Jersey: Changes To The Jersey Companies Law

Last Updated: 15 July 2008
Most Read Contributor in Jersey, September 2016


Jersey has long been established as one of the top offshore jurisdictions for international finance transactions. There is a constant process of updating the legal and regulatory framework to ensure that a wide range of structures is available to the client. This briefing note summarises certain changes to the Companies (Jersey) Law 1991 (the "CJL").

Proposed amendments

The Companies (Amendment No.2) (Jersey) Regulations 2008 were passed by the States of Jersey on 15 January 2008 and came into force on 22 January 2008.

The Companies (Amendment No. 9) (Jersey) Law was passed by the States of Jersey on 15 January 2008 and awaits Privy Council approval; it is anticipated that it will come into force in mid-2008.


A Jersey company will be permitted to make a distribution from any source, not merely from distributable profits. Therefore, distributions may be made from capital without a need to obtain either shareholder or Court approval for a reduction of capital, as is currently the case.

A distribution may be debited from any account of the company (including the share premium account and the stated capital account) other than the capital redemption reserve or the nominal capital account. The fact that distributions may be made from the stated capital account of a no par value company but not the nominal share capital of a par value company may lead to an increased use of no par value companies in the future.

A distribution may only be made if the directors authorising the distribution make a statement that they have formed the opinion that:

Client briefing

  • immediately following the date of the distribution, the company will be able to discharge its liabilities as they fall due; and
  • having regard to the prospects of the company and their intentions with respect to the management of the company's business and the amount and character of the financial resources that, in their view, will be available to the company, the company will be able to continue to carry on business and discharge its liabilities as they fall due for a period of 12 months immediately following the date of distribution (or, if sooner, a solvent winding up of the company).

A director who makes such statement without having reasonable grounds for the opinion may be guilty of a criminal offence.

This amendment is expected to come into effect in mid-2008.

Financial assistance

The CJL previously prohibited a company giving financial assistance in respect of the acquisition of its own shares. The provisions of Article 58 of the CJL were similar to those in the equivalent United Kingdom statute, so that financial assistance was unlawful, and therefore void, as well as being a criminal offence. That said, financial assistance was historically less of an issue in Jersey given that Article 58 provided for a simplified whitewash procedure.

This prohibition has been removed with effect from 22 January 2008. Importantly, the amendments make it clear that any previous common law prohibition on financial assistance isnot revived by virtue of the removal of the statutory prohibition.

There are transitional provisions addressing the concern that, prior to the amendments relating to distributions coming into force in mid-2008, any acts that would previously have constituted financial assistance might be an unlawful distribution.

Redemption and buy back of shares

With effect from mid-2008, it is proposed that the monies payable on the redemption of redeemable shares or on the buy back of shares by a Jersey company may be funded from any source, including capital. Currently, in the case of a par value company, the sources available to fund such payments are limited, in general terms, to distributable profits or the proceeds of a fresh issue of shares (although, where such payment includes a premium element in excess of the nominal value, the share premium account may also be used). Similar restrictions apply in the case of a no par value company, although stated capital account can also be used. In all cases, the shares to be redeemed or bought back must be fully paid.

The directors responsible for authorising the redemption or buy back payment will be required to make a statement that they have formed the opinion that:

  • immediately following the date on which the payment is to be made, the company will be able to discharge its liabilities as they fall due; and
  • having regard to the prospects of the company and their intentions with respect to the management of the company's business and the amount and character of the financial resources that will, in their view, be available to the company, the company will be able to continue to carry on business and discharge its liabilities as they fall due for a period of 12 months after the date of such payment (or, if sooner, a solvent winding up of the company).

Treasury shares

A Jersey company is now permitted to hold its own shares as treasury shares. The company will not be treated as a member by virtue of holding such shares. Indeed, it will not be allowed to exercise any voting rights in respect of such shares and the number of treasury shares in issue will not be taken into account when calculating, for the purposes of any resolutions or other statutory consents, the total number or any required proportion of shares in issue. The company cannot make or receive any dividend in respect of treasury shares and cannot exercise or enforce any rights or obligations in respect of such shares.

This amendment will be of particular value to investment funds where the fund manager may want to have shares of the fund available for investors on short notice.

Corporate directors

Prior to 22 January 2008, the CJL required Jersey companies to have directors who are individuals. Jersey companies are now permitted to have corporate directors provided that the body corporate acting as a director (a) is registered to provide such services pursuant to the Financial Services (Jersey) Law 1998 and (b) does not itself have any corporate directors.


Currently, the CJL requires that all Jersey companies must prepare accounts in accordance with generally accepted accounting principles (GAAP) and show a "true and fair view" of the profit and loss and the state of the affairs of the company. This provision is to be relaxed so that, while all companies must still prepare accounts in accordance with GAAP, any company that is required to appoint an auditor (essentially all public companies or companies the articles of which so require) can prepare accounts which either "show a true and fair view" of or "present fairly on all material respects" the financial position of the company. This proposed amendment is due to come into force in mid-2008.

Other changes

With effect from 22 January 2008

  • A cell company and each of its cells are no longer required to have the same directors. With effect from mid-2008
  • Public companies will be permitted to dispense with annual general meetings, provided that all members agree in writing. (This relaxation of the statutory requirement for annual general meetings to be held is currently available only to private companies).
  • A public company that is a limited company will be allowed to end its name with "Public Limited Company", "PLC" or "plc".
  • The notice period for calling an annual general meeting or a general meeting to consider a special resolution will be reduced from 21 days to 14 days.
  • The statements of solvency required in respect of a re-domiciliation in or out of Jersey will be amended to be consistent with those required for redemption/buyback and distribution, as set out above.


The proposed changes to the CJL underline Jersey's commitment to remain in the top tier of offshore jurisdictions. The increased flexibility in respect of the sources of funds available to fund redemptions and buybacks of shares, the removal of the prohibition on unlawful financial assistance and the greater flexibility in terms of distributions mean that Jersey companies will be increasingly attractive for vehicles in cross-border transactions. Indeed, given the recent amendments to the UK Companies Acts, it may be that the greater flexibility of Jersey corporate law may make Jersey vehicles attractive for domestic UK transactions, as well as cross-border tax-driven structures.

About Ogier

Ogier is one of the world's leading providers of offshore legal and fiduciary services employing over 700 professional and support staff. The group has a presence in nine jurisdictions around the world, namely the British Virgin Islands, the Cayman Islands, Guernsey, Hong Kong, Ireland, Jersey, London, Montevideo and New Zealand.

Ogier provides advice on all aspects of BVI, Cayman, Guernsey and Jersey law and associated fiduciary services through a global network of offices that cover all time zones and key financial markets including the rapidly growing Asian and Chinese markets.

Ogier continues to be recognised as a leading law firm by the leading legal directories, including Legal 500 and Chambers.

  • In Legal 500 Ogier has more lawyers recommended and more tier 1 rankings for individual practice areas than any other Jersey firm.
  • In Chambers the firm has more lawyers recommended than any other Jersey firm.
  • In PLC Which Lawyer - Ogier received tier 1 rankings for all four categories in Jersey.

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
Mondaq Advice Centre (MACs)
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.