Guernsey: New Companies Law - Enabling The Guernsey Cyber Company

Last Updated: 8 February 2009

The Companies (Guernsey) Law, 2008 contains a number of provisions which enable electronic communications and website facilities to be used in administering Guernsey companies. In recent years, such provisions may have been found in the articles of companies but these new provisions assist in providing a statutory framework. This briefing surfs through the various references in the new law (guidance notes, practice notes and standard articles).

1 Company Website

Where a company has a website, the company's name, registration number and address of its registered office must appear in a reasonably prominent location on that website.

Additionally, if the company that is subject to an administration order has a website, the administrator's name and a statement that the affairs, business and property of the company are being managed by the administrator shall appear on a reasonably prominent location on that website. There are no provisions, however, that provide what should happen when the company is being wound-up or where a cell of a PCC or ICC has a receiver appointed to it.

10 Electronic correspondence

A company's correspondence can be in electronic form. Its name must appear in all its correspondence unless the company's identity is readily ascertainable from the context of the correspondence or from a course of dealing between the company and the person to whom the correspondence is addressed. Furthermore, all order forms and formal business letters of the company must contain the company's name, registration number and address of its registered office. The distinction between all correspondence, order forms and formal letters is not clear and, therefore, it will be easier to put the company's name, registration number and address of its registered office on all documents.

Additionally, if the company is subject to an administration order then there must also be a statement of the administrator's name and a statement that the affairs, business and property of the company are being managed by the administrator, unless this is readily ascertainable from the context of the correspondence, or from a course of dealing between the company and the person to whom the correspondence is addressed. Again there is no mention of winding-up or receivership of cells.

11 Electronic company records

Company records may be kept in hard copy or electronic form and may be arranged in such manner as the directors or secretary think fit provided that the information in question is adequately recorded for future reference. Where company records are kept in electronic form they must be capable of being reproduced in hard copy form. They are deemed to be kept at a place if access to them and a hard copy can be obtained at that place. This is important as there are requirements for certain records to be kept at the company's registered office; processing may take place elsewhere but a hard copy must be available at the registered office.

Where company records are kept otherwise than in bound books, adequate precautions must be taken to guard against falsification and to facilitate the discovery of falsification. Any duty imposed by law to allow inspection, or to furnish a copy of a company record, shall be treated, where the company records are in electronic form, as a duty to allow inspection, or to furnish a copy in hard copy. However, if the person seeking inspection or a copy consents, then the inspection or copy can be in electronic form. It will be wise, therefore, to include in the company's articles effective consent by all directors, secretaries and shareholders to inspection and obtaining copies in electronic form.

The company records include any register, index, record, accounting records, agreement, memorandum, articles, minutes or other document required to be kept by a company.

100 Company Registrar

The provisions of the new law do not apply only to the companies. Any register kept or other information held by the Registrar of Companies may also be in electronic form.

Additionally, any document to be given to or served on the Registrar may be in such electronic form and may be submitted by such electronic means as may be permitted by the Registrar. That includes anything accompanying any application, annual validation, statement, consent, declaration or signature.

It is anticipated that the vast majority of filings that are to be made with the Registrar of Companies are to be made electronically. Furthermore, incorporation of companies, registration of directors and other filings are intended to be done online. The registry will be issuing PINs to company administrators and directors to enable this to take place.

101 Service of documents

Any document to be given or served under the new law may be given or served by being transmitted. The expression "transmitted" means transmitted by electronic communication, facsimile transmission or other similar means which produce or enable the production of a document containing the text of the communication; in which event the document shall be regarded as served when it is received. No document to be given to or served on the Registrar shall be deemed to have been given or served until it is received. In sending any electronic communication it will be advisable, therefore, to include an electronic receipt to ensure that there is proof of receipt.

If a person notifies the Registrar of an address for service within the Bailiwick for the purposes of the new law, any document to be given to or served on him may be given or served by being transmitted to that address. If service of a document cannot, after reasonable enquiry, be effected in accordance with this section of the law, the document may be served by being published by the Registrar in such manner and for such period as he thinks fit, or by being published in La Gazette Officielle on two occasions falling in successive weeks, and a document served under this subsection of the law is sufficient if addressed to the person for whom it is intended.

Any document to be given or served may be given or served on an individual by being transmitted to his usual or last known place of abode; on a company by being transmitted to its registered office; on an overseas company by being transmitted to its principal or last known principal place of business in the Bailiwick or, if there is no such place, its registered or principal office or last known registered or principal office elsewhere; on the Registrar by being transmitted to the principal offices of the Registrar in Guernsey.

It is not clear how an electronic communication can be transmitted to a place as envisaged by this part of the new law when e-mail addresses by their very nature have no "place" in that sense. These provisions of the new law do appear contradictory in that respect but the provisions which follow it do provide sufficient clarity to enable e-mail to be used.

110 Electronic communications

The more useful provisions in relation to e-mail state that electronic communications by a company to its members or their proxies, or to a company, have effect. There are a number of important principles for electronic comm.- unications. Those apply where a document, other than a summons, is sent by a company to its members or their proxies, or to a company. They can be summarised as follows:

  • A document is sent in electronic form if it is in electronic form and is sent by electronic means. That means that it is sent and received at its destination by means of electronic equipment for the processing (which expression includes, without limitation, digital compression) or storage of data, and entirely transmitted and received by wire, by radio, by optical means or by other electromagnetic means, or is sent by other means.
  • A document authorised or required to be sent in electronic form must be sent in a form, and by a means, that the sender reasonably considers will enable the recipient to read it, and to retain a copy of it. A document can be read only if it can be read with the naked eye, or to the extent that it consists of images it can be seen with the naked eye. Audio files would not, presumably, be acceptable under the new law.
  • A company may send documents in electronic form or by means of a website. Notice of a written resolution or a statement relating to a written resolution may also be validly given by a company by means of a website. The notice must be available on the website throughout the period beginning with the circulation date and ending on the date on which the resolution lapses under section. Notice of a meeting may also be validly given by a company by means of a website. The notice must be available on the website throughout the period beginning with the date of the notification and ending with the conclusion of the meeting.
  • A document can only be sent in any particular electronic form if the recipient has so agreed either generally or in any particular case. The agreement of a member may be deemed by virtue of provision made by the articles or a resolution of the company. The most practical way to take advantage of these provisions, therefore, is to include this in the company's articles.
  • The document may only be sent by electronic means to an address specified for that purpose by the recipient (generally or in any particular case), or by other means to an address to which it could be sent if it were a document in hard copy.
  • The provisions of the law are subject to any provision to the contrary in the company's articles.
  • A document sent otherwise than in hard copy form or electronic form is validly sent if it is sent in a manner that has been agreed by the recipient.
  • Documents can only be sent by means of a website if the member has so agreed, either generally or in any particular case. The agreement of a member under subparagraph may be deemed by virtue of provision made by the articles or a resolution of the company. The most practical way to take advantage of these provisions, therefore, is to include this in the articles.
  • A document authorised or required to be sent by means of a website must be made available in a form, and by a means, that the company reasonably considers will enable the recipient to read it, and to retain a copy of it. For this purpose a document can be read only if it can be read with the naked eye, or to the extent that it consists of images it can be seen with the naked eye.
  • The company must notify the intended recipient of the presence of the document on the website, the address of the website, the place on the website where it may be accessed, and how to access the document. Where the document is a notice of a company meeting, the notification must state that it concerns a notice of a company meeting, and specify the place, date and time of the meeting. The document is taken to be sent on the date on which the notification required by this paragraph is sent, or if later, the date on which the document first appears on the website after that notification is sent.
  • The company must make the document available on the website throughout the period specified by the applicable provision of this law, or if no such period is specified, the period of 28 days beginning with the day on which the notification required under paragraph 9 of the law is sent to the person in question. For the purposes of this section, a failure to make a document available on a website throughout the period shall be disregarded if it is made available on the website for part of the period, and the failure to make it available throughout that period is wholly attributable to circumstances that it would not be reasonable to have expected the company to prevent or avoid.

111 Standard Articles

Standard articles are to be prescribed which will be automatically adopted by any company to the extent that they are not applied. Those standard articles are likely to contain the following:

All members are deemed to have agreed to accept communication from the company by electronic means unless the members notify the company otherwise. Notice under this article must be in writing and signed by the member and delivered to the company's registered office or such other place as the board directs

1000 Conclusions

Whilst the new law contains many provisions which are useful, they are enabling in nature and the articles of a company will require appropriate provisions to enable full advantage to be taken of them

In respect of private companies, the ability to send notices and written resolutions by e-mail will be of significance in the administration of those companies' affairs. Directors' resolutions and shareholder resolutions can be processed quickly and, with appropriate planning and wording, well within the traditional time limits imposed by the law.

For investment funds and listed companies, the ability to use websites for publication of notices in addition to email for notices and other documents will also assist in the administration of those entities. There should be savings in time and cost.

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.

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