Guernsey: Companies (Guernsey) Law, 2008 (As Amended)

Last Updated: 9 September 2016
Article by Frances Watson and Andrew Munro

Provisions which may be displaced or supplemented by contrary provisions in a company's memorandum or articles of incorporation.

This memorandum has been prepared to assist our clients in connection with the provisions in the Companies (Guernsey) Law, 2008 (as amended) (most recently by the Companies (Guernsey) law, 2008 (Amendment) Ordinance 2015) (the "Companies Law") which may (i) be displaced by contrary provisions in a company's memorandum or articles of incorporation or (ii) allow a Guernsey company to make express provision in its memorandum or articles permitting such company to undertake anything which it would not otherwise be able to take. 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.

The memorandum has been prepared on the basis of the law and practice in Guernsey as at 11 August 2016.

Provision

Description

Section

Types of Member

In the case of a company that is limited by guarantee which has a share capital, the memorandum or articles may:

  1. require a guarantee member also to be a shareholder; or
  2. prohibit a guarantee member from also being a shareholder.

s.7(3)

Types of Member

In the case of an unlimited liability company which has a share capital, the memorandum or articles may:

  1. require an unlimited member also to be a shareholder; or
  2. prohibit an unlimited member from also being a shareholder

s.8(3)

Types of Member

The memorandum or articles of a mixed liability company may:

  1. require a member of one type also to be a shareholder; and
  2. prohibit a member of one type from also being a shareholder.

s.9(3)

Contributions of Members

Without prejudice to any liability that a member has to a mixed liability company, the memorandum or articles of that company may make provisions for any adjustments or contributions to be made between members.

s.9(5)

Memorandum of Incorporation

The memorandum may be in the French language

s.15(8)

Seal

A common seal may be used in any jurisdiction unless the articles provide to the contrary,

s.36(2)

Alteration of Memorandum or Articles of an Incorporated Cell

In the case of an incorporated cell company the articles of an incorporated cell may not, unless the memorandum or articles of the incorporated cell provide to the contrary, be altered unless the incorporated cell company (as well as the incorporated cell) has also passed a special resolution authorising the alteration.

s.39 and s.43

Entrenchment of Provisions of Articles

Articles may contain provision for entrenchment to the effect that specified provisions in the articles may be amended or repealed only if conditions are met, or procedures complied with, that are more restrictive than those applicable in the case of a special resolution.

s.44

Objects

A company's objects are unrestricted unless specifically limited in its memorandum.

s.113

Power of Attorney

A company may, by power of attorney, empower any person, either generally or in respect of specified matters, to represent it, act in its name and execute documents on its behalf, and such a power is not valid unless signed by a director of the company or in such manner as provided for in its articles.

s.118

Release of Guarantee Member

A person does not cease to be a guarantee member of a company except by dissolution of the company or by retirement in accordance with such formalities as may be set out by the company's articles.

s.122(1)(b)(i)

Release of unlimited liability member

A person shall not cease to be an unlimited member of a company except by dissolution of the company or by retirement in accordance with such formalities as may be set out by the company's articles.

s.122(2)(b)(i)

Management

The business and affairs of a company must be managed by or under the direction, or supervision of the board of the company. This is subject to any modifications, exceptions or limitations in the Companies Law or in the company's memorandum and articles.

s.134(3)

Appointment of Directors

Subject to any provision to the contrary in a company's memorandum or articles of incorporation, any directors appointed, subsequent to the first directors, must be appointed by ordinary resolution.

Subject to the memorandum or articles, the members of the company may vote in a resolution to appoint a director only if-

(i)         the resolution is for the appointment of one director; or

(ii)        the resolution is a single resolution for the appointment of two or more directors and a separate resolution that it be so voted on has first been passed without a vote being cast against it.

s.139(2)a

and s.140

Directors Ceasing to Hold Office

A person ceases to be a director if he (i) resigns or becomes ineligible to be a director in accordance with the Companies Law, (ii) dies, or (iii) is removed from or vacates office in accordance with the memorandum or articles of the company.

s.142

Attendance at Directors' Meetings

Subject to any provision to the contrary in a company's memorandum or articles of incorporation, each director participating by telephone, video link or similar is deemed to be present at a meeting.

s.153

Interested Director may Vote

A director who is interested in a transaction entered into by the company may vote, attend meetings, sign documents or do any other thing in his capacity as a director in relation thereto subject to the company's memorandum and articles.

s.166

Ratification of Acts of Directors

Subject to anything in a company's memorandum or articles requiring a higher majority (or unanimity), the decision of a company to ratify conduct by a director which exceeds his powers or amounts to negligence, default, breach of duty or breach of trust in relation to the company must be taken by the members pursuant to an ordinary resolution.

s.160

Notice of Ordinary Resolution

The articles may specify the manner in which notice must be given of an ordinary resolution in contemplation of a general meeting of the company at which the resolution is to be proposed.

s.176(6)

Variation of Majority Voting

Notwithstanding s.176, a company's memorandum or articles may allow certain ordinary resolutions to be passed by a different proportion of votes than a simple majority.

s.177

Period for Passing Written Special

Resolutions

The memorandum or articles of incorporation may specify a period within which a written resolution is to be passed if it is not to lapse. In default of any such provision in the memorandum and articles, the default position is 28 days from the circulation date.

s.188

Written Resolutions

A provision of the articles is void if it would have the effect of not allowing any resolution that is required by or provided for in an enactment to be passed as a written resolution.

s.190

Voting

Every member has one vote, subject to provisions in the articles providing for the issue of the shares which (a) do not entitle the holder to voting rights, or (b) entitle the holder to restricted voting rights.

s.191(4)

Voting – Joint Holders of Shares

Subject to any provision of the company's article, where there are joint holders of shares of a company only the senior holder may vote.

s.194(3)

Voting –Second Vote of Chairman

Subject to any provision of the company's memorandum or articles the chairman has a second or casting vote.

s.197

Voting – Admissibility of Votes

Effect of provision in company's articles as to admissibility of votes. This section applies where the company's articles provide that an objection to a person's entitlement to vote must be made in accordance with a procedure specified in the articles.

s.198

AGM of Incorporated Cell

An incorporated cell is not required to hold an annual general meeting, unless the memorandum or articles of incorporation require it to.

s.200

Members' Power to call General Meeting

Unless stated otherwise in the company's memorandum or articles, the members may require the directors to call a general meeting.

s.203(1)

Notice of GM

Subject to any provision of the company's memorandum or articles, notice of a general meeting must state the general nature of the business to be dealt with at the meeting.

s.210(2)

Location of GM

Subject to the provisions of a company's articles, a general meeting may be held at any place in Guernsey or elsewhere.

s.212

Quorum

In the case of a company having more than one member, two qualifying persons holding 5% of the total voting rights of the company is a quorum, subject to its memorandum and articles.

s.213(2)

Chairman at Members' Meeting

The chairman of a meeting may be elected by a resolution passed at the meeting, subject to any provision of the company's articles that states who may or may not be chairman.

s.214

Attendance at Members' Meeting

Subject to any provision to the contrary in the company's articles of incorporation, each member participating by telephone, video link or similar is deemed to be present at a meeting.

s.217

Details of Members

Membership details shall be available throughout a meeting, unless a company's articles of incorporation request otherwise.

s.219

Proxy

A company's articles may require or permit notice of termination of proxy's authority to be given to a person other than the company.

s.226(4)

Quorum for Variation of Class Rights Meeting

Subject to the provisions of a company's memorandum and articles, the quorum for a variation of class rights meeting is two persons present holding at least one third of the voting rights of the class in question or, in the case of an adjourned meeting or class with only one member, one person present holding share(s) of class in question

s.232

Variation of Voting Rights

A share confers on the shareholder a right to vote on resolutions of the company and the right to an equal share in dividends and the right to an equal share in the distribution of surplus assets of the company unless varied by the memorandum or articles of the company.

s.276

Classes of

Shares

Subject to the memorandum and articles of incorporation, different classes of share may be issued in a company.

s.277

No Par Value

Shares

The memorandum or articles of a company may authorise a company to issue shares which have no nominal or par value.

s.278

Alteration of

Share Capital

A company may, if so authorised by its memorandum or articles, by ordinary resolution alter its memorandum or articles so as to alter its share capital.

s.287

Transfer of

Shares

The shares of any shareholder in a company are transferable in the manner provided by the company's memorandum or articles.

s.289

Power of

Directors to

Issue Shares

To the extent authorised by a company's memorandum or articles (or resolution of the company), the directors of a company may exercise any power of the company to issue shares (and grant rights to subscribe for or convert any security into shares in the company). To the extent that the directors are not prohibited from doing so by the memorandum or articles (or resolution of the company), they may issue shares (or grant rights to subscribe for or convert any security into shares in the company) in pursuance of an employee's share scheme.

s.291

Issue of

Shares

The board of directors may issue shares to any shareholders who have agreed to accept the issue of shares, subject to the memorandum or articles of incorporation of the company in lieu of a proposed dividend(s) in certain circumstances.

s.306

Acquisition of

own shares

A company may, if so authorised by its memorandum or articles acquire its own shares.

s.312

Treasury

Shares

If so authorised by its memorandum or articles a company may acquire its own shares (section 312). A company may hold any shares acquired by it in accordance with section 312 as treasury shares if it is authorised to do so by (a) its memorandum or articles, or (b) subject to any provision to the contrary in its memorandum or articles, an ordinary resolution.

s.326(b)

Variation of

Class Rights of Members (who are not shareholders)

The rights of a class of shareholders (without prejudice to any other restrictions on their variation) may only be varied with consent of the holders of shares of that class (in writing from 75% of the members of that class or a special resolution passed at a meeting of the members of that class) or in accordance with the company's articles.

s. 342

Variation of Class Rights of Members (who are not shareholders)

The rights of a class of members (without prejudice to any other restrictions on their variation) may only be varied with consent of the members of that class (in writing from 75% of the members of that class or a special resolution passed at a meeting of the members of that class) or in accordance with the company's articles.

s. 343

Voluntary winding-up

The memorandum or articles of a company may provide for a date upon which the company expires or an occurrence on which the company shall be dissolved, provided that in each case the company passes an ordinary resolution that it would be wound up voluntarily

s.391

Distribution of Company's Property

Subject to the law (including rules as to preferential payments) and any agreement between a company and any creditor(s), a company's assets in a winding-up shall be realised and applied in satisfaction of the company's debts and liabilities pari passu. Unless the memorandum or articles provide otherwise, any surplus shall be distributed among the members according to their respective rights and interest in the company.

s.419(2)

Distribution after Receivership

During the discharge or variation of receivership orders any surplus shall thereafter be distributed (a) among the holders of the cell shares or the persons otherwise entitled to the surplus, or (b) where there are no cell shares and no such persons, among the holders of the core shares, unless the memorandum or articles provide otherwise.

s.462(6)

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 Mondaq.com.

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

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
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

    Mondaq.com (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 www.mondaq.com

    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 Mondaq.com’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.

    Disclaimer

    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.

    Registration

    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 unsubscribe@mondaq.com 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.

    Cookies

    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.

    Links

    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.

    Mail-A-Friend

    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.

    Emails

    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 .

    Security

    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 webmaster@mondaq.com.

    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 EditorialAdvisor@mondaq.com.

    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 enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com 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