on a regulated market (as defined in Article 102(1)) is to be treated as if it were a public company for the purposes of the Principal Law without clearly reflecting the fact that companies that are exempted from being treated as public company under Article 102(1) should be exempt from being treated as a public company under Article 17.

 

  1. To achieve the aim of consistency Article 3 of the Draft Law amends Article 17(2)(c) so that it refers to a company which is a market traded company within the meaning of Part 16 of the Principal Law.

 

Articles 4 and 6 of the Draft Law (Proposed amendment no. 3)

 

  1. By virtue of Article 17(2)(a) of the Principal Law a private company with more than 30 members is to be treated as if it were a public company. Article 17A in its current form provides that, in determining whether a company has more than 30 members, no account is to be taken of members who are (or were) also directors or employees of the company.

 

  1. This requirement can have a significant impact on groups of companies where directors or employees of companies in the same group are also members of a company.  Consequently the amendment extends Article 17A to exclude current and former directors and employees of companies in the same group in calculating whether the company has more than 30 members for the purposes of Article 17(2)(a).

 

  1. Furthermore, the responses to the consultation revealed wide support for removing the 30-member limit for private companies altogether as it no longer serves any useful purpose in modern company law.  Article 6 of the Draft Law confers a power on the States to remove the 30-member limit for private companies by Regulations. This will make it simpler as a matter of process to take such action, should the decision to do so be taken in due course following consultation. 

 

Article 5 of the Draft Law (Proposed amendment no. 4)

 

  1. Article 17B of the Principal Law is amended to make it clear that, where a company changes its status from private to public (or vice versa) by passing a special resolution altering its memorandum of association, the altered status has effect from the date on which the new certificate of incorporation is issued.

 

Article 7 of the Draft Law (Proposed amendments nos. 5 and 6)

 

  1. The Draft Law removes the prohibition on commission and discounts.  These are widely considered to be unnecessary and unduly restrictive, given that Jersey company law has moved away from the maintenance of capital doctrine towards a solvency-based approach to creditor protection. Article 7(1) of the Draft Law achieves this by repealing Articles 35 and 36 of the Principal Law.

 

  1. Article 7(2) of the Draft Law inserts a new Article 35 into the Principal Law, which makes it clear that the repeal of the former Articles 35 and 36 does not revive any previous rule of law, which rendered the issuing of shares at a discount or the payment of commissions unlawful.

 

Articles 8 and 9 of the Draft Law (Proposed amendment no. 7)

 

  1. Changes have previously been made to permit no par value companies to make payments into their stated capital account.  This creates an imbalance as par value companies cannot do this at present.  Therefore, Article 8 of the Draft Law inserts a new paragraph (1A) into Article 39 of the Principal Law permitting transfers to a share premium account from any other account of the company other than the capital redemption reserve or the nominal capital account.  However, there is protection provided for creditors because no distribution can be made out of a share premium account unless a solvency statement is made.  The restriction on transfers from capital redemption reserves and the share premium account matches that in Article 115 of the Principal Law relating to distributions.

 

  1. A further change is a logical consequence of the previous changes to the rules of capital maintenance.  Previously, there was a requirement for a special resolution to be made before making a transfer by a no par value company into its stated capital account.  Article 9 of the Draft Law removes this requirement because the modern focus is on the solvency of a company.  Logically, to protect creditors, a solvency statement is required to be made in order to make distributions or during reductions or redemptions of capital rather than during an internal re-organisation of a company.  It is considered that the safeguards in place elsewhere in the law provide sufficient protection for creditors.

 

 

Article 10 of the Draft Law (Proposed amendment no. 8)

 

  1. Article 10 of the Draft Law amends Article 49(1) of the Principal Law so as to permit a company maintaining a branch register in any country, territory or place outside Jersey to enter the names of all or any of its members onto that register, not just those who are resident in that particular country, territory or place.  This is because certain exchanges require a register of all members to be held within that territory.

 

 

Articles 11 and 16 of the Draft Law (Proposed amendment no. 9)

 

  1. The view held by the majority of legal practitioners in the island is that Articles 55 and 57 of the Principal Law permit a redemption or repurchase of shares in specie as well as in cash. It is wished to clarify this view by a clear statement in the Principal Law by the insertion of a new paragraph (12A) into Article 55.

 

  1. Furthermore, Article 16 of the Draft Law amends Articles 62(2)(b) and (6) of the Principal Law to make it clear that any payment made to a shareholder upon a reduction of capital pursuant to Article 61 may be made in cash or otherwise.

 

Articles 12 and 13 of the Draft Law (Proposed amendments nos. 10 and 11)

 

  1. A Jersey company can be listed on certain stock exchanges by using depository certificates (sometimes called depository receipts).  The redemption and repurchase provisions contained in Articles 55 and 57 of the Principal Law do not work adequately for depository certificates and therefore the Draft Law seeks to address this.  

 

  1. Therefore the power conferred on a company by Article 57 of the Principal Law to redeem and repurchase its own shares is extended to include depository certificates, provides a mechanism for such and adds a definition of the term ‘depository certificate’.  Article 13 of the Draft Law amends Article 58A of the Principal Law so as to provide that any depository certificates repurchased pursuant to Article 57 may be held as ‘treasury shares’.

 

  1. The Draft Law also amends Article 57(4) to extend the maximum expiry date for a resolution authorizing the on-market repurchase of shares from 18 months to 5 years. This would achieve parity with the relevant UK legislation.

 

Articles 14 and 15 of the Draft Law (Proposed amendment no. 13)

 

  1. Following consultation the Economic Development Minister proposed that Jersey should follow the UK position, where a reduction in capital for a private company is not subject to the sanction of the court, although it was felt that it would be helpful to retain the option of a court procedure.  Further, it was decided to propose that a procedure based on a solvency statement should be available as an alternative to the court sanction route for both public and private companies. The key factors were that both a public company and a private company might have a nominal amount of share capital and the Principal Law already permits distributions to be made providing that a solvency statement is passed.  Accordingly, if a solvency statement is deemed sufficient protection for creditors in respect of distributions, it should also be deemed sufficient protection for reductions of capital where the amount of capital held by a company is often insignificant.

 

  1. Article 14 of the Draft Law implements this policy by amending paragraph (3) of Article 61 to provide that a reduction of capital shall either be supported by solvency statement, or be subject to the confirmation to the court.

 

  1. Article 15 of the Draft Law inserts two new Articles (61A and 61B) into the Principal Law, which set out the solvency statement procedure in more detail. A solvency statement is defined in Article 61A(2) as a statement that the directors making it have formed the opinion that, as at the date of the statement, the company is able to discharge its liabilities as they fall due, and that it will be able to continue to carry on business, and discharge its liabilities as they fall due, until the end of a period of 12 months beginning with the date of the statement, or until the company is dissolved.

 

Article 17 of the Draft Law

 

  1. Article 73 of the Principal Law excludes partnership entities from being directors of a Jersey company.  This prohibition is extended to limited liability partnerships.

 

Articles 18 and 19 of the Draft Law (proposed amendment no. 14)

 

  1. Article 74(2) of the Principal Law permits the members of a company to ratify or authorize a breach of a director’s duties under Article 74(1). In its current form Article 74(2) requires the unanimous consent of all members of the company, and that the company will be able to discharge its liabilities as they fall due after the act or omission that is the subject of the ratification/authorization.

 

  1. However this is out of step with the equivalent provision contained in section 239 of the UK Companies Act 2006, which permits ratification of a director’s negligence, default or breach of duty by ordinary resolution (or such higher threshold as may be specified in the company’s articles of association).

 

  1. Articles 18 and 19 of the Draft Law give effect to this proposal. The draft provision, however, differs from the original proposal in that it preserves the current procedure for unanimous ratification contained in Article 74(2), but adds to this a new procedure for ratification by ordinary (or if the articles so require) special resolution.  The new procedure puts in place greater safeguards where there is not unanimity to ensure that the director and members connected to the director are not entitled to vote to ratify his acts.  An order making power is also inserted so that this new process can be limited to appropriate types of company.  It should be noted that the Commission wishes for the order making power to be utilized so that this process will not be applicable to existing fund companies.  It is recommended that this approach is followed subject to further consideration of this issue.

 

Articles 20 and 27 of the Draft Law (proposed amendment no. 15)

 

  1. Article 87 of the Principal Law requires every company to hold an annual general meeting (“AGM”), although this requirement can be dispensed with by agreement between all the members of the company under Article 87(4). It is noted that very few private companies in fact held annual general meetings, and that the current dispensing procedure under Article 87(4) was administratively inconvenient. It was proposed therefore in the Green Paper that Article 87 be amended so as to make it possible to enshrine an agreement to dispense with the requirement for an AGM in the company’s articles.

 

  1. As set out in the Summary of Response, the Government took the view following the Green Paper that the original proposal, which would have required many private companies to amend their articles, created an unnecessary administrative burden and that a better approach would be to amend Article 87 so that private companies are no longer required to hold an AGM, unless their articles specifically require them to do so.

 

  1. Article 20 of the Draft Law amends Article 87(2) so that the requirement for an AGM only applies to a public company and a ‘relevant private company’. This term is defined in a new paragraph (2A) as a private company which is either required to hold an AGM by a provision made in its articles after the coming into force of the Draft Law, or in whose case such a provision was made in its articles before the coming into force of the Draft Law and confirmed by a special resolution thereafter.

 

  1. This approach has been adopted because the articles of many existing private companies will contain an express requirement for an AGM to be held. The provisions outlined above avoid the need for those companies to amend their articles. Only private companies that wish to retain the requirement for an AGM after the coming into force of the Draft Law (which will be relatively few) need take any positive action.

 

  1. Article 27 of the Draft Law amends Article 105 so as to ensure that the obligation on a company to lay its accounts before a general meeting does not apply to a private company which is not a ‘relevant private company’ or there is an agreement under 87(4) in force.

 

Article 21 of the Draft Law (proposed amendment no. 16)

 

  1. Article 90 of the Principal Law defines the term ‘special resolution’. Paragraph (1A) provides that the majority required to pass a special resolution is two-thirds, or such greater majority as the company’s articles might specify.

 

  1. Article 21 of the Draft Law amends Article 90 to clarify that a company in its articles may specify different majorities for different types of special resolution (provided that the requisite majority is at least two-thirds) and also that the articles can impose a requirement for unanimity in respect of certain special resolutions.

 

Article 22 of the Draft Law (proposed amendment no. 17)

 

  1. As proposed in the Green Paper, Article 22 of the Draft Law amends Article 91 of the Principal Law so that a general meeting of the company (which is not an annual general meeting) can be called with less than 14 days’ notice with the agreement of a majority in number of members entitled to attend and vote at the meeting, who represent not less than 90% (rather than the current 95%) of the total voting rights, or such greater percentage as the company’s articles may specify.

 

Article 23 of the Draft Law (proposed amendment no. 18)

 

  1. Article 23 of the Draft Law amends Article 93 of the Principal Law so as to make it clear that a body corporate may appoint more than one person to represent it at any meeting of a company, or of any class of members of the company, or of creditors of the company, which it is entitled to attend.

 

 

Articles 24 and 25 of the Draft Law (proposed amendment no. 19)

 

  1. This proposal seeks to resolve uncertainty over whether Article 95 of the Principal Law permitted resolutions in writing to be passed by fewer than all the members entitled to vote.

 

  1. The consensus amongst respondents to the Green Paper was that the Law should be amended to make it clear that a written resolution may be passed by such majority as is specified in the company’s articles of association, provided that, where the written resolution procedure is being used to pass a special resolution the requisite majority shall not be less than two-thirds of shareholders entitled to vote.

 

  1. Article 24(a) of the Draft Law restates the existing position in Article 95 (1B) that a written resolution may be passed unanimously by all the members of the company entitled to vote.   

 

  1. The Draft Law inserts new paragraphs (1C) and (1D) into Article 95, which allows written resolutions required to be circulated by the company or those proposed by the directors of a company to be passed by two thirds majority voting.   

 

  1. The Chief Minister concluded following the consultation that Article 95 should also be amended to include safeguards including the requirement (similar to that those found in sections 288 to 300 of the UK Companies Act 2006) that the proposed resolution be circulated to all shareholders at the same time.

 

  1. Article 25 of the Draft Law inserts new Articles 95ZA to 95ZC into the Principal Law, which contain the provisions governing the circulation of written resolutions. Article 95ZA deals with the circulation of written resolutions proposed by the directors of a company (other than a resolution passed unanimously). Article 95ZB confers a right on members to request that the company circulate a written resolution. If at least 10% of the members (or such lower percentage as may be specified in the articles) make such a request, the company is required to circulate the resolution and any accompanying statement. Article 95ZC contains further provisions that are applicable where a company is required to circulate a written resolution under Article 95ZB.

 

Articles 26 and 47 of the Draft Law (proposed amendment no. 20)

 

  1. Article 26 of the Draft Law amends Article 96(4) of the Principal Law to ensure that weekends and Bank holidays were left out of account for the purposes of calculating any notice period imposed by a company’s articles.

 

  1. The amendments made by those Articles provide that, in calculating the notice period, no account is taken of a day that is not a working day. A ‘working day’ is defined by reference to Part 1 of the Schedule to the Public Holidays and Bank Holidays (Jersey) Act 2010.

 

Article 28 of the Draft Law (proposed amendment no. 22)

 

  1. Article 113 of the Principal Law requires a company to appoint auditors to examine and report on its accounts if (a) it is a public company, (b) its articles so require, or (c) a resolution of the company in general meeting so requires.  It was decided to draft amendments to Article 113 so as to relieve public companies of the audit requirement in certain circumstances such as when they are dormant fund companies.  

 

  1. Article 28 of the Draft Law amends Article 113 by inserting new paragraphs (1A) to (1F) into Article 113. Paragraph (1A) provides that for prescribed classes of company the audit requirement may be disapplied in respect of a financial period of the company by a resolution passed before the date by which it is required to prepare its accounts.

 

  1. However, to protect shareholders (and particularly those holding non-voting shares) such a resolution can be rescinded, inter alia, if the company receives requests for its rescission from members holding not less than 10% by value of the shares.

 

 

Articles 29 and 30 of the Draft Law (proposed amendment no. 23)

 

  1. Article 113B(4) of the Principal Law provides that an auditor of a company is entitled to require from the company’s officers and secretary such information and explanations as the auditor thinks necessary for the performance of his duties. Article 113C makes it an offence for an officer or secretary of the company knowingly or recklessly to make a false or misleading statement to an auditor in response to a request from him.

 

  1. Article 29 of the Draft Law extends Article 113B(4) to other officers so that it applies to former officers of the company, current and former employees who appear to be in possession of relevant information, and any person who holds or is accountable for (or previously held or was accountable for) any of the company’s records and who appears to be in possession of relevant information, subject to safeguards.

 

Article 31 of the Draft Law (proposed amendment no. 24)

 

  1. The purpose of this Article is to amend the definition of a ‘distribution’ to exclude any transaction which does not result in a reduction in the net assets of the company. This removes a perceived risk that the definition might catch certain common commercial transactions (such as the giving of a guarantee by a subsidiary in respect of its parent’s indebtedness), thereby rendering them unlawful unless the procedure laid down by Article 115 of the Principal Law (which requires the making of a solvency statement prior to any distribution) has been followed.

 

  1. Accordingly, Article 31 of the Draft Law amends Article 115 so as to provide that the requirement for an ex ante solvency statement does not apply to a distribution which does not reduce the net assets of the company. It also inserts a new paragraph (2A), which defines the phrase ‘net assets’ and provides that the question whether a distribution reduces the amount of a company’s net assets falls to be determined in accordance with the generally accepted accounting principles adopted in the preparation of the company’s most recently prepared accounts.

 

Articles 32 and 33 of the Draft Law (proposed amendment no. 25)

 

  1. Article 115 of the Principal Law provides that a company can only make a distribution to its members if the directors authorizing the distribution have made a statement to the effect that they have formed the opinion that the company will be able to discharge its debts as they fall due immediately following the date on which the distribution is proposed to be made, and that the company will be able to continue to carry on business and discharge its liabilities as they fall due for a period of 12 months thereafter.

 

  1. There was anecdotal evidence that the requirement for a solvency statement was sometimes overlooked by directors of Jersey companies when authorizing a distribution to members. There is currently no mechanism whereby such a distribution, which is technically ultra vires, can be ratified retrospectively. Article 32 of the Draft Law seeks to remedy this by introducing a court process to ratify such distributions based on factors including; the solvency of the company at the time of the distribution, the solvency of the company at the time that the court hears the application, and that there are no reasons contrary to the interests of justice why such a ratification should not take place. 

 

  1. As set out in the Supplemental Response Paper, the Government envisages that, in cases where the solvency of the company is not in doubt, and it is clear that the failure to make a solvency statement was an innocent mistake by the directors, an order under Article 115ZA(1) should generally be made as a matter of course.

 

  1. To ensure that the procedure is not unduly onerous, paragraph (3) of Article 115ZA expressly provides that no notice of an application under paragraph (1) need be given to any creditor of the company, or any other person, unless the court otherwise directs.

 

  1. Article 33 of the Draft Law makes a consequential amendment to Article 115A of the Principal Law to make it clear that there is no liability on a member of the company to repay a distribution that has been ratified by the court pursuant to Article 115ZA.

 

Article 34 of the Draft Law (proposed amendment no. 27)

 

  1. This amendment addresses a difficulty sometimes encountered that a ‘takeover offer’ must be made to every shareholder on identical terms (subject only to variations permitted under Article 116(4)). However, the laws of some jurisdictions make it impossible for an offer under Article 116 to be made to shareholders resident in them, or for such shareholders to accept the offer.

 

  1. Article 34 follows the UK Companies Act 2006 which makes specific provision for this situation (in section 878) with new Article 116 (2C), (2D), and (2E).  

 

Articles 35 to 39, 41 and 42 of the Draft Law (proposed amendment no. 28)

 

  1. Following consultation, Article 35 to 39, 41 and 42 of the Draft Law amends various Articles in the Principal Law, in relation to mergers to reduce the period for various parties to apply to court from 28 to 21 days.

 

  1. In addition, Article 36 of the Draft Law amends Article 127FC of the Principal Law so as to make it possible to serve notice of a proposed merger on a company’s creditors at the same time as notice is given to members.

 

  1. Article 39 of the Draft Law amends Article 127FJ(3), which deals with the application to the registrar in order to complete a merger. Paragraph (3) is amended so as to make it possible for such an application to be made earlier than the times specified therein with the agreement in writing of all the members and creditors of the merging companies.

 

 

Article 40 of the Draft Law (proposed amendment no. 29)

 

  1. Article 40 of the Draft Law inserts a new Article 127GB into the Principal Law, which allows the States to pass Regulations which make provision for enabling the undertaking, property and liabilities of a company to be divided among 2 or more companies, i.e. the demerger of companies. 

 

Article 43 of the Draft Law (proposed amendment no. 30)

 

  1. As proposed in the Green Paper, Article 43 of the Draft Law updates the definition of ‘relevant supervisory authority’ contained in Article 135(3) of the Principal Law.

 

Article 44 of the Draft Law (proposed amendments nos. 31 and 32)

 

  1. Article 44(a)(i) of the Draft Law amends Article 169A of the Principal Law to achieve consistency between paragraph (4) of that Article and Article 8(5) of the Companies (General Provisions) (Jersey) Order 2002. In its amended form the wording of paragraph (4) requires a resolution to be supported by creditors the value of whose votes are in excess of half the value of the votes of the creditors who vote on the resolution (i.e. a simple majority).

 

  1. Article 44(a)(ii) makes a further minor amendment that was not originally proposed in the Green Paper. It inserts wording to make it clear that the phrase ‘the creditors who vote on the resolution’ includes both creditors voting in person and by proxy.

 

Article 45 of the Draft Law (proposed amendment no. 33)

 

  1. Article 45 of the Draft Law inserts into Article 205 of the Principal Law, (which already confers on the registrar powers to strike off for other reasons (e.g. failure to deliver an annual return)) powers for the registrar to strike off a company for the failure to comply with the requirements contained in Article 67 to maintain a registered office in Jersey. The new power may be exercised where a company fails to comply with a notice from the registrar under Article 67(6) or the registrar refuses under Article 67(8) to register a notice given by a company under Article 67(5) or (6).  If the notice is not complied with, the registrar may strike off the company under Article 205(7).

 

Articles 46 of the Draft Law

 

  1. Article 46 of the Draft Law amends the penalty provisions to reflect new offences.

 

Recommendation

 

  1. For the reasons set out in this paper, it is recommended that the Chief Minister signs a Decision Summary to signify his agreement to the lodging this law, agrees to adopt the Report to the Law, signs the Human Rights statement of compatibility, and requests that this Draft Law is set down for debate for the sitting of the States on 13th May 2014.

 

 

Director, Finance Industry Development, Financial Services Unit

26 March 2014

1

 

Our sites
Back to top
rating button