Statutory requirements applying to companies in the Island are set out in the Companies (Jersey) Law 1991. Financial institutions are primarily concerned with complying with the relevant laws applicable to their sector. These are set out in detail in the KPMG publication Banking and Finance in Jersey.
The Companies (Jersey) Law 1991 revised and updated significantly the previous provisions of the Companies (Jersey) Laws 1861 to 1968. Important aspects introduced by the Law were the distinction between private and public companies and the requirement for all public companies to prepare and file audited financial statements. Under the Jersey Law a public company is one that states that it is public in its Memorandum of Association, or one that has more than thirty members.
Incorporation is effected by registration. Registration confers legal personality and, unless limited in the Memorandum and Articles of Association, perpetual succession on the incorporated body. The only form of company which the Island will allow to be registered is a company with liability limited by shares. Bearer shares and shares of no par value are not permitted. However amendments are being made to the Companies (Jersey) Law 1991 which will permit the incorporation of unlimited liability companies and companies limited by guarantee.
The main documents to be registered are the Memorandum and Articles of Association. The main clauses of the Memorandum, which can subsequently be altered, specify:
- The name of the company.
- That the members' liability is limited.
- The amount of authorised capital.
- The duration of the company if limited.
- Whether the company is public or not.
The Memorandum of Association is signed by the original members (subscribers), numbering at least two unless the company is a wholly owned subsidiary where only one member is required. Members are often nominee companies operated by local professional firms. However, there is no legal requirement that the shareholders be local professional firms or that the shareholders be local residents. Nominee shareholders would normally sign share transfers and declarations of trust in favour of the beneficial owners, whose identities must be disclosed to the relevant authority on formation.
The Articles of Association represent the company's internal constitution and set out the rights of its members and the duties of its officers. In Jersey the Standard Table of Articles can be used in its entirety or with certain amendments. The Articles may be altered by a special resolution, which requires a majority of two-thirds of votes. The subscribers to the Memorandum of Association appoint the first directors (any number subject to any limits in its Articles), none of whom need to be local residents.
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.
For further information contact Jonathan G. Hooley on Tel (indirect line): + 44 (0) 1481 721000, Tel (direct line): +44 (0) 1481 719544, Fax: +44 (0) 1481 722373.