The Companies (Jersey) Law 1991, as amended, (the "Law") sets out the accounts requirements and rules relating to financial records, accounts, annual returns and audit requirements for private Jersey companies.
What accounting records must a company keep?
Each Jersey company must keep accounting records that are sufficient to show and explain its transactions and which:
- disclose with reasonable accuracy, at any time, its financial position; and
- enable the directors to ensure that any accounts prepared by the company comply with the requirements of the Law.
What period should accounts relate to?
The directors must prepare accounts for a period of not more than eighteen months from the date of incorporation or, if the company has previously prepared accounts, eighteen months from the end of the period covered by the most recent set of accounts.
What accounting principles should be applied?
The accounts must be prepared in accordance with generally accepted accounting principles ("GAAP") and the accounts must specify the GAAP adopted in their preparation. Specific GAAP may be prescribed for market traded companies.
Must the accounts be audited?
Private Jersey companies are only required to appoint an auditor if:
- it is required by the articles of association of the company; or
- it is required pursuant to a resolution of the company's shareholders passed at a general meeting.
Presenting the accounts to shareholders
If the company is a "relevant private company" (i.e. it is required to hold an annual general meeting), the accounts (and any auditor's report) must be laid before a meeting of the shareholders within 10 months of the end of the financial period covered by the accounts.
If the company is not obliged to hold an annual general meeting, it does not have to present the accounts or auditor's report to a meeting of the shareholders unless required by a shareholder within eleven months of the end of the financial period covered by the accounts.
Entitlement to copies of accounts
A shareholder that has not been provided with a copy of a company's accounts may make a written request to the company to be furnished with a copy of those accounts and any auditor's report. The company must provide a copy of the accounts (and any auditor's report) without charge within seven days of receipt of the request.
How long should the accounts be kept for?
The Law requires accounting records to be preserved by the company for at least ten years from the date on which they are made.
Is an annual return required?
All Jersey companies are required to deliver an annual return to the Registrar of Companies (the "Registrar") by the end of February each year, together with the applicable filing fee.
The annual return of a private company must be signed by a director or the secretary and set out details of the company's members and share class details, share structure and share totals. Annual returns are available for public inspection.
Failure by a company to file its annual by the end of February will result in a late filing fees and the company will be guilty of an offence. If no annual return has been delivered by the end of June, the company may to be struck off by the Registrar.
It is important to note that due to the impact of Covid-19 late fees have been capped at £55 until 2021 and companies will have until the end of September 2020 to deliver their annual return.
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.