Jersey: Introduction To Jersey Companies

Last Updated: 25 April 2012
Article by Vistra

Jersey is a tax neutral jurisdiction, and using a Jersey company for structuring can be beneficial in terms of company law provisions and tax treatment. A Jersey company can be set up for a variety of purposes, which include both holding assets and conducting transactions.

Benefits include:

  • separate legal identity
  • limited liability for shareholders and ease of transfer of ownership
  • share capital can be denominated in any currency and issued in various classes, including redeemable shares

Jersey companies are used in a wide range of transactions, such as:

  • investing in property, securities and other assets
  • acting as a group holding company
  • holding and exploiting patents and copyright
  • provision of nominees shareholders to hold shares for the beneficial owner
  • facilitating the collection of commissions and consultancy fees
  • employing an internationally based work force
  • yacht ownership and chartering
  • leasing of aircraft
  • confidentiality

By choosing to incorporate a Jersey company the underlying beneficial owner is able to conduct business and hold assets globally. The company is not allowed to trade as a local company within Jersey however.

It is sometimes recommended that to protect assets further that the ownership of the company be vested in a Trust rather than by the beneficial owner directly. A trust can be used to transfer the legal ownership of assets to a trustee who is responsible for managing the assets, for the benefit of the beneficial owner/s.

Please see Vistra Jersey's separate 'Introduction to Trusts' information sheet for further information.

Incorporation of Jersey companies

A Jersey company is incorporated with the payment of a registration fee, accompanying an application to the Registrar of Companies.

The local regulator (Jersey Financial Services Commission) will process the incorporation papers within one to two days. A 'fast track' incorporation service is available for an additional fee and will usually take in the region of four to five hours.

Available structures

The following company structures are available in Jersey:

Limited companies

Companies whose members' liability is limited to the amount unpaid on their shares.

Unlimited companies

The liability of the shareholders of the company upon liquidation is unlimited.

Guarantee companies

The liability of shareholders of guarantee companies is limited to the amounts they guarantee.

Cell companies

Cell companies are companies which, once established, have the ability to create cells separate from themselves, each of which may hold separate assets (and liabilities), therefore enabling the assets and liabilities of each cell to be isolated from the assets and liabilities of the cell companies themselves and of any other cells. This creates statutory 'ring fencing' of assets. The Law permits the incorporation of two types of Cell Company, protected cell companies and incorporated cell companies.

PCC

A protected cell structure involves a single legal entity, a PCC, within which there may be, established numerous protected cells. Each protected cell is treated for Jersey law purposes as if it were a common company however each cell does not have a separate legal entity from the PCC itself. Where a protected cell wishes to contract with another party, it does so through the PCC acting on its behalf.

ICC

This is a cell company where each cell is an incorporated cell that has a separate legal entity with the ability to enter into arrangements or contracts and to hold assets and liabilities in its own name.

Limited life companies

Jersey companies may be incorporated with a limited or set period of existence. On incorporation, the company's "lifespan" is defined by specifying a liquidation date in the Articles of Association, or by specifying the occurrence of a particular event. Such companies are granted favorable treatment by a number of revenue authorities in that they are regarded in the same manner as a partnership (as opposed to a corporation).

No par value shares

Jersey companies may be incorporated with 'no par value' shares. As the name suggests, no par value shares have no par or nominal value, nor are they denominated in any currency, and the number of authorised no par value shares can be (but does not have to be) unlimited shares. Most Jersey companies are now incorporated as no par value companies.

Formalities

Registered office

The registered office of a Jersey company must be located in Jersey.

Directors

A private company must have at least one director and a public company at least two. Directors' meetings can, but need not, be held in Jersey and the directors themselves can, but need not be, resident in Jersey. Directors may be individuals or, subject to certain restrictions, corporate entities.

Shareholders

A private company is permitted to have just one shareholder (although more are possible); a public company must have at least two (who may be nominees for a single beneficial owner).

General meetings

A private company has the ability to dispense with the need to hold an annual general meeting, a public company may not.

Auditors

All companies are required to keep adequate records sufficient to show their financial position. Only public companies are required to have auditors.

Requirement to prepare accounts

Jersey Law requires that accounts be prepared for all Jersey Companies. Subject to the terms of the consent given by the Registrar of Companies on incorporation of a company, only public companies need file their accounts with the Registrar.

Annual return

A company must submit an annual return before the end of February in each year giving certain details of its share capital. For public companies information must also be supplied regarding its directors.

Registers

A Jersey company must maintain registers of directors and shareholders.

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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