Guernsey: Amendments To Guernsey's Company Legislation

Last Updated: 10 July 2015
Article by Mark Helyar and Kate Ovenden


It is expected that the States of Guernsey will approve a number of amendments to the Companies (Guernsey) Law, 2008 (as amended) (the "Law"), the principal legislation governing Guernsey companies, on 29 July 2015. The changes are set out in the draft Companies (Guernsey) Law, 2008 (Amendment) Ordinance, 2015 (the "Ordinance") published on 19 June 2015 which, if approved, will commence on a date to be set out in a separate regulation. Certain provisions of the Ordinance (for example those affecting the memorandum and articles of companies incorporated under the old Companies (Guernsey) Law, 1994) will not come into effect until 31 December 2016, when the Companies (Transitional Provisions) Regulations, 2008 (as amended) will expire.

The amendments simplify and clarify a number of administrative matters concerning Guernsey companies and make various changes to certain corporate transactions.

This note summarises the key changes made by the Ordinance.

Incorporation of Guernsey companies

A wider category of persons will be able to submit applications for the incorporation of Guernsey companies, which can currently only be made by corporate service providers (i.e. entities holding a full fiduciary licence in Guernsey). The States of Guernsey Commerce and Employment Department (the "Department") will be given the power to prescribe other persons, bodies or officers able to make such applications. It is anticipated that law firms and other regulated bodies will be given such authority which will increase flexibility in the way companies are incorporated. This will be particularly useful where this is being done as part of a wider transaction (for example where a law firm is already instructed in respect of the establishment of a corporate collective investment scheme or is advising an individual on the structuring of his or her private wealth).

Names of Guernsey companies

It will be permissible to incorporate a Guernsey company with a name in non-Roman alphabet, characters or script, provided that the other statutory requirements relating to company names are complied with. This will give companies increased flexibility and be of particular interest where the first language of key stakeholders of a company uses non-Roman script or where this will help with marketing overseas.

Directors and company secretaries

The requirement for directors to disclose to the board their interests in transactions or proposed transactions with the company will be simplified, with directors no longer specifically being required to determine and disclose the monetary value of the transaction if this is quantifiable - they will simply be required to disclose the nature and extent of their interest.

Directors will be responsible for the duties previously identified in the Law as those of the company's secretary (where it had one), not just where the company does not have a secretary but also where the company's articles of incorporation do not specifically impose these duties on the company's secretary. The company's articles will need to specify the duties to be given to the company's secretary, which may include those previously imposed on the secretary by statute (for example, the maintenance of registers and indexes, the filing of notices and documents with the Registrar of Companies in Guernsey and the keeping of resolutions and records). Where the articles do not provide that such duties are imposed on the secretary, the directors will automatically be responsible for them.

The amendments will enable directors and secretaries disqualified from acting (and therefore previously prohibited from being appointed by a Guernsey company) to apply to the Royal Court of Guernsey for an order that the prohibition does not apply to them in a particular case if it would be just for the Court to so order, taking into account matters such as human rights and the interests of justice.

The Ordinance will also introduce savings for the validity of the acts of a company secretary should there be a defect in its appointment.

It will be possible for certain non-regulated companies to waive the requirement for directors to produce an annual directors' report. This will be helpful for smaller companies or companies with one or two members closely involved with the business of the company where the preparation of such a report may be disproportionate and unnecessary.

Finally, a failure by a company to have at least one director will leave the company liable to be struck off the Register of Companies in Guernsey.

Shareholder resolutions

The Ordinance will introduce a number of clarificatory provisions concerning the way shareholder resolutions are passed, for example the amendments will confirm that a unanimous resolution is agreed to by every member of the company if it is agreed to by every member entitled to vote on it and that a written resolution is agreed to by every member entitled to vote on it if it is passed by members representing all of the voting rights of eligible members. Further, the memorandum or articles will be able to specify the time for the closing and reopening of the register for the purposes of voting on written resolutions, to ensure that the register does not change during the period in which a written resolution is in circulation.

Issue of new shares

The procedure for the issue of new shares will be greatly simplified with the existing restrictions on the directors' authority to issue shares (which currently must state the maximum amount of shares which may be issued and a time limit) being relaxed. The Ordinance will give the directors the power to exercise any power of the company to issue shares in the company (or to grant rights to subscribe for or to convert any security into shares in the company) to the extent authorised by the company's memorandum or articles or by resolution of the company. The requisite authorisation will be much more flexible, for example it may be given for a particular exercise of the power or its exercise generally, may be unconditional or subject to conditions, may state the maximum number and/or aggregate value of shares that may be issued or be unlimited as to number of aggregate value and may state an expiration date or be of unlimited duration - the authority (whether contained in the memorandum or articles of the company or a members' resolution) will no longer have to state the matters previously prescribed.

The requirements for directors to resolve that the consideration for and terms of the issue of shares is fair and reasonable to all existing members will be removed (the directors will only need to consider fairness and reasonableness to the company itself, which reflects the fact that directors owe duties to the company, not its members). The requirement for directors to approve and sign a consideration certificate stating, amongst other things, the consideration for and terms of issue of the shares will also be removed.

These amendments will make the administration of the issue of new shares much more straightforward, particularly where new shares are issued regularly, for example a weekly dealing open-ended collective investment scheme, and will avoid issues in determining the appropriate authority to issue shares where there is no need to impose any limits on the number of shares or duration of the authority.

Restructuring of Guernsey companies

Conversion of a cell of a protected cell company in to a non-cellular company

The Ordinance will add to the existing range of statutory procedures enabling conversions from non-cellular companies to protected cell companies (PCCs), incorporated cell companies (ICCs) and incorporated cells by introducing a procedure to convert a cell of a PCC into a non-cellular company. This will enable the assets and liabilities comprised in a cell of a PCC to be entirely separated from the PCC when the cell becomes a standalone company, with those assets and liabilities becoming those of the company. Upon conversion, the company which was formerly a cell will be like any other company - a separate legal entity, with its own board of directors and shareholders and able to contract in its own name.

Flexibility in amalgamations

The amendments will enable Guernsey companies of different types to amalgamate using the existing statutory procedure which previously only applied to companies of the same type (so, for example, a company limited by guarantee will be able to amalgamate with a company limited by shares). Changes are also being made to the existing short form amalgamation procedure which applies to amalgamations between a parent company and its wholly-owned subsidiary and wholly-owned subsidiaries with the same parent and is currently limited to amalgamations between Guernsey companies. The changes will allow for amalgamations with overseas companies, provided that at least one of the amalgamating bodies is a Guernsey company.


The Ordinance will revise the procedure applicable to the takeover of a Guernsey company making significant changes to the squeeze out provisions.

The changes are intended to bring the procedure into line with market practice and to align the statutory provisions more closely with provisions which apply in other jurisdictions which fall within the scope of The City Code on Takeovers and Mergers.

The amendments will enable a bidder for shares in a Guernsey company to serve a compulsory acquisition notice on any dissenting shareholder as soon as its offer is approved by shareholders comprising not less than 90% in value of the shares affected, provided that happens within 4 months of the offer (whereas currently the bidder has to wait 4 months, even if the 90% threshold is met sooner).

The new provisions will provide that where a bidder gives a choice of consideration in the offer, the same choice must be given to any dissenting shareholder and they will clarify how the squeeze out provisions apply to non-Guernsey residents. The amendments will also clarify that the squeeze out provisions will only apply if the offer relates to all of the shares in the company or (as the case may be) to all of the shares in the particular class to which the dissenting shareholder belongs, excluding any shares held as treasury shares (unless the bidder elects that they should be included) and any shares held by the bidder or which it has otherwise contracted to acquire. Shares held as treasury shares and shares held by the bidder or its nominee or other closely related entities (including its holding company, subsidiaries and fellow subsidiaries) and, where the bidder is an individual, certain family members will not be taken into account in calculating the 90% threshold.

Protected cell companies

The amendments will allow separate accounts to be prepared for each cell of a PCC and the core of that PCC, which will preserve confidentiality for shareholders in different cells and the core and ease administration in larger and more complex PCCs.

Incorporated cell companies

The Ordinance widens the categories of companies which may be incorporated as ICCs to include companies which are (or when incorporated will be) licensed to carry on controlled investment business within the meaning of the Protection of Investors (Bailiwick of Guernsey) Law, 1987 (as amended).

Winding up of Guernsey companies

A Guernsey company regulated by the Guernsey Financial Services Commission (the "Commission") will need to give notice to the Commission of any ordinary or special resolution for its voluntary winding up within a period of 30 days after the day of the resolution being passed. The Commission must also be given not less than 7 days' notice before the hearing date of any court application by a company or liquidator in the course of the winding up of a company which is regulated by the Commission or engaged in a financial services business.

The Ordinance will allow the members of a company being wound up voluntarily to grant the liquidator of the company a release from liability by ordinary resolution. From the time determined in the resolution, the liquidator will be discharged from all liability in respect of his acts and omissions in the winding up and otherwise in relation to his conduct as liquidator, other than liability arising from his own fraud, recklessness or gross negligence or except to the extent that he has acted in bad faith. The Royal Court of Guernsey will have power in certain cases to revoke such a release (for example, where it was obtained by fraud) and also to itself grant a release to liquidators.

Electronic records and service of documents

The Ordinance will permit documents which have been received by or issued by or on behalf of the Registrar of Companies in Guernsey (including documents in electronic form or sent by electronic means) to be destroyed or otherwise disposed of, provided a copy is retained in electronic form, subject to certain time limits. In the case of a document in electronic form and sent by electronic means, it can be destroyed at any time and in any other case (i.e. a hard copy document) it can be destroyed on the expiration of a period of 3 years from the date of receipt or issue, as applicable.

The Ordinance also contains provisions which will specifically enable the service of documents under or for the purposes of the Law to electronic addresses.

Secondary legislation concerning corporate transactions

The Ordinance will give the Department various powers to make regulations concerning corporate transactions (such as amalgamations, conversions and migrations) and company administration (for example, the simplification of the statutory requirements for resolutions and meetings of small companies and the exemption of directors of certain types or class or descriptions of companies from preparing a directors' report for each financial year). This will give flexibility to a number of statutory provisions as regulations can be introduced relatively quickly.


Company administrators and directors should take this opportunity to review company memoranda and articles and procedures concerning the administration of companies in respect of which they are appointed to update them in line with changes being made by the Ordinance.

The Ordinance is available publicly on the States of Guernsey website and should be reviewed in full by interested parties. Professional advice should be taken where appropriate.

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.

Mark Helyar
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
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 you may opt out by clicking here

    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.

    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.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    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.

    By clicking Register you state you have read and agree to our Terms and Conditions