The Seychelles' statute law on companies is contained in the Companies Ordinance, 1972 (Companies Ordinance) which was modelled on the old UK Companies Act. However, for investors looking to benefit from Seychelles as an offshore jurisdiction, companies can be formed under the International Business Companies Act, 1994 (IBC Act) and the majority of companies incorporated for the purpose of offshore business are incorporated pursuant to the IBC Act.
All references to legislative provisions herein are to the IBC Act, unless otherwise stated.
PART A: SEYCHELLES COMPANIES
The IBC Act provides solely for companies incorporated under the IBC Act and a company so
incorporated is referred to as an "international business company" (IBC).
A company incorporated as an IBC is allowed to carry on business outside the Seychelles and is restricted from owning or leasing immovable property situated in the Seychelles (except where the IBC holds a lease of property for use as an office from which to communicate with members or where books and records of the company are prepared or maintained) and cannot carry on banking business or business as an insurance or reinsurance company or the business of providing the registered office for companies. For such business activities, a separate licence is required and the company must be incorporated under the Companies Ordinance and then apply for separate licences as provided for in relevant legislation.
An IBC is subject to relaxed statutory requirements and the salient issues are as follows:
- the name of the company may be in any language 1;
- have at least one director and one shareholder (although there is no residency requirement,
- nor nationality stipulations);
- proper accounting records are required to be maintained that are sufficient to show and correctly explain the IBC's transactions and to enable the financial position of the IBC to be determined with reasonable accuracy at any time and for accounts to be prepared;
- registered shares may be issued in any currency;
- no minimum capital requirements;
- the only documents of the company that are on the public record are the Memorandum and Articles of Association;
- shareholder(s), director(s) and officer(s) need not make any returns; and
- meetings of shareholder(s) and director(s) are not required to be held in Seychelles.
An application for incorporation of an IBC is submitted to the Registrar of Companies at the Seychelles International Business Authority (the Registrar) and must include the memorandum and articles of association (§14(1)).
Where the Registrar is satisfied that the application for incorporation of a company complies with the IBC Act and upon payment of the prescribed fees, the Registrar will register the memorandum and articles of association on the Register of International Business Companies as maintained by the Registrar and thereafter issue a certificate of incorporation in respect of the IBC (§14(2) & (3)).
The approval of name reservations and registration and incorporation of a new IBC can be completed on the same day.
4. IBC MEMORANDUM AND ARTICLES OF ASSOCIATION
A certificate of incorporation issued by the Registrar is prima facie evidence that all the requirements of the IBC Act have been complied with, in respect of the incorporation (§16).
The IBC Act requires that a company should have a memorandum and articles of association, which may be written in English or French. If they are written in a language other than English or French, they shall be accompanied by a translation in the English or French language certified by the registered agent of the company.
Under the memorandum and articles of association the company, the board, and each director and member have the same rights, powers, duties and obligations set out in the IBC Act, except to the extent that they are restricted, limited or modified by the memorandum. In effect, an IBC's memorandum and articles of association act as a binding contract between (i) the company and each member; and (ii) each member, in accordance with its terms and provisions (§12(4) & 13(3)). Subject to any limitation in its Memorandum or Articles, an IBC may amend its memorandum or articles by a resolution of members or, where permitted by its memorandum or articles or by the IBC Act, by a resolution of directors.
The memorandum of every IBC shall be subscribed to by one or more persons in the presence of another person who shall write his full name and address and sign as a witness. Once the memorandum is registered it will bind the company and its members (§12(3), (4)).
The memorandum must state (§12(1)):
- the name of the company;
- the address within Seychelles of the registered office of the company;
- the name and address within Seychelles of the registered agent of the company;
- the objects or purposes for which the company is to be incorporated (although the company may include a statement, which denotes that the company is to be incorporated for all objects and purposes and to engage in all activities that are not prohibited under any law for the time being in force in Seychelles. This statement effectively provides that all acts and activities that are not illegal are a part of the objects or purposes of the company, subject to any limitations in the memorandum);
- the currency in which shares in the company shall be issued;
- a statement of the authorised capital of the company setting forth the aggregate of the par value of the shares that the company is authorised to issue and the amount, if any, to be represented by shares without par value that the company is authorised to issue;
- a statement of the number of classes and series of shares, the number of shares of each such class and series and the par value of shares with par value and that the shares may be without par value if this is the case;
- a statement of the designation, powers, preferences and rights, and the qualifications, limitations or restrictions of each class and series of shares that the company is authorised to issue, unless the directors are to be authorised to fix any such designations, powers, preferences, rights, qualifications, and in that case, an express grant of such authority as may be desired to grant to the directors to fix by resolution any such designations, powers, preferences, rights, qualifications, limitations and restrictions that have not been fixed by the memorandum;
- in the case of a limited life or duration company, the period, which shall not exceed 50 years, of the duration of the life of the company;
- a statement that the company shall not carry on any banking, insurance, reinsurance or trust business;
- a statement that the liability of the members is limited;
- in the case of a company limited by guarantee and with or
without a share capital, a statement to the effect that every
guarantee member of the company undertakes to contribute up to a
specified amount to the assets of the company in the event of its
being wound up while that member is a guarantee member or within
six months of that member ceasing to be guarantee member for:
- the payment of the liabilities of the company contracted or otherwise incurred before that member ceased to be a guarantee member;
- the costs, charges and expenses of winding up; and
- the adjustment of the rights of contributories among themselves.
4.2 Articles of Association
The articles of association of every IBC shall be subscribed to by one or more persons in the presence of another person who shall write his full name and address and sign as a witness. Once the articles of association are registered (within 30 days following the date of incorporation) it will bind the company and its members (§13).
Subject to any limitations in the IBC Act and the IBC's memorandum and articles of association, an IBC has the power, irrespective of corporate benefit, to perform all acts and engage in all activities necessary or conducive to the conduct, promotion or attainment of the objects or purposes of the IBC (§9(1)).
In addition, a person is not deemed to have notice or knowledge of the contents of a company's constitution (or any other document relating to a company) merely because the constitution (or document) is registered with the Registrar or is available for inspection at an office of the company.
4.3 Names and Change of Name
The Registrar will not register a company (or register a change of the name of a company or reserve a name) if the name is identical with that of a statutory corporation or that under which a company in existence is already incorporated under the IBC Act or registered under the Companies Ordinance or so nearly resembles the name of another company as to be calculated to deceive, except where the company in existence gives its consent (§11). The Registrar will also not register a company with a name that includes the word "Assurance", "Bank", "Building Society", "Chamber of Commerce", "Chartered", "Cooperative", "Imperial", "Insurance", "Municipal", "Trust", "Foundation", or a word conveying a similar meaning or any other word that, in the opinion of the Registrar, suggests or is calculated to suggest the patronage of or any connection with Seychelles or the Government of Seychelles or with the Government of any other country. However, the Registrar may permit the incorporation of a company under a name that includes the word "Seychelles" if the registrar thinks fit to do so. Further, no name will be registered which is indecent, offensive or, in the opinion of the Registrar is otherwise objectionable or misleading or being confused with another company wherever registered, or is a registered trademark in Seychelles or elsewhere of a product (§11(3)). The IBC Act also provides a list of words (Part III of the Schedule) from which any word or combination of words or the abbreviation of that word or combination of words found therein must form part of the name of every IBC, provided that a company incorporated under the laws of a jurisdiction outside Seychelles and continued as an IBC, they may use the name designated in the articles of continuation (§11(1)).
The successful name reservation will preserve a name for 90 days, upon payment of the prescribed fee.
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