This memorandum has been prepared for the assistance of our clients in connection with the provisions relevant to the incorporation process under the Companies (Guernsey) Law, 2008 (the "Companies Law"). It is intended to provide only a summary of the main legal and general principles and it is not intended to be comprehensive in scope. It is strongly recommended that you seek specific legal advice on such matters and we would be pleased to assist in this respect. A series of briefings on other specific aspects of Guernsey companies has been produced by Ogier and is available on our website www.ogier.com. Transitional provisions have also been made (a separate briefing addresses the operation of these).
The memorandum has been prepared on the basis of the law and practice in Guernsey as at 1 July 2008.
The Companies Law came into force on 1 July 2008.
Introduction of company formation agents
The removal of the Royal Court from the incorporation process means that company incorporations do not have to be carried out solely by Advocates. Under the Companies Law "Corporate Service Providers" are able to complete the incorporation process. A Corporate Service Provider is required to hold a fiduciary licence regulated by the Commission. This ensures that all due diligence, know your customer and anti-money laundering requirements are met. The Commission's consent is only required in the case of cellular companies.
Standardised memorandum and articles of incorporation
The incorporation process has been simplified by the creation of standardised articles of incorporation which are (previously known as articles of association) produced from time to time under regulations issued by the Commerce and Employment Department which apply unless the company specifically chooses to adopt different articles. In addition, the objects of a company are unrestricted unless specifically limited in the memorandum of incorporation.
Ogier has a standard set of memorandum and articles of incorporation which will ordinarily be used in place of the standard sets promulgated under the Companies Law unless our clients have other specific requirements.
Section 13 of the Companies Law allows companies to be incorporated with only one shareholder (the previous position was that at least two shareholders were required). This removes the need for companies to have nominee shareholders which hold their shares on trust for the ultimate beneficial shareholder, resulting in cost savings.
New companies registry
The Companies Law removes both the Royal Court and the Commission from the process of incorporation of a company in Guernsey (although consent of the Commission is required for the incorporation of protected cell companies and incorporated cell companies). Company incorporations are implemented through the new companies registry (the "Registry").
The fact that the Commission and Royal Court have been removed from the process means that standard company incorporations are able to be processed by the Registry within 24 hours. The Registry's incorporation fees are competitively priced compared to other jurisdictions. For example, standard (24 hour) incorporations cost £100. For urgent company incorporation, the Registry will offer a Rapid Incorporation (2 hours) for £350 or Special Company Incorporations which are available in certain limited circumstances (15 minutes) for £750. As Guernsey companies are no longer required to have an authorised share capital, no document duty is payable.
The Registry keeps all information in electronic form and companies are able to submit information to the Registry in electronic form such as their annual validation (which replaces the annual return which each Guernsey company previously had to file at the Greffe). Company names are also able to be reserved online for a fee of £25.
Electronic records are available online, 24 hours a day, seven days a week. It is intended that the current paper files at the Greffe will be gradually input into the new electronic system so that eventually all company searches will be able to be completed online.
The Registry website can be found at www.guernseyregistry.com.
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.