Jersey Law 9/2002
COMPANIES (AMENDMENT No. 6) (JERSEY)
LAW 2002
____________
A LAW to amend further the Companies
(Jersey) Law 1991, sanctioned by Order of Her
Majesty in Council of the
12th day of FEBRUARY 2002
____________
(Registered on the 8th day of March 2002)
____________
STATES OF JERSEY
____________
The 17th day of July 2001
____________
THE STATES, subject
to the sanction of Her Most Excellent Majesty in Council, have adopted the
following Law -
ARTICLE 1
In
this Law, “the principal Law” means the Companies (Jersey)
Law 1991, as amended.
ARTICLE 2
(1) In Article 1(1) of the principal Law, the definitions “distributable
profits” and “equity share capital” shall be deleted.
(2) In Article 1(1) of the principal Law, for the definitions “limited life
company”, “private company”, “prospectus”, “public company”, “securities” and
“share” respectively there shall be substituted the following definitions -
“ ‘limited life company’ means
a limited life company as defined in Article 3H;”;
“ ‘private company’ means a
private company as defined in Article 3B;”;
“ ‘prospectus’ means an
invitation to the public to become a member of a company or to acquire or apply
for any securities, for which purposes -
(a) an
invitation is made to the public where it is not addressed exclusively to a
restricted circle of persons; and
(b) an
invitation shall not be considered to be addressed to a restricted circle of
persons unless -
(i) the invitation is addressed to an
identifiable category of persons to whom it is directly communicated by the
inviter or his agent,
(ii) the members of that category are the only
persons who may accept the offer and they are in possession of sufficient
information to be able to make a reasonable evaluation of the invitation, and
(iii) the number of persons in the Island or elsewhere to whom the invitation is so
communicated does not exceed 50;”;
“ ‘public company’ means a
public company as defined in Article 3A;”;
“ ‘securities’ -
(a) in
Article 51A, has the meaning assigned to it by paragraph (4) of that
Article; and
(b) except
as provided in sub-paragraph (a) of this definition, means -
(i) shares in or debentures of a body
corporate,
(ii) interests in any such shares or debentures,
or
(iii) rights to acquire any of the foregoing;”;
“ ‘share’ -
(a) means
a share in the share capital of a body corporate and, unless a distinction
between shares and stock is expressed or implied, also means stock; and
(b) in
Article 36, also has the meaning assigned to it by paragraph (2A) of
that Article,
except that in paragraph (1) of
Article 116, it means a share (as defined in sub-paragraph (a) of
this definition) to which paragraph (2) of Article 116 refers;”.
(3) In Article 1(1) of the principal Law, there shall be inserted in their
appropriate alphabetical order the following definitions -
“ ‘arrangement’, in Articles 125
and 126, includes a reorganisation of a company’s share capital by the
consolidation of shares of different classes or by the division of shares into
shares of different classes, or by both of those methods;”;
“ ‘capital accounts’ means -
(a) in
relation to a par value company, its share capital accounts and any share
premium accounts and capital redemption reserves; and
(b) in
relation to a no par value company, its stated capital accounts and any capital
redemption reserves;”;
“ ‘cause’ has the meaning
assigned to it by the customary law of the Island;”;
“ ‘certificate of continuance’
means a certificate of continuance issued by the registrar under
Article 127O;”;
“ ‘delivered’, in Articles 200
and 201, includes (in the case of a document which is a notice) given;”;
“ ‘fixed period of time’, in
Articles 3H, 144 and 144A, means a period of time which is ascertainable without
reference to any event which is -
(a) contingent;
or
(b) otherwise
uncertain;”;
“ ‘former forenames or surname’
does not include -
(a) in
the case of a peer or a person usually known by a British title which differs
from his surname, the name by which he was known before the adoption of the
title or his succession to it; or
(b) in the case of any person,
a former forename or surname which was changed or disused before he attained
the age of 20, or which has been changed or disused for a period of not less
than 20 years;”;
“ ‘guarantee company’ means a
guarantee company as defined in Article 3G;”;
“ ‘guarantor member’ means a
member of a company (whether or not it is a guarantee company) whose liability
in his capacity as such a member is limited by guarantee, that is to say
limited by the memorandum to the amount which he thereby undertakes (by way of
guarantee and not by reason of holding any share) to contribute to the assets
of the company in the event of its being wound up;”;
“ ‘limited company’ means a
limited company as defined in Article 3C;”;
“ ‘limited share’ means a share
in respect of which liability is limited to the amount unpaid on it;”;
“ ‘merged company’ means a
company in respect of which a certificate of incorporation is issued under
Article 9, pursuant to paragraph (1) of Article 127G;”;
“ ‘net asset value’, in
relation to the shares of an open-ended investment company, means net asset
value as defined in the company’s articles;”;
“ ‘no par value company’ means
a no par value company as defined in Article 3F;”;
“ ‘no par value share’ means a
share which is not expressed as having nominal value;”;
“ ‘open-ended investment
company’ means a company -
(a) the
sole business of which is to invest in securities or other property of any
description, with the aim of spreading investment risk;
(b) the
articles of which provide that its shares, or substantially all its shares, are
to be redeemed or purchased at the request of the holders at a price or prices
not exceeding the net asset value of those shares; and
(c) which
holds a permit as a functionary of Group 1 of Part II of the Schedule
to the Collective Investment Funds (Jersey)
Law 1988;”;
“ ‘partnership’, in Articles
113A, 113B, 113C and 113D, includes -
(a) a
Scottish firm; and
(b) a
limited liability partnership which is registered under the Limited Liability
Partnerships (Jersey) Law 1997;”;
“ ‘par value company’ means a
par value company as defined in Article 3E;”;
“ ‘par value share’ means a
share which is expressed as having nominal value;”;
“ ‘recognized professional
body’, in Articles 113, 113A, 113B and 113D, means -
(a) the
Institute of Chartered Accountants in England and Wales;
(b) the
Institute of Chartered Accountants of Scotland;
(c) the
Association of Chartered Certified Accountants; or
(d) the
Institute of Chartered Accountants in Ireland;”;
“ ‘surname’, in the case of a
peer or a person usually known by a title which differs from his surname, means
that title;”;
“ ‘unlimited share’ means a
share in respect of which liability is not limited to the amount unpaid on
it;”;
“ ‘variation’, in Articles 52
and 53, includes abrogation;”.
(4) For sub-paragraphs (b) and (c) of
Article 1(2) there shall be substituted the
following sub-paragraphs -
“(b) except
in Articles 2 and 2A, do not include an association incorporated under the ‘Loi (1862) sur les teneures en fidéicommis
et l’incorporation d’associations’;
(c) do
not include a Scottish firm;”.
(5) Article 1(2A) of the principal Law8 shall be
repealed.
ARTICLE 3
For Article 2 of the principal
Law there shall be substituted the
following Articles -
“ARTICLE 2
Meanings of ‘subsidiary’,
‘wholly-owned subsidiary’ and ‘holding body’
(1) A body corporate is a subsidiary of another
body corporate if the second body -
(a) holds a majority of the voting rights in
the first body;
(b) is a member of the first body and has the
right to appoint or remove a majority of the board of directors of the first
body; or
(c) is a member of the first body and controls
alone, pursuant to an agreement with other shareholders or members, a majority
of the voting rights in the first body,
or if the first body is a subsidiary
of a body corporate which is itself a subsidiary of the second body.
(2) A body corporate is a wholly-owned
subsidiary of another body corporate if the first body has no members except -
(a) the second body; and
(b) wholly-owned subsidiaries of or persons
acting on behalf of the second body or the second body’s wholly-owned subsidiaries.
(3) A body corporate is the holding body of
another body corporate if the second body is a subsidiary of the first body.
(4) A holding company is a holding body which
is a company.
(5) The Committee may by Order modify the
provisions of this Article and Article 2A and, without prejudice to the
generality of the foregoing, any such Order may amend the meanings of
‘subsidiary’, ‘wholly-owned subsidiary’, ‘holding body’ and ‘holding company’
for the purposes of all or any provisions of this Law.
ARTICLE 2A
Further provisions relating to
subsidiaries and holding bodies
(1) The provisions of this Article explain
expressions used in Article 2 and otherwise supplement that Article.
(2) In sub-paragraphs (a) and (c) of paragraph (1)
of Article 2, the references to the voting rights in a body corporate are
to the rights conferred on shareholders in respect of their shares, or (in the
case of a body not having a share capital) on members, to vote at general
meetings of the body on all or substantially all matters.
(3) In sub-paragraph (b) of paragraph (1)
of Article 2, the reference to the right to appoint or remove a majority
of a board of directors is to the right to appoint or remove directors holding
a majority of the voting rights at meetings of the board on all or
substantially all matters; and for the purposes of that provision -
(a) a body corporate shall be treated as having
the right to appoint to a directorship if -
(i) a person’s appointment to it follows
necessarily from his appointment as director of the body, or
(ii) the directorship is held by the body
itself; and
(b) a right to appoint or remove which is
exercisable only with the consent or concurrence of another person shall be
left out of account unless no other person has a right to appoint or, as the
case may be, remove in relation to that directorship.
(4) Rights which are exercisable only in
certain circumstances shall be taken into account only -
(a) when the circumstances have arisen, and for
so long as they continue to obtain; or
(b) when the circumstances are within the
control of the person having the rights,
and rights which are normally
exercisable but are temporarily incapable of exercise shall continue to be
taken into account.
(5) Rights held by a person in a fiduciary
capacity shall be treated as not held by him.
(6) Rights held by a person as nominee for
another shall be treated as held by the other; and rights shall be regarded as
held as nominee for another if they are exercisable only on his instructions or
with his consent or concurrence.
(7) Rights attached to shares held by way of
security shall be treated as held by the person providing the security -
(a) where, apart from the right to exercise
them for the purpose of preserving the value of the security, or of realising
it, the rights are exercisable only in accordance with his instructions; and
(b) where the shares are held in connexion with
the granting of loans as part of normal business activities and apart from the
right to exercise them for the purpose of preserving the value of the security,
or of realising it, the rights are exercisable only in his interests.
(8) Rights shall be treated as held by a body
corporate if they are held by any of its subsidiaries; and nothing in paragraph (6)
or (7) shall be construed as requiring rights held by a body corporate to be
treated as held by any of its subsidiaries.
(9) For the purposes of paragraph (7),
rights shall be treated as being exercisable in accordance with the
instructions or in the interests of a body corporate if they are exercisable in
accordance with the instructions of or, as the case may be, in the interests of
-
(a) any subsidiary or holding body of the first
body; or
(b) any subsidiary of a holding body of the first
body.
(10) The voting rights in a body corporate shall
be reduced by any rights held by the body itself.
(11) References in any of paragraphs (5) to (10)
to rights held by a person include rights falling to be treated as held by him
by virtue of any other provision of those paragraphs, but do not include rights
which by virtue of any such provision are to be treated as not held by him.”.
ARTICLE 4
For
Articles 3, 4, 5, and 6 of the principal Law there shall be substituted the
following Articles -
“ARTICLE 3
Method of formation
(1) Any two or more persons associated for a
lawful purpose (none of whom is a minor or an interdict) may, by signing and
delivering to the registrar a memorandum of association which states that the
company is to be a public company, apply for the formation of an incorporated
public company with or without limited liability.
(2) Any one or more persons associated for a
lawful purpose (not being more than 30 in number, and none of whom is a minor
or an interdict) may, by signing and delivering to the registrar a memorandum
of association which states that the company is to be a private company, apply
for the formation of an incorporated private company with or without limited
liability.
(3) A public company or a private company may
be formed -
(a) having the liability of all or any of its
members limited by shares, that is to say limited by the memorandum to the
amounts (if any) unpaid on the shares respectively held by them;
(b) having the liability of all or any of its
members limited by guarantee, that is to say limited by the memorandum to such
amounts as those members thereby respectively undertake (by way of guarantee
and not by reason of holding any share) to contribute to the assets of the
company in the event of its being wound up; or
(c) having, in respect of the liability of all
or any of its members, no limit.
(4) A public company or a private company may
be formed as -
(a) a par value company;
(b) a no par value company; or
(c) a guarantee company,
but shall not have a share capital
the shares of which include par value shares and no par value shares.
ARTICLE 3A
Public companies
A
company is a public company if -
(a) its memorandum states that it is a public
company; or
(b) it is an existing company which became a
public company on the thirtieth day of March 1992 by the operation of
paragraph (2) of Article 16 (as then in force), and it has not
subsequently become a private company.
ARTICLE 3B
Private companies
A
company is a private company if -
(a) its memorandum states that it is a private
company; or
(b) it is a company which immediately before
the commencement of this Article was a private company, and it has not
subsequently become a public company.
ARTICLE 3C
Limited companies
(1) A par value company or a no par value
company is a limited company if -
(a) any person is a member of the company by
reason of holding a limited share; or
(b) any person is a guarantor member of the
company,
whether or not it also has members
whose liability is unlimited.
(2) A guarantee company is a limited company.
ARTICLE 3D
Unlimited companies
A
company is an unlimited company if -
(a) it is a par value company or a no par value
company;
(b) no person is a member of the company by
reason of holding a limited share; and
(c) no person is a guarantor member of the
company.
ARTICLE 3E
Par value companies
A
company is a par value company if -
(a) it is registered with share capital;
(b) its shares are expressed as having nominal
value; and
(c) either -
(i) its memorandum states that it is a par
value company, or
(ii) it is a company which was registered under
this Law before the commencement of this Article,
whether or not it also has guarantor
members.
ARTICLE 3F
No par value companies
A
company is a no par value company if -
(a) it is registered with shares which are not
expressed as having nominal value; and
(b) its memorandum states that it is a no par
value company,
whether or not it also has guarantor
members.
ARTICLE 3G
Guarantee companies
A
company is a guarantee company if -
(a) it consists only of guarantor members; and
(b) its memorandum states that it is a
guarantee company.
ARTICLE
3H
Limited life companies
(1) A company (whether it is a par value
company, a no par value company or a guarantee company) is a limited life
company if its memorandum includes or its articles include a provision that the
company shall be wound up and dissolved upon -
(a) the bankruptcy, death, expulsion, insanity,
resignation or retirement of any member of the company; or
(b) the happening of some other event which is
not the expiration of a fixed period of time.
(2) A limited life company may include in its
memorandum or articles a provision for its winding up and dissolution on the
expiration of a fixed period of time.
ARTICLE 4
Memorandum of association
(1) The memorandum of a company shall be in the
English or French language, and shall be printed.
(2) The memorandum shall state -
(a) the name of the company;
(b) whether it is a public company or a private
company;
(c) whether it is a par value company, a no par
value company or a guarantee company;
(d) the full name and the address of each
subscriber who is a natural person; and
(e) the corporate name and the address of the
registered or principal office of each subscriber which is a body corporate.
(3) The memorandum shall be signed by or on
behalf of each subscriber, in the presence of at least one witness who shall
attest the signature and insert his own name and address.
ARTICLE 4A
Memorandum of company with shares
(1) Where a company is to be registered with
shares -
(a) if it is a par value company, the
memorandum shall state the amount of share capital with which it is to be
registered, and the amounts (being fixed amounts) into which the shares of each
class are divided;
(b) if it is a no par value company, the
memorandum shall state the limit (if any) on the number of shares of each class
which the company is to be authorized to issue;
(c) if the company is to be registered with any
limited share, the memorandum shall state that the liability of a member
arising from his holding of such a share is limited to the amount (if any)
unpaid on it;
(d) if the company is to be registered with any
unlimited share, the memorandum shall state that the liability of a member
arising from his holding of such a share is unlimited; and
(e) in every case, against the name of each
person who subscribes for shares, the memorandum shall state separately -
(i) the number of limited shares (if any) of
each class which he takes, and
(ii) the number of unlimited shares (if any) of
each class which he takes.
(2) The amount of a par value share may be
stated in any currency.
(3) If a company is to be registered with
shares, no person may subscribe for less than one share.
ARTICLE 4B
Memorandum of company with guarantor
members
(1) Where a company is to be registered with a
memorandum which provides for guarantor members, the memorandum shall state
that each guarantor member undertakes to contribute to the assets of the
company, if it should be wound up while he is a member or within 12 months
after he ceases to be a member, such amount as may be required for the purposes
specified in paragraph (2) but does not exceed a maximum amount to be
specified in the memorandum in relation to that member.
(2) The purposes to which paragraph (1) refers
are -
(a) payment of the debts and liabilities of the
company contracted before he ceases to be a member;
(b) payment of the costs, charges and expenses
of winding up; and
(c) adjustment of the rights of the
contributories among themselves.
(3) Where a company is to be registered with a
memorandum which provides for guarantor members the memorandum shall also
state, against the name of each person who subscribes as a guarantor member -
(a) that he does so as such a member; and
(b) the maximum amount so specified in relation
to him.
ARTICLE 4C
Memorandum or articles of company of
limited duration
Where
a company is to be wound up and dissolved upon -
(a) the expiration of a period of time; or
(b) the happening of some other event,
that period or event shall be
specified in the memorandum or articles of the company.
ARTICLE 5
Articles of association
(1) There shall be delivered to the registrar,
with the memorandum for a company which is to be formed, articles specifying
regulations for the company.
(2) The articles shall be in the English or
French language, and shall -
(a) be printed;
(b) be divided into paragraphs numbered
consecutively.
(3) The articles shall be signed by or on
behalf of each subscriber of the memorandum, in the presence of at least one
witness who shall attest the signature and insert his own name and address.
(4) This Article is subject to Article 6.
ARTICLE 6
Standard Table
(1) The Committee may prescribe a set of model
articles, to be known as the Standard Table, which is appropriate for a par
value company which -
(a) does not have unlimited shares; and
(b) has a memorandum which does not provide for
guarantor members.
(1A) Any company (whether or not it is one to which
paragraph (1) refers) may adopt the whole or any part of the Standard Table for
its articles to the extent that it is appropriate to do so.
(2) Where a company to which paragraph (1)
refers is registered after the Standard Table has been prescribed, the Table
(so far as it is applicable, and in force at the date of the company’s
registration) shall -
(a) if articles have not been registered; or
(b) if articles have been registered, to the
extent that they do not modify or exclude the Table,
constitute the company’s articles as
if articles in the form of the Table had been duly registered.
(3) If the Standard Table is altered in
consequence of an Order under this Article, the alteration shall not -
(a) affect a company registered before the
alteration takes effect; or
(b) have the effect of altering, as respects
that company, any portion of the Table.”.
ARTICLE 5
After
Article 7(2) of the principal Law there shall be added the following
paragraphs -
“(3) Where the company is a public company, the statement
shall specify the following particulars with respect to each director -
(a) his present forenames and surname;
(b) any former forenames or surname;
(c) his business or usual residential address;
(d) his nationality;
(e) his business occupation (if any); and
(f) his date of birth.
(4) If the Standard Table has been prescribed
under Article 6, the statement shall specify the extent (if any) to which
the company adopts the Table.”.
ARTICLE 6
(1) For Article 9(1) of the principal Law there shall be substituted the
following paragraph -
“(1) On the registration -
(a) of a company’s memorandum; or
(b) of a company under paragraph (1) of
Article 127G,
the registrar shall issue a
certificate that the company is incorporated.”.
(2) For paragraphs (4) and (5) of Article 9
of the principal Law there shall be substituted the
following paragraphs -
“(4) If the memorandum states that the company is
a public company or a private company, the certificate shall so state.
(5) A certificate of incorporation issued under
this Law is conclusive evidence of the following matters -
(a) that the company is incorporated under this
Law;
(b) that the requirements of this Law have been
complied with in respect of -
(i) the registration of the company,
(ii) all matters precedent to its registration,
and
(iii) all matters incidental to its registration;
and
(c) if the certificate states that it is a
public company or a private company, that it is such a company.
(6) The Act of Incorporation of an existing
company, issued by the Court and ordering the registration of its memorandum
and articles of association in accordance with the Laws repealed by Article 223,
is conclusive evidence of the following matters -
(a) that the company is incorporated; and
(b) that the requirements of those Laws have
been complied with in respect of -
(i) the registration of the company,
(ii) all matters precedent to its registration,
and
(iii) all matters incidental to its
registration.”.
ARTICLE 7
In
Article 11(4) of the principal Law -
(a) for the words “The power to alter the
memorandum or articles conferred by this Article” there shall be substituted
the words “The power conferred by this Article to alter the memorandum or articles”;
(b) for the words “cannot be” there shall be
substituted the words “could not have been”.
ARTICLE 8
For
Article 13(2) of the principal Law there shall be substituted the
following paragraphs -
“(2) The name of a limited company shall end -
(a) with the word ‘Limited’ or the abbreviation
‘Ltd’; or
(b) with the words ‘avec responsabilité limitée’
or the abbreviation ‘a.r.l.’.
(3) A company which is registered with a name
ending -
(a) with the word ‘Limited’ or the abbreviation
‘Ltd’; or
(b) with the words ‘avec responsabilité
limitée’ or the abbreviation ‘a.r.l’,
may, in setting out or using its
name for any purpose under this Law, do so in full or in the abbreviated form,
as it prefers.”.
ARTICLE 9
In
Article 14(2) of the principal Law, after the words “and shall issue”
there shall be inserted the words “under Article 9”.
ARTICLE 10
For
Part IV of the principal Law there shall be substituted the
following Part -
“PART IV
PUBLIC COMPANIES AND PRIVATE COMPANIES
ARTICLE 16
Change of status of public company
(1) A public company which has not more than
30 members may become a private company by altering its memorandum to
state that it is a private company.
(2) If, on the application of a public company
which has more than 30 members, the Commission is satisfied that by reason
of the nature of the company’s activities its affairs may properly be regarded
as the domestic concern of its members, the Commission may in its discretion by
written notice to the company direct that notwithstanding that it has more than
30 members it may, subject to such conditions as may be specified in the
direction, become a private company by altering its memorandum to state that it
is a private company.
(3) The Commission may at any time by written
notice withdraw or amend the terms of any such condition.
(4) If -
(a) a company which is a private company in
consequence of a direction under paragraph (2) fails to comply with a
condition of the direction; or
(b) at any time while such a company continues
to have more than 30 members, the Commission ceases to be satisfied that
its affairs may properly be regarded as the domestic concern of its members,
the Commission may in its
discretion, by written notice to the company, direct that as from a date
specified in the notice (being not sooner than 28 days after the company
is served with the notice) the company shall as long as it has more than 30
members be subject to this Law as though it were a public company.
(5) The company shall within 14 days after
the receipt of a notice under any of paragraphs (2), (3) and (4) deliver a
copy of the notice to the registrar.
(6) If there is a failure to comply -
(a) with a condition of a direction under
paragraph (2); or
(b) paragraph (5),
the company is guilty of an offence.
ARTICLE 17
Change of status of private company
(1) A private company which has at least two
members may become a public company by altering its memorandum to state that it
is a public company.
(2) If -
(a) a private company enters the name of any
person in its register of members so as to increase the number of its members
beyond 30, and their number for the time being remains above 30; or
(b) a private company circulates a prospectus
relating to its own securities,
the company shall be subject to this
Law as though it were a public company.
(3) If a private company enters the name of any
person in its register of members so as to increase the number of its members
beyond 30, it shall within 14 days give written notice of that fact to the
registrar.
(4) If there is a contravention of
sub-paragraph (b) of paragraph (2) then, without derogation from the
consequences under that paragraph, the company and every officer of it who is
in default is guilty of an offence.
(5) If there is a contravention of paragraph (3)
then, without derogation from the consequences under that paragraph, the
company is guilty of an offence.
(6) If the court, on the application of a
company which has increased the number of its members in the manner described
in sub-paragraph (a) of paragraph (2), or of any other person
interested, is satisfied that it is just to relieve the company from all or any
of the consequences of the breach, it may grant relief on such terms as seem to
it expedient.
(7) If, on the application of a private
company, the Commission is satisfied that by reason of the nature of the
company’s activities its affairs may properly be regarded as the domestic
concern of its members, the Commission may in its discretion by written notice
to the company direct that paragraph (2) shall apply to the company with
such modifications as are specified in the direction, and the Commission may at
any time withdraw or amend the terms of any such direction.
(8) The company shall within 14 days after
the making of an order under paragraph (6) or the receipt of a direction
under paragraph (7) deliver the relevant Act of the court or a copy of the
direction, as the case may be, to the registrar, and if there is failure to comply
with this paragraph the company is guilty of an offence.
ARTICLE 17A
Calculation of number of members
(1) In determining for the purposes of Article 16
and paragraph (2) of Article 17 the number of members of a company,
no account shall be taken of a member -
(a) who is a director or is in the employment
of the company; or
(b) who, having been a director or in the
employment of the company -
(i) was at the same time a member, and
(ii) has continued to be a member since ceasing
to be a director or in its employment.
(2) Where two or more persons hold one or more
shares in a company jointly, they shall be treated as a single member for the
purposes of this Part.
ARTICLE 17B
Notice of change of status
Where
a company changes its status in accordance with Article 16 or
paragraph (1) of Article 17 the registrar shall, upon delivery to him
of a copy of the special resolution altering the memorandum, issue under
Article 9 a certificate of incorporation which is appropriate to the
altered status.
ARTICLE 17C
Alteration of numbers
The
Committee may by Order amend paragraph (2) of Article 3,
Article 16 and Article 17 so as to increase or reduce -
(a) the number of 30 persons to which those
provisions refer; or
(b) any other number which the Committee may
have substituted by an Order under this Article.”.
ARTICLE 11
For
Articles 22, 23 and 24 of the principal Law there shall be substituted the
following Articles -
“ARTICLE
22
Company seals
(1) A company which has a common seal shall
have its name engraved in legible characters on that seal.
(1A) A company having a common seal which does not
comply with paragraph (1) is guilty of an offence.
(1B) A company which has a common seal may have
duplicate common seals.
(2) If an officer of a company or a person on
its behalf uses or authorizes the use of any seal -
(a) which purports to be a seal of the company;
and
(b) on which its name is not engraved in
legible characters,
he is guilty of an offence.
ARTICLE 23
Official seal for use abroad
(1) A company which has a common seal and
engages in business outside the Island may, if authorized by its articles, have
for use in any country, territory or place outside the Island an official seal,
which shall be a facsimile of the common seal of the company with the addition
on its face either of the words ‘Branch Seal’ or the name of the country,
territory or place where it is to be used.
(1A) A company which has an official seal for use
outside the Island may have duplicates of that
seal.
(2) A document to which an official seal for
use outside the Island is duly affixed binds
the company as if it had been sealed with the company’s common seal.
(3) A company may, in writing under its common
seal, authorize an agent appointed for the purpose to affix an official seal
for use outside the Island to a document to
which the company is party.
(4) As between the company and the person
dealing with the agent, the agent’s authority continues until that person has
actual notice of the termination of the authority.
ARTICLE 24
Official seal for securities
A
company which has a common seal may have -
(a) an official seal which is a facsimile of
its common seal, with the additional word ‘Securities’ on its face; and
(b) duplicates of such a seal,
for use for sealing securities
issued by the company, and for sealing documents creating or evidencing
securities so issued.”.
ARTICLE 12
For
paragraphs (1), (2) and (3) of Article 26 of the principal Law there shall be substituted the
following paragraphs -
“(1) Except in the cases mentioned in this Article
-
(a) a body corporate cannot be a member of a
company which is its holding company; and
(b) an allotment or transfer of shares in a
company to its subsidiary is void.
(2) Paragraph (1) does not prevent a
subsidiary which was, on the thirtieth day of March 1992 or when it became a
subsidiary, a member of its holding company from continuing to be a member, but
as long as it is a subsidiary -
(a) it has no right to vote at a meeting of the
holding company or of a class of its members; and
(b) it shall not acquire further shares in the
holding company, except as provided in paragraph (3A).
(3) Paragraphs (1) and (2) apply in relation to
a nominee for a body corporate which is a subsidiary as if references to the
body corporate included a nominee for it.
(3A)
If a body corporate is permitted by virtue of paragraph (2) to continue as
a member of its holding company, an allotment to it of fully paid shares in its
holding company may be made by way of a capitalization of reserves of the
holding company.”.
ARTICLE 13
(1) In Article 27(1) of the principal Law, after the words “If a” there
shall be inserted the word “public”.
(2) For Article 27(2) of the principal Law there shall be substituted the
following paragraph -
“(2) Paragraph (1) does not apply to a public
company of which all of the issued shares are held by or by a nominee for a
holding body.”.
ARTICLE 14
In
Article 28 of the principal Law, for the words “the shares” there
shall be substituted the words “his rights of membership”.
ARTICLE 15
(1) For Article 29(1) of the principal Law23 there
shall be substituted the following paragraph -
“(1) The Committee may by Order prohibit all or
any of the following things, namely -
(a) the circulation by any person of a
prospectus in the Island;
(b) the circulation by a company of a
prospectus outside the Island; and
(c) the procuring (whether in or outside the Island) by a company of the circulation of a prospectus
outside the Island,
except in such circumstances and
subject to such conditions as may be specified in the Order.”.
(2) In Article 29(2) of the principal Law,23 after
the word “Such” there shall be inserted the word “an”.
(3) Paragraphs (4) and (5) of Article 29 of the
principal Law shall be repealed.
ARTICLE 16
For Article 35(1) of the
principal Law there shall be substituted the
following paragraph -
“(1) Except as permitted by Article 36 -
(a) a par value company shall not issue shares
at a discount; and
(b) a company shall not apply its shares or
capital money either directly or indirectly in payment of a commission,
discount or allowance to a person,
in return for his subscribing or
agreeing to subscribe (whether absolutely or conditionally) for shares in the
company, or procuring or agreeing to procure subscriptions (whether absolute or
conditional) for shares in the company.”.
ARTICLE 17
(1) In Article 36(1) of the principal Law, for the words “in consideration of”
there shall be substituted the words “in return for”.
(2) After Article 36(2) of the principal
Law there shall be inserted the
following paragraph -
“(2A) In
this Article, ‘shares’ include securities which confer (conditionally or
unconditionally) on the holders the right to acquire shares in a company.”.
ARTICLE 18
In
Article 37 of the principal Law27 -
(a) in paragraph (a), after the word
“calls” there shall be inserted the words “or instalments payable”;
(b) in paragraph (b), for the semicolon
there shall be substituted the words “or become payable; and”.
ARTICLE 19
(1) In the heading to Article 38 of the
principal Law, for the words “share capital” there shall be substituted the words “capital of par value companies”.
(2) In Article 38(1) of the principal Law28 -
(a) after the word “A” there shall be inserted
the words “par value”;
(b) in sub-paragraph (e) -
(i) for the words “paragraph (3)” there
shall be substituted the words “Article 38B”,
(ii) for the word “amount”, in both places where
it occurs, there shall be substituted the word “value”;
(c) in sub-paragraph (ea), for the word
“amount” there shall be substituted the word “value”.
(3) In Article 38(1A) of the principal
Law,28 for the word “amount” in both places where it
occurs there shall be substituted the word “value”.
(4) Article 38(3) of the principal Law shall be repealed.
ARTICLE 20
For Article 39 of the
principal Law there shall be substituted the
following Articles -
“ARTICLE 38A
Alteration of capital of no par
value companies
(1) A no par value company may, by altering its
memorandum -
(a) increase or reduce the number of shares
which it is authorized to issue; or
(b) consolidate and divide all or any of its
shares (whether issued or not) into fewer shares.
(2) The powers conferred by this Article shall
be exercised by the company by special resolution.
ARTICLE 38B
Rate of exchange for currency
conversions
A
conversion under sub-paragraph (e) of paragraph (1) of Article 38
shall be effected at the rate of exchange current at a time to be specified in
the resolution, being a time within 40 days before the conversion takes
effect.
ARTICLE 39
Share premium accounts for par value
companies
(1) If a par value company allots shares at a
premium (whether for cash or otherwise) -
(a) where the premiums arise as a result of the
issue of a class of limited shares, a sum equal to the aggregate amount or value
of those premiums shall be transferred, as and when the premiums are paid up,
to a share premium account for that class; and
(b) where the premiums arise as a result of the
issue of a class of unlimited shares, a sum equal to the aggregate amount or
value of those premiums shall be transferred, as and when those premiums are
paid up, to a separate share premium account for that class.
(2) A share premium account may be expressed in
any currency.
(3) A share premium account may be applied by
the company for any of the following purposes -
(a) in paying up unissued shares to be allotted
to members as fully paid bonus shares;
(b) in writing off the company’s preliminary
expenses;
(c) in writing off the expenses of and any
commission paid on any issue of shares of the company; and
(d) in the redemption or purchase of shares
under Part XI.
(4) Subject to this Article, the provisions of
this Law relating to the reduction of a par value company’s share capital apply
as if each of its share premium accounts were part of its paid up share
capital.
ARTICLE
39A
Stated capital accounts for no par
value companies
(1) Every no par value company shall maintain a
separate account, to be called a stated capital account, for each class of
issued share.
(2) A stated capital account may be expressed
in any currency.
(3) There shall be transferred to the stated
capital account for the class of share concerned -
(a) the amount of cash received by the company
for the issue of shares of that class; and
(b) the value, as determined by the directors,
of the ‘cause’ received by the company, otherwise than in cash, for the issue
of shares of that class; and
(c) every amount which the company, by special
resolution, resolves to transfer into the account from a profit and loss
account or from any capital or revenue reserve.
ARTICLE 39B
Relief from requirements to make
transfers to share premium accounts and stated capital accounts
(1) This Article applies where a company (‘the
issuing company’) is a wholly-owned subsidiary of any body corporate and allots
shares -
(a) to that holding body; or
(b) to any other body corporate which is a
wholly-owned subsidiary of that holding body,
in return for the transfer to the
issuing company of assets, other than cash, of any body corporate (‘the
transferor’) which is either the holding body itself or a subsidiary of the
holding body.
(2) Notwithstanding paragraph (1) of
Article 39, if the issuing company is a par value company, it need not
transfer to a share premium account any amount in excess of the minimum premium
value.
(3) Notwithstanding sub-paragraphs (a) and
(b) of paragraph (3) of Article 39A, if the issuing company is a no
par value company, it need not transfer to a stated capital account any amount
in excess of the base value of that for which the shares are allotted.
(4) For the purpose of paragraph (2),
‘minimum premium value’ means the amount (if any) by which the base value of
that for which the shares are allotted exceeds the aggregate nominal value of
those shares.
(5) For the purposes of paragraphs (3) and (4)
-
(a) ‘the base value of that for which the
shares are allotted’ means the amount by which the base value of the assets
transferred exceeds the base value of the liabilities (if any) of the
transferor assumed by the issuing company as part of the terms of transfer of
the assets;
(b) ‘the base value of the assets transferred’
means -
(i) the cost of those assets to the
transferor, or
(ii) the amount at which those assets are stated
in the transferor’s accounting records immediately before the transfer,
whichever
is less; and
(c) the base value of the liabilities assumed
is the amount at which they are stated in the transferor’s accounting records
immediately before the transfer.
(6) The Committee may by Order make additional
provision for relieving companies from the provisions of Articles 39 and
39A”.
ARTICLE 21
In
Article 40(1) of the principal Law, for the words “sub-paragraph (b)
of paragraph (1) of Article 4, a company” there shall be substituted
the words “paragraph (3) of Article 4A a par value company”.
ARTICLE 22
After
Article 40 of the principal Law,31 but before Part IX of the
principal Law, there shall be inserted the following Articles -
“ARTICLE 40A
Conversion of shares in par value
companies
(1) A par value company may convert its shares
into no par value shares by altering its memorandum in accordance with this
Article.
(2) The power conferred by paragraph (1) -
(a) may only be exercised by converting all of
the company’s shares into no par value shares;
(b) may only be exercised by a special
resolution of the company and, if there is more than one class of issued
shares, with the approval of a special resolution passed at a separate meeting
of the holders of each class of shares; and
(c) may be exercised whether or not the issued
shares of the company are fully paid.
(3) The special resolution of the company -
(a) shall specify the number of no par value
shares into which each class of issued shares is to be divided;
(b) may specify any number of additional no par
value shares which the company may issue; and
(c) shall make such other alterations to the
memorandum and articles as may be requisite in the circumstances.
(4) Upon converting its shares under this
Article, the company -
(a) shall transfer, from the share capital
account for each class of shares to the stated capital account for that class,
the total amount that has been paid up on the shares of that class; and
(b) shall transfer any amount standing to the
credit of a share premium account or capital redemption reserve to the stated
capital account for the class of share which would have fallen to be issued if
that amount had been applied in paying up unissued shares allotted to members
as fully paid bonus shares.
(5) On the conversion of a company’s shares
under this Article, any amount which is unpaid on any share immediately before
the conversion remains payable when called or due.
ARTICLE 40B
Conversion of shares in no par value companies
(1) A no par value company may convert its
shares into par value shares by altering its memorandum in accordance with this
Article.
(2) The power conferred by paragraph (1) -
(a) may only be exercised by converting all of
the company’s shares into par value shares;
(b) may only be exercised by a special
resolution of the company and, if there is more than one class of issued
shares, with the approval of a special resolution passed at a separate meeting
of the holders of each class of shares; and
(c) may be exercised whether or not the issued
shares of the company are fully paid.
(3) For the purpose of a conversion of shares
under this Article, each share of a class shall be converted into a share which
-
(a) confers upon the holder, as nearly as
possible, the same rights as were conferred by it before the conversion; and
(b) has a nominal value specified in the
special resolution of the company, being a value not exceeding the amount
standing to the credit of the stated capital account for that class divided by
the number of shares of that class in issue.
(4) The special resolution of the company shall
make such alterations to the memorandum and articles as may be requisite in the
circumstances.
(5) Upon converting its shares under this
Article, the company -
(a) shall, to the extent that the amount
standing to the credit of the stated capital account for each class of shares
equals the total nominal amount of the shares of the class into which those
shares are converted, transfer the amount to the share capital account; and
(b) shall, to the extent (if any) that the
amount exceeds that total nominal amount, transfer it to the share premium
account for that class.
(6) On the conversion of a company’s shares
under this Article, any amount which is unpaid on any share immediately before
the conversion remains payable when called or due.”.
ARTICLE 23
(1) For Article 41(1) of the principal Law there shall be substituted the
following paragraph -
“(1) Every company shall keep a register of its
members, and enter in it the following information -
(a) the name and address of every member;
(b) where he is a member because he holds
shares in the company -
(i) the number of shares held by him,
(ii) if the shares are numbered, their numbers,
(iii) if the company has more than one class of
shares, the class or classes held by him, and
(iv) in the case of shares which are not fully
paid, the amount remaining unpaid on each share;
(c) where he is a guarantor member -
(i) the fact that he is a member in that
capacity,
(ii) the amount which he has undertaken by
reason of his membership in that capacity to contribute to the assets of the
company if it is wound up, and
(iii) if the company has more than one class of
guarantor members, the class to which he belongs;
(d) in every case, the date on which he was
registered as a member; and
(e) in every case where a person ceases to be a
member, the date on which that event occurs.”.
(2) In Article 41(2) of the principal Law, the words “sub-paragraph (a)
of” shall be deleted.
ARTICLE 24
For
Article 45(2) of the principal Law there shall be substituted the
following paragraph -
“(2) A person may -
(a) in the case of any company, on payment of
such sum (if any), not exceeding the prescribed maximum, as the company may
require; and
(b) in the case of a public company, on
submission to the company of a declaration under Article 46,
require a copy of the register and the
company shall, within 10 days after the receipt of the payment and (in the case
of a public company) the declaration, cause the copy so required to be
available at the place where the register is kept, for collection by that
person during business hours.”.
ARTICLE 25
In
Article 46(1) of the principal Law, for the word “shareholders” in both
places where it occurs there shall be substituted the word “members”.
ARTICLE 26
In
Article 47(1)(a) of the principal Law, after the words “held by him” there
shall be inserted the words “, or the class of members to which he belongs”.
ARTICLE 27
For Article 49 of the
principal Law there shall be substituted the
following Article -
“ARTICLE 49
Overseas branch registers
(1) A public company which transacts business
in any country, territory or place outside the Island
may cause to be kept there a register of members who are resident in that
country, territory or place.
(2) A register to which paragraph (1)
refers shall be known as an overseas branch register.
(3) A company shall give notice to the
registrar, in such form as he may require and within 14 days after the
event -
(a) of the situation of the office at which the
company begins to keep an overseas branch register;
(b) of any change in its situation; and
(c) if the keeping of the register is
discontinued, of its discontinuance.
(4) A company which keeps an overseas branch
register -
(a) shall cause to be kept, at the place where
its register of members is kept, a duplicate of the overseas branch register;
(b) shall cause to be transmitted to its
registered office a copy of every entry in the overseas branch register, as
soon as may be after it is made; and
(c) shall cause every entry in the overseas branch
register to be duly entered in the duplicate, as soon as may be after it is
made in the overseas branch register.
(5) An overseas branch register and its
duplicate shall be parts of the company’s register of members for the purposes
of this Law, and shall be kept in the same manner as the register of members is
to be kept under this Law.
(6) The shares to which an overseas branch
register relates shall be distinguished from those to which the register of
members relates and, while an overseas branch register is kept, no transaction
in respect of any shares to which it relates shall be registered or otherwise
entered in any other register except its duplicate.
(7) If a company discontinues the keeping of an
overseas branch register, it shall thereupon cause all entries in it to be
transferred -
(a) to any other overseas branch register which
is kept by it in the same country, territory or place; or
(b) to its register of members.
(8) Subject to the provisions of this Law, a
company may by its articles provide as it thinks fit for the keeping of an
overseas branch register.
(9) The Committee may by Order -
(a) extend the provisions of this Article to
private companies, with such modifications (if any) as it may specify in the
Order;
(b) modify the provisions of this Article in
respect of any kind of company; or
(c) prescribe other conditions relating to the
keeping of overseas branch registers.
(10) In the event of a failure to comply with any
of paragraphs (3), (4), (5), (6) and (7), or with any Order made under
paragraph (9), the company is guilty of an offence.”.
ARTICLE 28
For
paragraphs (2), (3) and (4) of Article 50 of the principal Law there shall be substituted the
following paragraphs -
“(2) Paragraph (1) does not apply -
(a) to an allotment or transfer of shares to a
nominee of a stock exchange on which those shares are or are to be listed;
(b) to a transfer of shares which the company
is for any reason entitled to refuse to register and does not register; or
(c) to an open-ended investment company whose
articles do not require a certificate to be delivered on every occasion when
shares of the company are allotted or transferred.
(3) The Committee may by Order do all or any of
the following things -
(a) provide for exemptions from the provisions
of paragraph (1);
(b) provide that Article 51 shall not
apply, or shall only apply subject to modifications specified in the Order, to
certificates relating to shares to which any such exemptions apply; and
(c) prohibit the issue of certificates in
respect of any such shares.”.
ARTICLE 29
In
Article 51(1) of the principal Law, after the words “by the company”
there shall be inserted the words “, or signed either by two of its directors
or by one of its directors and its secretary,”.
ARTICLE 30
For
Article 52 of the principal Law there shall be substituted the
following Article -
“ARTICLE 52
Variation of class rights
(1) The provisions of this Article -
(a) are concerned with the variation of the
rights of any class of members of a company;
(b) are subject to the provisions of
paragraph (3) of Article 11; and
(c) do not apply in respect of a conversion of
shares in accordance with Article 40A or 40B.
(2) If provision for the variation of the
rights of any class of members is made in the memorandum or articles, or by the
terms of admission to membership, those rights may only be varied in accordance
with those provisions.
(3) If no such provision is made, the rights
may be varied if but only if the following persons consent in writing, namely -
(a) in the case of any class of par value
shares, the holders of not less than two-thirds in nominal value of the issued
shares of that class;
(b) in the case of any class of no par shares,
the holders of not less than two-thirds in number of the issued shares of that
class; or
(c) in the case of any class of guarantor
members, those whose liability as such members is in the aggregate not less
than two-thirds of the total liability of all the members of that class,
or (in any case) the variation is
sanctioned by a special resolution passed at a separate meeting of the class of
members concerned.
(4) A variation which -
(a) reduces the liability of any class of
members to contribute to the share capital of a company;
(b) reduces the liability of any class of
members otherwise to pay money to a company; or
(c) increases the benefits to which any class
of members is or may become entitled,
is for the purposes of this Article
a variation of the rights of each other class of members of the company.
(5) No member -
(a) whose liability is to be so reduced or
whose entitlement to benefits is to be so increased; and
(b) who is also a member of any other class,
shall for the purposes of
paragraph (3) be treated as a member of that other class.
(6) An alteration of a provision in either the
memorandum or articles for the variation of the rights of any class of members
of a company, or the insertion of such a provision in the memorandum or
articles, is itself a variation of those rights.
(7) Unless the context otherwise requires, in
any provision contained -
(a) in the memorandum or articles; or
(b) in the terms of admission to membership,
for the variation of the rights of
any class of members, references to the variation of those rights include
references to their abrogation.”.
ARTICLE 31
(1) In the heading to Article 53 of the
principal Law, for the word “Shareholders’” there shall be substituted the word “Members’”.
(2) For paragraphs (1) and (2) of Article 53
of the principal Law41 there shall be substituted the
following paragraphs -
“(1) If the rights of any class of member of a
company are varied in accordance with the memorandum or articles, or otherwise
in accordance with Article 52, any members of that class who did not
consent to or vote in favour of the resolution for variation, being -
(a) in the case of any class of par value
shares, the holders of not less than one-tenth in nominal value of the issued
shares of that class;
(b) in the case of any class of no par value
shares, the holders of not less than one-tenth in number of the issued shares
of that class; or
(c) in the case of any class of guarantor members,
those whose liability as such members is in the aggregate not less than
one-tenth of the total liability of all the members of that class,
may apply to the court to have the
variation cancelled.
(2) If an application is made under paragraph (1),
the variation to which it relates shall not have effect unless and until it is
confirmed by the court.
(2A) The application -
(a) must be made within 28 days after the
date on which the consent was given or the resolution was passed; and
(b) may be made, on behalf of the members who
are entitled to make it, by one or more of them as they appoint in writing.”.
(3) In Article 53(4) of the principal Law, for the word “shareholders” there
shall be substituted the word “members”.
ARTICLE 32
(1) For paragraphs (1) and (2) of
Article 54 of the principal Law there shall be substituted the
following paragraphs -
“(1) If a public company admits a member or allots
shares with rights which are not stated in its memorandum or articles, or in a
resolution or agreement of which a copy is required by Article 100 to be
delivered to the registrar, the company shall deliver to the registrar within
one month after admitting the member or allotting those shares a statement
containing particulars of those rights.
(2) Paragraph (1) does not apply if the
rights are in all respects uniform with the rights of existing members, and for
that purpose they are not different by reason only that during the period of
12 months immediately following the admission of the member or the
allotment of the shares, he does not have the same rights to dividends as
members previously admitted.”.
(2) In Article 54(3) of the principal Law, for the words “attached to shares”
there shall be substituted the words “of members”.
(3) In Article 54(4) of the principal Law,44 for the
words “of its shares” there shall be substituted the words “of rights of
membership”.
ARTICLE 33
(1) For Article 55 of the principal Law there shall be substituted the
following Article -
“ARTICLE 55
Power to issue redeemable shares
(1) Subject to the provisions of this Article,
and Articles 57 and 58, a company may, if authorized to do so by its
articles -
(a) issue; or
(b) convert existing non-redeemable limited
shares, whether issued or not, into,
limited shares which are to be
redeemed, or are liable to be redeemed, at the option of the company or the
shareholder.
(2) No redeemable limited shares may be issued
at a time when there are no issued shares of the company which are not redeemable,
and no existing issued non-redeemable limited shares shall be converted into
redeemable shares if as a result there are no issued shares of the company
which are not redeemable.
(3) The redeemable limited shares of a par
value company (not being an open-ended investment company) may be redeemed only
when they are fully paid up and only from the following sources -
(a) in the case of a payment of the nominal
value of the shares on redemption -
(i) out of its realised capital and revenue profits
less its realised capital and revenue losses,
(ii) out of its realised revenue profits less
its revenue losses, whether realised or unrealised, or
(iii) out of the proceeds of a fresh issue of
shares made for the purposes of the redemption,
or
out of any combination of those sources; and
(b) in the case of a payment of any premium on
redemption -
(i) out of the share premium account for
shares of the class concerned,
(ii) out of the sources mentioned in
sub-paragraph (a), or
(iii) if so authorized by a special resolution of
the company, out of its unrealised capital or revenue profits less its capital
or revenue losses, whether realised or unrealised,
or
out of any combination of those sources.
(3A) The redeemable limited shares of a no par
value company (not being an open-ended investment company) may be redeemed only
when they are fully paid up and only out of a stated capital account or out of
a source mentioned in sub-paragraph (a) or clause (iii) of
sub-paragraph (b) of paragraph (3).
(3B) The redeemable limited shares of a par value
company or a no par value company (not being in either case an open-ended
investment company) may be redeemed only if the directors who authorize the
payment on redemption reasonably believe that, immediately after the payment is
made -
(a) the company will be able to discharge its
liabilities as they fall due; and
(b) the realisable value of the company’s
assets will not be less than the aggregate of its liabilities and the amounts standing
to the credit of its capital accounts.
(3C) The redeemable limited shares of an open-ended
investment company (whether it is a par value company or a no par value
company) may be redeemed from any source but only -
(a) if they are fully paid up;
(b) if they are so redeemed at a price not
exceeding their net asset value; and
(c) if the directors who authorize the payment
on redemption reasonably believe that, immediately after the payment is made -
(i) the company will be able to discharge its
liabilities as they fall due, and
(ii) the realisable value of the company’s
assets will not be less than the amount of its liabilities.
(4) A special resolution passed for the
purposes of clause (iii) of sub-paragraph (b) of paragraph (3)
or paragraph (3A) may have effect in relation to a particular redemption
of shares or generally but shall not be capable of sanctioning any redemption
effected more than 18 months after the resolution is passed.
(5) If
limited shares are redeemed wholly out of a par value company’s profits, there
shall be transferred out of profits out of which the company may make a
distribution under Article 114 to a capital redemption reserve a sum equal
to the nominal value of the shares redeemed.
(6) If
limited shares of a par value company are redeemed wholly or partly out of the
proceeds of a fresh issue and the aggregate amount of those proceeds is less
than the aggregate nominal value of the shares redeemed, the amount of the
difference shall be transferred out of profits out of which the company may
make a distribution under Article 114 to the capital redemption reserve.
(7) The
provisions of Article 61 shall apply as if the capital redemption reserve
were paid up share capital of the company except that the reserve may be
applied in paying up unissued shares to be allotted as fully paid bonus shares.
(8) Upon
the redemption of limited shares of a par value company under this Article, the
amount of the company’s issued share capital shall be diminished by the nominal
value of those shares but the redemption shall not be taken as reducing the
authorized share capital of the company.
(9) Where
pursuant to this Article a par value company is about to redeem limited shares,
it may issue shares up to the nominal amount of the shares to be redeemed as if
those shares had never been issued.
(10) Any
limited preference shares issued by a company before Article 223 came into
force which could but for the repeal of Article 5 of the Companies
(Supplementary Provisions) (Jersey) Law 1968 have been redeemed under that
Article shall be subject to redemption either in accordance with that Article
or in accordance with the provisions of this Law.
(11) Any capital redemption reserve fund
established by a company before Article 223 came into force for the
purposes of Article 5 of the Companies (Supplementary Provisions) (Jersey)
Law 1968 shall be treated as if it had been
established as a capital redemption reserve for the purposes of this Article,
and any reference in any existing enactment or in the articles of any company
or in any other instrument to a company’s capital redemption reserve fund shall
be construed as a reference to a capital redemption reserve for the purposes of
this Article.”.
ARTICLE 34
Article 56
of the principal Law shall be repealed.
ARTICLE 35
For
Article 57 of the principal Law there shall be substituted the
following Article -
“ARTICLE 57
Power of company to purchase its own limited shares
(1) A company may purchase its own limited
shares (including any redeemable shares).
(2) A purchase under this Article, other than a
purchase of its own shares by a company which is a wholly-owned subsidiary of
another company, shall be sanctioned by a special resolution of the company.
(3) However, if the shares are to be purchased
otherwise than on a stock exchange -
(a) they may only be purchased in pursuance of
a contract approved in advance by a resolution of the company; and
(b) they shall not carry the right to vote on
the resolution sanctioning the purchase or approving that contract.
(4) If the shares are to be purchased on a
stock exchange, the resolution authorizing the purchase shall specify -
(a) the maximum number of shares to be
purchased;
(b) the maximum and minimum prices which may be
paid; and
(c) a date, not being later than 18 months
after the passing of the resolution, on which the authority to purchase is to
expire.
(4A) For the purposes of sub-paragraph (b) of
paragraph (4), maximum and minimum prices shall be determined -
(a) by specifying particular sums; or
(b) by specifying a basis or formula by which
those amounts can be calculated without reference to any person’s discretion or
opinion.
(5) Paragraphs (2), (3) and (4) do not
apply to an open-ended investment company.
(6) Article 55 applies to the purchase by
a company under this Article of its own shares as it applies to the redemption
of redeemable shares.
(7) A company may not under this Article
purchase its shares if as a result of the purchase there would no longer be a
member of the company holding shares other than redeemable shares.”.
ARTICLE 36
(1) For the heading to Article 58 of the principal Law there shall be substituted the
following heading -
“Financial assistance by company
for purchase of its shares”.
(2) For Article 58(1) of the principal Law49 there
shall be substituted the following paragraph -
“(1) Except as provided in this Article -
(a) where a person is acquiring or proposing to
acquire shares in a company, it is not lawful for the company or any of its
subsidiaries which is a Jersey company to give financial assistance directly or
indirectly for the purpose of that acquisition before or at the same time as
the acquisition takes place; and
(b) where a person has acquired shares in a
company and any liability has been incurred (by that person or any other
person) for the purpose of that acquisition, it is not lawful for the company
or any of its subsidiaries which is a Jersey company to give financial
assistance directly or indirectly for the purpose of reducing or discharging
the liability so incurred.”.
(3) For Article 58(3) of the principal Law there shall be substituted the
following paragraph -
“(3) This Article does not prohibit a company from
giving financial assistance if -
(a) the giving of
assistance is sanctioned by a prior special resolution of the company proposing
to give it; and
(b) the directors
of the company reasonably believe that, immediately after the assistance has
been given, the company will be able to discharge its liabilities as they fall
due and the realisable value of the company’s assets will be not less than the
aggregate of -
(i) its
liabilities,
(ii) any
amounts standing to the credit of its capital accounts.”.
ARTICLE 37
For Article 59 of the
principal Law there shall be substituted the
following Article -
“Power of States to extend or modify Part XI
The
States may by Regulations extend or modify the provisions of Articles 55, 57
and 58 with respect to any of the following matters -
(a) the circumstances and manner in which a
company may redeem or purchase its own shares; and
(b) the authority required for a redemption or
purchase by a company of its own shares.”.
ARTICLE 38
For Article 60 of the
principal Law there shall be substituted the
following Article -
“ARTICLE 60
Forfeiture of shares
If it is authorized by its articles,
a company may -
(a) cause any of its shares which have been
issued otherwise than as fully paid to be forfeited for failure to pay any sum
due and payable on them; or
(b) accept their surrender instead of causing
them to be so forfeited.”.
ARTICLE 39
For
Article 61 of the principal Law there shall be substituted the
following Article -
“ARTICLE 61
Reduction of capital accounts
(1) A company may by special resolution reduce
its capital accounts in any way.
(2) In particular, and without prejudice to the
generality of paragraph (1), the company -
(a) may extinguish or reduce the liability on
any of its shares in respect of share capital not paid up; and
(b) may, with or without extinguishing or
reducing liability on any of its shares -
(i) reduce any capital account by an amount
which is lost or is unrepresented by available assets, or
(ii) pay off any amount standing to the credit
of a capital account which is in excess of the company’s wants.
(3) Except as provided in paragraphs (4)
and (5), every reduction of capital shall be subject to confirmation by the
court.
(4) A reduction of capital by extinguishing or
reducing a capital account established in respect of an issue of unlimited
shares shall not be subject to confirmation by the court.
(5) A reduction of capital by reducing a share
capital account or stated capital account which is in either case established
in respect of limited shares shall not be subject to confirmation by the court
if -
(a) the reduction does not extinguish or reduce
the liability on any share in respect of capital which is not paid up; and
(b) the reduction does not reduce the net
assets of the company,
and the amount of the reduction is
credited to a capital redemption reserve which may be applied only in paying up
unissued shares which are to be allotted to members as fully paid bonus
shares.”.
ARTICLE 40
(1) In Article 62(1) of the principal Law, for the words “share capital” there
shall be substituted the words “a capital account”.
(2) In Article 62(2) of the principal Law,54 for
sub-paragraphs (a) and (b) there shall be substituted the following
sub-paragraphs -
“(a) a diminution of liability in respect of any
amount unpaid on a share; or
(b) the payment to a shareholder of any paid up
capital,”.
(3) In Article 62(6) of the principal Law, the word “share” shall be deleted
in each place where it occurs.
ARTICLE 41
For
paragraphs (1) and (2) of Article 64 of the principal Law there shall be substituted the
following paragraphs -
“(1) Where the court confirms the reduction of a
company’s capital account, the company shall deliver to the registrar -
(a) the Act of the court confirming the
reduction; and
(b) a minute, approved by the court, showing in
respect of the company the information specified in paragraph (2).
(2) The information to which paragraph (1)
refers is -
(a) the amounts of the capital accounts;
(b) the number of shares into which the share
capital is to be divided, and, in the case of a par value company, the amount
of each share;
(c) in the case of a par value company the
amount (if any), at the date of the registration of the Act and minute under
paragraph (2A), which will remain paid up on each share which has been
issued; and
(d) in the case of a no par value company, the
amount (if any) remaining unpaid on issued shares.
(2A) The registrar shall register the Act and
minute, and thereupon the resolution for reducing the capital as confirmed by
the Act shall take effect.”.
ARTICLE 42
In
Article 65(1) of the principal Law, before the word “company’s” there
shall be inserted the words “par value”.
ARTICLE 43
For
Article 71 of the principal Law there shall be substituted the
following Article -
“ARTICLE 71
Annual return
(1) Every company (other than a company in a
creditors’ winding up or which is the subject of a declaration under the
Désastre Law) shall, before the end of February in every year after the year in
which it is incorporated, deliver to the registrar a return stating the
following information -
(a) in the case of a par value company, in
respect of each class of shares, either -
(i) the name and address of each member who on
1st January in the year of the return held not less than one per cent in
nominal value of all the issued shares of that class and the number of shares
so held by him, together with the number of the members who on that date each
held less than one per cent in nominal value of all the issued shares of that
class and together also with the total number of shares comprised in those
holdings, or
(ii) the name and address of every member who on
1st January in the year of the return held any shares of that class, and the
number of shares of that class so held by him;
(b) in the case of a no par value company, in
respect of each class of shares, either -
(i) the name and address of each member who on
1st January in the year of the return held not less than one per cent in number
of all the issued shares of that class and the number of shares so held by him,
together with the number of the members who on that date each held less than
one per cent in number of all the issued shares of that class and together also
with the total number of shares comprised in those holdings, or
(ii) the name and address of every member who on
1st January in the year of the return held any shares of that class, and the
number of shares of that class so held by him;
(c) in the case of a company which includes
guarantor members, the name and address of each person who was such a member on
1st January in the year of the return;
(d) in the case of a company which includes
persons who are members by reason of holding unlimited shares -
(i) the name and address of each person who
was such a member on 1st January in the year of the return, and
(ii) the number of those shares so held by him;
and
(e) in the case of a company which on 1st
January in the year of the return is either a public company or a subsidiary of
a public company, the particulars required by Article 84 to be kept in the
register of the directors and secretary of the company to which the return
relates, in respect of the persons who are at that date its directors.
(2) Where the company has converted any of its
shares into stock, the return shall give the corresponding information in
relation to that stock, stating the amount of stock instead of the nominal
value or number of shares (as the case may be).
(3) The return -
(a) shall contain such other information as may
be prescribed;
(b) shall be verified by a declaration in such
manner as may be prescribed; and
(c) shall be accompanied by such filing fee as
may be prescribed.
(4) The registrar shall not provide to any
person a copy of a return made under this Article by a public company unless
that person has delivered to the registrar a declaration under Article 46
in respect of the return.
(5) The Committee may by Order -
(a) prescribe fees which shall be payable by
companies for the filing of returns required by this Article;
(b) prescribe, in addition, late filing fees
which shall be payable by companies which do not file returns within the time
required by this Article (being in the case of private companies not more than
five times the fee prescribed under sub-paragraph (a) and in the case of
public companies not more than ten times the fee prescribed under that
sub-paragraph); and
(c) in so providing, specify different late
filing fees according to the times which have elapsed since returns were due.
(6) If a company fails to comply with this
Article, it is guilty of an offence.”.
ARTICLE 44
Article 73(3)
of the principal Law shall be repealed.
ARTICLE 45
In
Article 74(2)(b) of the principal Law, before the words “value of the
company’s assets” there shall be inserted the word “realisable”.
ARTICLE 46
After Article 74 of the
principal Law there shall be
inserted the following Article -
“ARTICLE 74A
Contracts with sole members who are
also directors
(1) If a private company which -
(a) is a limited company; and
(b) has only one member, who is also a director
of the company,
enters into a contract with him
which is not in writing, the company shall ensure that the terms of the
contract are either set out in a written memorandum or recorded in the minutes
of the first meeting of the directors of the company following the making of
the contract.
(2) If a company fails to comply with
paragraph (1), it and every officer of it in default are guilty of an
offence.
(3) Failure to comply with paragraph (1)
shall not affect the validity of the contract.
(4) Subject to paragraph (3), nothing in
paragraph (1) shall be construed as excluding the operation of any other
enactment or rule of law applying to contracts between a company and a director
of that company.
(5) Paragraph (1) of this Article does not
apply to contracts entered into in the ordinary course of the company’s
business.”.
ARTICLE 47
For paragraphs (2) and (3)
of Article 75 of the principal Law there shall be substituted the
following paragraphs -
“(2) The disclosure shall be made -
(a) at the first meeting of the directors at
which the transaction is considered after the director concerned becomes aware
of the circumstances giving rise to his duty to make it; or
(b) if for any reason he fails to comply with
sub-paragraph (a), as soon as practical after that meeting, by notice in
writing delivered to the secretary.
(2A) The secretary, where the disclosure is made to
him -
(a) shall inform the directors that it has been
made; and
(b) shall in any event table the notice of the
disclosure at the next meeting of the directors after it is made.
(2B) Any disclosure at a meeting of the directors
shall be recorded in the minutes of the meeting.
(3) A disclosure to the company by a director
in accordance with paragraph (2) that he is to be regarded as interested
in a transaction with a specific person is sufficient disclosure of his interest
in any such transaction entered into after the disclosure is made.”.
ARTICLE 48
For
Articles 78 and 79 of the principal Law there shall be substituted the
following Articles -
“ARTICLE 78
Disqualification orders
(1) Where it appears to the Committee or the
Commission, or to the Attorney General, that it is expedient in the public
interest that a person should not without the leave of the court -
(a) be a director of or in any way whether
directly or indirectly be concerned or take part in the management of a
company; or
(b) in the Island
in any way whether directly or indirectly be concerned or take part in the
management of a body incorporated outside the Island,
the Committee or the Commission, or
the Attorney General (as the case may be), may apply to the court for an order
to that effect against that person.
(2) Where the court, on such an application, is
satisfied that the person’s conduct in relation to any body corporate (wherever
it is incorporated and wherever it carries on business) makes him unfit -
(a) to be concerned in the management of a
company; or
(b) to be concerned in the management, in the Island, of a body incorporated outside the Island,
it may make the order.
(3) An order under paragraph (2) shall be
for such period, not exceeding 15 years, as the court thinks fit.
(4) A person who acts in contravention of an
order made under this Article is guilty of an offence.
ARTICLE 79
Personal responsibility for
liabilities where person acts
while disqualified
(1) A person who acts in contravention of an
order made under Article 78 is personally responsible for such liabilities
of the company or other body corporate as are incurred at a time when that
person was, in contravention of the order, involved in its management.
(2) Where a person is personally responsible
under paragraph (1) for liabilities of a company or other body corporate,
he is jointly and severally liable in respect of those liabilities with it and
with any other person who, whether under this Article or otherwise, is so
liable.
(3) For the purposes of this Article, a person
is involved in the management of a company or other body corporate if he is a
director of it, or if he is concerned whether directly or indirectly or takes
part in its management.”.
ARTICLE 49
(1) For Article 82(2)(c) of the principal
Law there shall be substituted the
following sub-paragraph -
“(c) the Association of Chartered Certified
Accountants;”.
(2) In Article 82(3) of the principal Law,64 after
the words “paragraph (2)” there shall be added the words “by adding,
deleting or substituting any body”.
ARTICLE 50
For Article 83(3) of the
principal Law there shall be substituted the
following paragraph -
“(3) The registrar shall not disclose or make use
of any information obtained by him as a result of the exercise of the right conferred
upon him by paragraph (2) except -
(a) to the Commission on being required in
writing by it to do so; or
(b) for the purpose of enabling any provision
of this Law or any obligation owed to the company by an officer or secretary of
the company to be enforced.”.
ARTICLE 51
Article 84(2)
of the principal Law shall be repealed.
ARTICLE 52
In
Article 87(7) of the principal Law, after the words “If such an
agreement ceases” there shall be inserted the words “later than 18 months
after the incorporation of the company”.
ARTICLE 53
(1) In Article 89(1) of the principal Law, for the words “the holders of a
class of shares” there shall be substituted the words “any class of members”.
(2) For Article 89(2) of the principal Law68 there
shall be substituted the following paragraph -
“(2) A members’ requisition is a requisition of
members of the company holding at the date of the deposit of the requisition
not less than one-tenth of the total voting rights of the members of the
company who have the right to vote at the meeting requisitioned.”.
ARTICLE 54
(1) In Article 90(1) of the principal Law, for the words “the holders of a
class of shares in” there shall be substituted the words “a class of members
of”.
(2) In Article 90(2) of the principal Law,69 for the words “in nominal value of the shares giving that right” there shall
be substituted the words “of the total voting rights of the members who have
that right”.
ARTICLE 55
(1) In Article 91(1) of the principal Law, for the words “the holders of any
class of shares in” there shall be substituted the words “any class of members
of”.
(2) For Article 91(3)(b) of the principal
Law there shall be substituted the
following sub-paragraph -
“(b) otherwise, by a majority in number of the
persons who have the right to attend and vote at the meeting, being a majority
together holding not less than 95 per cent of the total voting rights of
the members who have that right.”.
ARTICLE 56
For
Article 92 of the principal Law71 there shall be substituted the
following Article -
“ARTICLE 92
General provisions as to meetings
and votes
(1) Notwithstanding anything to the contrary in
the memorandum or articles of a private company with only one member, or in the
terms of admission to membership of such a company, he shall be the quorum at
any meeting of the company, or of any class of member, when he is present
personally or by his proxy.
(2) Subject to paragraph (1), in so far as
the memorandum or articles of a company or the terms of admission to membership
of the company do not make other provision in that behalf, the following
provisions shall apply to any meeting of the company or of any class of members
of the company -
(a) notice of a meeting shall be given, to
every member entitled to receive it, by delivering or posting it to his
registered address;
(b) at a meeting of the company, two members
present personally shall be a quorum;
(c) at a meeting (other than an adjourned
meeting) of any class of members -
(i) in the case of a class of par value
shares, the quorum shall be persons holding or representing by proxy not less
than one-third in nominal value of the issued shares of that class,
(ii) in the case of a class of no par value
shares, the quorum shall be persons holding or representing by proxy not less
than one-third in number of the issued shares of that class, and
(iii) in the case of a class of guarantor members,
the quorum shall be persons whose liability as such members, or representing by
proxy persons whose liability as such members, is in the aggregate not less
than one-third of the total liability of all members of that class,
and
where any such meeting has been adjourned, the quorum on its resumption shall
be one person of the class or his proxy;
(d) any member, or director of the company,
elected by the members present at a meeting may be chairman of that meeting;
(e) on a show of hands, every member present in
person at a meeting has one vote; and
(f) on a poll -
(i) every member has one vote for every share
held by him and, in the case of stock, one vote for each share from which the
holding of stock arose, and
(ii) every member who does not have a share has
one vote.”.
ARTICLE 57
In Article 93(1) of the
principal Law, for the words “the holders of a
class of shares” there shall be substituted the words “any class of members”.
ARTICLE 58
In
Article 94(1) of the principal Law, for the words “the holders of a
class of shares in” there shall be substituted the words “any class of members
of”.
ARTICLE 59
(1) For Article 95(1) of the principal Law there shall be substituted the
following paragraphs -
“(1) This Article does not apply to a resolution
removing an auditor but otherwise applies to any resolution, including a
special resolution.
(1A) This Article does not apply to a resolution if
the memorandum or articles of the company concerned prohibit the passing of a
resolution in writing in the manner permitted by this Article.
(1B) Subject to paragraphs (1) and (1A) and in
so far as the memorandum or articles of a company do not make other provision
in that behalf, anything which may be done at a meeting of the company or at a
meeting of any class of its members may be done by a resolution in writing
signed by or on behalf of each member who, at the date when the resolution is
deemed to be passed, would be entitled to vote on the resolution if it were
proposed at a meeting.”.
(2) In Article 95(6) of the principal Law,74 after
the words “affects or limits” there shall be inserted the words “any provision
in the memorandum or articles of a company or”.
ARTICLE 60
After Article 95 of the
principal Law there shall be inserted the
following Article -
“ARTICLE 95A
Recording of decisions by sole member
(1) If -
(a) a private company has only one member;
(b) he takes a decision which may be taken by
the company in general meeting and has effect as if agreed by the company in
general meeting; and
(c) the decision is not taken by way of a
resolution in writing,
he shall provide the company with a
record in writing of the decision.
(2) If the member fails to comply with
paragraph (1), he is guilty of an offence.
(3) Failure to comply with paragraph (1)
shall not affect the validity of the decision.”.
ARTICLE 61
In Article 96(6) of the
principal Law, for the words “the holders of any
class of shares” there shall be substituted the words “any class of members”.
ARTICLE 62
In Article 97(1)(a) of the
principal Law,
for the words “the holders of any class of shares” there shall be substituted
the words “any class of members”.
ARTICLE 63
In
Article 98(1) of the principal Law, for the words “the holders of any
class of its shares” there shall be substituted the words “any class of its
members”.
ARTICLE 64
(1) In Article 99(1) of the principal Law,78 for the
words “the holders of a class of shares” there shall be substituted the words
“any class of members”.
(2) In Article 99(4) of the principal Law, for the words “the holders of a
class of shares” there shall be substituted the words “any class of members”.
ARTICLE 65
In
Article 100(3) of the principal Law -
(a) in sub-paragraph (b), after the word
“resolutions;” there shall be added the word “and”;
(b) for sub-paragraph (c) there shall be
substituted the following sub-paragraph -
“(c) resolutions or agreements which have been
agreed to by all the members of any class but which, if not so agreed to, would
not have been effective for their purpose unless they had been passed or agreed
to by some particular majority or otherwise in some particular manner, and all
resolutions or agreements which effectively bind all of the members of any
class though not agreed to by all those members,”.
ARTICLE 66
For
Article 101(b) of the principal Law there shall be substituted the
following paragraph -
“(b) any class of members of a company; or”.
ARTICLE 67
For
Article 106(3) of the principal Law there shall be substituted the
following paragraphs -
“(3) Where for special reasons the Commission
thinks fit it may, on an application made not later than one month before the
expiry of the period otherwise allowed, by notice in writing to a company
extend a period mentioned in paragraph (1), (4) or (5) of Article 104
or in paragraph (2) of this Article by such a period as is specified in
the notice.
(4) The Commission shall also give a copy of
the notice to the registrar.
(5) The Committee may by Order -
(a) prescribe fees which shall be payable by
companies for the filing of documents required by this Article;
(b) prescribe, in addition, late filing fees
which shall be payable by companies which do not file such documents within the
time required by this Article (being not more than ten times the fee prescribed
under sub-paragraph (a)); and
(c) in so providing, specify different late filing
fees according to the times which have elapsed since such documents were due.”.
ARTICLE 68
In
Article 111(4) of the principal Law, for the word “shareholders” there
shall be substituted the word “members”.
ARTICLE 69
For
Article 113 of the principal Law there shall be substituted the
following Articles -
“ARTICLE 113
Qualifications of individual for appointment as auditor
(1) An individual is qualified for appointment
under Article 109 as auditor of a company if -
(a) he is a member of a recognized professional
body; and
(b) he is eligible for appointment as auditor
under that body’s rules.
(2) An individual is also qualified for
appointment under Article 109 as auditor of a company if he is authorized
by the Commission to be so appointed.
ARTICLE 113A
Qualifications of partnership for appointment as auditor
(1) A partnership is qualified for appointment
under Article 109 as auditor of a company if all of the partners are so
qualified.
(2) A partnership is also qualified for appointment
under Article 109 as auditor of a company if -
(a) at least 75 per cent of the partners
are -
(i) individuals who are members of recognized
professional bodies, or are authorized under paragraph (2) of Article 113,
(ii) partnerships which are themselves qualified
for appointment under Article 109, or
(iii) bodies corporate which are so qualified;
(b) at least 75 per cent of the voting
rights in the partnership and, if it has a management body, in that body are
held by persons specified in sub-paragraph (a); and
(c) each of the partners who examines or
reports on the accounts of the company pursuant to Article 104, or who
supervises the examination of or report on such accounts, is an individual who
is a member of a recognized professional body or is authorized under paragraph (2)
of Article 113.
ARTICLE
113B
Qualifications of body corporate for
appointment as auditor
(1) A body corporate is qualified for
appointment under Article 109 as auditor of a company if -
(a) each of the persons who are responsible to
it for examining or reporting on the accounts of the company pursuant to
Article 104, or for supervising the examination of or report on such
accounts, is an individual who is a member of a recognized professional body or
is authorized under paragraph (2) of Article 113; and
(b) the body corporate is controlled by persons
or partnerships specified in paragraph (3).
(2) A body corporate is also qualified for
appointment under Article 109 as auditor of a company if it is authorized
by the Commission to be so appointed.
(3) Paragraph (1) refers to -
(a) individuals who are members of recognized
professional bodies, or are authorized under paragraph (2) of Article 113;
(b) partnerships which are qualified for appointment
under Article 109 as auditors of companies, or are accepted by a
recognized professional body as being qualified for appointment as auditors of
companies incorporated in the United Kingdom; and
(c) bodies corporate which are themselves
qualified for appointment under Article 109 as auditors of companies, or
are accepted by a recognized professional body as being qualified for
appointment as auditors of companies incorporated in the United Kingdom.
(4) For the purposes of paragraph (1), a
body corporate is controlled by persons or partnerships specified in
paragraph (3) if -
(a) they constitute in number at least 75 per
cent of the members of the body corporate;
(b) they hold at least 75 per cent of the
voting rights of each class of members;
(c) at least 75 per cent of the directors
are individuals specified in sub-paragraph (3); or
(d) at least 75 per cent of the voting
rights in the board of directors, committee or other management body of the
body corporate are held by persons or partnerships specified in
paragraph (3).
ARTICLE 113C
Disqualification for appointment as
auditor
(1) This Article applies notwithstanding
Articles 113, 113A and 113B.
(2) A person is disqualified for appointment
under Article 109 as auditor of a company if he is -
(a) an officer, secretary or servant of the
company;
(b) a partner or employee of an officer,
secretary or servant of the company;
(c) a person against whom an order under
Article 78 is in force; or
(d) a person who, on any ground described in
sub-paragraph (a), (b) or (c), is disqualified for appointment under
Article 109 as auditor of any other body corporate which is -
(i) a subsidiary or holding body of the
company, or
(ii) a subsidiary of the company’s holding body,
or who would be so disqualified if
that other body corporate were a company.
(3) A partnership is disqualified for
appointment under Article 109 as auditor of a company if any of the
partners is -
(a) a person who is disqualified under
paragraph (2) for such an appointment; or
(b) the company whose accounts are to be
audited under Article 109, or a holding body or subsidiary of that
company, or a subsidiary of any such holding body.
(4) A body corporate is disqualified for
appointment under Article 109 as auditor of a company if -
(a) any of the individuals specified in
sub-paragraph (a) of paragraph (1) of Article 113B in relation
to that company, or any of its shareholders or directors, is a person who is
disqualified under paragraph (2) of this Article for such an appointment;
or
(b) the company whose accounts are to be
audited under Article 109, or a holding body or subsidiary of that
company, or a subsidiary of any such holding body, holds shares in the body
corporate.
(5) If a person or partnership -
(a) has been appointed under Article 109
as auditor of a company; and
(b) during his term of office becomes, to his
or its knowledge, disqualified for the appointment,
that person or partnership shall
thereupon vacate the office and give notice to the company that by reason of
that disqualification he or it has done so.
ARTICLE 113D
Power of Committee to amend qualifications
Notwithstanding
Articles 113, 113A, 113B and 113C, the Committee may by Order -
(a) amend the definition of “recognized professional
body” in paragraph (1) of Article 1 by adding, deleting or
substituting any body;
(b) provide that any partnership or body
corporate of a class described in the Order shall, on such conditions as are
specified in the Order, be qualified for appointment under Article 109 as
auditor of a company; or
(c) amend sub-paragraph (a), (b) or (c) of
paragraph (2) of Article 113C by adding, deleting or substituting
persons who are disqualified for such an appointment, or by varying the
circumstances in which persons described in that paragraph are disqualified for
such an appointment.
ARTICLE 113E
Criminal liability of unqualified auditor
(1) Any person who, knowing that he is not
qualified by or under this Law for appointment under Article 109, acts for
the purposes of that Article as an auditor of a company is guilty of an
offence.
(2) Any person who without reasonable excuse
fails to give notice in accordance with paragraph (5) of Article 113C
is guilty of an offence.”.
ARTICLE 70
(1) In Article 114(2)(b)(ii) of the
principal Law, there shall be inserted before the
word “value” the word “realisable”.
(2) For Article 114(3)(b) of the principal
Law there shall be substituted the
following sub-paragraph -
“(b) the realisable value of the company’s assets
will not be less than the aggregate of its liabilities and the amount standing
to the credit of its capital accounts.”.
(3) In Article 114(3A) of the principal
Law -
(a) for the words “a company” there shall be
substituted the words “an open-ended investment company”;
(b) in sub-paragraph (b), there shall be
inserted before the word “value” the word “realisable”.
(4) In Article 114(4) of the principal Law87 -
(a) for clauses (ii) and (iii) of
sub-paragraph (a) there shall be substituted the following clauses -
“(ii) the redemption or purchase of any of the
company’s shares,
(iii) the
reduction of capital by extinguishing or reducing the liability of any of the
members on any of the company’s shares in respect of capital not paid up or by
paying off any amount standing to the credit of any capital account, and”;
(b) for sub-paragraph (e)(ii) there shall
be substituted the following clause -
“(ii) transferring
profits to a capital redemption reserve or a stated capital account.”.
(5) Article 114(7) of the principal Law shall be repealed.
ARTICLE 71
In the heading to Part XVIII
of the principal Law, for the words “AMALGAMATIONS AND
ARRANGEMENTS” there shall be substituted the word “TAKEOVERS”.
ARTICLE 72
For
paragraphs (1) and (2) of Article 117 of the principal Law there shall be substituted the
following paragraphs -
“(1) If, in a case in which a takeover offer does
not relate to shares of different classes, the offeror has by virtue of
acceptances of the offer acquired or contracted to acquire -
(a) in the case of a par value company, not
less than nine-tenths in value of the shares to which the offer relates; or
(b) in the case of a no par value company, not
less than nine-tenths in number of the shares to which the offer relates,
he may give notice, to the holder of
any shares to which the offer relates which the offeror has not acquired or
contracted to acquire, that he desires to acquire those shares.
(2) If, in a case in which a takeover offer
relates to shares of different classes, the offeror has by virtue of
acceptances of the offer acquired or contracted to acquire -
(a) in the case of a par value company, not
less than nine-tenths in value of the shares to which the offer relates; or
(b) in the case of a no par value company, not
less than nine-tenths in number of the shares to which the offer relates,
he may give notice, to the holder of
any shares of that class which the offeror has not acquired or contracted to
acquire, that he desires to acquire those shares.”.
ARTICLE 73
For
paragraphs (1) and (2) of Article 119 of the principal Law there shall be substituted the following
paragraphs -
“(1) If a takeover offer relates to all the shares
in a company and at any time before the end of the period within which the
offer can be accepted -
(a) the offeror has by virtue of acceptances of
the offer acquired or contracted to acquire some (but not all) of the shares to
which the offer relates; and
(b) those shares (with or without any other
shares in the company which he has acquired or contracted to acquire) amount,
in the case of a par value company, to not less than nine-tenths in value of
all the shares in the company or, in the case of a no par value company, to not
less than nine-tenths in number of all the shares in the company,
the holder of any shares to which
the offer relates who has not accepted the offer may by a written communication
addressed to the offeror require him to acquire those shares.
(2) If a takeover offer relates to shares of
any class or classes and at any time before the end of the period within which
the offer can be accepted -
(a) the offeror has by virtue of acceptances of
the offer acquired or contracted to acquire some (but not all) of the shares of
any class to which the offer relates; and
(b) those shares (with or without any other
shares of that class which he has acquired or contracted to acquire) amount, in
the case of a par value company, to not less than nine-tenths in value of all
the shares in the company or, in the case of a no par value company, to not
less than nine-tenths in number of all the shares in the company,
the holder of any shares of that
class who has not accepted the offer may by a written communication addressed
to the offeror require him to acquire those shares.”.
ARTICLE 74
After Article 124 of the
principal Law there shall be inserted the
following heading -
“PART XVIIIA
COMPROMISES AND ARRANGEMENTS”.
ARTICLE 75
(1) For Article 125(2) of the principal Law92 there
shall be substituted the following paragraph -
“(2) If a majority in number of the creditors or
class of creditors, or members or class of members, present and voting either
in person or by proxy at the meeting, being -
(a) in the case of any class of par value
shares, the holders of not less than three-quarters in nominal value of the
issued shares of that class;
(b) in the case of any class of no par value
shares, the holders of not less than three-quarters in number of the issued
shares of that class; or
(c) in the case of any class of guarantor
members, those whose liability as such members is in the aggregate not less
than three-quarters of the total liability of all the members of that class,
agree to a compromise or
arrangement, the compromise or arrangement, if sanctioned by the court, is
binding on all creditors or the class of creditors or on the members or class
of members, and also on the company or, in the case of a company in the course
of being wound up, on the liquidator and contributories of the company.”.
(2) Article 125(5) of the principal Law shall be repealed.
ARTICLE 76
After
Article 127 of the principal Law, but before Part XIX of the
principal Law, there shall be inserted the following Parts -
“PART XVIIIB
MERGERS
ARTICLE 127A
Mergers
(1) Two or more companies may merge and
continue as one company, in accordance with this Part, if none of them has
unlimited shares or guarantor members.
(2) Each company proposing to merge shall, in
order to do so, enter into an agreement in writing with each company with which
it proposes to merge.
(3) The agreement shall state the terms and
means of effecting the merger and, in particular, the following
information -
(a) the memorandum and articles of the merged
company, including the provisions which would be required by Part II to be
included in the memorandum of the merged company if it were being incorporated
under this Law otherwise than by merger;
(b) the name and address of each proposed
director of the merged company;
(c) the manner in which the securities of each
merging company are to be converted into securities of the merged company;
(d) if any securities of a merging company are
not to be converted into securities of the merged company, what the holders are
to receive instead and the manner in which and the time at which they are to
receive it; and
(e) details of any arrangements which are
necessary to complete the merger and to provide (in addition to the provisions
of the articles) for the management of the merged company.
(4) If shares of one merging company are held
by or on behalf of another merging company -
(a) the merging agreement shall provide for the
cancellation of those shares, without any repayment of capital, when the
agreement becomes effective; and
(b) no provision may be made in the merging
agreement for the conversion of those shares into securities of the merged
company.
(5) A merger agreement may provide that, at any
time before the issue of a certificate of merger, the agreement may be
terminated by the directors of any merging company notwithstanding that it has
been approved by all or any of the merging companies.
ARTICLE 127B
Approval of merger agreement
(1) The directors of each merging company shall
submit the merger agreement for approval by a special resolution of that
company and, where there is more than one class of members, for approval by a special
resolution of a separate meeting of each class.
(2) Notice of each meeting -
(a) shall be accompanied by a copy or summary
of the merger agreement; and
(b) shall state that any member of the company
who objects to the merger may, within 30 days after the merger agreement
has been approved in accordance with paragraph (1), apply to the court for
an order under Article 143 on the ground that the merger would unfairly
prejudice his interests.
(3) On a resolution to approve a merger -
(a) each member of a merging company shall be
entitled to vote;
(b) on a show of hands, every person present in
person at the meeting shall have one vote; and
(c) the right to demand a poll and the right to
vote on a poll shall be determined in accordance with Article 97 and
sub-paragraph (f) of paragraph (2) of Article 92 respectively,
subject to any provision to the
contrary in the memorandum or articles of the merging company.
(4) A merger is approved when the members of
each merging company have approved the merger agreement by a special resolution
passed at each meeting to which it is to be submitted in accordance with
paragraph (1).
ARTICLE 127C
Merger of subsidiaries
(1) A holding company and one or more of its
wholly-owned subsidiaries may merge and continue as one company, without
complying with Articles 127A and 127B but otherwise in accordance with
this Part, if -
(a) none of the companies has unlimited shares
or guarantor members;
(b) the merger is approved by a special
resolution of each merging company and, where it has more than one class of
members, by a special resolution of a separate meeting of each class;
(c) each resolution provides that -
(i) the shares of each merging subsidiary
shall be cancelled without any repayment of capital, and
(ii) except as otherwise provided in the special
resolutions, the memorandum and articles of the merged company shall be the
same as the memorandum and articles of the merging holding company; and
(d) no securities are issued and no assets are
distributed by the merged company in connexion with the merger.
(2) Two or more wholly-owned subsidiaries of
the same holding company may merge and continue as one company without
complying with Articles 127A and 127B, but otherwise in accordance with
this Part, if -
(a) the merger is approved by a special
resolution of each merging subsidiary; and
(b) the resolutions provide that -
(i) the shares of all but one of the merging
subsidiaries shall be cancelled without any repayment of capital,
(ii) the memorandum and articles of the merged
company shall be the same as those of the merging subsidiary whose shares are
not cancelled, except as may be provided in the special resolution of that
subsidiary, and
(iii) the issued share capital or, as the case may
be, the stated capital of the merging subsidiary or subsidiaries whose shares
are cancelled shall be added to the issued share capital or stated capital of
the merging subsidiary whose shares are not cancelled.
ARTICLE 127D
Notice to creditors
(1) Subject to paragraph (5) of
Article 127A, within 28 days after a merger has been approved under
Article 127B or 127C each merging company shall give notice to its creditors
in accordance with paragraph (2).
(2) The notice -
(a) shall state that the company intends to
merge, in accordance with this Part, with one or more specified companies;
(b) shall be sent in writing to each creditor
who, to the knowledge of the company, has a claim against it exceeding £5000;
(c) shall be sent in writing to such other
creditors as the court may direct;
(d) shall also be published once in a newspaper
circulating in the Island or in such other
manner as the court may on application direct; and
(e) shall state that any creditor of the
company who objects to the merger may within 30 days of the date of the
advertisement give notice of his objection to the company.
(3) A creditor who gives notice in accordance
with sub-paragraph (e) of paragraph (2) and whose claim against the
company has not been discharged may, within 30 days after the date of the
notice, apply to the court for an order restraining the merger.
(4) On the application the court, if satisfied
that the interests of the applicant would be unfairly prejudiced by the merger,
may make an order (subject to such terms, if any, as it may think fit)
restraining the merger.
(5) The Committee may by Order alter the amount
specified in sub-paragraph (b) of paragraph (2).
ARTICLE 127E
Objections by members
(1) If a company is a party to a merger
agreement, any member of the company who objects to the merger (other than a
member who consented to or voted in favour of it) may apply to the court for an
order under Article 143 on the ground that the merger would unfairly
prejudice his interests.
(2) No such application may be made after the
expiration of the period of 30 days following the approval of the merger
under Article 127B or 127C.
ARTICLE 127F
Documents to be delivered to registrar
(1) Subject to paragraph (5) of
Article 127A -
(a) after the expiration of 30 days from
the approval of a merger; or
(b) if any application is made to the court
under paragraph (3) of Article 127D or under Article 127E, after
that application has been disposed of otherwise than by an order restraining
the merger,
the merged company shall deliver to
the registrar -
(i) a copy of the merger agreement,
(ii) a copy of the memorandum and articles of
the merged company, and
(iii) a declaration in accordance with
paragraph (2), made on behalf of each merging company and signed by each
director of that company.
(2) Each declaration shall state that the
directors of the company by whom it is made each believe on reasonable grounds
-
(a) that each merging company is able to
discharge its liabilities as they fall due;
(b) that immediately after the merger, the
merged company will be able to discharge its liabilities as they fall due and
that the realisable value of its assets will be not less than the aggregate of
its liabilities and the amounts standing to the credit of its capital accounts;
(c) that there are no creditors (of any of the
merging companies) whose interests will be unfairly prejudiced by the merger;
(d) that the merger has been approved in
accordance with this Part;
(e) that notice has been given to creditors in
accordance with Article 127D; and
(f) that the making of the declaration has
been authorized by the directors of the company on whose behalf it is made.
ARTICLE 127G
Completion of merger
(1) Upon the delivery to the registrar in
accordance with Article 127F of the documents to which that Article refers
the registrar shall, if those documents comply with that Article, register the
merged company and issue to it a certificate of incorporation under Article 9.
(2) Upon the issue of the certificate of
incorporation -
(a) the merging companies are merged and
continue as one company as provided in the merger agreement or, in the case of
a merger under Article 127C, the resolutions approving the merger;
(b) all property and rights to which each
merging company was entitled immediately before the certificate of
incorporation is issued become the property and rights of the merged company;
(c) the merged company becomes subject to all
criminal and civil liabilities, and all contracts, debts and other obligations,
to which each of the merging companies was subject immediately before the
certificate of incorporation is issued; and
(d) all actions and other legal proceedings
which, immediately before the certificate of incorporation is issued, were
pending by or against any of the merging companies may be continued by or
against the merged company,
and the merging companies cease to
be companies incorporated under this Law.
(3) The registrar shall record that a company
has, by virtue of paragraph (2), ceased to be a company incorporated under
this Law.
PART XVIIIC
CONTINUANCE
ARTICLE 127H
Bodies corporate which are eligible for continuance
(1) Subject to Article 127I, a body which
is incorporated outside the Island may apply under Article 127K to the
Commission for the issue to it of a certificate that it continues as a company
incorporated under this Law, if it is authorized to make such an application by
the laws of the jurisdiction under which it is incorporated outside the Island.
(2) Subject to Article 127I, a company
which is incorporated in the Island under this Law may apply under
Article 127T to the Commission for authorization to seek continuance as a
body incorporated under the laws of another jurisdiction, if the proposal to
apply in that other jurisdiction for continuance there is approved by the
company and its members in accordance with Article 127Q.
ARTICLE 127I
Restrictions on continuance
(1) An application may not be made under
Article 127K, by a body corporate to which paragraph (3) applies, for
continuance as a company incorporated under this Law.
(2) An application may not be made under
Article 127T, by a company to which paragraph (3) applies, for
authorization to seek continuance in another jurisdiction.
(3) This paragraph applies to a body corporate
or company if -
(a) it is being wound up, or is in liquidation
or is subject to a declaration under the Désastre Law;
(b) it is insolvent;
(c) a receiver, manager or administrator (by
whatever name any such person is called) has been appointed, whether by a court
or in some other manner, in respect of any property of that body corporate or
company;
(d) it has entered into a compromise or arrangement
with a creditor (not being a compromise or arrangement approved by the
Commission) and that compromise or arrangement is in force; or
(e) an application is pending before a court
for the winding up or liquidation of that body corporate or company, or to have
it declared insolvent, or for a declaration under the Désastre Law, or for the
appointment of such a receiver, manager or administrator or for the approval of
such a compromise or arrangement.
(4) For the purposes of paragraph (3), the
jurisdiction in which -
(a) the body corporate is being wound up or is
in liquidation;
(b) the receiver, manager or administrator has
been appointed or the compromise or arrangement has been entered into; or
(c) the application before a court is pending,
is immaterial.
ARTICLE 127J
Security for Commission’s expenses under this Part
(1) On receiving -
(a) an application under Article 127K, by
a body incorporated outside the Island, for
continuance as a company incorporated under this Law; or
(b) an application under Article 127T, by
a company incorporated under this Law, for authorization to seek continuance in
another jurisdiction,
the Commission shall estimate the likely amount
of its expenses in dealing with the application.
(2) The Commission shall then require the
applicant to give it security for that amount, to the satisfaction of the
Commission, and shall not consider the application further until the security
has been given.
(3) If the Commission, in the course of
considering the application, subsequently forms the view that its expenses will
be of a higher amount -
(a) it may require the applicant to give it
security for that higher amount, to its satisfaction; and
(b) it may refuse to consider the application
further until that security has been given.
(4) On determining the application, the
Commission shall ascertain the actual amount of its expenses, and inform the
applicant.
(5) The expenses shall be a debt due and
payable by the applicant to the Commission.
(6) Without prejudice to any other mode of
recovery, the Commission may recover the expenses by realising the security if
they are not paid by the applicant on demand.
ARTICLE 127K
Application to Commission for continuance within Island
(1) An application to the Commission under this
Article by a body incorporated outside the Island, for continuance as a company
incorporated under this Law, shall be accompanied by -
(a) a copy (certified, in a manner approved by
the Commission, to be a true copy) of the memorandum and articles, or of the
law or other instrument constituting or defining the constitution of the body
corporate;
(b) articles of continuance which comply with
Article 127L;
(c) a statement of solvency which is in
accordance with Article 127W;
(d) the name under which it is proposed to
continue the body corporate as a company incorporated under this Law;
(e) in relation to every person who is a
director of the body corporate at the date of the application under this
Article or is to be a director of it upon its continuance as a company
incorporated under this Law, the particulars specified in sub-paragraphs (a)
to (f) (inclusive) of paragraph (1) of Article 84;
(f) in relation to each person who is a
secretary of the body corporate at the date of the application under this
Article or is to be its secretary upon its continuance as a company
incorporated under this Law, the particulars specified in Article 85 and
his qualifications;
(g) such other information as the registrar
would require on an application to register the body corporate as a company
under this Law;
(h) such other documents and information as are
prescribed or as the Commission may require in respect of a particular
application under this Article; and
(i) such application fee as may be prescribed.
(2) The application under this Article shall
also be accompanied by evidence, satisfactory to the Commission, of the
following matters -
(a) that the body corporate is authorized, by
the laws of the jurisdiction under which it is incorporated, to make the
application to the Commission;
(b) where the constitution of the body
corporate or the law of that jurisdiction requires that any authorization be
given for the application to the Commission, that it has been given;
(c) that if a certificate of continuance is
issued under this Law pursuant to the application under this Article, the body
will thereupon cease to be incorporated under the other jurisdiction;
(d) that if a certificate of continuance is so
issued, the interests of the members and the creditors of the body corporate
will not be unfairly prejudiced; and
(e) that the body corporate is not prevented by
Article 127I from making the application under this Article.
(3) If an instrument which is submitted in
accordance with sub-paragraph (a) of paragraph (1) is not in the
English or French language, the application under this Article shall also be
accompanied by a translation of the instrument into English or French.
(4) Every translation to which paragraph (3)
refers shall be certified, in a manner approved by the Commission, to be a
correct translation.
ARTICLE 127L
Articles of continuance
(1) Articles of continuance shall state those
amendments to be made to the memorandum or articles of the body corporate, or
to the instrument constituting or defining its constitution, which are
necessary to conform to the laws of the Island.
(2) If any other amendments which are to be
made to the memorandum or articles, or to the instrument -
(a) have been approved by its members in the
manner required by this Law for amendments to the memorandum or articles of a
company; and
(b) would be permitted under the laws of the Island if the body corporate were a company,
the articles of continuance shall
also state those amendments.
ARTICLE 127M
Proposed name
(1) After receiving an application under
Article 127K, the Commission shall inform the registrar of the name in
which the applicant proposes to continue as a company incorporated under this
Law.
(2) The registrar shall then inform the
Commission whether that name is in his opinion in any way misleading or
otherwise undesirable.
(3) If the applicant proposes that it shall
continue as a limited company, its name must in any event comply with
paragraph (2) of Article 13.
ARTICLE 127N
Determination of application to
Commission for continuance within Island
(1) If the Commission, on an application under
Article 127K for continuance as a company incorporated under this
Law -
(a) is satisfied that the application complies
with that Article and with paragraph (1) of Article 127H;
(b) is informed by the registrar that the
proposed name of the applicant is in his opinion not in any way misleading or
otherwise undesirable, and is also satisfied that the name complies with paragraph (2)
of Article 13; and
(c) is satisfied that all other approvals and
consents required by the law of the Island for
the issue of a certificate of continuance to the applicant have been given,
and, in addition to having paid the
application fee (if any), the applicant has paid the expenses due to the
Commission under Article 127J, the Commission may grant the application.
(2) If the application is granted, the
Commission shall thereupon inform the registrar and deliver to him the
documents which accompanied the application.
(3) On determining the application, the
Commission shall inform the applicant of its decision.
(4) If so required by the applicant, the
Commission shall furnish it within fourteen days with a statement in writing of
its reasons for its decision.
(5) An applicant may, within one month after
being informed of a decision by the Commission to refuse its application,
appeal to the court on the ground that the decision of the Committee was
unreasonable having regard to all the circumstances of the case.
(6) On hearing the appeal, the court -
(a) may confirm or reverse the decision of the
Commission; and
(b) may make such order as to the costs of the
appeal as it thinks fit.
ARTICLE 127O
Issue of certificate of continuance within
Island
(1) When the registrar -
(a) is informed
under Article 127N by the Commission that it has granted an application
for a certificate of continuance as a company incorporated under this Law; and
(b) receives from
the Commission the documents which accompanied the application,
he
shall register the application and those documents.
(2) On registration, the registrar shall
immediately issue to the applicant a certificate of continuance which is signed
by him and sealed with his seal.
(3) When the registrar issues a certificate of
continuance, he shall also immediately send a copy of it (electronically or by
some other means of instantaneous transmission) to the appropriate official or
public body in the jurisdiction to which sub-paragraph (a) of paragraph (2)
of Article 127K refers.
ARTICLE 127P
Effect of issue of certificate of
continuance within Island
(1) Upon the issue of the certificate of
continuance by the registrar -
(a) the body corporate becomes a company incorporated
under this Law, to which this Law applies accordingly; and
(b) the memorandum and articles, or the
instrument constituting or defining the constitution of the body corporate, as
amended in accordance with its articles of continuance, become the memorandum
and articles of the continued company.
(2) When a body corporate is continued as a
company incorporated under this Law -
(a) all property and rights to which the body
corporate was entitled immediately before the certificate of continuance is
issued are the property and rights of the company;
(b) the company is subject to all criminal and
civil liabilities, and all contracts, debts and other obligations, to which the
body corporate was subject immediately before the certificate of continuance is
issued; and
(c) all actions and other legal proceedings
which, immediately before the issue of the certificate of continuance, were
pending by or against the body corporate may be continued by or against the
company.
(3) A certificate of continuance is conclusive
evidence of the following matters -
(a) that the company is incorporated under this
Law;
(b) that the requirements of this Law have been
complied with in respect of -
(i) the continuance of the company under this
Law,
(ii) all matters precedent to its continuance as
such a company, and
(iii) all matters incidental to its continuance as
such a company; and
(c) if the certificate states that it is a
public company or a private company, that it is such a company.
ARTICLE 127Q
Approval by company and members of proposal for continuance overseas
(1) A proposal by a company to apply in another
jurisdiction for continuance there shall be approved by a special resolution of
the company and, where there is more than one class of members, by a special
resolution of the members of each class passed at a separate meeting of the
members of that class.
(2) Notice of each meeting -
(a) shall be accompanied by a copy or summary
of the proposed application in the other jurisdiction for continuance there;
and
(b) shall state that any member of the company
who objects to the application may, within the time limit specified in
paragraph (2) of Article 127S, apply to the court for an order under
Article 143 on the ground that the proposed continuance would unfairly
prejudice his interests.
(3) On a resolution to approve an proposed
application in another jurisdiction for continuance -
(a) each member of the company shall be
entitled to vote;
(b) on a show of hands, every person present in
person at the meeting shall have one vote; and
(c) the right to demand a poll and the right to
vote on a poll shall be determined in accordance with Article 97 and
sub-paragraph (f) of paragraph (2) of Article 92 respectively,
subject to any provision to the
contrary in the memorandum or articles of the company.
ARTICLE 127R
Notice to creditors of application
to Commission for authorization to seek continuance overseas
(1) At least 31 days before making an
application under Article 127T to the Commission for authorization to seek
continuance in another jurisdiction, a company shall give notice to its
creditors in accordance with paragraph (2).
(2) The notice -
(a) shall state that the company intends to
make the application to the Commission, and shall specify the jurisdiction in
which it proposes to seek continuance;
(b) shall be sent in writing to each creditor
of the company;
(c) shall be published once in a newspaper
circulating in the Island or in such other
manner as the court may on application direct; and
(d) shall state that any creditor of the
company who objects to the application may within 30 days of the date of
the advertisement give notice of his objection to the company.
(3) A creditor who gives notice in accordance
with sub-paragraph (d) of paragraph (2) and whose claim against the
company has not been discharged may, within 30 days after the date of the
notice, apply to the court for an order restraining the application by the
company under Article 127T to the Commission.
(4) On the creditor’s application the court, if
satisfied that the interests of the creditor would be unfairly prejudiced by
the proposed continuance, may make an order (subject to such terms, if any, as
it may think fit) restraining the application by the company under
Article 127T to the Commission.
ARTICLE 127S
Objections by members to continuance
overseas
(1) If a company resolves to make an
application under Article 127T to the Commission for authorization to seek
continuance in another jurisdiction, any member of the company who objects to
the application (other than a member who consented to or voted in favour of it)
may apply to the court for an order under Article 143 on the ground that
the proposed continuance would unfairly prejudice his interests.
(2) No such application may be made by a member
after the expiration of the period of 30 days following the last of the
resolutions of the company which are required under Article 127Q.
ARTICLE 127T
Application to Commission for authorization to seek continuance overseas
(1) An application to the Commission under this
Article for authorization to seek continuance in another jurisdiction shall be
accompanied by -
(a) a copy (certified, in a manner approved by
the Commission, to be a true copy) of each resolution which is required under
Article 127Q;
(b) a statement of solvency which is made in
accordance with Article 127W;
(c) such other documents and information as may
be prescribed or as the Commission may require in respect of a particular
application for such authorization; and
(d) such application fee as may be prescribed.
(2) The application under this Article shall
also be accompanied by evidence, satisfactory to the Commission, of the
following matters -
(a) that the laws of the jurisdiction in which
the company proposes to continue allow its continuance there as a body
corporate incorporated under those laws;
(b) that those laws provide that upon the
continuance of the company as a body corporate in that jurisdiction -
(i) all property and rights of the company
will become the property and rights of the body corporate,
(ii) the body corporate will become subject to
all criminal and civil liabilities, and all contracts, debts and other
obligations, to which the company is subject, and
(iii) all actions and other legal proceedings
which are pending by or against the company may be continued by or against the
body corporate;
(c) that notice has been given to the creditors
of the company in accordance with Article 127R of the application to the
Commission under this Article, and either -
(i) that no creditor has applied to the court
for an order restraining the application made to the Commission under this
Article, or
(ii) that the application of every creditor who
has so applied to the court has been determined by the court in a way which
does not prevent the Commission from granting the application made to it under
this Article;
(d) either -
(i) that no member of the company has applied
to the court for an order under Article 143 on the ground specified in
paragraph (1) of Article 127S, or
(ii) that the application of every member who
has so applied to the court has been determined by the court in a way which
does not prevent the Commission from granting the application made to it under
this Article;
(e) that the company has complied with such
other conditions as may be prescribed; and
(f) that the company is not prevented by
Article 127I from making the application.
ARTICLE 127U
Determination of application to Commission for authorization to seek
continuance overseas
(1) If, on an application under
Article 127T to the Commission -
(a) it is satisfied that the application
complies with that Article and with paragraph (2) of Article 127H;
and
(b) in addition to having paid the application
fee (if any), the applicant has paid the expenses due to the Commission under
Article 127J,
the Commission may grant the
application on the condition specified in paragraph (2) and on such other
conditions (if any) as it may specify in its decision.
(2) It shall be a condition of the grant of any
application made under Article 127T that the applicant will ensure -
(a) that the registrar is informed of the date
on which continuance will be or is granted in the other jurisdiction; and
(b) that a copy of the instrument of
continuance in the other jurisdiction, certified to be a true copy, is
delivered to the registrar,
in sufficient time to enable the
registrar to comply with Article 127V.
(3) On determining the application, the
Commission shall inform the applicant of its decision.
(4) If so required by the applicant, the
Commission shall furnish it within fourteen days with a statement in writing of
its reasons for its decision.
(5) An applicant may, within one month after
being informed of a decision by the Commission to refuse its application, or to
grant it subject to a condition (not being a condition specified in
paragraph (2)), appeal to the court on the ground that the decision of the
Commission was unreasonable having regard to all the circumstances of the case.
(6) On hearing the appeal, the court -
(a) may confirm, reverse or vary the decision
of the Commission; and
(b) may make such order as to the costs of the
appeal as it thinks fit.
ARTICLE 127V
Effect of continuance overseas
When
a company is, in accordance with the terms of authorization of the Commission
under Article 127U, continued as a body corporate under the laws of the
other jurisdiction to which the authorization relates -
(a) it thereupon ceases to be a company
incorporated under this Law; and
(b) the registrar shall on that date record
that by virtue of paragraph (a) of this Article, it has ceased to be so
incorporated.
ARTICLE 127W
Statements of solvency in respect of continuance
(1) A statement of solvency for the purposes of
an application under Article 127K for continuance as a company
incorporated under this Law shall be signed by each person who is a director of
the applicant and shall state that, having made full inquiry into the affairs
of the applicant, that director reasonably believes -
(a) that the applicant is and, if the
application is granted, will upon the issue to it of a certificate of
continuance be able to discharge its liabilities as they fall due; and
(b) that the value of the assets of the
applicant is and, if the application is granted, will upon the issue of a
certificate of continuance be greater than the value of its liabilities.
(2) A statement of solvency for the purposes of
an application under Article 127T for authorization to seek continuance in
another jurisdiction shall be signed by each person who is a director of the
applicant and shall state that, having made full inquiry into the affairs of
the applicant, that director reasonably believes -
(a) that the applicant is and, if the
application is granted, will upon its incorporation under the laws of the other
jurisdiction be able to discharge its liabilities as they fall due; and
(b) that the value of the assets of the
applicant is and, if the application is granted, will upon its incorporation
under those laws be greater than the value of its liabilities.
(3) A statement of solvency for the purposes of
Article 127K or Article 127T shall also be signed by each person who
is to be a director of the applicant upon its continuance as proposed in the
application and shall state that the person so signing has no reason to believe
that anything in the statement is untrue.
ARTICLE 127X
Orders relating to continuance
(1) The Committee may by Order prescribe for
the purposes of this Part -
(a) the forms of statements of solvency;
(b) any other document or information which is
to be provided on applications relating to continuance within or outside the Island;
(c) the manner in which applicants are to
verify documents or information so provided;
(d) application fees;
(e) conditions to be complied with in respect
of applications under Article 127T to the Commission for authorization to
seek continuance under the laws of other jurisdictions; and
(f) the manner in which records are to be
kept, by the registrar, of bodies which have ceased under Article 127V to
be companies incorporated under this Law.
(2) Without prejudice to the generality of
paragraph (1), conditions to which sub-paragraph (e) of that
paragraph refers -
(a) may relate to matters to be complied with
on or before the making of such applications to the Commission, or after the
grant of such applications; and
(b) may require applicants to appoint and
maintain authorized representatives in the Island
for such periods, whether before or after their applications to the Commission
are determined, as may be prescribed.
ARTICLE 127Y
Offences relating to continuance
Any
person who on or in connexion with an application under this Part knowingly or
recklessly provides to the Commission -
(a) any information which is false, misleading
or deceptive in a material particular; or
(b) any document containing any such
information,
is guilty of an offence.”.
ARTICLE 77
(1) In the heading to Article 128 of the
principal Law, the words “by Committee” shall be deleted.
(2) In Article 128(1) of the principal
Law, the words “, on being satisfied
that there is good reason to do so,” shall be deleted.
(3) In Article 128(3) of the principal
Law, for the amount “£5,000” there shall
be substituted the amount “£10,000”.
ARTICLE 78
For Article 130(3) of the
principal Law there shall be substituted the
following paragraphs -
“(3) A person who, being required under
paragraph (1) to answer any question which is put to him by an inspector -
(a) knowingly or recklessly makes a statement
which is false, misleading or deceptive in a material particular; or
(b) knowingly or recklessly withholds any
information the omission of which makes the information which is furnished
misleading or deceptive in a material particular,
is guilty of an offence.
(4) An answer given by a person to a question
put to him in exercise of the powers conferred by this Article may not be used
in evidence against him in any criminal proceedings except -
(a) proceedings in which he is charged with
knowingly or recklessly making a false statement in the course of being
examined on oath under paragraph (2);
(b) proceedings under paragraph (3); or
(c) proceedings for contempt of court under
paragraph (2) of Article 134.”.
ARTICLE 79
(1) For Article 135(2)(b)(v) of the
principal Law there shall be substituted the
following clauses -
“(v) a relevant supervisory authority, or
(vi) any person whose financial interests appear
to the Committee or the Commission to be affected by the matters dealt with in
the report, whether as a creditor of the company or as a body corporate, or
otherwise; and”.
(2) After Article 135(2) of the principal
Law there shall be added the following
paragraph -
“(3) In this Article, ‘relevant supervisory
authority’ means an authority discharging in a country or territory outside the
Island supervisory functions corresponding to
those of the Commission in respect of bodies corporate.”
ARTICLE 80
In
Article 139 of the principal Law, the words “or to the Committee”
shall be deleted.
ARTICLE 81
(1) In Article 143(1) of the principal Law, after the word “Article” there
shall be inserted the words “127E, 127S,”.
(2) For Article 143(2)(d) of the principal
Law102 there shall be substituted the following sub-paragraph -
“(d) provide for the purchase of the rights of any
members of the company by other members or by the company itself and, in the
case of a purchase by the company itself, the reduction of the company’s
capital accounts accordingly.”.
ARTICLE 82
Article 176(9)
of the principal Law shall be repealed.
ARTICLE 83
In
Article 181(2)(b) of the principal Law, for the words “the belief referred
to in Article 56” substitute the words “the appropriate belief referred to
in Article 55”.
ARTICLE 84
In
Article 196(1) of the principal Law, for the words “there shall be
appointed” there shall be substituted the words “the Commission shall appoint”.
ARTICLE 85
Article 200(2)
of the principal Law shall be repealed.
ARTICLE 86
In
Article 202(6)(c) of the principal Law, for the number “(3)” there shall be
substituted the number “(4)”.
ARTICLE 87
For Article 205 of the
principal Law there shall be substituted the
following Article -
“ARTICLE 205
Registrar’s powers to strike
companies off register
(1) If the registrar has reason to believe that
a company is not carrying on business or is not in operation -
(a) he may send to it a letter inquiring
whether it is carrying on business or is in operation; and
(b) if he receives an answer to the effect that
the company is not carrying on business or is not in operation, or if he does
not within one month after sending the letter receive an answer, he may publish
in the Jersey Gazette and send to the company a notice under paragraph (6).
(2) Where a company does not deliver a return
to the registrar in accordance with Article 71, before 30th June in the
year in which that return is due, the registrar may send to the company a
notice under paragraph (6).
(3) Where in the case of a company (other than
a limited life company) -
(a) its memorandum specifies or its articles
specify a period of time for the duration of the company;
(b) that period has expired; and
(c) a notice in accordance with either of
paragraphs (1) and (2) of Article 144A has not been delivered to the
registrar,
he may publish in the Jersey Gazette
and send to the company a notice under paragraph (6).
(4) If, where a company is being wound up in a
creditors’ winding up, the registrar has reason to believe either that no
liquidator is acting, or that the affairs of the company are fully wound up,
and the returns required to be made by the liquidator have not been made for a
period of six consecutive months, the registrar shall publish in the Jersey
Gazette and send to the company or the liquidator (if any) a notice under
paragraph (6).
(5) If the registrar has reason to believe that
a company which is being wound up summarily has, for a period of six months
failed to comply with paragraph (4) of Article 150, he shall publish
in the Jersey Gazette and send to the company or the liquidator (if any) a
notice under paragraph (6).
(6) A notice to which paragraph (1), (2),
(3), (4) or (5) refers shall state that at the end of the period of three
months following the date of the notice, the name of the company will be struck
off the register and the company will be dissolved unless -
(a) where the notice relates to non-compliance
with a requirement of this Law, that requirement is complied with; or
(b) in any other case, reason is shown by the
company or a member, creditor or liquidator of the company why the company’s
name should not be struck off the registrar and the company should not be
dissolved.
(7) If the conditions in sub-paragraph (a)
or (b) (as the case may be) of paragraph (6) have not been satisfied
before the end of the period mentioned in the notice, the registrar may strike
the company’s name off the register.
(8) On the striking of the company’s name off
the register under paragraph (7), the company shall by operation of this
Article be dissolved; but the liability (if any) of every director and member
of the company shall nevertheless continue and may be enforced as if the
company had not been dissolved.
(9) On striking a company’s name off the
register under paragraph (7), the registrar shall publish notice of that
fact in the Jersey Gazette.
(10) A notice to be sent under this Article to a
company or a liquidator may be sent by post, and in the case of a liquidator
may be addressed to him at his last known place of business.”.
ARTICLE 88
After Article 213 of the
principal Law there shall be inserted the
following Article -
“ARTICLE 213A
Recognition of status of foreign corporations
(1) If at any time -
(a) any question arises whether a body which
purports to have corporate status under or, as the case may be, which appears
to have lost corporate status under the laws of a territory which is not at
that time a recognized State should or should not be regarded as having legal
personality as a body corporate under the law of the Island; and
(b) it appears that the laws of that territory
are at that time applied by a settled court system in that territory,
that question and any other material
question relating to the body shall be determined (and account shall be taken
of those laws) as if that territory were a recognized State.
(2) For the purposes of paragraph (1) -
(a) ‘a recognized State’ is a territory which
is recognized by Her Majesty’s Government in the United Kingdom as a State;
(b) the laws of a territory which is so
recognized shall be taken to include the laws of any part of the territory
which are acknowledged by the federal or other central government of the
territory as a whole; and
(c) a material question is a question (whether
as to capacity, constitution or otherwise) which, in the case of a body
corporate, falls to be determined by reference to the laws of the territory
under which the body is incorporated.
(3) Any registration or other thing done at a
time before the coming into force of this Article shall be regarded as valid if
it would have been valid at that time, had paragraphs (1) and (2) then
been in force.”.
ARTICLE 89
For
Article 216 of the principal Law there shall be substituted the
following Article -
“ARTICLE 216
Accessories and abettors
Any
person who aids, abets, counsels or procures the commission of an offence under
this Law shall also be guilty of the offence and liable in the same manner as a
principal offender to the penalty provided for that offence.”.
ARTICLE 90
In
the First Schedule to the principal Law -
(a) for the items relating to Article 17(4)
and 17(5) there shall be substituted the following items -
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“16(5) Company failing to comply with condition of direction, or to
deliver to registrar copy of notice of direction of Commission or of
withdrawal or amendment of condition
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Level 3
|
Level 2
|
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17(4) Private company
issuing a prospectus
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2 years or a fine; or both
|
|
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17(5) Private company
failing to give written notice to registrar of increase of membership
beyond 30
|
Level 3
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Level 2
|
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17(8) Private company failing to deliver to registrar Act of the
court relieving company from consequences of increasing the number of its
members beyond 30
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Level 3
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Level 2
|
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17(8) Company failing to deliver to registrar copy of direction by
Commission modifying Article 17(2) in its application to the company
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Level 3
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Level 2”;
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(b) for the reference to Article 22(1)
there shall be substituted a reference to Article 22(1A);
(c) in the item relating to Article 22(2),
after the words “engraved on it” there shall be inserted the words “in legible
characters”;
(d) for the item relating to Article 29(3)
there shall be substituted the following item -
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“29(3) Failure to comply with Order of Committee prohibiting the
circulation of a prospectus in the Island,
the circulation of a prospectus outside the Island
by a company, or the procuring by a company (whether in or outside the Island) of the circulation of a prospectus outside the Island
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2 years or
a fine; or both”;
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(e) after the item relating to Article 47(4)
there shall be inserted the following item -
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“49(10) Company failing to comply with requirements
in respect of overseas branch registers
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Level 3
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Level 2”;
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(f) in the item relating to
Article 53(5), for the word “shareholders” there shall be substituted the
word “members”;
(g) in the item relating to Article 54(5),
for the words “shares carrying special rights” there shall be substituted the
words “special rights of members”;
(h) after the item relating to Article 70(3)
there shall be inserted the following items -
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“71(6) Company failing to comply with requirements
for annual returns
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Level 3
|
Level 2
|
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74A(2) Company
failing to record contracts with sole member who is a director
|
Level
3
|
”;
|
(i) after the item relating to Article 88(5)
there shall be inserted the following item -
|
“95A(2) Sole member failing to provide company with
written record of decision
|
Level 3
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”;
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(j) for the item relating to Article 113(6)
there shall be substituted the following items -
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“113E(1) Person
acting as company auditor knowing he is not qualified;
113E(2) Person
failing to give notice of disqualification
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2 years or a fine; or both;
2 years or a fine; or both”;
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(k) after the item relating to Article 127(4)
there shall be inserted the following items -
|
“127Y
|
Person giving
false, misleading or deceptive information in respect of application under
Part XVIIIC
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2 years or a fine; or both
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130(3)
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Person giving false, misleading or deceptive information etc. to an
inspector
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2 years or a fine; or both”.
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ARTICLE 91
The
following enactments shall be revoked -
(a) Paragraph (d) of Article 2 of the
Companies (General Provisions) (Jersey) Order
1992;
(b) the Companies (Application of Share
Premiums) (Jersey) Order 1992;
(c) the Companies (Share Certificates)
(Exemption) (Jersey) Order 1992;
(d) the Companies (Purchase of Own Shares) (Jersey) Regulations 1992;
(e) the Companies (Overseas Branch Registers) (Jersey) Order 1992;
(f) the Companies (Application of Share
Premiums) (Amendment) (Jersey) Order 1994;
(g) the Companies (Qualifications of Auditor) (Jersey) Order 1996;
(h) the Companies (Qualifications of Auditor)
(Amendment) (Jersey) Order 1998.
ARTICLE 92
The
enactments specified in the first column of the Schedule to this Law shall be
amended in the manner shown in the second column of that Schedule.
ARTICLE 93
The
long title to the principal Law shall be amended by deleting the
words “limited liability”.
ARTICLE 94
(1) This Law may be cited as the Companies
(Amendment No. 6) (Jersey) Law 2002.
(2) This Law shall come into force on such day
as the States may by Act appoint and different days may be appointed for
different provisions or different purposes of this Law.
M.N.
DE LA HAYE
Deputy Greffier of the States.
SCHEDULE
(Article 92)
Consequential amendments to other enactments
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(1)
Short title
|
(2)
Extent of amendment
|
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Borrowing (Control) (Jersey) Law
1947
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The long title shall be amended by
inserting after the words “the issue of securities,” the words “the admission
of members of bodies corporate and the continuance on the Island
of bodies incorporated abroad,”.
Article 2 shall be amended -
(a) by
inserting after the word “transactions” in paragraph (1) the words “and
acts”;
(b) by
inserting after sub-paragraph (c) of paragraph (1) the following paragraphs -
“(ca) the
admission of any person to membership, otherwise than by reason of the issue
or transfer of shares, of a body incorporated in the Island;
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|
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(cb) the issue to a body incorporated outside
the Island of a certificate of continuance under Article 127O of the
Companies (Jersey) Law 1991.”.
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