The Companies (Guernsey) Law, 2008 (the Companies
Law) came into force on 1 July 2008.
Given the significance of the Companies Law, the Guernsey
Commerce and Employment Department (the
Department) has recently reviewed the Companies
Law with a view to making amendments to:
clarify the current provisions and resolve certain practical
take account of developments in company law elsewhere; and
ensure that Guernsey remains a highly regarded and competitive
The Department has released a consultation paper setting out the
proposed amendments to the Companies Law and has invited comments
from interested parties which must be provided by 31 May 2010. The
Department has also invited comments on any matters relating to the
Companies Law which are not covered by the proposed amendments.
Notable proposed amendments include:
repealing the requirement for the founder member to sign the
memorandum of incorporation;
introducing a criminal offence for breach of the requirement
for a company to have a registered office at all times in
clarifying eligibility/disqualification criteria for
introducing an optional new court approved share capital
introducing a general provision permitting directors to issue
shares to the extent permitted by the company's memorandum and
exempting open-ended investment companies from the
certification provisions relating to consideration for the issue of
providing expressly that companies may provide financial
assistance for the purchase of their own shares.
Interested parties are also being asked to consider and comment
on various provisions including as to whether:
the restrictions in respect of the notice periods for
appointment and termination of a proxy are appropriate;
the quorum requirements for class meetings where class rights
are to be varied should be amended or repealed;
the distinction between dividends and distributions is
a time limit should be introduced for recovery of distributions
it would be appropriate for the solvency test to only have a
cash flow test (rather than the current cash flow and balance sheet
tests) except where the company is migrating into or out of
Ogier is preparing a response on the proposed amendments which
will include some suggestions relating to other amendments not
covered but which we believe would be beneficial to Guernsey as a
jurisdiction of choice.
A public summary of the responses received identifying those
amendments which will be taken forward is expected to be issued by
the Department once the responses to this consultation process have
been collated and analysed.
The Department has indicated that it will give priority to
implementing appropriate amendments to the Companies Law. The
current indications on likely implementation of any amendments are
that it will be towards the end of 2010.
We will provide you with further updates on developments as they
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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