Isle of Man: New Isle Of Man Corporate Vehicle

Last Updated: 10 October 2006
Article by Nick Verardi

The "New Manx Vehicle" or "NMV" is due to be introduced into Isle of Man law later this year. The new corporate vehicle will be created and governed by the Isle of Man Companies Act 2006 (the "Act") which is currently in bill form. The bill has now completed its passage through the Isle of Man legislative process and is awaiting Royal Assent.

Once in force, the Act will be largely a stand alone piece of legislation and NMVs incorporated under the Act will coexist with present and future companies incorporated under the existing Isle of Man Companies Acts 1931-2004 ("1931 Act Companies").

The NMV will be a flexible and modern corporate vehicle which will be attractive to business, especially as a special purpose vehicle. Some of its key features include: no requirement for authorised share capital; no capital maintenance requirements (subject to satisfaction of a solvency test); no prohibition of financial assistance; reduced compulsory registry filings; less prescriptive accountancy requirements; no distinction between public and private companies; simplified offering document requirements; ability to have single directors and (within certain limits) corporate directors; no requirement to hold an AGM and availability of transfer of domicile procedures, reregistration procedures and merger and consolidation procedures.

Types Of Vehicles Available

The NMV will be a legal entity in its own right separate from its members and will continue in existence until it is dissolved in the same way as 1931 Act Companies.

An NMV can be incorporated, registered or continued under the Act as:

  • a company limited by shares;
  • a company limited by guarantee;
  • a company limited by shares and by guarantee;
  • an unlimited company without shares; or
  • an unlimited company with shares.

Incorporation Of NMVs

Every NMV will be required to have:

  • a registered agent in the Isle of Man who holds the appropriate licence granted by the Isle of Man Financial Supervision Commission pursuant to the Isle of Man Fiduciary Services Acts 2000 and 2005; and
  • a registered office address in the Isle of Man.

Only registered agents will be permitted to incorporate a NMV by submitting to the Registrar of Companies (the "Registrar") the proposed memorandum and articles of association of the company. Upon receipt the Registrar will register the documents, allot a company registration number to the company and issue a certificate of incorporation.

If a NMV is formed as a company limited by shares, a company limited by guarantee or a company limited by shares and by guarantee, it will be able to have "Incorporated", "Inc", "Corporation" or "Corp" as the last word of its name, in addition to the usual "Limited", Ltd", "Public Limited Company" or "PLC". In addition, foreign character names will be permitted.

Power And Capacity

The doctrine of ultra vires will not apply to NMVs. The Act expressly states that notwithstanding any provision to the contrary in a company’s memorandum or articles of association and irrespective of corporate benefit and whether or not it is in the best interests of a company to do so, a company will have unlimited capacity to carry on or undertake any business or activity, to do, or to be subject to, any act or to enter into any transaction.

In addition, in favour of any person dealing with a company in good faith, the power of the directors to bind the company or to authorise others to do so will be deemed to be free of any limitations (including limitations deriving from any provision in the memorandum or articles of association of the company or any resolution of the members of the company or any agreement between the members of the company).

A person will not be deemed to have notice or knowledge of any document (other than registered charges) relating to a company (including the company’s memorandum and articles of association) by reason only of the fact that it is available for public inspection at the companies registry, at the registered office address of the company or at the office of its registered agent.

Notwithstanding these provisions, the directors of a NMV will still be subject to the various duties imposed on directors by common law as well as fiduciary duties, including the duties to act bona fide in the best interests of the company and for proper purposes.


Unlike 1931 Act Companies, a NMV will be permitted to have a single director which may be an individual or a body corporate. A body corporate will only be eligible to act as a corporate director if it, or another body corporate of which it is a subsidiary, is:

  • the holder of an appropriate licence issued by the Isle of Man Financial Supervision Commission under the Isle of Man Fiduciary Services Acts 2000 and 2005; or
  • permitted to act as a corporate director by regulations made pursuant to the Act.

Subject to any contrary provision in a company’s memorandum or articles of association, the Act expressly provides that the business and affairs of the company will be managed by or under the direction or supervision of the directors and that the directors will have all the powers necessary for managing, directing and supervising the business and affairs of the company.

The directors will exercise their powers by resolutions:

  • passed at a board meeting; or
  • passed as written resolutions.

Resolutions passed at board meetings will require the approval of the majority of the directors present (subject to any contrary provision in the company’s memorandum or articles of association). There is express authority in the Act to enable telephonic or electronic board meetings to be held provided that all directors participating in the meeting can communicate with each other.

Directors written resolutions will require the agreement of all of the directors or of such majority (greater than 50%) as is specified in the company’s memorandum or articles of association. Written resolutions can be consented to in writing or by email, telex, fax or other electronic communication.


The Act permits NMVs to be single member companies.

Subject to contrary provision in the Act or a company’s memorandum or articles of association, the members will exercise their powers by resolutions:

  • passed at a meeting of the members; or
  • passed as a written resolution.

Resolutions passed at a members meeting will only require the approval of a member or members holding in excess of 50% of the voting rights exercised in relation thereto (subject to any contrary provision in the Act or in the company’s memorandum or articles of association). In the same way as board meetings, the Act enables telephonic or electronic members meetings to be held.

Members written resolutions will require the agreement of all of the members entitled to vote or of a member or members holding such percentage of the voting rights as is specified in the memorandum or articles of association (subject to any requirement in the Act for any resolution to be passed by a particular majority). Written resolutions can be consented to in writing or by email, telex, fax or other electronic communication without the need for any notice.

The terms "ordinary", "special" and "extraordinary" resolution are not used in the Act.


The provisions relating to shares and share capital in the Act are considerably more relaxed than the equivalent provisions applying to 1931 Act Companies.

The Act provides that shares in a company may (without limitation):

  • be convertible, common or ordinary;
  • be redeemable at the option of the shareholder or the company or either of them;
  • confer preferential rights to distributions;
  • confer special, limited or conditional rights, including voting rights;
  • entitle participation only in certain assets.

In addition, subject to any contrary provisions in a company’s memorandum or articles of association, a NMV will be able to:

  • issue bonus shares and nil or partly paid shares;
  • issues shares with or without a par value;
  • issue shares in any currency (if the shares have a par value);
  • issue shares numbered or unnumbered; and/or
  • issue fractional shares.

As with 1931 Act Companies, bearer shares are not permitted.

Offering Documents

The prospectus/offering document requirements in the Act are far less prescriptive than those applying to 1931 Act Companies. The Act only requires that any offering document issued in relation to a company:

  • contains all material information relating to the offer or invitation contained therein (i) that the intended recipients would reasonably expect to be included therein in order to enable them make an informed decision as to whether or not to accept the offer or make the application referred to therein; and (ii) of which the directors or proposed directors were aware at the time of issue of the offering document or of which they would have been aware had they made such enquiries as would have been reasonable in all the circumstances; and
  • sets out such information fairly and accurately.

It will be the duty of the directors or proposed directors (in the case of a company yet to be incorporated) to ensure that any offering document complies with these straightforward requirements.

Distributions And The Solvency Test

The Act introduces a new definition of "distribution" in relation to a distribution by a company to a member. A "distribution" essentially means the transfer of company assets or the incurring of a debt by a company to or for the benefit of a member and includes the payment of dividends and the redemption, purchase or other acquisition by a company of its own shares.

The Act will permit the directors of a company to authorise a distribution by the company to its members at such time and of such amount as they think fit if they are satisfied, on reasonable grounds, that the company will immediately after the distribution satisfy the solvency test.

A company will satisfy the "solvency test" if:

  • it is able to pay its debts as they become due in the normal course of its business; and
  • the value of its assets exceeds the value of its liabilities.

The solvency test replaces the traditional capital maintenance requirements which apply to 1931 Act Companies.

Provided that the solvency test has been satisfied, dividends may be paid and shares redeemed or purchased out of any capital or profits of the company. In addition (subject to any contrary provision in the company’s memorandum or articles of association) the consent of the members will not be required.

Accounting Records

The accounting requirements imposed on a NMV are far less prescriptive than those imposed on 1931 Act Companies. The Act will simply require a company to keep reliable accounting records which:

  • correctly explain the transactions of the NMV;
  • enable the financial position of the NMV to be determined with reasonable accuracy at any time; and
  • allow financial statements to be prepared.

A NMV must also retain such invoices, contracts and other information as are necessary to allow the NMV to document:

  • all sums of money received and expended and the matters in respect of which the receipt and expenditure took place;
  • all sales and purchases; and
  • the assets and liabilities of the NMV.

Statutory Books

Originals or copies of the following statutory books and documents are required to be kept by NMVs at all times at the office of their registered agent:

  • its memorandum and articles of association signed by each subscriber;
  • the register of members;
  • the register of directors;
  • the register of charges;
  • copies of all notices and other documents filed with the Registrar is the previous 6 years;
  • its accounting records.

NMVs must also keep minute books of meetings and resolutions passed by its directors, members and classes of members. Whilst these minutes books do not need to be kept at the office of the NMVs registered agent, the registered agent must be provided with a written record of the physical address where such records are kept.

Filing Requirements

In comparison with 1931 Act Companies, there are reduced compulsory registry filings, however a NMV is still required to file the following with the Registrar:

  • its memorandum and articles of association and any subsequent amendments;
  • any change in its name;
  • any change of its registered office address;
  • any change of its registered agent;
  • its annual return;
  • any charges which it creates (including any subsequent variation or release of such charges);
  • any late registration of a charge;
  • any applications and filings in connection with its dissolution, restoration or winding up; and
  • any applications and filings in connection with any re-registration, scheme of merger, consolidation or arrangement, transfer of domicile or conversion into a protected cell company.

In particular, there is no requirement for NMVs to file with the Registrar details of any change in its directors, any increase or reduction in its share capital, any alteration to its share capital, any allotment of shares or any members resolutions (other than as required in connection with any of the matters listed above).

A NMV can voluntarily elect to file a copy of its register of directors and/or register of members with the Registrar. If a NMV makes such an election it must notify the Registrar of any changes to those details. In addition, a NMV can voluntarily file any offering document with the Registrar, but it is not required to do so.

Re-Registration Procedures, Transfer Of Domicile, Schemes Of Merger, Consolidation Or Arrangements And Protected Cell Companies

The Act also contains relatively simple procedures to enable:

  • a NMV to be re-registered as a different type of company permitted under the Act and to enable 1931 Act Companies to be converted into NMVs;
  • a NMV to be continued in a country or territory outside the Isle of Man and discontinued under the Act and to enable a foreign company to be continued in the Isle of Man as a NMV;
  • NMVs to be merged or consolidated or to be subject to a scheme of arrangement; and
  • a NMV which has been constituted as a company limited by shares to be converted into a protected cell company.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.