Guernsey: Guernsey Company Law Explained

Last Updated: 1 May 2009
Article by Ian Kirk

Most Read Contributor in Guernsey, September 2018

Competition between international financial centres is strong and increasing. The foundation for a competitive jurisdiction is up-to-date legislation that helps the finance sector to do business flexibly and bears scrutiny. A new book provides a guide to Guernsey's comprehensively revised Company Law.

Company law in Guernsey has developed through accumulation of amendments and revisions. In 1994 a new law, the Companies (Guernsey) Law 1994 was introduced, which consolidated a law of 1908 together with subsequent laws. The 1994 law ran to 124 Sections. Since then much has changed in the field of company law.

The new legislation ran to some 545 sections and 5 Schedules. The legal draftsmen not only consolidated Guernsey's existing law and ordinances but also took into consideration ideas and concepts from other jurisdictions. The intention was to provide legislation that matches the standards that are expected around the world but will remain flexible.

Since its introduction on 1 July 2008 the Company Guernsey Law 2008 has been the focus of many seminars and briefings on the island. Now specialist legal publisher Key Haven of Oxford, is producing a book that provides a comprehensive guide to the law. The book, titled 'Kirk on Guernsey Company Law' is expected to be published on the anniversary of the Law's introduction - 1 July 2009. It is expected to be a valuable reference resource to those who need to know about Guernsey company law, including lawyers, accountants, insolvency practitioners, corporate secretaries, and other corporate administrators, whether based locally or internationally.

The length of the draft legislation makes it evident that much has changed or been introduced since the previous law. The principal areas of change include:

New Types Of Company

Two new types of company are introduced: 'Unlimited Companies' (where the liability of the members is unlimited) and 'Mixed' liability companies (which can have shares, unlimited liability members and guarantee members).

Simplified Incorporation Of Companies

Incorporation of companies is no longer a judicial process. A newly created Company Registry controls this function.

Online Incorporation

Online incorporation, filing and notification of changes have been introduced. Searches can be done online. Different service levels, including a fast-track incorporation within 15 minutes, are available.

Standard Articles Of Incorporation

Standard articles are prescribed which are adopted automatically unless otherwise indicated on incorporation.

Unrestricted Objects, By Default

Unless a company's memorandum of incorporation specifies, its objects are unrestricted.

Better Scope For Compromises And Arrangements

The law facilitates compromises and arrangements between a company and its creditors (or a class of creditor) or its members (or a class of member). The Royal Court can sanction a compromise or arrangement agreed by 75% or more of creditors or of members, helping to avoid situations where minorities block proposals against the will of substantial majorities.

Squeeze-Out Provision

A proposed purchaser with 90% acceptances will be able compulsorily to acquire remaining shares.

A New Solvency Test

A new solvency test applies to a number of company actions including:

  • migrations
  • amalgamations
  • making distributions (including dividends)
  • reduction of share capital
  • financial assistance for the acquisition of a company's own shares
  • certain payments associated with the acquisition of shares by a company
  • redemptions

Under the new provisions a three part solvency test is introduced that offers greater certainty and consistency.

Optional Use Of Electronic Communication.

The law permits documents to be sent electronically to shareholders by the company if such means of communication is agreed by the shareholder

Dividends And Distributions

There are multiple changes affecting dividends and distributions.

Overall, this is a progressive piece of legislation that helps to underpin Guernsey's position as a specialist financial centre.

About the Author And The Publisher

Author Ian Kirk is the head of the Commercial department at Guernsey law firm Collas Day. He is a noted authority on the island's law, with over 25 years legal practice. An English solicitor and Guernsey Advocate, he specialises in banking, company and commercial law and is a regular author and speaker on Guernsey Company Law, directors' duties and financial services. He is widely consulted as an advisor to companies and boards and holds several directorships himself. He is a former Chairman of the Institute of Directors, Guernsey.

Key Haven is a publisher of books and professional reviews and event organiser, based in Oxford. It specialises in legal topics including Company Law and Channel Island Law as well as Taxation, Trusts, Charities, Comparative Law, European Law and Constitutional Law.

For more information about Guernsey's finance industry please visit

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
Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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