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Jersey Companies Act

COMPANIES (JERSEY) LAW 1991

PART 1

PRELIMINARY

1 Interpretation3

(1) In this Law, unless the context otherwise requires –

“annual return” means the return to be made by a company under Article 71;

“allotment”, in relation to shares, means a transaction by which a person acquires the unconditional right to be included in a company’s register of members in respect of the shares;

“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;4

“articles”, in relation to a company, means its articles of association as originally framed or as altered;

“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;5

“cause” has the meaning assigned to it by the customary law of Jersey;6

“cell” means a cell of a cell company;

“cell company” means a company that is an incorporated cell company or a protected cell company;

“certificate of continuance” means a certificate of continuance issued by the registrar under Article 127O;7

“class of members”, in respect of a protected cell company, includes –

(a) the members of a cell of the company; and

(b) any class of members of a cell of the company;

“Commission” means the Jersey Financial Services Commission established by the Financial Services Commission (Jersey) Law 19988;9

“company” means a company registered under this Law, or an existing company;

“contributory” means a person liable to contribute to the assets of a company pursuant to Article 192;

“court” means the Royal Court;10

“currency” includes foreign currency and any other means of exchange that may be prescribed;

“delivered”, in Articles 200 and 201, includes (in the case of a document which is a notice) given;11

“Désastre Law” means the Bankruptcy (Désastre) (Jersey) Law 199012;

“director” means a person occupying the position of director, by whatever name called;

“dissolved”, in relation to a company, means dissolved under this Law or any other law of Jersey;

“document” includes summons, notice, statement, return, account, order, and other legal process, and registers;

“existing company” means a company registered under the Laws repealed by Article 223;

“external company” means a body corporate which is incorporated outside Jersey and which carries on business in Jersey or which has an address in Jersey which is used regularly for the purposes of its business;

“financial period” means a period for which a profit and loss account of a company is made up in accordance with this Law;

“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;13

“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 or her surname, the name by which he or

she was known before the adoption of the title or his or her succession to it; or

(b) in the case of any person, a former forename or surname which was changed or disused before the person attained the age of 20, or which has been changed or disused for a period of not less than 20 years;14

“guarantee company” means a guarantee company as defined in Article 3G;15

“guarantor member” means a member of a company (whether or not it is a guarantee company) whose liability in his or her capacity as such a member is limited by guarantee, that is to say limited by the memorandum to the amount which the member 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;16

“incorporated cell company” means a company to which Article 3I(1) applies;

“insolvent” means unable to pay debts as they fall due;

“interdict” means a person in respect of whom a curator has been appointed in pursuance of Article 43 of the Mental Health (Jersey) Law 196917, or a corresponding provision of the law of a place outside Jersey;

“liabilities” includes any amount reasonably necessary to be retained for the purpose of providing for any liability or loss which is either likely to be incurred or certain to be incurred but uncertain as to amount or as to the date on which it will arise;

“limited company” means a limited company as defined in Article 3C;18

“limited life company” means a limited life company as defined in Article 3H;19

“limited share” means a share in respect of which liability is limited to the amount unpaid on it;20

“memorandum”, in relation to a company, means its memorandum of association as originally framed or as altered;

“merged company” means a company in respect of which a certificate of incorporation is issued under Article 9, pursuant to Article 127G(1);21

“Minister” means the Minister for Economic Development;

“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;22

“no par value company” means a no par value company as defined in Article 3F;23

“no par value share” means a share which is not expressed as having nominal value;24

“number”, in relation to shares, includes amount, where the context admits of the reference to shares being construed to include stock;

“officer”, in relation to a body corporate, means a director or liquidator; “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 2 of the Schedule to the Collective Investment Funds (Jersey) Law 198825;26

“paid up” includes credited as paid up;

“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 199727;28

“par value company” means a par value company as defined in Article 3E;29

“par value share” means a share which is expressed as having nominal value;30

“personal representative” means the executor or administrator for the time being of a deceased person;

“prescribed” means prescribed by Order made by the Minister;

“printed” includes typewritten and a photocopy of a printed or typewritten document;

“private company” means a private company as defined in Article 3B;31

“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 the inviter’s 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 Jersey or elsewhere to whom the invitation is so communicated does not exceed 50;32

“protected cell company” means a company to which Article 3I(2) applies;

“public company” means a public company as defined in Article 3A;33

“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;

(d) the Institute of Chartered Accountants in Ireland;34

“records” means documents and other records however stored;

“registrar” means the registrar of companies appointed pursuant to Article 196 and “registrar’s seal”, in relation to the registrar, means a seal prepared under Article 197;

“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;35

“share” –

(a) means a share in a body corporate or a cell 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 Article 116(1), it means a share, as defined in sub-paragraph (a) of this definition, to which Article 116(2) refers;

“special resolution” has the meaning given to that expression by Article 90;

“surname”, in the case of a peer or a person usually known by a title which differs from his or her surname, means that title;36

“unlimited share” means a share in respect of which liability is not limited to the amount unpaid on it;37

“variation”, in Articles 52 and 53, includes abrogation;38

“year” means a calendar year.39

(2) References in this Law to a body corporate –

(a) include a body corporate incorporated outside Jersey but do not include a corporation sole;

(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’associations40;

(d) do not include a limited liability partnership registered under the Limited Liability Partnerships (Jersey) Law 199741.42

2 Meanings of “subsidiary”, “wholly-owned subsidiary” and “holding body”43

(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 Minister 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.

2A Further provisions relating to subsidiaries and holding bodies44

(1) The provisions of this Article explain expressions used in Article 2 and otherwise supplement that Article.

(2) In Article 2(1)(a) and (c), 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 Article 2(1)(b), 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 the person’s 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 the person.

(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 or her instructions or with his or her 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 the person’s instructions; and

(b) where the shares are held in connection 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 the person’s 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 the person 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 the person.

PART 2

COMPANY FORMATION AND REGISTRATION

3 Method of formation of a company45

(1) Any 2 or more persons associated for a lawful purpose may apply for the formation of an incorporated public company, with or without limited liability, by signing and delivering to the registrar a memorandum of association that states that the company is to be a public company.

(2) Any person or 2 or more persons associated for a lawful purpose may apply for the formation of an incorporated private company, with or without limited liability, by signing and delivering to the registrar a memorandum of association that states that the company is to be a private company.

(3) The registrar shall not grant an application made under paragraph (2) by more than 30 persons unless the Commission notifies the registrar that, on application made to it and on payment of any prescribed fee, it has satisfied itself that by reason of the nature of the company’s intended activities its affairs may properly be regarded as the domestic concern of its members.

(4) The Commission may give its notification under paragraph (3) subject to such conditions as shall be specified in the approval.

(5) Where it does so, paragraphs (3), (4), (5) and (6) of Article 16 shall apply to the notification, with the necessary amendments, as if the approval were a written notice given under Article 16(2).

(6) A person mentioned in paragraph (1) or paragraph (2) must not be a minor or an interdict.

(7) A public or 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 its 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 its memorandum to such amounts as those members by the memorandum respectively undertake, by way of guarantee and not by reason of holding any share, to contribute to the assets of the company if it is wound up; or

(8) A public or private company may be formed as –

(a) a par value company;

(b) a no par value company; or

(9) A company shall not have a share capital the shares of which include par value shares and no par value shares.

(10) Paragraph (9) is without prejudice to Article 127YA(4) (which relates to the types of cells a cell company may create).

3A Public companies46

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 30th March 1992 by the operation of Article 16(2) (as then in force), and it has not subsequently become a private company.

3B Private companies47

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.

3C Limited companies48

(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.

3D Unlimited companies49

(1) 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

(2) Nothing in this Law shall be taken as prohibiting a company –

(a) from changing any unlimited shares in the company to limited shares in the company; or

(b) from changing any limited shares in the company to unlimited shares in the company.

3E Par value companies50

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

(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.

3F No par value companies51

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.

3G Guarantee companies52

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.

3H Limited life companies53

(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.

3I Cell companies54

(1) A company is an incorporated cell company if its memorandum provides that it is an incorporated cell company.

(2) A company is a protected cell company if its memorandum provides that it is a protected cell company.

(3) A cell company may be –

(a) a public or a private company;

(b) a par value company, a no par value company or a guarantee company; and

(a) Memorandum of association55

The memorandum of a company shall be in the English or French language, and shall be printed. 

The memorandum shall state – 

the name of the company; 

whether it is a public company or a private company; 

whether it is a par value company, a no par value company or a guarantee company; 

the full name and the address of each subscriber who is a natural person; and 

the corporate name and the address of the registered or principal office of each subscriber which is a body corporate. 

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 or her own name and address. 

If  a  memorandum is permitted under  the Electronic Communications

(Jersey) Law 200056 to be delivered under paragraph (1) by way of electronic communication, any memorandum so delivered is not required to be printed nor to be signed in the presence of a witness.57

4A Memorandum of company with shares58

(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 the member’s 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 the member’s 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 the person takes, and

(ii) the number of unlimited shares (if any) of each class which the person takes.

(2) The amount of a par value share may be stated in any unit or part of a unit of any currency.59

(3) If a company is to be registered with shares, no person may subscribe for less than one share.

4B Memorandum of company with guarantor members60

(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 or she is a member or within 12 months after he or she 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 or she ceases to be a member;

(b) payment of the costs, charges and expenses of winding up; and

(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 or she does so as such a member; and

(b) the maximum amount so specified in relation to him or her.

4C Memorandum or articles of company of limited duration61

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.

5 Articles of association62

(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 or her own name and address.

(4) This Article is subject to Article 6.

(5) If articles are permitted under the Electronic Communications (Jersey)

Law 200063 to be delivered under paragraph (1) by way of electronic communication, any articles so delivered are not required to be printed nor to be signed in the presence of a witness.64

6 Standard Table65

(1) The Minister 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.

7 Documents to be delivered to registrar

(1) With the memorandum there shall be delivered to the registrar a statement containing the intended address of the company’s registered office on incorporation and any other prescribed particulars; and the statement shall be signed by or on behalf of the subscribers of the memorandum.

(2) Where a memorandum is delivered by a person as agent for the subscribers, the statement shall specify that fact and the person’s name and address.

(3) Where the company is a public company, the statement shall specify the following particulars with respect to each director –

(a) the director’s present forenames and surname;

(b) any former forenames or surname;

(d) the director’s nationality;

(e) the director’s business occupation (if any); and

(f) the director’s date of birth.66

(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.67

8 Registration68

(1) If, on an application for the formation of a company, the registrar is of the opinion that the formation of the company would not be in the public interest, the registrar must refer the application to the court.

(2) If an application is referred to the court in accordance with paragraph (1) or if the court calls for an application to be referred to it, the court may –

(a) authorize the registration of the memorandum and any articles of the company; or

(b) if it considers that the formation of the company would not be in the public interest, refuse to authorize the registration of its memorandum and any articles.

(3) Where –

(a) the registrar is satisfied that all the requirements of this Law in respect of the registration of a company have been complied with; and

(b) if the application for the formation of the company has been considered by the court, the registrar has received an Act of the court authorizing the registration, the registrar shall register the memorandum and any articles of the company delivered to the registrar under Article 5.

9 Effect of registration

(1) On the registration –

(a) of a company’s memorandum; or

(b) of a company under Article 127G(1), the registrar shall issue a certificate that the company is incorporated.69

(2) The certificate shall be signed by the registrar and sealed with the registrar’s seal.

(3) From the date of incorporation mentioned in the certificate the subscribers of the memorandum, together with such other persons who may from time to time become members of the company, shall be a body corporate having the name contained in the memorandum capable forthwith of exercising all the functions of an incorporated company, but with such liability on the part of its members to contribute to its assets as is provided by this Law or any other enactment in the event of its being wound up.

(4) If the memorandum states that the company is a public company or a private company the certificate shall so state and if the memorandum also states that the company is an incorporated cell company or a protected cell company the certificate shall also so state.70

(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, or that it is an incorporated cell company or a protected cell company, that it is such a company.71

(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.72

10 Effect of memorandum and articles

(1) Subject to the provisions of this Law, the memorandum and articles, when registered, bind the company and its members to the same extent as if they respectively had been signed and sealed by the company and by each member, and contained covenants on the part of the company and each member to observe all the provisions of the memorandum and articles.

(2) Money payable by a member to the company under the memorandum or articles is a debt due from the member to the company.

11 Alteration of memorandum and articles73

(1) Subject to the provisions of this Law, a company may by special resolution alter its memorandum or articles.

(2) An alteration in the memorandum or articles of a company –

(a) may provide that upon –

(i) the expiration of a period of time, or

(ii) the happening of some other event, the company is to be wound up and dissolved; or

(b) may amend or delete any such provision.

(3) Notwithstanding anything in the memorandum or articles, a member of a company is not bound by an alteration made in the memorandum or articles after the date on which the member became a member, if and so far as the alteration –

(a) requires the member to take or subscribe for more shares than the number held by the member at the date on which the alteration is made; or

(b) in any way increases the member’s liability as at that date to contribute to the company’s share capital or otherwise to pay money to the company, unless the member agrees in writing, either before or after the alteration is made, to be bound by it.

(4) The power conferred by this Article to alter the memorandum or articles shall not be exercisable by an existing company –

(a) so as to shorten a period of time by which the company’s existence is limited, or to provide for its winding up and dissolution on the happening of an event other than the expiration of a period of time; or

(b) so as to alter rights attached to a class of shares which could not have been altered under the Laws repealed by Article 223, unless the alteration is agreed to by all of the members or approved by the court.74

12 Copies of memorandum and articles for members

(1) A company shall, on being so required by a member, send to the member a copy of the memorandum and of the articles subject to payment of such sum (if any), not exceeding the prescribed maximum, as the company may require.

(2) If a company fails to comply with this Article, it is guilty of an offence.

PART 3

NAMES

13 Requirements as to names

(1) The registrar may refuse to register –

(a) the memorandum; or

(b) a special resolution changing the name of a company, where the name to be registered is in the registrar’s opinion in any way misleading or otherwise undesirable.

(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”.75

(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.76

(4) Where the registrar considers that it would be convenient to do so and not misleading, the registrar may in any reference to a company in a document issued under this Law use an abbreviation permitted by this Article or Article 127YS.77

14 Change of name

(1) Subject to Article 13, a company may, by special resolution, change its name.

(2) Where a company changes its name under this Article, the registrar shall enter the new name on the register in place of the former name, and shall issue under Article 9 a certificate of incorporation altered to meet the circumstances of the case; and the change of name has effect from the date on which the altered certificate is issued.78

(3) Where, at the time of the passing of the special resolution enabling a company to change its name, the company has its name inscribed in the Public Registry as being the holder of, or having an interest in, immovable property in Jersey, the company shall deliver to the Judicial Greffier a copy of the altered certificate of incorporation within 14 days after it is issued and the Judicial Greffier shall cause the new name to be registered in the Public Registry.

(4) A company which fails to comply with paragraph (3) is guilty of an offence.

(5) A change of name by a company under this Law does not affect any rights or obligations of the company or render defective any legal proceedings by or against it; and any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name.

15 Power to require change of name

(1) If, in the opinion of the registrar, the name by which a company is registered is misleading or otherwise undesirable, the registrar may direct the company to change it.

(2) The direction, if not made the subject of an application to the court under paragraph (3), shall be complied with within 3 months from the date of the direction or such longer period as the registrar may allow.

(3) The company may within 21 days from the date of the direction apply to the court to set it aside; and the court may set the direction aside or confirm it.

(4) If the court confirms the direction, it shall specify a period not being less than 28 days within which it shall be complied with and may order the registrar to pay the company such sum (if any) as it thinks fit in respect of the expense to be incurred by the company in complying with the direction.

(5) A company which fails to comply with a direction under this Article is guilty of an offence.

(6) Expenses to be defrayed by the registrar under this Article shall be paid out of money provided by the States.

PART 4

PUBLIC COMPANIES AND PRIVATE COMPANIES79

16 Change of status of public company80

(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.

17 Change of status of private company81

(1) A private company which has at least 2 members may become a public company by altering its memorandum to state that it is a public company.

(2) If –

(a) a private company, otherwise than in accordance with a direction under Article 16(2), 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.82

(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 paragraph (2)(b) 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 paragraph (2)(a), 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 action, it may grant relief on such terms as seem to it expedient.83

(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.

17A Calculation of number of members84

(1) In determining for the purposes of Article 16 and Article 17(2) 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 2 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.

17B Notice of change of status85

Where a company changes its status in accordance with Article 16 or Article 17(1) the registrar shall, upon delivery to him or her 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.

17C Alteration of numbers86

The Minister may by Order amend Article 3(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 Minister may have substituted by an Order under this Article.87

PART 5

CORPORATE CAPACITY AND TRANSACTIONS

18 Capacity of company

(1) The doctrine of ultra vires in its application to companies is abolished and accordingly the capacity of a company is not limited by anything in its memorandum or articles or by any act of its members.

(2) This Article does not affect the capacity of an existing company in relation to anything done by it before this Article comes into force.

(3) Unless and until otherwise resolved by special resolution the authority of the directors of an existing company shall not include the exercise of any power which the company did not have when this Article came into force.

19 No implied notice of public records

No person is deemed to have notice of any records by reason only that they are made available by the registrar, or by a company, for inspection.

20 Form of contracts

(1) A person acting under the express or implied authority of a company may make, vary or discharge a contract or sign an instrument on behalf of the company in the same manner as if the contract were made, varied or discharged or the instrument signed by a natural person.

(2) Nothing in this Article shall affect any requirement of law that a contract be passed before the court.

21 Transactions entered into prior to corporate existence

(1) Where a transaction purports to be entered into by a company, or by a person as agent for a company, at a time when the company has not been formed, then, unless otherwise agreed by the parties to the transaction, the transaction has effect as one entered into by the person purporting to act for the company or as agent for it, and the person is personally bound by the transaction and entitled to its benefits.

(2) A company may, within such period as may be specified in the terms of the transaction or if no period is specified, within a reasonable time after it is formed, by act or conduct signifying its intention to be bound thereby, adopt any such transaction and it shall thenceforth be bound by it and entitled to its benefits and the person who entered into the transaction shall cease to be so bound and entitled.

22 Company seals88

(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 or she is guilty of an offence.

23 Official seal for use abroad89

(1) A company which has a common seal and engages in business outside Jersey may, if authorized by its articles, have for use in any country, territory or place outside Jersey 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 Jersey may have duplicates of that seal.

(2) A document to which an official seal for use outside Jersey 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 Jersey 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.

24 Official seal for securities90

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.

PART 6

MEMBERSHIP AND SHARES

25 Definition of “member”

(1) The subscribers of a company’s memorandum are deemed to have agreed to become members of the company, and on its registration shall be entered as such in its register of members.

(2) Except as provided by Article 127YQ (which relates to the members of protected cell companies), every other person who agrees to become a member of a company, and whose name is entered in its register of members, is a member of the company.91

26 Membership of holding company

(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.92

(2) Paragraph (1) does not prevent a subsidiary which was, on 30th 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

(a) it shall not acquire further shares in the holding company, except as provided in paragraph (3A).93

(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.94

(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.95

(4) Nothing in this Article applies where the subsidiary is concerned as personal representative, or where it is concerned as trustee, unless in the latter case the holding company or a subsidiary of it is beneficially interested under the trust and is not so interested only by way of security.

27 Minimum membership for carrying on business

(1) If a public company carries on business without having at least 2 members and does so for more than 6 consecutive months (whether or not those 6 months began before this Article came into force) a person who, for the whole or any part of the period that it so carries on business after those 6 months –

(a) is a member of the company; and

(b) knows that it is carrying on business with only one member, is liable (jointly and severally with the company) for the payment of the company’s debts contracted during the period or that part of it.96

(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.97

28 Prohibition of minors and interdicts

A minor or an interdict may not become a member of a company unless his or her rights of membership were transmitted to the person on the death of the holder thereof.98

PART 7

PROSPECTUSES

29 Prospectuses

(1) The Minister may by Order prohibit all or any of the following things, namely –

(a) the circulation by any person of a prospectus in Jersey;

(b) the circulation by a company of a prospectus outside Jersey; and

(c) the procuring (whether in or outside Jersey) by a company of the circulation of a prospectus outside Jersey, except in such circumstances and subject to such conditions as may be specified in the Order.99

(2) Such an Order may provide for the payment of fees for the purposes of the Order.100

(3) Any person who fails to comply with any provision of any such Order and, where the offence is committed by a body corporate, every officer of the body corporate which is in default is guilty of an offence.

(6) An invitation to the public to acquire or apply for securities in a company shall, if the securities are not fully paid or if the invitation is first circulated within 6 months after the securities were allotted, be deemed to be a prospectus circulated by the company unless it is shown that the securities were not allotted with a view to their being the subject of such an invitation.

30 Compensation for misleading statements in prospectus

(1) A person who acquires or agrees to acquire a security to which a prospectus relates and suffers a loss in respect of the security as a result of the inclusion in the prospectus of a statement of a material fact which is untrue or misleading, or the omission from it of the statement of a material fact, shall, subject to Article 31, be entitled to compensation –

(a) in the case of securities offered for subscription, from the body corporate issuing the securities and from each person who was a director of it when the prospectus was circulated;

(b) in the case of securities offered otherwise than for subscription, from the person making the offer and, where that person is a body corporate, from each person who was a director of it when the prospectus was circulated;

(c) from each person who is stated in the prospectus as accepting responsibility for the prospectus, or any part of it, but, in that case, only in respect of a statement made in or omitted from that part; and

(d) from each person who has authorized the contents of, or any part of, the prospectus.

(2) Nothing in this Article shall make a person responsible by reason only of giving advice as to the contents of a prospectus in a professional capacity.

(3) This Article does not affect any liability which any person may incur apart from this Article.

(4) This Article applies only to a prospectus first circulated after the Article comes into force.

31 Exemption from liability to pay compensation

A person shall not be liable under Article 30 if the person satisfies the court –

(a) that the prospectus was circulated without the person’s consent;

(b) that, having made such enquiries (if any) as were reasonable, from the circulation of the prospectus until the securities were acquired, the person reasonably believed that the statement was true and not misleading or that the matter omitted was properly omitted;

(c) that, after the circulation of the prospectus and before the securities were acquired the person, on becoming aware of the untrue or misleading statement or of the omission of the statement of a material fact, took reasonable steps to secure that a correction was brought to the notice of persons likely to acquire the securities;

(d) in the case of a loss caused by a statement purporting to be made by a person whose qualifications give authority to a statement made by the person which was included in the prospectus with the person’s consent, that when the prospectus was circulated the person reasonably believed that the person purporting to make the statement was competent to do so and had consented to its inclusion in the prospectus; or

(e) that the person suffering the loss acquired or agreed to acquire the securities knowing that the statement was untrue or misleading or that the matter in question was omitted.

32 Recovery of compensation

(1) A person is not debarred from obtaining compensation from a company by reason only of the person holding or having held shares in the company or any right to apply or subscribe for shares in the company or to be included in the company’s register of members in respect of shares.

(2) A sum due from a company to a person who has acquired or agreed to acquire shares in the company being a sum due as compensation for loss suffered by the person in respect of the shares, shall (whether or not the company is being wound up and whether the sum is due under Article 30 or otherwise) be treated as a sum due to the person otherwise than in the person’s character of a member.

33 Criminal liability in relation to prospectuses

If a prospectus is circulated with a material statement in it which is untrue or misleading or with the omission from it of the statement of a material fact, any person who authorized the circulation of the prospectus is guilty of an offence unless he or she satisfies the court that he or she reasonably believed, when the prospectus was circulated, that the statement was true and not misleading or that the matter omitted was properly omitted.

PART 8

SHARE CAPITAL

34 Nature and numbering of shares

(1) The shares or other interests of a member of a company are, subject to Article 42, transferable in the manner provided by the company’s articles.

(2) Each share in a company shall be distinguished by its appropriate number, except that, if and so long as all the issued shares in a company or all the issued shares in it of a particular class –

(a) are fully paid and carry the same rights in all respects; or

(b) are evidenced by certificates issued in accordance with Article 50, each certificate being distinguished by a number recorded in the register of members, none of those shares need have a distinguishing number.

35 Commissions and discounts barred

(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 the person’s 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.101

(2) Paragraph (1) applies whether the shares or money be so applied by being added to the purchase money of property acquired by the company or to the contract price of work to be executed for the company, or the money be paid out of the nominal purchase money or contract price, or otherwise.

(3) Nothing in this Article or Article 36 shall make unlawful a payment made or remuneration given by a company to a broker making the broker’s usual charges for services rendered to the company.

(4) A vendor to, or promoter of, or other person who receives payment in money or shares from, a company has, and is deemed always to have had, power to apply any part of the money or shares so received in payment of a commission, the payment of which, if made directly by the company, would have been lawful under this Article and Article 36.

36 Commissions

(1) A company may pay a commission to a person in return for the person 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, if the following conditions are satisfied –

(a) the payment of the commission is authorized by the company’s articles;

(b) the commission does not exceed 10% of the price at which the shares are allotted or the amount or rate authorized by the articles, whichever is less; and

(c) in the case of a public company, the amount or rate per cent of commission, and the number of shares which persons have agreed for a commission to subscribe absolutely are disclosed –

(i) where the shares are offered for subscription by a prospectus, in that prospectus, or

(ii) where the shares are not offered for subscription by a prospectus, in a statement signed by every director of the company or by the director’s agent authorized in writing and delivered (before payment of the commission) to the registrar.102

(2) If default is made in complying with paragraph (1)(c) as regards delivery to the registrar of the statement, the company and every officer of it who is in default is guilty of an offence.

(2A) In this Article, “shares” include securities which confer (conditionally or unconditionally) on the holders the right to acquire shares in a company.103

37 Provision for different amounts to be paid on shares

A company, if so authorized by its articles, may –

(a) make arrangements on the allotment of shares for a difference between the shareholders in the amounts and times of payments of calls or instalments payable on their shares;

(b) accept from a member the whole or a part of the amount remaining unpaid on shares held by the member, although no part of that amount has been called up or become payable; and

(c) pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.104

38 Alteration of capital of par value companies105

(1) A par value company may, by altering its memorandum –

(a) increase its share capital by creating new shares of such amount and in such currency or currencies as it thinks expedient;

(b) consolidate and divide all or any of its shares (whether issued or not) into shares of larger amount than its existing shares;

(c) convert all or any of its fully paid shares into stock, and reconvert that stock into fully paid shares of any denomination;

(d) subject to paragraph (2), subdivide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum;

(e) subject to Article 38B, convert any of its fully paid shares the nominal value of which is expressed in one currency into fully paid shares of a nominal value of another currency;

(ea) in the case to which paragraph (1A) refers, denominate the nominal value of its issued or unissued shares in units of the currency into which they have been converted; and

(f) cancel shares which, at the date of the passing of the resolution to cancel them, have not been taken or agreed to be taken by any person, and diminish the amount of the company’s share capital by the amount of the shares so cancelled.106

(1A) Paragraph (1)(ea) refers to the case in which –

(a) the nominal value of the shares concerned is expressed in one currency;

(b) those shares are then converted (whether under subparagraph (e) of that paragraph or otherwise) into shares of a nominal value of another currency; and

(2) In a sub-division under paragraph (1)(d) the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived.

(4) The powers conferred by this Article shall be exercised by the company by special resolution.

(5) A cancellation of shares under this Article does not for the purposes of this Law constitute a reduction of share capital.

38A Alteration of capital of no par value companies108

A no par value company may, by special resolution, alter its memorandum –

(a) to increase or reduce the number of shares that it is authorized to issue;

(b) to consolidate all or any of its shares (whether issued or not) into fewer shares; or

38B Rate of exchange for currency conversions109

A conversion under Article 38(1)(e) 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.

39 Share premium accounts for par value companies110

(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;

(d) in the redemption or purchase of shares under Part 11.

(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.

39A Stated capital accounts for no par value companies111

(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;

(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.

39B Relief from requirements to make transfers to share premium accounts and stated capital accounts112

(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 Article 39(1), 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 Article 39A(3)(a) and (b), 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 Minister may by Order make additional provision for relieving companies from the provisions of Articles 39 and 39A.

40 Power to issue fractions of shares113

(1) Despite Article 4A(3) (which provides that a person may not subscribe for less than one share), a company registered with shares may issue a fraction of a share if it is authorized to do so by its articles.

(2) If the holder of a fraction of a share acquires a further fraction of a share of the same class, the fractions shall be treated as consolidated.

(3) The rights of a member in respect of the holding of a fraction of a share in a company shall be as provided in the articles of the company.

(3) Except as otherwise provided by this Article and the articles of the company, this Law applies to a fraction of a share in the company as it applies to a whole share in the company.

40A Conversion of shares in par value companies114

(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

(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

(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.

40B Conversion of shares in no par value companies115

(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;

(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.

PART 9

REGISTER OF MEMBERS AND CERTIFICATES

41 Register of members

(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 or she is a member because he or she holds shares in the company –

(i) the number of shares held by the member,

(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 the member, and

(iv) in the case of shares which are not fully paid, the amount remaining unpaid on each share;

(i) the fact that he or she is a member in that capacity,

(ii) the amount which the guarantor member has undertaken by reason of his or her 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 or she belongs;

(d) in every case, the date on which he or she 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.116

(2) Where the company has converted any of its shares into stock, the register shall show the amount and class of stock held by each member instead of the amount of shares and the particulars relating to shares specified in paragraph (1).117

(3) If a company fails to comply with this Article, the company and every officer of it who is in default is guilty of an offence.

(4) An entry relating to a former member of the company may be removed from the register after 10 years from the date on which the member ceased to be a member.

(5) Without prejudice to any lesser period of limitation or prescription, liability incurred by a company from the making or deletion of an entry in its register of members, or from failure to make or delete any such entry, is not enforceable more than 10 years after the date on which the entry was made or deleted or the failure first occurred.

42 Transfer and registration

(1) Notwithstanding anything in its articles, a company shall not register a transfer of shares in the company unless –

(a) an instrument of transfer in writing has been delivered to it;

(b) the transfer is exempted from the provisions of this paragraph pursuant to paragraph (6); or

(2) Paragraph (1) does not prejudice a power of the company to register as a shareholder a person to whom the right to shares in the company has been transmitted by operation of law.

(3) A transfer of the share or other interest of a deceased member of a company made by the deceased member’s personal representative, although the personal representative is not a member of the company, is as valid as if the personal representative had been a member at the time of the execution of the instrument of transfer.

(4) On the application of the transferor of a share or interest in a company, the company shall enter in its register of members the name of the transferee in the same manner and subject to the same conditions as if the application for the entry were made by the transferee.

(5) If a company refuses to register a transfer of shares the company shall, within 2 months after the date on which the transfer was lodged with it, give to the transferor and transferee notice of the refusal.

(6) The Minister may by Order provide for exemptions from the provisions of paragraph (1), either as regards specified companies or classes of companies or as regards specified shares or classes of shares.119

43 Certification of transfers

(1) For the purpose of this Article –

(a) an instrument of transfer shall be deemed to be certificated if it bears the words “certificate lodged” or words to the like effect;

(b) the certification shall be deemed to be made by a company if –

(i) the person issuing the instrument is a person authorized to issue certificated instruments of transfer on the company’s behalf, and

(ii) the certification is signed by a person authorized to certificate transfers on behalf of the company or by an officer or servant of the company or of a body corporate so authorized;

(i) it purports to be authenticated by the person’s signature or initials (whether handwritten or not), and

(ii) it is not shown that the signature or initials was not or were not placed there by the person or by any other person authorized to use the signature or initials for the purpose of certificating instruments of transfer on behalf of the company.

(2) The certification by a company of an instrument of transfer of any shares or debentures in a company shall be taken as a representation by the company to any person acting on the faith of the certification that there have been produced to the company such documents as on their face show a prima facie title to the shares or debentures in the transferor named in the instrument of transfer but not as a representation that the transferor has any title to the shares or debentures.

(3) Where a person acts on the faith of a false certification by a company made negligently the company is under the same liability to the person as if the certification had been made fraudulently.

(4) Where a certification is expressed to be limited to 42 days or any longer period from the date of certification, the company is not, in the absence of fraud, liable in respect of the registration of any transfer of shares or debentures comprised in the certification after the expiration of the period so limited if the instrument of transfer has not, within that period, been lodged with the company for registration.

44 Location of register of members

(1) A company’s register of members shall be kept at its registered office or, if it is made up at another place in Jersey, at that place.

(2) A company shall give notice to the registrar of the place where its register of members is kept, and of any change of that place.

(3) The notice need not be given if the register has at all times since it came into existence (or, in the case of a register in existence when this Article comes into force, at all times since then) been kept at the company’s registered office.

(4) If a company fails for 14 days to comply with paragraph (2), the company is guilty of an offence.

45 Inspection of register

(1) The register of members shall during business hours be open to the inspection of a member of the company without charge, and of any other person on payment of such sum (if any), not exceeding the prescribed maximum, as the company may require.

(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.120

(3) If inspection under this Article is refused, or if a copy so required is not made available within the proper period, the company is guilty of an offence.

(4) In the case of refusal or default, the court may by order compel an immediate inspection of the register, or direct that the copies required be made available to the person requiring them.

46 Declaration

(1) The declaration required under Article 45(2) or Article 71(3) shall be made in writing under oath and shall state the name and address of the applicant and contain an undertaking by the applicant that no information contained in the copy of the register made available to the applicant will be used by the applicant, or by any person who acquires any such information on behalf of the applicant, or directly or indirectly from the applicant or any such person, save for the following purposes –

(a) to call a meeting of members;

(b) to influence the voting by members of the company at any such meeting;

(c) an offer to acquire all the shares, or all the shares of any class in the company other than shares in which the applicant has directly or indirectly a beneficial interest; or

(d) any other purpose which may be prescribed.121

(2) Where the applicant is a body corporate the declaration shall be made by a director of the body corporate and the address given shall be its address for service and where the applicant is an individual the declaration shall state the applicant’s residential address.

(3) If any such information is used in a manner inconsistent with the terms of a declaration under paragraph (1) the person who made the declaration is guilty of an offence.

47 Rectification of share register

(1) If –

(a) the name of a person, the number of shares held, the class of shares held, or the amount paid up on the shares, or the class of members to which the person belongs is, without sufficient reason, entered in or omitted from a company’s register of members; or

(b) there is a failure or unnecessary delay in entering on the register the fact of a person having ceased to be a member, the person aggrieved, or a member of the company, or the company, may apply to the court for rectification of the register.122

(2) The court may refuse the application or may order rectification of the register and payment by the company of any damages sustained by a party aggrieved.

(3) On an application under paragraph (1) the court may decide any question necessary or expedient to be decided with respect to the rectification of the register.

(4) Where an order is made under this Article, the company in relation to which the order is made shall cause the relevant Act of the court to be delivered to the registrar for registration within 14 days after the making of the order; and in the event of failure to comply with this paragraph the company is guilty of an offence.

48 Trusts not to be entered on register

(1) No notice of a trust, express, implied or constructive, shall be receivable by the registrar or entered on the register of members.

(2) The register of members is prima facie evidence of any matters which are by this Law directed or authorized to be inserted in it.

49 Overseas branch registers123

(1) A public company which transacts business in any country, territory or place outside Jersey 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 or she 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

(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 Minister may by Order –

(a) extend the provisions of this Article to private companies, with such modifications (if any) as he or she may specify in the Order;

(b) modify the provisions of this Article in respect of any kind of company; or

(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.

50 Share certificates124

(1) Subject to this Article and Article 51A, every company shall –

(a) within 2 months after the allotment of any of its shares; and

(b) within 2 months after the date on which a transfer of any of its shares is lodged with the company, complete and have ready for delivery the certificates of all shares allotted or transferred unless the conditions of allotment of the shares otherwise provide.125

(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.126

(3) The Minister 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

(5) In the event of failure to comply with paragraph (1), the company and every officer of it who is in default is guilty of an offence.

(6) If a company to which a notice has been given by a person entitled to have the certificates delivered to the person requiring it to make good a failure to comply with paragraph (1) fails to make good the failure within 10 days after the service of the notice, the court may, on the application of that person, make an order directing the company and any officer of it to make good the failure within a time specified in the order; and the order may provide that all costs of and incidental to the application shall be borne by the company or by an officer of it responsible for the failure.

51 Certificate to be evidence of title

(1) A certificate sealed by the company, or signed either by two of its directors or by one of its directors and its secretary, specifying any shares held by a member is prima facie evidence of the member’s title to the shares.128

(2) Paragraph (1) applies notwithstanding any subsequent change of the currency in which the nominal amount of the shares to which the certificate relates is expressed.129

51A Uncertificated securities130

(1) Notwithstanding any other provision in this Law, the Minister may by Order provide in accordance with this Article for title to securities or to any specified class or description of securities to be evidenced and transferred without a written instrument.

(2) An Order under this Article may provide for any of the following matters –

(a) procedures for recording and transferring title to securities, and with respect to the keeping of the register of members in relation to such securities;

(b) the regulation of those procedures and the persons responsible for or involved in their operation;

(c) provision with respect to the rights and obligations of persons in relation to securities dealt with under such procedures;

(d) the giving of effect to –

the transmission of title to securities by operation of law, 

any restriction on the transfer of title to securities arising by virtue of the provisions of any enactment, instrument, court order or agreement, and 

any power conferred on a person, by any provision to which clause (ii) refers, to deal with securities on behalf of the person entitled;

(e) in relation to the persons responsible for or involved in the operation of the procedures to which sub-paragraph (a) refers, provision as to –

the consequences of their insolvency, bankruptcy or incapacity, and 

the transfer by or from them to other persons of their functions in relation to those procedures, and

(f) for any of the purposes in sub-paragraphs (a) to (e) –

the modification or exclusion of any provisions of any enactment or rule of law, 

the application (with such modifications, if any, as the Minister may think appropriate) of any provisions of this Law creating criminal offences,

(iii) the application (with such modifications, if any, as the Minister may think appropriate) of any other provisions of any enactment (not being provisions creating criminal offences),

(iv) the requiring of the payment of fees of such amounts as are specified in the Order or are determined in accordance with the Order, or the enabling of persons specified in the Order to require payment of such fees, and

(v) the empowering of the Minister to delegate to any person willing to discharge them any of the Minister’s functions under the Order.

(3) An Order made under this Article shall contain such safeguards as appear to the Minister to be appropriate for the protection of investors.

(4) In this Article –

(a) “securities” means –

(i) shares, stock, debentures, debenture stock, loan stock and bonds,

(ii) warrants entitling the holders to subscribe for any securities specified in clause (i),

(iii) units in a collective investment fund within the meaning of the Collective Investment Funds (Jersey) Law 1988131, and

(iv) other securities of any description;

(b) references to title to securities include any legal, equitable or other interest in securities; and

PART 10

CLASS RIGHTS

52 Variation of class rights132

(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 Article 11(3); and

(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 2/3rds 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 2/3rds 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 2/3rds 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.

53 Members’ right to object to variation133

(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 1/10th 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 1/10th 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 1/10th of the total liability of all the members of that class, may apply to the court to have the variation cancelled.134

(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.135

(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.136

(3) Notice signed by or on behalf of the applicants that an application to the court has been made under this Article shall be given by or on behalf of the applicants to the registrar within 7 days after it is made.

(4) The court after being satisfied that paragraph (3) has been complied with, and after hearing the applicant and any other persons who appear to the court to be interested in the application, may, if satisfied having regard to all the circumstances, that the variation would unfairly prejudice the members of the class, disallow the variation and shall, if not so satisfied, confirm it.137

(5) The company shall, within 14 days after the making of an order by the court under this Article deliver the relevant Act of the court to the registrar; and if default is made in complying with this provision, the company is guilty of an offence.

54 Registration of particulars of special rights

(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.138

(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 or she does not have the same rights to dividends as members previously admitted.139

(3) Where the rights of members of a public company are varied otherwise than by an amendment of the company’s memorandum or articles or by a resolution or agreement subject to Article 100, the company shall within one month from the date on which the variation is made deliver to the registrar a statement containing particulars of the variation.140

(4) Where a public company, otherwise than by an amendment, resolution or agreement mentioned in paragraph (3), assigns a name or other designation, or a new name or other designation, to a class of rights of membership, it shall within one month from doing so deliver to the registrar a notice giving particulars of the name or designation so assigned.141

(5) If a company fails to comply with this Article, the company and every officer of it who is in default is guilty of an offence.

PART 11

REDEMPTION AND PURCHASE OF SHARES

55 Power to issue redeemable shares142

(1) Except as otherwise provided by this Article, 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 that are to be redeemed, or are liable to be redeemed, either in accordance with their terms or at the option of the company or of the shareholder.

(2) A company shall not issue redeemable limited shares at a time when there are no issued shares of the company that are not redeemable.

(3) A company shall not convert existing issued non-redeemable limited shares into redeemable shares if as a result there are no issued shares of the company that are not redeemable.

(4) The redeemable limited shares of a par value company (not being an open-ended investment company) shall not be capable of being redeemed unless they are fully paid up.

(5) The redeemable limited shares of a par value company (not being an open-ended investment company) shall not be capable of being redeemed except 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 a premium on redemption –

(i) out of any share premium account,

(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.

(6) The redeemable limited shares of a no par value company (not being an open-ended investment company) shall not be capable of being redeemed unless they are fully paid up.

(7) The redeemable limited shares of a no par value company (not being an open-ended investment company) shall not be capable of being redeemed except –

(a) out of any stated capital account;

(b) out of its realised capital and revenue profits less its realised capital and revenue losses;

(d) out of the proceeds of a fresh issue of shares made for the purposes of the redemption; or

(e) 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.

(8) 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) are not capable of being redeemed unless all the directors of the company who authorize the redemption make a statement in the form specified by paragraph (9).

(9) The statement shall state that the directors of the company authorising the redemption, having made full enquiry into the affairs and prospects of the company, have formed the opinion –

(a) that, immediately following the date on which the payment is proposed to be made, the company will be able to discharge its liabilities as they fall due; and

(b) that, having regard to the prospects of the company and to the intentions of the directors with respect to the management of the company’s business and to the amount and character of the financial resources that will in their view be available to the company, the company will be able to continue to carry on business and will be able to discharge its liabilities as they fall due until the expiry of the period of one year immediately following the date on which the payment is proposed to be made or until the company is dissolved under Article 150, whichever first occurs.

(10) A director who makes a statement under paragraph (8) without having reasonable grounds for the opinion expressed in the statement is guilty of an offence.

(11) 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.

(12) The redeemable limited shares of an open-ended investment company (whether it is a par value company or a no par value company) shall not be capable of being redeemed unless –

(a) they are fully paid up;

(b) they are redeemed at a price not exceeding their net asset value; and

(c) the directors have reasonable grounds for believing that, immediately following the date on which the payment is proposed to be made, the company will be able to discharge its liabilities as they fall due.

(13) A special resolution passed for the purpose of paragraph (5)(b)(iii) or of paragraph (7)(e) may have effect in relation to a particular redemption of shares or generally but shall not be capable of sanctioning a redemption effected more than 18 months after the date the resolution is passed.

(14) If limited shares are redeemed wholly or partly out of a par value company’s profits, there must be transferred out of profits out of which the company may make a distribution under Article 115 to a capital redemption reserve a sum equal to the amount of profits applied towards the payment of the nominal value of the shares redeemed.

(15) If limited shares of a par value company are redeemed wholly or partly out of the proceeds of a fresh issue of shares and the aggregate amount of those proceeds is less than the aggregate nominal value of the shares redeemed, the amount of the difference must be transferred out of profits out of which the company may make a distribution under Article 115 to the capital redemption reserve.

(16) 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.

(17) 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.

(18) 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.

(19) Limited preference shares issued by a company before Article 223 came into force that could but for the repeal of Article 5 of the Companies (Supplementary Provisions) (Jersey) Law 1968143 have been redeemed under that Article shall be subject to redemption either in accordance with that Article or in accordance with this Law.

(20) 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.

57 Power of company to purchase its own limited shares144

(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 paragraph (4)(b), 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.

58 Financial assistance by company for purchase of its shares145

(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.146

(2) This Article does not prohibit –

(a) assistance given in the ordinary course of the company’s business;

(b) assistance given by means of any distribution of the company’s assets to its members, lawfully made;

(c) the provision by a company in good faith in the interests of the company of assistance for the purposes of an employees’ share scheme; or

(d) the making by a company of loans to persons (other than directors) employed in good faith by the company with a view to enabling those persons to acquire fully paid shares in the company or its holding company to be held by them by way of beneficial ownership.

(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 who are to authorize the giving of the assistance make a prior statement that, having made full enquiry into the affairs and prospects of the company, they have formed the opinion –

(i) that, immediately following the date on which the assistance is proposed to be given, the company will be able to discharge its liabilities as they fall due, and

(ii) that, having regard to the prospects of the company and to the intentions of the directors with respect to the management of the company’s business and to the amount and character of the financial resources that will in their view be available to the company, the company will be able to continue to carry on business and will be able to discharge its liabilities as they fall due until the expiry of the period of one year immediately following the date on which the assistance is proposed to be given or until the company is dissolved under Article 150, whichever first occurs.147

(4) For the purposes of this Article, an employees’ share scheme is a scheme for encouraging or facilitating the holding of shares or debentures in a company by or for the benefit of –

(a) the bona fide employees or former employees of the company, the company’s subsidiary or holding company or a subsidiary of the company’s holding company; or

(b) the wives, husbands, widows, widowers or minor children or minor step-children of such employees or former employees.

(5) If a company gives financial assistance in contravention of this Article the company and any officer of it who is in default is guilty of an offence.

59 Power of States to amend Part 11148

The States may amend this Part by Regulations.

PART 12

REDUCTION OF CAPITAL

60 Forfeiture of shares149

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.

61 Reduction of capital accounts150

(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 maintained in respect of unlimited shares shall not be subject to confirmation by the court.151

(5) A reduction of capital by reducing a share capital account or stated capital account that is, in either case, maintained 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 that 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 that may be applied only in paying up unissued shares that are to be allotted to members as fully paid bonus shares.152

62 Application to Court for order of confirmation

(1) Where a company has passed a resolution for reducing a capital account, it may apply to the court for an order confirming the reduction.153

(2) If the proposed reduction of share capital involves either –

(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, and in any other case if the court so directs, paragraphs (3), (4), and (5) have effect, but subject throughout to paragraph (6).154

(3) Every creditor of the company who at the date fixed by the court is entitled to a debt or claim which if that date were the commencement of the winding up of the company, would be admissible in proof against the company is entitled to object to the reduction of capital.

(4) The court shall settle a list of creditors entitled to object, and for that purpose –

(a) shall ascertain, as far as possible, without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims; and

(b) may publish notices fixing a day or days within which creditors not entered on the list are to claim to be so entered or are to be excluded from the right of objecting to the reduction of capital.

(5) If a creditor entered on the list whose debt or claim is not discharged or has not determined does not consent to the reduction, the court may dispense with the consent of that creditor, on the company securing payment of the creditor’s debt or claim by appropriating (as the court may direct) the following amount –

(a) if the company admits the full amount of the debt or claim or, though not admitting it, is willing to provide for it, then the full amount of the debt or claim;

(b) if the company does not admit, and is not willing to provide for, the full amount of the debt or claim, or if the amount is contingent

62 Application to Court for order of confirmation

(1) Where a company has passed a resolution for reducing a capital account, it may apply to the court for an order confirming the reduction.153

(2) If the proposed reduction of share capital involves either –

(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, and in any other case if the court so directs, paragraphs (3), (4), and (5) have effect, but subject throughout to paragraph (6).154

(4) The court shall settle a list of creditors entitled to object, and for that purpose –

(a) shall ascertain, as far as possible, without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims; and

(a) if the company admits the full amount of the debt or claim or, though not admitting it, is willing to provide for it, then the full amount of the debt or claim;

(b) if the company does not admit, and is not willing to provide for, the full amount of the debt or claim, or if the amount is contingent or not ascertained, then an amount fixed by the court after an enquiry and adjudication.

(6) If a proposed reduction of capital involves either the diminution of a liability in respect of unpaid capital or the payment to a shareholder of paid up capital, the court may, if having regard to any special circumstances of the case it thinks proper to do so, direct that paragraphs (3) to (5) shall not apply as regards any class or any classes of creditors.155

63 Court order confirming reduction

(1) The court, if satisfied with respect to every creditor of the company who under Article 62 is entitled to object to the reduction of capital that either –

(a) the creditor’s consent to the reduction has been obtained; or

(b) the creditor’s debt or claim has been discharged or has determined, or has been secured, may make an order confirming the reduction on such terms and conditions as it thinks fit.

(2) Where the court so orders, it may also make an order requiring the company to publish (as the court directs) the reasons for reduction of capital or such other information in regard to it as the court thinks expedient with a view to giving proper information to the public and (if the court thinks fit) the causes which led to the reduction.

64 Registration of Act and minute of reduction

(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).156

(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.157

(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. 158

(3) The registrar shall certify the registration of the Act and minute and the certificate –

(a) shall be signed by the registrar and sealed with the registrar’s seal;

(b) is conclusive evidence that all the requirements of this Law with respect to the reduction of share capital have been complied with, and the company’s share capital is as stated in the minute.

(4) The minute when registered is deemed to be substituted for the corresponding part of the company’s memorandum.

65 Liability of members on reduced shares

(1) Where a par value company’s share capital is reduced, a member of the company (past or present) is not liable in respect of any share to a call or contribution exceeding in amount the difference (if any) between the amount of the share as fixed by the minute and the amount paid on the share or the reduced amount (if any) which is deemed to have been paid on it.159

(2) Paragraphs (3) and (4) apply if –

(a) a creditor, entitled in respect of a debt or claim to object to the reduction of share capital, by reason of the creditor’s ignorance of the proceedings for reduction of share capital, or of their nature and effect with respect to the creditor’s claim, is not entered on the list of creditors; and

(b) after the reduction of capital, the company is unable to pay the amount of the creditor’s debt or claim.

(3) Every person who was a member of the company at the date of the registration of the Act and minute is then liable to contribute for the payment of the debt or claim in question an amount not exceeding that which the person would have been liable to contribute if the company had commenced to be wound up on the day before that date.

(4) If the company is wound up under this Law, or a declaration is made under the Désastre Law, the court, on the application of the creditor in question and proof of ignorance referred to in paragraph (2)(a) may settle accordingly a list of persons so liable to contribute, and make and enforce calls and orders on the contributories settled on the list, as if they were ordinary contributories in a winding up.

(5) Nothing in this Article affects the rights of the contributories among themselves.

66 Penalty for concealing name of creditor, etc.

If an officer of the company –

(a) wilfully conceals the name of a creditor entitled to object to the reduction of capital;

(b) wilfully misrepresents the nature or amount of the debt or claim of a creditor; or

PART 13

ADMINISTRATION

67 Registered office

(1) A company shall at all times have a registered office in Jersey to which all communications and notices may be addressed.

(2) On incorporation the situation of the company’s registered office shall be that specified in the statement sent to the registrar under Article 7.

(3) The company may change the situation of its registered office from time to time by giving notice to the registrar.

(4) The change shall take effect upon the notice being registered by the registrar, but until the end of the period of 14 days beginning with the date on which it is registered a person may validly serve any document on the company at its previous registered office.

(5) For the purposes of any duty of a company –

(a) to keep at its registered office, or make available for public inspection there, any document; or

(b) to mention the address of its registered office in any document, a company which has given notice to the registrar of a change in the situation of its registered office may act on the change as from such date, not more than 14 days after the notice is given, as it may determine.

(6) Where a company unavoidably ceases to perform at its registered office any such duty as is mentioned in paragraph (5)(a) in circumstances in which it was not practicable to give prior notice to the registrar of a change in the situation of its registered office, but –

(a) resumes performance of that duty at other premises as soon as practicable; and

(b) gives notice accordingly to the registrar of a change in the situation of its registered office within 14 days of doing so, it shall not be treated as having failed to comply with that duty.

(7) In proceedings for an offence of failing to comply with any such duty as is mentioned in paragraph (5), it is for the person charged to show that by reason of the matters referred to in that paragraph or paragraph (6) no offence was committed.

68 160

69 Company’s name to appear in its correspondence, etc.

(1) The name of a company shall appear in legible characters in all its –

(a) business letters, statements of account, invoices and order forms;

(b) notices and other official publications; and

(2) If a company fails to comply with paragraph (1) it is guilty of an offence.

70 Particulars in correspondence, etc.

(1) The address of the registered office of a company shall appear in legible characters in all its business letters and order forms.

(2) If there is on the stationery used for any such letters, or on the company’s order forms, a reference to the amount of share capital, the reference shall be to paid up share capital.

(3) If a company fails to comply with paragraph (1) or (2) it is guilty of an offence.

71 Annual return161

(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 or her, 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 or her;

(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 or her, 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 or her;

(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.

(3) 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).

(4) 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

(5) 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.

(6) The Minister 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 10 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.

72 Service of documents

A document may be served on a company –

(a) by leaving it at, or sending it by post to, the registered office of the company;

(b) in accordance with Article 67(4); or

(i) in the case of a public company which is in compliance with the requirements of Article 83 to any person who is shown on the register kept in accordance with that Article as a director or secretary of the company at the address entered in that register,

(ii) in any other case to any person shown as a member of the company in the register of members or in the latest annual return delivered to the registrar under Article 71 at the person’s address entered in that register or, as the case may be, in that return, and

(iii) where no annual return has been delivered to the registrar in compliance with Article 71 to any person whose name appears as a subscriber in the company’s memorandum at the person’s address shown in the memorandum.

PART 14

DIRECTORS AND SECRETARY

73 Directors162

(1) A private company must have at least one director.

(2) A public company must have at least 2 directors.

(3) A person may not be a director of a company if the person –

(a) has not attained the age of 18 years;

(b) is an interdict; or

(4) A body corporate may not be a director of a company.

(5) The States may, by Regulations, amend this Article.

74 Duties of directors

(1) A director, in exercising the director’s powers and discharging the director’s duties, shall –

(a) act honestly and in good faith with a view to the best interests of the company; and

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(2) Without prejudice to the operation of any rule of law empowering the members, or any of them, to authorize or ratify a breach of this Article, no act or omission of a director shall be treated as a breach of paragraph (1) if –

(a) all of the members of the company authorize or ratify the act or omission; and

(b) after the act or omission the company will be able to discharge its liabilities as they fall due.163

74A Contracts with sole members who are also directors164

(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 or her 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.

75 Duty of directors to disclose interests

(1) A director of a company who has, directly or indirectly, an interest in a transaction entered into or proposed to be entered into by the company or by a subsidiary of the company which to a material extent conflicts or may conflict with the interests of the company and of which the director is aware, shall disclose to the company the nature and extent of the director’s interest.

(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 or her duty to make it; or

(b) if for any reason the director fails to comply with sub-paragraph (a), as soon as practical after that meeting, by notice in writing delivered to the secretary.165

(2A) The secretary, where the disclosure is made to him or her –

(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.166

(2B) Any disclosure at a meeting of the directors shall be recorded in the minutes of the meeting.167

(3) A disclosure to the company by a director in accordance with paragraph (2) that he or she is to be regarded as interested in a transaction with a specific person is sufficient disclosure of his or her interest in any such transaction entered into after the disclosure is made. 168

(4) Nothing in this Article prejudices the operation of any rule of law restricting directors of a company from having an interest in transactions with a company.

76 Consequences of failure to comply with Article 75

(1) Subject to paragraphs (2) and (3), where a director fails to disclose an interest of the director under Article 75 the company or a member of the company may apply to the court for an order setting aside the transaction concerned and directing that the director account to the company for any profit or gain realised, and the court may so order or make such other order as it thinks fit.

(2) A transaction is not voidable, and a director is not accountable, under paragraph (1) where, notwithstanding a failure to comply with Article 75 –

(a) the transaction is confirmed by special resolution; and

(b) the nature and extent of the director’s interest in the transaction were disclosed in reasonable detail in the notice calling the meeting at which the resolution is passed.

(3) Without prejudice to its power to order that a director account for any profit or gain realised, the court shall not set aside a transaction unless it is satisfied that –

(a) the interests of third parties who have acted in good faith thereunder would not thereby be unfairly prejudiced; and

(b) the transaction was not reasonable and fair in the interests of the company at the time it was entered into.

77 Indemnity of officers and former officers

(1) Subject to paragraphs (2) and (3), any provision, whether contained in the articles of, or in a contract with, a company or otherwise, whereby the company or any of its subsidiaries or any other person, for some benefit conferred or detriment suffered directly or indirectly by the company, agrees to exempt any person from, or indemnify any person against, any liability which by law would otherwise attach to the person by reason of the fact that the person is or was an officer of the company shall be void.

(2) Paragraph (1) does not apply to a provision for exempting a person from or indemnifying the person against –

(a) any liabilities incurred in defending any proceedings (whether civil or criminal) –

(i) in which judgment is given in the person’s favour or the person is acquitted,

(ii) which are discontinued otherwise than for some benefit conferred by the person or on the person’s behalf or some detriment suffered by the person, or

(iii) which are settled on terms which include such benefit or detriment and, in the opinion of a majority of the directors of the company (excluding any director who conferred such benefit or on whose behalf such benefit was conferred or who suffered such detriment), the person was substantially successful on the merits in the person’s resistance to the proceedings;

(b) any liability incurred otherwise than to the company if the person acted in good faith with a view to the best interests of the company;

(c) any liability incurred in connection with an application made under Article 212 in which relief is granted to the person by the court; or

(d) any liability against which the company normally maintains insurance for persons other than directors.

(3) Nothing in this Article shall deprive a person of any exemption or indemnity to which the person was lawfully entitled in respect of anything done or omitted by the person before the coming into force of this Article.

(4) This Article does not prevent a company from purchasing and maintaining for any such officer insurance against any such liability.

78 Disqualification orders169

(1) Where it appears to the Minister 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 Jersey in any way whether directly or indirectly be concerned or take part in the management of a body incorporated outside Jersey, the Minister 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.

(3) 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 or her unfit –

(a) to be concerned in the management of a company; or

(b) to be concerned in the management, in Jersey, of a body incorporated outside Jersey, 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.

79 Personal responsibility for liabilities where person acts while disqualified170

(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, the person 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 or she is a director of it, or if he or she is concerned whether directly or indirectly or takes part in its management.

80 Validity of acts of director

The acts of a director are valid notwithstanding any defect that may afterwards be found in the director’s appointment or qualification.

81 Secretary

(1) Every company shall have a secretary.

(2) A sole director shall not also be a secretary.

(3) Anything required or authorized to be done by or to the secretary may, if the office is vacant or there is for any other reason no secretary capable of acting, be done by or to an assistant or deputy secretary or, if there is no assistant or deputy secretary capable of acting, by or to an officer of the company authorized generally or specially in that behalf by the directors.

(4) No company shall have as secretary to the company a body corporate the sole director of which is a sole director of the company.

82 Qualifications of secretary

(1) It is the duty of the directors of a public company to take all reasonable steps to secure that the secretary (or each joint secretary) of the company is a person who appears to them to have the requisite knowledge and experience to discharge the functions of secretary of the company and who –

(a) on the coming into force of this Article was the secretary or assistant or deputy secretary of the company;

(b) is a member of any of the professional bodies specified in paragraph (2);

(d) is a person who, by virtue of holding or having held any other position or being a member of any other body, appears to the directors to be capable of discharging those functions.

(2) The professional bodies referred to in paragraph (1)(b) are –

(a) the Institute of Chartered Accountants in England and Wales;

(b) the Institute of Chartered Accountants of Scotland;

(d) the Institute of Chartered Accountants in Ireland;

(e) the Institute of Chartered Secretaries and Administrators;

(f) the Chartered Institute of Management Accountants; and

(g) the Chartered Institute of Public Finance and Accountancy.171

(3) The Minister may by Order amend paragraph (2) by adding, deleting or substituting any body.172

83 Register of directors and secretaries

(1) Every company shall keep at its registered office a register of its directors and secretary; and the register shall with respect to the particulars to be contained in it comply with Articles 84 and 85.

(2) The register shall during business hours (subject to such reasonable restrictions as the company may by its articles or in general meeting impose, but so that not less than 2 hours in each business day be allowed for inspection) be open to the inspection of the registrar and of a member or director of the company without charge and, in the case of a public company or a company which is a subsidiary of a public company, of any other person on payment of such sum (if any), not exceeding the prescribed maximum, as the company may require.

(3) The registrar shall not disclose or make use of any information obtained by him or her as a result of the exercise of the right conferred upon him or her 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.173

(4) If an inspection required under this Article is refused, or if there is a failure to comply with paragraph (1), the company and every officer of it who is in default is guilty of an offence.

(5) In the case of a refusal of inspection of the register, the court may by order compel an immediate inspection of it.

84 Particulars of directors

Subject to the provisions of this Article, the register kept by a company under Article 83 shall contain the following particulars with respect to each director –

(a) the director’s present forenames and surname;

(b) any former forenames or surname;

(d) the director’s nationality;

(e) the director’s business occupation (if any);

(f) the director’s date of birth; and

(g) the date on which the person became a director and, where appropriate, the date on which the person ceased to be a director.

85 Particulars of secretaries

The register to be kept by a company under Article 83 shall contain the following particulars with regard to the secretary, or, where there are joint secretaries, with respect to each of them –

(a) in the case of an individual, the person’s present forenames and surname, any former forenames or surname and the person’s usual residential address;

(b) in the case of a body corporate or a Scottish firm, its corporate or firm name, the place where it is incorporated and its registered or principal office; and

(c) in either case, the date on which the person or it became the secretary and, where appropriate, the date on which the person or it ceased to be the secretary.

PART 15

MEETINGS

86 Participation in meetings

(1) Subject to the articles of a company, if a member is by any means in communication with one or more other members so that each member participating in the communication can hear what is said by any other of them, each member so participating in the communication is deemed to be present at a meeting with the other members so participating.

(2) Paragraph (1) applies to the participation in such communication by directors or by members of a committee of directors as it applies to the participation of members of a company.

87 Annual general meeting

(1) Paragraphs (2) and (3) shall have effect subject to paragraphs (4) to (7).

(2) Every company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that year and shall specify the meeting as such in the notice calling it; but so long as a company holds its first annual general meeting within 18 months of its incorporation, it need not hold it in the year of its incorporation or in the following year.

(3) In the case of a public company, not more than 18 months, and in the case of a private company, not more than 22 months shall elapse between the date of one annual general meeting and the date of the next.

(4) If all members of a private company agree in writing that an annual general meeting shall be dispensed with, then so long as the agreement has effect, it shall not be necessary for that company to hold an annual general meeting.

(5) In any year in which an annual general meeting would be required to be held but for such an agreement and in which no such meeting has been held, any member of the company may by written notice to the company given not later than 3 months before the end of the year require the holding of an annual general meeting in that year.

(6) Notwithstanding anything contained in any such agreement, it shall cease to have effect –

(a) if any person who becomes a member of the company while the agreement is in force does not within 2 months of becoming a member accede to the agreement;

(b) if any member of the company gives written notice to the company determining the agreement; or

(7) If such an agreement ceases later than 18 months after the incorporation of the company to have effect, whether pursuant to paragraph (6) or otherwise, and an annual general meeting has not previously been held in the year in which the cessation takes place, the directors shall forthwith call an annual general meeting to be held within 3 months after the agreement ceases to have effect.174

(8) If a public company fails to comply with paragraph (2) or (3), it and every director of it in default is guilty of an offence.

88 Commission’s power to call meeting in default

(1) If default is made in holding a meeting in accordance with Article 87, the Commission may, on the application of any officer, secretary or member of the company, call, or direct the calling of, a general meeting of the company and give such ancillary or consequential directions as the Commission thinks expedient, including directions modifying or supplementing, in relation to the calling, holding and conduct of the meeting, the operation of the company’s articles.175

(2) The directions that may be given under paragraph (1) include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.

(3) If default is made in complying with directions given under paragraph (1), the company and any officer or secretary of it who is in default is guilty of an offence.

(4) A general meeting held under this Article shall, subject to any directions of the Commission, be deemed to be an annual general meeting of the company; but, where a meeting so held is not held in the year in which the default in holding the company’s annual general meeting occurred, the meeting so held shall not be treated as the annual general meeting for the year in which it is held, unless at that meeting the company resolves that it shall be so treated.176

(5) Where a company so resolves, a copy of the resolution shall, within 21 days after it is passed, be forwarded to the registrar and recorded by the registrar; and if default is made in complying with this paragraph, the company is guilty of an offence.

89 Requisition of meetings

(1) The directors of a company shall, notwithstanding anything in the company’s articles, on a members’ requisition forthwith proceed to call a general meeting or, as the case may be, a meeting of any class of members to be held as soon as practicable but in any case not later than 2 months after the date of the deposit of the requisition.177

(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.178

(3) The requisition shall state the objects of the meeting, and shall be signed by or on behalf of the requisitionists and deposited at the registered office of the company, and may consist of several documents in similar form each signed by or on behalf of one or more requisitionists.

(4) If the directors do not within 21 days from the date of the deposit of the requisition proceed duly to call a meeting to be held within 2 months of that date, the requisitionists, or any of them representing more than one half of the total voting rights of all of them, may themselves call a meeting, but a meeting so called shall not be held after 3 months from that date.

(5) A meeting called under this Article by requisitionists shall be called in the same manner, as nearly as possible, as that in which meetings are to be called by directors.

(6) Reasonable expenses incurred by the requisitionists by reason of the failure of the directors to call a meeting shall be repaid to the requisitionists by the company, and sums so repaid shall be retained by the company out of sums due or to become due from the company by way of fees or other remunerations in respect of their services to the directors who were in default.

(7) In the case of a meeting at which a resolution is to be proposed as a special resolution the directors are deemed not to have duly called the meeting if they do not give the notice required for special resolutions by Article 90.

90 Definition of special resolution

(1) A resolution is a special resolution when it has been passed by a majority of not less than 2/3rds of members who (being entitled to do so) vote in person, or by proxy, at a general meeting of the company or at a separate meeting of a class of members of the company of which in either case not less than 21 days’ notice, specifying the intention to propose the resolution as a special resolution, has been duly given.179

(2) If it is so agreed by a majority in number of the members having the right to attend and vote at such a meeting upon the resolution, being a majority together holding not less than 95% of the total voting rights of the members who have that right, a resolution may be proposed and passed as a special resolution at a meeting of which less than 21 days’ notice has been given.180

(3) At a meeting at which a special resolution is proposed, a declaration by the chairman that the resolution is carried is, unless a poll is demanded, conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.

(4) In computing the majority on a poll demanded on the question that a special resolution be passed, reference is to be had to the number of votes cast for and against the resolution.

(5) For the purposes of this Article, notice of a meeting shall be deemed to be duly given and the meeting duly held, when the notice is given and the meeting held in the manner provided by this Law or the company’s articles.

(6) References in this Law to a special resolution are, unless otherwise expressly provided, references to a special resolution passed at a general meeting of the company.

91 Notice of meetings

(1) A provision of a company’s articles is void insofar as it provides for the calling of a meeting of the company or of any class of members of the company (other than an adjourned meeting) by a shorter notice than –

(a) in the case of the annual general meeting, 21 days’ notice in writing; and

(b) in the case of a meeting, other than an annual general meeting or a meeting for the passing of a special resolution, 14 days’ notice in writing.181

(2) Save insofar as the articles of a company make other provision in that behalf (not being a provision avoided by paragraph (1)), any such meeting of the company (other than an adjourned meeting) may be called –

(a) in the case of the annual general meeting, by 21 days’ notice in writing; and

(b) in the case of a meeting, other than an annual general meeting or a meeting for the passing of a special resolution, by 14 days’ notice in writing.

(3) Notwithstanding that a meeting is called by shorter notice than that specified in paragraph (2) or in the company’s articles (as the case may be), it is deemed to have been duly called if it so agreed –

(a) in the case of a meeting called as the annual general meeting, by all the members entitled to attend and vote thereat; and

(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.182

92 General provisions as to meetings and votes183

(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 or she shall be the quorum at any meeting of the company, or of any class of member, when he or she is present personally or by his or her 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 or her registered address;

(b) at a meeting of the company, 2 members present personally shall be a quorum;

(i) in the case of a class of par value shares, the quorum shall be persons holding or representing by proxy not less than 1/3rd 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 1/3rd 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 1/3rd 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 or her 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 or her 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.

93 Representation of body corporate at meetings

(1) A body corporate, whether or not a company within the meaning of this Law, may by resolution of its directors or other governing body authorize such person as it thinks fit to act as its representative at any meeting of a company, or of any class of members of a company, or of creditors of a company which it is entitled to attend.184

(2) A person so authorized is entitled to exercise the same powers on behalf of the body corporate which the person represents as that body corporate could exercise if it were an individual member or creditor of the company.

94 Power of court to order meetings

(1) If for any reason it is impracticable to call a meeting of a company, or of any class of members of a company, in a manner in which those meetings may be called, or to conduct the meeting in the manner specified in the articles or this Law, the court may, either of its own motion or on the application –

(a) of a director of the company; or

(b) of a member of the company who would be entitled to vote at the meeting, order a meeting to be called, held and conducted in any manner the court thinks fit.185

(2) Where such an order is made, the court may give such ancillary or consequential directions as it thinks expedient; and these may include a direction that one member of the company present in person or by proxy be deemed to constitute a meeting.

95 Resolutions in writing

(1) This Article does not apply to a resolution removing an auditor but otherwise applies to any resolution, including a special resolution.186

(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.187

(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. 188

(2) A resolution in writing may consist of several instruments in the same form each signed by or on behalf of one or more members.

(3) A resolution under this Article shall be deemed to be passed when the instrument, or the last of several instruments, is last signed or on such later date as is specified in the resolution.

(4) Any document attached to a resolution in writing under this Article shall be deemed to have been laid before a meeting of the members signing the resolution.

(5) Articles 98 and 100 apply to a resolution in writing under this Article as if it had been passed at a meeting.

(6) Nothing in this Article affects or limits any provision in the memorandum or articles of a company or any rule of law relating to the effectiveness of the assent of members, or any class of members, of a company given to any document, act or matter otherwise than at a meeting of them.189

95A Recording of decisions by sole member190

(1) If –

(a) a private company has only one member;

(b) the member 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, the member shall provide the company with a record in writing of the decision.

(2) If the member fails to comply with paragraph (1), the member is guilty of an offence.

(3) Failure to comply with paragraph (1) shall not affect the validity of the decision.

96 Proxies

(1) A member of a company entitled to attend and vote at a meeting of it is entitled to appoint another person (whether a member or not) as the member’s proxy to attend and vote instead of the member; and in the case of a private company a proxy appointed to attend and vote instead of a member has also the same right as the member to speak at the meeting; but, unless the articles otherwise provide, a proxy is not entitled to vote except on a poll.

(2) In every notice calling a meeting of the company there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint a proxy or, where that is allowed, one or more proxies to attend and vote instead of the member, and that a proxy need not also be a member.

(3) In the event of failure to comply with paragraph (2) as respects any meeting, every officer of the company who is in default is guilty of an offence.

(4) A provision contained in a company’s articles is void in so far as it would have the effect of requiring the instrument appointing a proxy, or any other document necessary to show the validity of, or otherwise relating to, the appointment of a proxy, to be received by the company or any other person more than 48 hours before a meeting or adjourned meeting in order that the appointment may be effective.

(5) If for the purpose of a meeting of a company, invitations to appoint as proxy a person or one of a number of persons specified in the invitations are issued at the company’s expense to some only of the members entitled to be given notice of the meeting and to vote at it by proxy, then every officer of the company who knowingly and wilfully authorizes or permits their issue in that manner is guilty of an offence; but an officer is not so liable by reason only of the issue to a member at the member’s request in writing of a form of appointment naming the proxy, or a list of persons willing to act as proxy, if the form or list is available on request in writing to every member entitled to vote at the meeting by proxy.

(6) This Article applies to meetings of any class of members as it applies to general meetings.191

97 Demand for poll

(1) A provision contained in a company’s articles is void in so far as it would have the effect either –

(a) of excluding the right to demand a poll at a general meeting, or at a meeting of any class of members, on a question other than the election of the chairman of the meeting or the adjournment of the meeting; or

(b) of making ineffective a demand for a poll on any such question which is made either –

(i) by not less than 5 members having the right to vote on the question, or

(ii) by a member or members representing not less than 1/10th of the total voting rights of all the members having the right to vote on the question.192

(2) The instrument appointing a proxy to vote at such a meeting is deemed also to confer authority to demand or join in demanding a poll; and for the purposes of paragraph (1) a demand by a person as proxy for a member is the same as a demand by the member.

(3) On a poll taken at such a meeting, a member entitled to more than one vote need not, if the member votes, (in person or by proxy) use all the member’s votes or cast all the votes the member uses in the same way.

98 Minutes

(1) Every company shall cause minutes of all proceedings at general meetings, meetings of any class of its members, meetings of its directors and of committees of directors to be entered in books kept for that purpose, and the names of the directors present at each such meeting shall be recorded in the minutes.193

(2) Any such minute, if purporting to be signed by the chairman of the meeting at which the proceedings took place, or by the chairman of the next succeeding meeting, is evidence of the proceedings.

(3) Where minutes have been made in accordance with this Article then, until the contrary is proved, the meeting is deemed duly held and convened, and all proceedings which took place at the meeting to have duly taken place.

(4) If a company fails to comply with paragraph (1), the company and every officer of it who is in default is guilty of an offence.

99 Inspection of minute books

(1) The books containing the minutes of a general meeting or of a meeting of any class of members held after this Article comes into force shall be kept at the company’s registered office, and shall during business hours be open to the inspection of a member without charge.194

(2) A member may require, on submission to the company of a written request and on payment of such sum (if any), not exceeding the prescribed maximum, as the company may require, a copy of any such minutes and the company shall, within 7 days after the receipt of the request and the payment, cause the copy so required to be made available at the registered office of the company for collection during business hours.

(3) If an inspection required under this Article is refused or if a copy required under this Article is not sent within the proper time, the company is guilty of an offence.

(4) In the case of a refusal or default, the court may make an order compelling an immediate inspection of the books in respect of all proceedings of general meetings, or meetings of any class of members or directing that the copies required be furnished to the persons requiring them.195

100 Filing of resolutions

(1) A printed copy of every resolution or agreement to which this Article applies shall, within 21 days after it is passed or made, be forwarded to the registrar and recorded by the registrar.

(2) A printed copy of every such resolution or agreement for the time being in force shall be embodied in or annexed to every copy of the memorandum or articles issued after the passing of the resolution or the making of the agreement; and a printed copy of every such resolution or agreement shall be forwarded to a member at the member’s request on payment of such sum (if any), not exceeding the prescribed maximum, as the company may require.

(3) This Article applies to –

(a) special resolutions; and

(b) resolutions or agreements which have been agreed to by all the members of a company but which, if not so agreed to, would not have been effective for their purpose unless they had been passed as special resolutions and;

(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, which are passed, agreed to or entered into after this Article comes into force.196

(4) If a copy of a resolution or agreement is not delivered to the registrar as required by paragraph (1) there shall be payable by the company when the copy is delivered a prescribed late filing fee.

(5) If a company fails to comply with paragraph (2), it is guilty of an offence.

(6) Save as otherwise provided by this Law, a resolution or agreement to which this Article applies has effect notwithstanding that a copy is not delivered to the registrar as required by paragraph (1).

101 Resolution passed at adjourned meeting

Where a resolution is passed at an adjourned meeting of –

(a) a company;

(b) any class of members of a company; or

(c) the directors or a committee of directors of a company, the resolution is for all purposes to be treated as having been passed on the date on which it was in fact passed, and is not to be deemed passed on any earlier date.197

PART 16

ACCOUNTS AND AUDIT

102 Accounting records

Every company shall keep accounting records which are sufficient to show and explain its transactions and are such as to –

(a) disclose with reasonable accuracy, at any time, the financial position of the company at that time; and

(b) enable the directors to ensure that any accounts prepared by the company under this Part comply with the requirements of this Law.

103 Retention of records

(1) A company’s accounting records shall be kept at such place as the directors think fit and shall at all times be open to inspection by the company’s officers and the secretary.

(2) If accounting records of a public company are kept at a place outside Jersey, returns with respect to the business dealt with in the accounting records so kept shall be sent to, and kept in, Jersey, shall at all times be open to such inspection, and shall be such as to –

(a) disclose with reasonable accuracy the financial position of the business in question at intervals of not more than 6 months; and

(b) enable the directors to ensure that any accounts prepared by the company under this Part comply with the requirements of this Law.

(3) Subject to Article 194, accounting records which a company is required by Article 102 to keep shall be preserved by it for 10 years from the date on which they are made.

104 Accounts

(1) The directors of every company shall prepare accounts for a period of not more than 18 months beginning on the date the company was incorporated or, if the company has previously prepared a profit and loss account, beginning at the end of the period covered by the most recent account:

Provided that an existing company which has not prepared a profit and loss account for a period ending within 12 months before the date on which this Article comes into force shall not be required to prepare accounts for a period beginning earlier than that date.

(2) The accounts shall be prepared in accordance with generally accepted accounting principles and show a true and fair view of the profit or loss of the company for the period and of the state of the company’s affairs at the end of the period and comply with any other requirements of this Law.

(3) A company’s accounts shall be approved by the directors and signed on their behalf by one of them.

(4) In the case of a public company, within 7 months, and in the case of a private company, within 10 months, after the end of the financial period, the accounts for that period shall be –

(a) prepared, and where it is required under this Law, examined and reported upon by auditors; and

(b) subject in the case of a private company to paragraph (5), laid before a general meeting together with a copy of the auditors’ report (if any).

(5) If at the end of any financial period of a company, an agreement under Article 87(4) dispensing with the holding of an annual general meeting has effect –

(a) the company shall not be obliged to lay the accounts for that period or a copy of any auditors’ report before a general meeting; but

(b) if any member of the company, not later than 11 months after the end of that period, by written notice given to the company so requires, those accounts and a copy of any auditors’ report thereon shall be laid before a general meeting which shall be held within 28 days after the receipt of the notice by the company, or after approval of the accounts by the directors, whichever shall last occur.

(6) In this Part, references to “accounts” are to those prepared in accordance with this Article.

105 Copies of accounts

(1) Any member of a company who has not previously been furnished with a copy of the company’s latest accounts is entitled, on written request made by the member to the company and without charge, to be furnished with a copy of those accounts together, where the accounts have been audited, with a copy of the auditors’ report.

(2) If default is made in complying with such a request within 7 days after its making, the company and every officer of it who is in default is guilty of an offence.

106 Delivery of accounts to registrar

(1) In respect of each financial period the directors of a public company –

(a) shall deliver to the registrar a copy of the accounts for the period signed on behalf of the directors by one of them together with a copy of the report thereon by the auditors; and

(b) if any document so delivered is in a language other than English, shall annex to the copy of that document a translation of it into English, certified to be a correct translation.

(2) The documents referred to in paragraph (1) shall be delivered to the registrar within 7 months after the end of the financial period to which they relate.

(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 Article 104(1), (4) or (5) or in paragraph (2) of this Article by such a period as is specified in the notice.198

(4) The Commission shall also give a copy of the notice to the registrar.199

(5) The Minister 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 10 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.200

107 Failure to comply with Articles 102 to 104 or 106

If a company fails to comply with the provisions of Articles 102, 103, 104 or 106, it and (in the case of a public company) every officer of it who is in default is guilty of an offence.

108 Power to make Regulations as to accounts

(1) The States may by Regulations extend or modify the provisions of this Part.

(2) Without prejudice to the generality of the foregoing, such Regulations may provide for –

(a) the inclusion in accounts of group accounts dealing with the affairs of a company and its subsidiaries;

(b) the inclusion in accounts of a report by the directors dealing with such matters as may be specified;

(d) the appointment, remuneration, removal, resignation, rights and duties of auditors, and different provisions may be made for different cases or classes of case.

(3) Such Regulations may further provide for the imposition of fines in respect of offences under the Regulations.

109 Appointment and removal of auditors

(1) Where –

(a) a company is a public company;

(b) the articles of the company so require; or

(c) a resolution of the company in general meeting so requires, the company shall appoint auditors who shall examine and report in accordance with this Law upon the accounts prepared pursuant to Article 104.

(2) Subject to paragraphs (4) and (5), a company which is required by this Article to appoint auditors shall at each annual general meeting appoint auditors to hold office from the conclusion of that meeting to the conclusion of the next annual general meeting.

(3) The directors or (failing the directors) the company in general meeting may, at any time before the first annual general meeting, appoint auditors who shall hold office to the conclusion of that meeting.

(4) If a private company required by this Article to appoint auditors dispenses with the holding of an annual general meeting pursuant to Article 87(4) any auditors then in office shall continue to act and be deemed to be re-appointed for each succeeding financial period until the conclusion of the next annual general meeting or until the company in general meeting resolves that the appointment of the auditors be brought to an end.

(5) If a private company which has dispensed as aforesaid with the holding of an annual general meeting becomes bound to appoint auditors and there are no auditors in office, the directors shall appoint auditors who shall continue to act until the conclusion of the next annual general meeting.

(6) The directors or the company in general meeting may fill any casual vacancy in the office of auditors and fix their remuneration.

(7) A company may by resolution at any time remove an auditor notwithstanding anything in any agreement between it and the auditor.

(8) Nothing in this Article is to be taken as depriving a person removed under it of compensation or damages payable to the person in respect of the termination of the person’s appointment as auditor.

(9) If a company fails to comply with paragraph (1), the company and every officer of it who is in default is guilty of an offence.

110 Auditors’ report

(1) This Article, and Articles 111 and 113, apply only to a company which is required to appoint auditors pursuant to Article 109.

(2) A company’s auditors shall make a report to the company’s members on the accounts examined by them.

(3) The auditors’ report shall state whether in their opinion the accounts have been properly prepared in accordance with this Law and in particular whether a true and fair view is given.

111 Auditors’ duties and powers

(1) A company’s auditors shall, in preparing their report, carry out such investigations as will enable them to form an opinion as to the following matters –

(a) whether proper accounting records have been kept by the company and proper returns adequate for their audit have been received from branches not visited by them; and

(b) whether the company’s accounts are in agreement with the accounting records and returns.

(2) If the auditors are of the opinion that proper accounting records have not been kept, or that proper returns adequate for their audit have not been received from branches not visited by them, or if the accounts are not in agreement with the accounting records and returns, the auditors shall state that fact in their report.

(3) The auditors have a right of access at all times to the company’s records, and are entitled to require from the company’s officers and the secretary such information and explanations as they think necessary for the performance of their duties as auditors.

(4) Every auditor is entitled to receive notice of, and attend, any meeting of members and to be heard on any part of the business of the meeting which concerns the auditors.201

(5) If the auditors fail to obtain all the information and explanations which, to the best of their knowledge and belief, are necessary for the purposes of their audit, they shall state that fact in their report.

(6) An auditor of a company may resign the auditor’s office by depositing a notice in writing to that effect together with a statement under paragraph (7) at the company’s registered office; and any such notice operates to bring the auditor’s term of office to an end on the date on which the notice is deposited, or on such later date as may be specified in it.

(7) When an auditor ceases for any reason to hold office the auditor shall deposit at the company’s registered office –

(a) a statement to the effect that there are no circumstances connected with the auditor’s ceasing to hold office which the auditor considers should be brought to the notice of the members or creditors of the company; or

(b) a statement of any circumstances as are mentioned above.

(8) Where a statement under paragraph (7) falls within sub-paragraph (b) of that paragraph, the company shall within 14 days send a copy of the statement to every member of the company and to every person entitled to receive notice of general meetings.

(9) If a person ceasing to hold office as auditor fails to comply with paragraph (7) the person is guilty of an offence.

(10) If a company fails to comply with paragraph (8) the company and every officer of it who is in default is guilty of an offence.

112 False statements to auditors

Where Article 109 requires a company to appoint auditors, an officer and the secretary of a company is guilty of an offence if the person knowingly or recklessly makes to the company’s auditors a statement (whether written or oral) which –

(a) conveys or purports to convey any information or explanation which the auditors require, or are entitled to require, as auditors of the company; and

(b) is misleading, false or deceptive in a material particular.

113 Qualifications of individual for appointment as auditor202

(1) An individual is qualified for appointment under Article 109 as auditor of a company if –

(a) the individual is a member of a recognized professional body; and

(b) the individual 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 or she is authorized by the Commission to be so appointed.

113A Qualifications of partnership for appointment as auditor203

(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% of the partners are –

(i) individuals who are members of recognized professional bodies, or are authorized under Article 113(2),

(ii) partnerships which are themselves qualified for appointment under Article 109, or

(iii) bodies corporate which are so qualified;

(b) at least 75% 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 Article 113(2).

113B Qualifications of body corporate for appointment as auditor204

(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 Article 113(2); 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 Article 113(2);

(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% of the members of the body corporate;

(b) they hold at least 75% of the voting rights of each class of members;

(d) at least 75% 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).

113C Disqualification for appointment as auditor205

(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 the person is –

(a) an officer, secretary or servant of the company;

(b) a partner or employee of an officer, secretary or servant of the company;

(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 Article 113B(1)(a) 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 or her term of office becomes, to his or her 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, she or it has done so.

113D Power of Minister to amend qualifications206

Notwithstanding Articles 113, 113A, 113B and 113C, the Minister may by Order –

(a) amend the definition of “recognized professional body” in Article 1(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 Article 113C(2)(a), (b) or (c) 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.

113E Criminal liability of unqualified auditor207

(1) Any person who, knowing that he or she 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 Article 113C(5) is guilty of an offence.

PART 17208

DISTRIBUTIONS

114 Construction of terms used in Part 17

(1) This Article applies to the interpretation of this Part.

(2) “Capitalization”, in respect of a company, means –

(a) applying profits in wholly or partly paying up unissued shares in the company to be allotted to members as fully or partly paid bonus shares; or

(b) transferring profits of the company to a capital redemption reserve or a stated capital account of the company.

(3) “Distribution”, in respect of a company, means every description of distribution of the company’s assets to its members as members, whether in cash or otherwise but does not include a distribution by way of –

(a) an issue of shares as fully or partly paid bonus shares;

(b) the redemption or purchase of any of the company’s shares;

(c) 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; or

(d) a distribution of assets to members of the company on its winding up.

(4) A reference to profits of any description is to accumulated profits of that description made at any time so far as not previously utilized by distribution or capitalization.

(5) A reference to losses of any description is to accumulated losses of that description made at any time so far as not previously written off in a reduction or reorganization of capital duly made.

(6) A reference to profits and losses of any description is to profits and losses of that description ascertained in accordance with generally accepted accounting principles.

115 Restrictions on distributions

(1) A company shall not make a distribution except in accordance with this Article.

(2) A company may make a distribution at any time –

(a) out of its realized profits less its realized losses; or

(b) out of its realized revenue profits less its revenue losses, whether realized or unrealized, if the directors who are to authorize the distribution reasonably believe that immediately after the distribution has been made the company will be able to discharge its liabilities as they fall due.

(3) A company may, with the sanction of a special resolution, make a distribution out of its unrealized profits less its losses, whether realized or unrealized, if the directors who are to authorize the distribution make a prior statement that, having made full enquiry into the affairs and prospects of the company, they have formed the opinion –

(a) that, immediately following the date on which the distribution is proposed to be made, the company will be able to discharge its liabilities as they fall due; and

(b) that, having regard to the prospects of the company and to the intentions of the directors with respect to the management of the company’s business and to the amount and character of the financial resources that will in their view be available to the company, the company will be able to continue to carry on business and will be able to discharge its liabilities as they fall due until the expiry of the period of one year immediately following the date on which the distribution is proposed to be made or until the company is dissolved under Article 150, whichever first occurs.

(4) Despite any other provisions of this Law an open-ended investment company to which this paragraph applies may make a distribution at any time if the directors who are to authorize the distribution reasonably believe that immediately after the distribution has been made the company will be able to discharge its liabilities as they fall due.

(5) A distribution made in accordance with paragraph (4) shall be debited to the capital or revenue profit and loss account of the company.

115A Consequences of unlawful distribution

If a distribution or part of a distribution made by a company to one of its members is made in contravention of Article 115 and at the time of the distribution the member knows or has reasonable grounds for believing that it is so made, the member is liable –

(a) to repay it or the part of it to the company; or

(b) if a distribution was made otherwise than in cash, to pay to the company a sum equal to the value of the distribution or the part of it at that time.

PART 18

TAKEOVERS209

116 Takeover offers

(1) In this Part, “a takeover offer” means an offer to acquire all the shares, or all the shares of any class or classes, in a company (other than shares which at the date of the offer are already held by the offeror), being an offer on terms which are the same in relation to all the shares to which the offer relates or, where those shares include shares of different classes, in relation to all the shares of each class.

(2) In paragraph (1), “shares” means shares which have been allotted on the date of the offer but a takeover offer may include among the shares to which it relates all or any shares that are subsequently allotted before a date specified in or determined in accordance with the terms of the offer.

(3) The terms offered in relation to any shares shall for the purposes of this Article be treated as being the same in relation to all the shares or, as the case may be, all the shares of a class to which the offer relates notwithstanding any variation permitted by paragraph (4).

(4) A variation is permitted by this paragraph where –

(a) the law of a country or territory outside Jersey precludes the acceptance of an offer in the form or any of the forms specified or precludes it except after compliance by the offeror with conditions with which the offeror is unable to comply or which the offeror regards as unduly onerous; and

(b) the variation is such that the persons by whom the acceptance of an offer in that form is precluded are able to accept an offer otherwise than in that form but of substantially equivalent value.

(5) The reference in paragraph (1) to shares already held by the offeror includes a reference to shares which offeror has contracted to acquire but that shall not be construed as including shares which are the subject of a contract binding the holder to accept the offer when it is made, being a contract entered into by the holder for nothing other than a promise by the offeror to make the offer.

(6) Where the terms of an offer make provision for their revision and for acceptances on the previous terms to be treated as acceptances on the revised terms, the revision shall not be regarded for the purposes of this Part as the making of a fresh offer and references in this Part to the date of the offer shall accordingly be construed as references to the date on which the original offer was made.

(7) In this Part the “offeror” means, subject to Article 122, the person making a takeover offer and the “company” means the company whose shares are the subject of the offer.

117 Right of offeror to buy out minority shareholders

(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 9/10ths in value of the shares to which the offer relates; or

(b) in the case of a no par value company, not less than 9/10ths in number of the shares to which the offer relates, the offeror 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 or she desires to acquire those shares.210

(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 9/10ths in value of the shares to which the offer relates; or

(b) in the case of a no par value company, not less than 9/10ths in number of the shares to which the offer relates, the offeror may give notice, to the holder of any shares of that class which the offeror has not acquired or contracted to acquire, that he or she desires to acquire those shares.211

(3) No notice shall be given under paragraph (1) or (2) unless the offeror has acquired or contracted to acquire the shares necessary to satisfy the minimum specified in that paragraph before the end of the period of 4 months beginning with the date of the offer; and no such notice shall be given after the end of the period of 2 months beginning with the date on which the offeror has acquired or contracted to acquire shares which satisfy that minimum.

(4) When the offeror gives the first notice in relation to an offer he or she shall send a copy of it to the company together with a declaration by the offeror that the conditions for the giving of the notice are satisfied.

(5) Where the offeror is a body corporate (whether or not a company within the meaning of this Law) the declaration shall be signed by a director.

(6) Any person who fails to send a copy of a notice or a declaration as required by paragraph (4) or makes such a declaration for the purposes of that paragraph knowing it to be false or without having reasonable grounds for believing it to be true is guilty of an offence.

(7) If a person is charged with any offence for failing to send a copy of a notice as required by paragraph (4) it is a defence for the person to prove that the person took reasonable steps for securing compliance with that paragraph.

(8) Where during the period within which a takeover offer can be accepted the offeror acquires or contracts to acquire any of the shares to which the offer relates but otherwise than by virtue of acceptances of the offer, then if –

(a) the value of that for which they are acquired or contracted to be acquired (the “acquisition value”) does not at that time exceed the value of that which is receivable by an acceptor under the terms of the offer; or

(b) those terms are subsequently revised so that when the revision is announced the acquisition value, at the time mentioned in sub-paragraph (a), no longer exceeds the value of that which is receivable by an acceptor under those terms, the offeror shall be treated for the purposes of this Article as having acquired or contracted to acquire those shares by virtue of acceptances of the offer; but in any other case those shares shall be treated as excluded from those to which the offer relates.

118 Effect of notice under Article 117

(1) The following provisions shall, subject to Article 121, have effect where a notice is given in respect of any shares under Article 117.

(2) The offeror shall be entitled and bound to acquire those shares on the terms of the offer.

(3) Where the terms of an offer are such as to give the holder of any shares a choice of payment for the holder’s shares the notice shall give particulars of the choice and state –

(a) that the holder of the shares may within 6 weeks from the date of the notice indicate the holder’s choice by a written communication sent to the offeror at an address specified in the notice; and

(b) which payment specified in the offer is to be taken as applying in default of the holder indicating a choice as aforesaid, and the terms of the offer mentioned in paragraph (2) shall be determined accordingly.

(4) Paragraph (3) applies whether or not any time limit or other conditions applicable to the choice under the terms of the offer can still be complied with; and if the payment chosen by the holder of the shares –

(a) is not cash and the offeror is no longer able to make that payment; or

(b) was to have been made by a third party who is no longer bound or able to make that payment, the payment shall be taken to consist of an amount of cash payable by the offeror which at the date of the notice is equivalent to the chosen payment.

(5) At the end of 6 weeks from the date of the notice the offeror shall forthwith–

(a) send a copy of the notice to the company; and

(b) make payment to the company for the shares to which the notice relates.

(6) The copy of the notice sent to the company under paragraph (5)(a) shall be accompanied by an instrument of transfer executed on behalf of the shareholder by a person appointed by the offeror; and on receipt of that instrument the company shall register the offeror as the holder of those shares.

(7) Where the payment referred to in paragraph (5)(b) is to be made in shares or securities to be allotted by the offeror the reference in that paragraph to the making of payment shall be construed as a reference to the allotment of the shares or securities to the company.

(8) Any sum received by a company under paragraph (5)(b) and any other payment received under that paragraph shall be held by the company on trust for the person entitled to the shares in respect of which the sum or other payment was received.

(9) Any sum received by a company under paragraph (5)(b) and any dividend or other sum accruing from any other payment received by a company under that paragraph, shall be paid into a separate bank account, being an account the balance on which bears interest at an appropriate rate and can be withdrawn by such notice (if any) as is appropriate.

(10) Where after reasonable enquiry made at such intervals as are reasonable the person entitled to any sum or other payment held on trust by virtue of paragraph (8) cannot be found and 10 years have elapsed since the sum or other payment was received or the company is wound up, the sum or other payment (together with any interest, dividend or other benefit that has accrued from it) shall be paid to the Viscount.

(11) The expenses of any such enquiry as is mentioned in paragraph (10) may be defrayed out of the money or other property held on trust for the person or persons to whom the enquiry relates.

119 Right of minority shareholder to be bought out by offeror

(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 or she has acquired or contracted to acquire) amount, in the case of a par value company, to not less than 9/10ths in value of all the shares in the company or, in the case of a no par value company, to not less than 9/10ths 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 or her to acquire those shares.212

(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 or she has acquired or contracted to acquire) amount, in the case of a par value company, to not less than 9/10ths in value of all the shares in the company or, in the case of a no par value company, to not less than 9/10ths 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 or her to acquire those shares.213

(3) Within one month of the time specified in paragraph (1) or, as the case may be, paragraph (2) the offeror shall give any shareholder who has not accepted the offer notice of the rights that are exercisable by the shareholder under that paragraph; and if the notice is given before the end of the period mentioned in that paragraph it shall state that the offer is still open for acceptance.

(4) A notice under paragraph (3) may specify a period for the exercise of the rights, conferred by this Article and in that event the rights shall not be exercisable after the end of that period; but no such period shall end less than 3 months after the end of the period within which the offer can be accepted.

(5) Paragraph (3) does not apply if the offeror has given the shareholder a notice in respect of the shares in question under Article 117.

(6) If the offeror fails to comply with paragraph (3) the offeror and, if the offeror is a company, every officer of the company who is in default or to whose neglect the failure is attributable, is guilty of an offence.

(7) If an offeror other than a company is charged with an offence for failing to comply with paragraph (3) it is a defence for the offeror to prove that he or she took all reasonable steps for securing compliance with that paragraph.

120 Effect of requirement under Article 119

(1) The following provisions shall, subject to Article 121, have effect where a shareholder exercises the shareholder’s rights in respect of any shares under Article 119.

(2) The offeror shall be entitled and bound to acquire those shares on the terms of the offer or on such other terms as may be agreed.

(3) Where the terms of an offer are such as to give the holder of shares a choice of payment for the shareholder’s shares, the holder of the shares may indicate the shareholder’s choice when requiring the offeror to acquire them and the notice given to the holder under Article 119(3) –

(a) shall give particulars of the choice and of the rights conferred by this paragraph; and

(b) may state which payment specified in the offer is to be taken as applying in default of the shareholder indicating a choice, and the terms of the offer mentioned in paragraph (2) shall be determined accordingly.

(a) is not cash and the offeror is no longer able to make that payment; or

121 Applications to the court

(1) Where a notice is given under Article 117 to the holder of any shares the court may, on an application made by the shareholder within 6 weeks from the date on which the notice was given –

(a) order that the offeror shall not be entitled and bound to acquire the shares; or

(b) specify terms of acquisition different from those of the offer.

(2) If an application to the court under paragraph (1) is pending at the end of the period mentioned in Article 118(5) that paragraph shall not have effect until the application has been disposed of.

(3) Where the holder of any shares exercises the shareholder’s rights under Article 119 the court may, on an application made by the shareholder or the offeror, order that the terms on which the offeror is entitled and bound to acquire the shares shall be such as the court thinks fit.

(4) No order for costs or expenses shall be made against a shareholder making an application under paragraph (1) or (3) unless the court considers –

(a) that the application was unnecessary, improper or vexatious; or

(b) that there has been unreasonable delay in making the application or unreasonable conduct on the shareholder’s part in conducting the proceedings on the application.

(5) Where a takeover offer has not been accepted to the extent necessary for entitling the offeror to give notices under Article 117 (1) or (2) the court may, on the application of the offeror, make an order authorizing the offeror to give notices under that Article if satisfied –

(a) that the offeror has after reasonable enquiry been unable to trace one or more of the persons holding shares to which the offer relates;

(b) that the shares which the offeror has acquired or contracted to acquire by virtue of acceptances of the offer, together with the shares held by the person or persons mentioned in sub-paragraph (a), amount to not less than the minimum specified in that Article; and

(c) that the terms offered are fair and reasonable, but the court shall not make an order under this paragraph unless it considers that it is just and equitable to do so having regard, in particular, to the number of shareholders who have been traced but who have not accepted the offer.

122 Joint offers

(1) A takeover offer may be made by 2 or more persons jointly and in that event this Part has effect with the following modifications.

(2) The conditions for the exercise of the rights conferred by Articles 117 and 119 shall be satisfied by the joint offerors acquiring or contracting to acquire the necessary shares jointly (as respects acquisitions by virtue of acceptances of the offer) and either jointly or separately (in other cases); and, subject to the following provisions, the rights and obligations of the offeror under those Articles and Articles 118 and 120 shall be respectively joint rights and joint and several obligations of the joint offerors.

(3) It shall be a sufficient compliance with any provision of those Articles requiring or authorizing a notice or other document to be given or sent by or to the joint offerors that it is given or sent by or to any of them; but the declaration required by Article 117(4) shall be made by all of them and, in the case of a joint offeror being a company, signed by a director of that company.

(4) In Article 116, Article 118(7) and Article 123 references to the offeror shall be construed as references to the joint offerors or any of them.

(5) In Article 118(6) references to the offeror shall be construed as references to the joint offerors or such of them as they may determine.

(6) In Article 118(4)(a) and Article 120(4)(a) references to the offeror being no longer able to make the relevant payment shall be construed as references to none of the joint offerors being able to do so.

(7) In Article 121 references to the offeror shall be construed as references to the joint offerors except that any application under paragraph (3) or (5) may be made by any of them and the reference in paragraph (5)(a) to the offeror having been unable to trace one or more of the persons holding shares shall be construed as a reference to none of the offerors having been able to do so.

123 Associates

(1) The requirement in Article 116(1) that a takeover offer must extend to all the shares, or all the shares of any class or classes, in a company shall be regarded as satisfied notwithstanding that the offer does not extend to shares which associates of the offeror hold or have contracted to acquire; but, subject to paragraph (2), shares which any such associate holds or has contracted to acquire, whether at the time when the offer is made or subsequently, shall be disregarded for the purposes of any reference in this Part to the shares to which a takeover offer relates.

(2) Where during the period within which a takeover offer can be accepted, any associate of the offeror acquires or contracts to acquire any of the shares to which the offer relates, then, if the condition specified in Article 117(8)(a) or (b) is satisfied as respects those shares, they shall be treated for the purpose of that Article as shares to which the offer relates.

(3) In Article 119(1)(b) and (2)(b) the reference to shares which the offeror has acquired or contracted to acquire shall include a reference to shares which any associate of the offeror has acquired or contracted to acquire.

(4) In this Article, “associate”, in relation to an offeror, means –

(a) a nominee of the offeror;

(b) a holding company, subsidiary or fellow subsidiary of the offeror or a nominee of such a holding company, subsidiary or fellow subsidiary;

(5) For the purposes of paragraph (4)(b) a company is a fellow subsidiary of another body corporate if both are subsidiaries of the same body corporate but neither is a subsidiary of the other.

(6) For the purposes of paragraph (4)(c) an offeror has a substantial interest in a body corporate if –

(a) that body or its directors are accustomed to act in accordance with the offeror’s directions or instructions; or

(b) the offeror is entitled to exercise or control the exercise of one-third or more of the voting power at general meetings of that body.

(7) Where the offeror is an individual, the offeror’s associates shall also include the spouse and any minor child or step-child of the offeror.

124 Convertible securities

(1) For the purposes of this Part, securities of a company shall be treated as shares in the company if they are convertible into or entitle the holder to subscribe for such shares; and references to the holder of shares or a shareholder shall be construed accordingly.

(2) Paragraph (1) shall not be construed as requiring any securities to be treated –

(a) as shares of the same class as those into which they are convertible or for which the holder is entitled to subscribe; or

(b) as shares of the same class as other securities by reason only that the shares into which they are convertible or for which the holder is entitled to subscribe are of the same class.

124A Power of States to amend Part 18214

The States may amend this Part by Regulations.

PART 18A

COMPROMISES AND ARRANGEMENTS215

125 Power of company to compromise with creditors and members

(1) Where a compromise or arrangement is proposed between a company and its creditors, or a class of them, or between the company and its members, or a class of them, the court may on the application of the company or a creditor or member of it or, in the case of a company being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members of the company or class of members (as the case may be), to be called in a manner as the court directs.

(2) If a majority in number representing 3/4ths in value of the creditors or class of creditors, or members or class of members (as the case may be), present and voting either in person or by proxy at the meeting 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.216

(3) The court’s order under paragraph (2) has no effect until the relevant Act of the court has been delivered to the registrar for registration; and the relevant Act of the court shall be annexed to every copy of the company’s memorandum issued after the order has been made.

(4) If a company fails to comply with paragraph (3), it is guilty of an offence.

126 Information as to compromise to be circulated

(1) This Article applies where a meeting of creditors or a class of creditors, or of members or a class of members, is called under Article 125.

(2) With the notice calling the meeting which is given to a creditor or member there shall be included a statement explaining the effect of the compromise or arrangement and in particular stating any material interests of the directors of the company (whether as directors or as members or as creditors of the company or otherwise) and the effect on those interests of the compromise or arrangement, in so far as it is different from the effect on the same interests of other persons.

(3) In every notice calling the meeting which is given by advertisement there shall be included either a statement mentioned in paragraph (2) or a notification of the place at which, and the manner in which, creditors or members entitled to attend the meeting may obtain copies of the statement.

(4) Where the compromise or arrangement affects the rights of debenture holders of the company, the statement shall give the same explanation as respects the trustees of a deed for securing the issue of the debentures as it is required to give as respects the company’s directors.

(5) Where a notice given by advertisement includes a notification that copies of a statement explaining the effect of the compromise or arrangement proposed can be obtained by creditors or members entitled to attend the meeting, every such creditor or member shall, on making application in the manner indicated by the notice, be furnished by the company free of charge with a copy of the statement.

(6) If a company fails to comply with a requirement of this Article the company and every officer of it who is in default is guilty of an offence; and for this purpose a trustee of a deed for securing the issue of debentures of the company is deemed an officer of it; but a person is not liable under this paragraph if the person shows that the default was due to the refusal of another person, being a director or trustee for debenture holders, to supply the necessary particulars of the person’s interests.

(7) A director of the company, and a trustee for its debenture holders, shall give notice to the company of such matters relating to the person as may be necessary for the purposes of this Article; and a person who defaults in complying with this paragraph is guilty of an offence.

127 Provisions for facilitating company reconstruction or amalgamation

(1) This Article applies where application is made to the court under Article 125 for the sanctioning of a compromise or arrangement proposed between a company and any persons mentioned in that Article.

(2) If it is shown –

(a) that the compromise or arrangement has been proposed for the purposes of, or in connection with, a scheme for the reconstruction of a company or companies, or the amalgamation of 2 or more companies; and

(b) that under the scheme the whole or part of the undertaking or the property of a company concerned in the scheme (“a transferor company”) is to be transferred to another company (“the transferee company”), the court may, either by the order sanctioning the compromise or arrangement or by a subsequent order, make provision for all or any of the following matters –

(i) the transfer to the transferee company of the whole or part of the undertaking and of the property or liabilities of a transferor company;

(ii) the allotting or appropriation by the transferee company of shares, debentures, policies or other similar interests in that company which under the compromise or arrangement are to be allotted or appropriated by the company to or for any person;

(iii) the continuation by or against the transferee company of legal proceedings pending by or against a transferor company;

(iv) the dissolution, without winding up, of a transferor company;

(v) the provision to be made for persons who, within a time and in a manner which the court directs, dissent from the compromise or arrangement;

(vi) such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation is fully and effectively carried out.

(3) If an order under this Article provides for the transfer of property or liabilities, then –

(a) that property is by virtue of the order transferred to, and vests in, the transferee company; and

(b) those liabilities are, by virtue of the order, transferred to and become liabilities of that company, and property (if the order so directs) vests freed from any hypothec, security interest or other charge which is by virtue of the compromise or arrangement to cease to have effect.

(4) Where an order is made under this Article, every company in relation to which the order is made shall cause the relevant Act of the court to be delivered to the registrar for registration within 14 days after the making of the order; and in the event of failure to comply with this paragraph, the company is guilty of an offence.

(5) In this Article, “property” includes property, rights and powers of every description and “liabilities” includes duties.

PART 18B

MERGERS217

127A Mergers218

(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 2 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.

127B Approval of merger agreement219

(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 the member’s 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 Article 92(2)(f) 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).

127C Merger of subsidiaries220

(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;

(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 connection 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.

127D Notice to creditors221

(1) Subject to Article 127A(5), 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 £5,000;

(d) shall also be published once in a newspaper circulating in Jersey 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 the creditor’s objection to the company.

(3) A creditor who gives notice in accordance with paragraph (2)(e) 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 Minister may by Order alter the amount specified in paragraph (2)(b).

127E Objections by members222

(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 or her 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.

127F Documents to be delivered to registrar223

(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 Article 127D(3) 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 the merging company of which he or she is a director 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;

(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.224

127G Completion of merger225

(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 18C

CONTINUANCE226

127H Bodies corporate which are eligible for continuance227

(1) Subject to Article 127I, a body which is incorporated outside Jersey 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 Jersey.

(2) Subject to Article 127I, a company which is incorporated in Jersey 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.

127I Restrictions on continuance228

(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

127J Security for Commission’s expenses under this Part229

(1) On receiving –

(a) an application under Article 127K, by a body incorporated outside Jersey, 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.

127K Application to Commission for continuance within Jersey230

(1) An application to the Commission under this Article by a body incorporated outside Jersey, 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;

(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 Article 84(1)(a) to (f);

(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 or her 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 paragraph (1)(a) 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.

127L Articles of continuance231

218 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 Jersey.

(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 Jersey if the body corporate were a company, the articles of continuance shall also state those amendments.

127M Proposed name232

(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 or her 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 Article 13(2).

127N Determination of application to Commission for continuance within Jersey233

(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 Article 127H(1);

(b) is informed by the registrar that the proposed name of the applicant is in his or her opinion not in any way misleading or otherwise undesirable, and is also satisfied that the name complies with Article 13(2); and

(c) is satisfied that all other approvals and consents required by the law of Jersey 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 or her 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 14 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.

127O Issue of certificate of continuance within Jersey234

(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, the registrar 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 or her and sealed with his or her seal.

(3) When the registrar issues a certificate of continuance, the registrar 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 Article 127K(2)(a) refers.

127P Effect of issue of certificate of continuance within Jersey235

(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

127Q Approval by company and members of proposal for continuance overseas236

(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 Article 127S(2), apply to the court for an order under Article 143 on the ground that the proposed continuance would unfairly prejudice his or her 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

127R Notice to creditors of application to Commission for authorization to seek continuance overseas237

(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 Jersey 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 or her objection to the company.

(3) A creditor who gives notice in accordance with paragraph (2)(d) 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.

127S Objections by members to continuance overseas238

(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 or her 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.

127T Application to Commission for authorization to seek continuance overseas239

(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 Article 127S(1), 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.

127U Determination of application to Commission for authorization to seek continuance overseas240

(1) If, on an application under Article 127T to the Commission –

(a) it is satisfied that the application complies with that Article and with Article 127H(2); 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 14 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.

127V Effect of continuance overseas241

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.

127W* Statements of solvency in respect of continuance242

(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.

127X Orders relating to continuance243

(1) The Minister 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 Jersey;

(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 Jersey for such periods, whether before or after their applications to the Commission are determined, as may be prescribed.

127Y Offences relating to continuance244

Any person who on or in connection 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.

PART 18D245

CELL COMPANIES

Chapter 1 – General provisions

127YA Cell companies may create cells

(1) A cell company may, by special resolution, resolve to create one or more cells.

(2) Such a special resolution –

(a) must assign to the cell a name that complies with this Law; and

(b) must specify the terms of a memorandum and articles of the cell that set out, amongst other things, the matters mentioned in Article 4, Article 4A, Article 4B or Article 4C, as the case may be.

(3) A cell company may provide in the special resolution mentioned in paragraph (1) that a cell it creates shall be wound up and dissolved upon –

(a) the bankruptcy, death, expulsion, insanity, resignation or retirement of any cellular member of the cell;

(b) the happening of some other event that is not the expiration of a fixed period of time; or

(4) A cell company may also provide in the special resolution mentioned in paragraph (1) –

(a) that, in respect of the cell it creates, there may be issued par value shares or no par value shares; or

(b) that the cell it creates may have a guarantee member or guarantee members.

(5) There shall be taken to be included in the articles of a cell –

(a) a provision that the cell may not own shares in its cell company; and

(b) unless the contrary intention appears in the articles, a provision that the cell may own shares in any other cell of its cell company.

(6) The articles of a cell may be amended –

(a) in the manner set out in those articles; or

(b) in the absence of such a provision, by special resolution of both the cell and of the company of which it is a cell.

127YB Effect of filing of special resolution creating a cell

(1) When a cell company resolves by special resolution to create a cell, it shall file the resolution in accordance with Article 100.

(2) A special resolution filed in accordance with paragraph (1) shall have effect as if it were a memorandum of association delivered to the registrar in accordance with Article 3 that was signed by a person or persons applying to form a company in accordance with that Article.

(3) The cell shall be taken to have been created when the registrar issues –

(a) in the case of a cell of an incorporated cell company, a certificate of incorporation in respect of the cell; or

(b) in the case of a cell of a protected cell company, a certificate of recognition in respect of the cell.

127YC Status of cells

(1) Subject to this Article, a cell of a cell company –

(a) in the case of a cell of an incorporated cell company, is a company; and

(b) in the case of a cell of a protected cell company, is to be treated as a company registered under this Law for the purpose of the application to it of this Law.

(2) Accordingly, save as otherwise provided by this Part, the provisions of this Law shall apply to a cell of a cell company as if a reference in this Law –

(a) to a company were a reference to the cell;

(b) to the directors of a company were a reference to the directors of the cell;

(d) to members of a company were a reference to the members of the cell;

(e) to shares in a company were a references to shares in the cell;

(f) to assets and liabilities of a company were a reference to the assets and liabilities of the cell; and

(g) to the share capital of a company were a reference to the share capital of the cell.

(3) A cell of a cell company shall have the same directors, secretary and registered office as its cell company.

(4) Despite Article 2, a cell of a cell company is not a subsidiary or wholly owned subsidiary of the company.

127YD Register of members of cells

(1) The duties imposed on a company by Part 9 (which relates to the register of members and certificates) shall, in the case of a cell of a cell company, be performed by its cell company.

(2) Accordingly, a cell company must, in addition to keeping a register of its members, keep a register of the members of each of its cells, which it must keep in accordance with Part 9.

(3) If a cell company fails to comply with paragraph (2) it and every officer of it who is in default is guilty of an offence.

127YE Annual return in respect of cells

(1) Article 71(1) (which requires a company to deliver an annual return to the registrar) shall not apply to a cell of a cell company.

(2) However, the cell company must –

(a) include in its annual return the information required by Article 71 in respect of each cell of the company; and

(b) in respect of each of its cells – deliver to the registrar a copy of so much its annual return as relates to the cell.

(3) If a cell company fails to comply with paragraph (2) it is guilty of an offence.

127YF Accounting records of cell companies

(1) Article 102 (which requires a company to keep accounting records) shall not apply to a cell of a cell company.

(2) However, the cell company must keep accounting records in respect of each of its cells that are sufficient to show and explain the cell’s transactions and are such as to –

(a) disclose with reasonable accuracy, at any time, the financial position of the cell at that time; and

(b) enable its directors to ensure that any accounts prepared by the company in respect of the cell comply with the requirements of this Law.

(3) The accounting records kept by a cell company under Article 102 may include matters included by it in any accounting records kept by the company under paragraph (2).

(4) If a cell company fails to comply with paragraph (2), the company and, where the company or the cell concerned is a public company, every officer of the company who is in default, is guilty of an offence.

127YG Accounts of cell companies

(1) Article 104(1) (which requires a company to prepare regular accounts) shall not apply to a cell of a cell company.

(2) However, the cell company must prepare separate accounts in accordance with Article 104 that –

(a) show a true and fair view of the profit or loss of each cell of the company for the period mentioned in Article 104(1) and of the state of each cell’s affairs at the end of that period taking into account only the assets and liabilities solely attributable to the cell; and

(b) comply with any other requirement of this Law.

(3) The accounts of a cell company prepared by it in respect of the company in accordance with Article 104(1) need not include matters included by it in any accounts prepared by it in accordance with paragraph (2).

(4) Subject to any provision in the articles of a cell of a cell company or of the company to the contrary –

(a) a member of the cell company who is not a member of the cell shall only be entitled to be provided with so much of the accounts of the company as is mentioned in Article 104(1); and

(b) a member of a cell of the company shall only be entitled to be provided with so much of the accounts as is mentioned in paragraph (2) as relate to the cell of which the member is a member.

(5) If a cell company fails to comply with paragraph (2), the company and, where the company or the cell concerned is a public company, every officer of the company who is in default, is guilty of an offence.

127YH Incorporation of a cell independent of a cell company

(1) A cell of a cell company may apply to the registrar to be incorporated as a company independent of that company.

(2) If the articles of the cell are silent or do not provide otherwise, the application must be approved by a special resolution of the members of the cell or, if the cell has more than one class of members, a special resolution of each class of members.

(3) The application must include the information that would be required under Part 2 were the cell being incorporated under this Law otherwise than by virtue of this Article.

(4) In respect of an application under this Article the registrar has all the powers given under Part 2.

(5) Where a cell has made an application under this Article, a member of the cell who objects to the cell being incorporated as a company independent of its cell company may apply to the court for an order under Article 143 on the grounds that the incorporation or the terms of the incorporation unfairly prejudice his or her interests.

(6) An application may not be made under paragraph (5) after the expiration of the period of 30 days following the application being made under paragraph (1).

(7) When a cell is registered as a separate company by virtue of this Article –

(a) where the cell was a cell of an incorporated cell company, all property and rights to which the cell was entitled immediately before its registration remain the property and rights of the separate company;

(b) where the cell was a cell of a protected cell company, all property and rights of that company in respect of the cell immediately before its registration become the property and rights of the separate company;

(c) where the cell was a cell of an incorporated cell company, the separate company remains subject to all criminal and civil liabilities, and all contracts, debts and other obligations, to which the cell was subject immediately before its registration;

(d) where the cell was a cell of a protected cell company, all contracts, debts and other obligations of that company in respect of the cell, to which the protected cell company was subject immediately before the registration of the separate company, become the contracts, debts and other obligations of the separate company;

(e) where the cell was a cell of an incorporated cell company, all actions and other legal proceedings which, immediately before the registration of the separate company, were pending by or against the cell may be continued by or against the separate company; and

(f) where the cell was a cell of a protected cell company, all actions and other legal proceedings which, immediately before the registration of the separate company, were pending by or against the protected cell company in respect of the cell may be continued by or against the separate company.

(8) The operation of paragraph (7)(b) and (d) shall not be regarded –

(a) as a breach of contract or confidence or otherwise as a civil wrong;

(b) as a breach of any contractual provision prohibiting, restricting or regulating the assignment or transfer of rights or liabilities; or

(c) as giving rise to any remedy by a party to a contract or other instrument, as an event of default under any contract or other instrument or as causing or permitting the termination of any contract or other instrument, or of any obligation or relationship.

127YI Transfer of cells of cell companies

(1) A cell of a cell company may be transferred to another cell company.

(2) The companies shall enter into a written agreement that sets out the terms of the transfer (in this Article referred to as the “transfer agreement”).

(3) A transfer of a cell is approved when the directors of each cell company who authorized the transfer have approved the transfer agreement and the agreement is approved by a special resolution of the cell company to which the cell is being transferred and –

(a) when the transfer agreement is authorized by a special resolution of the cell being transferred and sanctioned by the court as an arrangement in accordance with the provisions of Article 125;

(b) when the transfer agreement is consented to by all the members of the cell being transferred and all the creditors (if any) of that cell; or

(c) if the agreement of all the creditors of the cell cannot be obtained, when the transfer is authorized by a special resolution of the cell and sanctioned by the court on it being satisfied that no creditor of the cell will be materially prejudiced by the transfer.

(4) Within 21 days of a transfer agreement being approved, the cell company to which the cell is being transferred must deliver to the registrar in accordance with Article 100 a copy of the special resolution of that company approving the transfer agreement together with –

(a) a copy of the transfer agreement;

(b) a copy of any new articles of the cell being transferred; and

(c) a declaration made in accordance with paragraph (5), signed by each director of the cell company transferring the cell who authorized the transfer.

(5) The declaration must state that each such director believes on reasonable grounds that –

(a) the cell being transferred is able to discharge its liabilities as they fall due;

(b) there are no creditors of the cell company from which the cell is being transferred whose interests will be unfairly prejudiced by the merger; and

(6) If a cell company fails to deliver the documents mentioned in paragraph (4) within the period also mentioned in that paragraph, the company and every officer of it in default is guilty of an offence.

(7) A director who makes a declaration under paragraph (5) without having the grounds to do so is guilty of an offence.

(8) Article 127YB(2) shall apply in respect of the documents delivered to the register in accordance with paragraph (4) as if the documents were a special resolution filed in accordance with Article 127YB(1).

(9) Upon delivery to the registrar of the documents referred to in paragraph (4), the registrar shall, if those documents comply with this Article –

(a) register the transfer of the cell and any new articles of the cell;

(b) issue to the cell a new certificate of incorporation or recognition in accordance with Article 127YB; and

(10) Upon the issue of the new certificate of incorporation or recognition –

(a) the cell ceases to be a cell of the cell company that transferred it;

(b) the cell becomes a cell of the company to which it has been transferred;

(d) where the cell was a cell of an incorporated cell company, all property and rights to which the cell was entitled immediately before the issue of the new certificate remain the property and rights of the cell if the transfer is to an incorporated cell company or, if the transfer is to a protected cell company, become the property and rights of that company in respect of the cell;

(e) where the cell was a cell of an incorporated cell company, the liabilities, and all contracts, debts and other obligations to which the cell was subject immediately before the issue of the new certificate remain the liabilities, contracts, debts and other obligations of the cell if the transfer is to an incorporated cell company or if the transfer is to a protected cell company, become the liabilities, contracts, debts and other obligations of that company in respect of the cell;

(f) where the cell was a cell of an incorporated cell company, all actions and other legal proceedings which, immediately before the issue of the new certificate were pending by or against the cell may be continued by or against the cell if the transfer is to an incorporated cell company or, if the transfer is to a protected cell company by or against that company in respect of the cell;

(g) where the cell was a cell of a protected cell company, all property and rights of that company in respect of the cell immediately before the issue of the new certificate become the property and rights of the cell if the transfer is to an incorporated cell company or, if the transfer is to a protected cell company, the property and rights of that company in respect of that cell;

(h) where the cell was a cell of a protected cell company, all liabilities, contracts, debts and other obligations of that company in respect of the cell, to which the protected cell company was subject immediately before the issue of the new certificate, become the contracts, debts and other obligations of the cell if the transfer is to an incorporated cell company or, if the transfer is to a protected cell company, the liabilities, contracts, debts and other obligations of that company in respect of the cell; and

(i) where the cell was a cell of a protected cell company, all actions and other legal proceedings that, immediately before the issue of the new certificate, were pending by or against the protected cell company in respect of the cell may be continued by or against the cell if the transfer is to an incorporated cell company or, if the transfer is to a protected cell company, against that company is respect of the cell.

(11) The operation of paragraph (10) shall not be regarded –

(a) as a breach of contract or confidence or otherwise as a civil wrong;

(b) as a breach of any contractual provision prohibiting, restricting or regulating the assignment or transfer of rights or liabilities; or

(12) A cell may not be transferred under this Article if the transfer would be inconsistent with the memorandum or articles of the cell, the cell company transferring the cell or the cell company to which it is to be transferred.

(13) A company that is not a cell company and a cell company may enter into an agreement to provide that the company that is not a cell company shall become a cell of the cell company.

(14) Where paragraph (13) applies –

(a) the agreement mentioned in that paragraph shall have effect for the purpose of this Article as if it were a transfer agreement; and

(b) this Article shall otherwise apply in respect of the transfer as if the company that is not a cell company were a cell of an incorporated cell company.

127YJ Application of Part 21 to cell companies

(1) Where a cell company with one or more cells is being wound up under Part 21 the company shall not be taken to have no assets and no liabilities while the company continues to have any such cell.

(2) Accordingly, in the course of the winding up of the company, each cell of the company must –

(a) be transferred to another cell company;

(b) be wound up;

(d) be incorporated independently of the cell company; or

(e) be merged with another company.

127YL Names of incorporated cell companies

(1) The name of an incorporated cell company must end with the words

“Incorporated Cell Company” or with the abbreviation “ICC”.

(2) A company that is registered with a name that ends with the words

“Incorporated Cell Company” or the abbreviation “ICC” 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 determines.

(3) An incorporated cell company must assign a distinctive name to each of its cells that –

(a) distinguishes the cell from any other cell of the company; and

(a) ends with the words “Incorporated Cell” or with the abbreviation “IC”.

(4) Article 13(2) (which specifies how the name of a limited company must end) shall not apply to a cell of an incorporated cell company where the cell is a limited company.

127YM Restriction on alteration of memorandum or article

216 The power conferred by Article 11 on a company to alter its memorandum or articles shall not be exercisable by a company to provide for it to be a cell company unless –

the alteration is authorized by a special resolution of the company and sanctioned by the court in accordance with Article 125; 

the alteration is consented to by all the members of the company and all the creditors of the company; or 

if the consent of all the creditors of the company cannot be obtained, the alteration is authorized by a special resolution of the company and sanctioned by the court on it being satisfied that no creditor will be materially prejudiced by the alteration.

217 The power conferred by Article 11 on a cell company to alter its memorandum or articles shall not be exercisable by a cell company to provide for it to cease to be a cell company, or for it to convert from an incorporated cell company to a protected cell company or from a protected cell company to an incorporated cell company, unless –

the alteration is authorized by a special resolution of the company and of each cell of the company, and sanctioned by the court in accordance with Article 125;

(b) the alteration is consented to by all the members of the company, all the members of each cell of the company, and all the creditors of the company and of each cell of the company; or

(c) where the consent of all the creditors of the company and of each cell of the company cannot be obtained, the alteration is authorized by a special resolution of the company and of each cell of the company, and sanctioned by the court on it being satisfied that no such creditor will be materially prejudiced by the alteration.

(3) Where a company seeks to change its status in accordance with paragraph (1) or paragraph (2) the registrar shall issue under Article 9 a certificate of incorporation that is appropriate to the altered status of the company if there is delivered to the registrar –

(a) a copy of the special resolution that alters its memorandum and its name; and

(b) evidence satisfactory to the registrar that the requirements of paragraphs (1) or paragraph (2), as appropriate, have been met.

(4) Where a company changes its status in accordance with paragraph (1) or paragraph (2) the change of status shall take effect when the registrar issues a certificate of incorporation in accordance with paragraph (3).

(5) Where a company changes its status in accordance with this paragraph the special resolution required under Article 11 for it to do so must include any change of name of the company necessary for it to comply with this Law.

(6) A body that is incorporated outside Jersey may, with the approval of the Commission, change its status in the manner set out in this Article as part of the process of obtaining the issue of a certificate of continuance in accordance with Part 18C.

(7) A change of status of a company to which paragraph (6) applies shall have effect on the issue of the certificate of continuance in accordance with Article 127O.

127YN Power of States to amend Part

The States may amend this Part by Regulations.

Chapter 2 – Protected cell companies

127YO Interpretation

In this Chapter –

“cellular assets”, in respect of a protected cell company, means the assets of the company attributable solely to the cell or cells of the company;

“cellular liabilities”, in respect of a protected cell company, means the liabilities of the company attributable solely to a cell or cells of the company;

“non-cellular assets”, in respect of a protected cell company, means its assets that are not its cellular assets;

“non-cellular liabilities”, in respect of a protected cell company, means its liabilities that are not its cellular liabilities.

127YP Status of cells of protected cell companies

(1) A cell of a protected cell company is not a body corporate and has no legal identity separate from that of its cell company.

(2) However, a cell of a protected cell company may enter into an agreement with its cell company or with another cell of the company that shall be enforceable as if each cell of the company were a body corporate that had a legal identity separate from that of its cell company.

(3) Where a protected cell company is liable for any criminal penalty, under this Law or otherwise, due to the act or default of a cell of the company or of an officer of a cell of the company, the penalty –

(a) may only be met by the company from the cellular assets of the cell; and

(b) shall not be enforceable in any way against any other assets of the company, whether cellular or non-cellular.

127YQ Membership of protected cell company

(1) In a protected cell company –

(a) its non-cell members are members of the company but are not, by virtue of being such members, members of any cell of the company; and

(b) the cell members of a cell created by the company are members of that cell but are not, by virtue of being such members, members of the company or of any other cell of the company.

(2) In paragraph (1) –

“cell member”, in respect of a protected cell company, means –

(a) a registered holder of a share in a cell of the company; or

(b) a guarantee member of a cell of the company;

“non-cell member”, in respect of a protected cell company, means –

(a) a registered holder of a share in the company that is not a share in a cell of the company; or

(b) a guarantor member of the company who is not a guarantor member of the company by virtue of being a guarantee member of a cell of the company.

127YR Additional duties of directors of protected cell companies

(1) A director of a protected cell company must exercise his or her powers and must discharge his or her duties in such a way as shall best ensure that –

(a) the cellular assets of the company are kept separate and are separately identifiable from the non-cellular assets of the company; and

(b) the cellular assets attributable to each cell of the company are kept separate and are separately identifiable from the cellular assets attributable to other cells of the company.

(2) A director of a protected cell company must ensure, when the company enters into an agreement in respect of a cell of the company –

(a) that the other party to the transaction knows or ought reasonably to know that the cell company is acting in respect of a particular cell; and

(b) that the minutes of any meeting of directors held with regard to the agreement clearly record the fact that the company was entering into the agreement in respect of the cell and that the obligation imposed by sub-paragraph (a) was or will complied with.

(3) A director who fails to comply with the requirements of paragraph (1) or paragraph (2) shall be guilty of an offence.

(4) The duties of a director of a protected cell company under this Article are in addition to those under Article 74.

127YS Names of protected cell companies

(1) The name of a protected cell company must end with the words

“Protected Cell Company” or with the abbreviation “PCC”.

(2) A company that is registered with a name that ends with the words

“Protected Cell Company” or the abbreviation “PCC” 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 determines.

(3) A protected cell company must assign a distinctive name to each of its cells that –

(a) distinguishes the cell from any other cell of the company; and

(b) ends with the words “Protected Cell” or with the abbreviation “PC”.

(4) Article 13(2) (which specifies how the name of a limited company must end) shall not apply to a cell of a protected cell company where the cell has the features of a limited company.

127YT Liability of protected cell company and its cells

(1) Where a protected cell company –

148 enters into a transaction in respect of a particular cell of the company; or

149 incurs a liability arising from an activity or asset of a particular cell, a claim by any person in connection with the transaction or liability extends only to the cellular assets of the cell.

(2) Where a protected cell company –

(a) enters into a transaction in its own right and not in respect of any of its cells;

(b) incurs a liability arising from an activity of the company in its own right and not in respect of any of its cells; or

(c) incurs a liability arising from an asset held by the company in its own right and not in respect of any of its cells, a claim by any person in connection with the transaction or liability extends only to the non-cellular assets of the company.

(3) Except as provided by paragraphs (4) and (6), a protected cell company has no power –

(a) to meet any liability attributable to a particular cell of the company from the non-cellular assets of the company; or

(b) to meet any liability, whether attributable to a particular cell or not, from the cellular assets of another cell of the company.

(4) If –

(a) a protected cell company is permitted to do so under its articles; and

(b) the requirement set out in paragraph (5) is satisfied, the company may meet any liability attributable to a particular cell of the company from the company’s non-cellular assets.

(5) The requirement mentioned in paragraph (4)(b) is that prior to the protected cell company meeting any liability attributable to the particular cell from the company’s non-cellular assets the directors who are to authorize the liability being met in such a way must make a statement that, having made full enquiry into the affairs and prospects of the company, they have formed the opinion –

(a) that, immediately following the date on which the liability is proposed to be met by the non-cellular assets of the company, the company will be able to discharge its liabilities as they fall due; and

(b) that, having regard to the prospects of the company and to the intentions of the directors with respect to the management of the company’s business and to the amount and character of the financial resources that will in their view be available to the company, the company will be able to continue to carry on business and will be able to discharge its liabilities as they fall due until the expiry of the period of one year immediately following the date on which the liability is proposed to be met by the non- cellular assets of the company or until the company is dissolved under Article 150, whichever first occurs.

(6) A protected cell company may meet any liability, whether attributable to a particular cell or not, from the cellular assets of another cell if –

(a) it is permitted to do so by the articles of that other cell; and

(b) the requirement set out in paragraph (7) is satisfied.

(7) The requirement mentioned in paragraph (6)(b) is that prior to the protected cell company meeting any liability from the cellular assets of that other cell the directors who are to authorize the liability being met in such a way must make a statement that, having made full enquiry into the affairs and prospects of that cell, they have formed the opinion –

(a) that, immediately following the date on which the liability is proposed to be met by the cellular assets of the cell, the cell will be able to discharge its liabilities as they fall due; and

(b) that, having regard to the prospects of the cell and to the intentions of the directors with respect to the management of the cell’s business and to the amount and character of the financial resources that will in their view be available to the cell, the cell will be able to continue to carry on business and will be able to discharge its liabilities as they fall due until the expiry of the period of one year immediately following the date on which the liability is proposed to be met by the cellular assets of the cell or until the cell is dissolved, as if it were a company, under Article 150, whichever first occurs.

(8) A director who makes a statement under paragraph (5) or paragraph (7) without having reasonable grounds for the opinion expressed in the statement is guilty of an offence.

127YU Protection of cellular and non-cellular assets of protected cell companies

(1) Where a creditor of a protected cell company has a claim against the company in respect of a particular cell of the company (in this Article called “the relevant cell”) by virtue of a transaction to which Article 127YT(1) applies, only the cellular assets of the company held by it in respect of the relevant cell shall be available to the creditor.

(2) Where a creditor of a protected cell company has a claim against the company by virtue of a transaction to which Article 127YT(1) does not apply, the cellular assets of the company shall not be available to the creditor.

(3) Accordingly –

(a) a creditor of the company to whom paragraph (1) applies only has the right to seek by proceedings or by any other means, whether in Jersey or elsewhere, to make or attempt to make the cellular assets of the company held by it in respect of the relevant cell available for all or any part of the amount owed to the creditor; and

(b) a creditor of the company to whom paragraph (2) applies has no right to seek by proceedings or by any other means, whether in Jersey or elsewhere, to make or attempt to make the cellular assets of the company available for all or any part of the amount owed to the creditor.

(4) If a creditor of a protected cell company to whom paragraph (1) applies succeeds, whether in Jersey or elsewhere, in making available for all or any part of the amount owed to the creditor any assets of the company that are not its cellular assets held by it in respect of the relevant cell, the creditor shall be liable to pay to the company an amount equal to the benefit so obtained.

(5) If a creditor of a protected cell company to whom paragraph (2) applies succeeds, whether in Jersey or elsewhere, in making available for all or any part of the amount owed to the creditor any cellular assets of the company, the creditor shall be liable to pay to the company an amount equal to the benefit so obtained.

(6) Any amount recovered by a protected cell company in respect of a cell of the company by virtue of paragraph (4) or paragraph (5), and the right to claim that amount, shall form part of the cellular assets of the company held by it in respect of the cell.

(7) If a creditor of a protected cell company to whom paragraph (1) applies succeeds, whether in Jersey or elsewhere in seizing or attaching or otherwise levying execution against any assets of the company, that are not its cellular assets held by it in respect of the relevant cell, for all or any part of the amount owed to the creditor, the creditor shall hold those assets or their proceeds on trust for the company or, as the case may be, the cell of the company whose cellular assets were wrongfully seized or attached.

(8) If a creditor of a protected cell company to whom paragraph (2) applies succeeds, whether in Jersey or elsewhere in seizing or attaching or otherwise levying execution against any cellular assets of the company for all or any part of the amount owed to the creditor, the creditor shall hold those assets or their proceeds on trust for the cell of the company whose cellular assets were wrongfully seized or attached.

(9) Where paragraph (7) or paragraph (8) applies, the creditor must –

(a) keep the assets so held on trust separated and identifiable as trust property; and

(b) pay or return them on demand to the protected cell company, and shall be guilty of an offence if he or she fails to do so.

(10) Any amount recovered by a protected cell company by virtue of a trust mentioned in paragraph (7) shall form part of the non-cellular assets of the company or, as the case may be, the cellular assets of the cell of the company whose cellular assets were wrongfully seized or attached.

(11) Any amount recovered by a protected cell company by virtue of a trust mentioned in paragraph (8) shall form part of the cellular assets of the cell of the company whose cellular assets were wrongfully seized or attached.

(12) If a creditor becomes liable to pay an amount or to return assets to a protected cell company under paragraph (4), paragraph (5) or paragraph (9)(b) and no amount or an insufficient amount is received, or no assets or less than all the assets are recovered, the company must cause or procure an auditor, acting as an expert and not as an arbitrator, to certify the loss suffered by the company and then, as the case may be –

(a) transfer to the company from the cellular assets of the relevant cell, if the liability was attributable to it, an amount sufficient to make good the loss suffered by the company’s cellular or non-cellular assets, as the case may be; or

(b) transfer from its non-cellular assets, if the liability was attributable to them an amount sufficient to make good the loss suffered by its the cellular assets.

(13) Where an amount transferred by virtue of paragraph (12)(a) was in respect of a loss suffered by the company’s cellular assets, the amount transferred shall be transferred to the cell of the company whose cellular assets were wrongfully made available to a creditor or seized, attached or executed against.

(14) An amount transferred by virtue of paragraph (12)(b) shall be transferred to the cell of the company whose cellular assets were wrongfully made available to a creditor or seized, attached or executed against.

(15) If a company fails to comply with paragraph (12), (13) or (14) the company and every officer of it who is in default is guilty of an offence.

(16) Paragraphs (4) to (14) do not apply to any payment made to a creditor by a protected cell company in accordance with Article 127YT(4) or Article 127YT(6).

127YV Effect of commencement of summary winding up of protected cell company

(1) Where a protected cell company is being wound up, Article 148(2) shall not apply in respect of any cell of the company.

(2) Where a cell of a protected cell company is being wound up, Article 148(2) shall not apply in respect of the company or any other cell of the company.

127YW Court may determine liability of protected cells companies

The court, on the application of a protected cell company, may determine, in accordance with this Part, if a liability of the company is to be met by its non-cellular assets, by the cellular assets of a specific cell of the company or by a combination of those assets.

PART 19

INVESTIGATIONS

128 Appointment of inspectors246

(1) The Minister or the Commission may appoint one or more competent inspectors to investigate the affairs of a company and to report on them as the Minister or the Commission may direct.247

(2) The appointment may be made on the application of the registrar, the company or a member, officer or creditor of the company.

(3) The Minister or the Commission may, before appointing inspectors, require the applicant, other than the registrar, to give security, to an amount not exceeding £10,000 or such other sum as may be prescribed for payment of the costs of the investigation.248

(4) This Article applies whether or not the company is being wound up.

(5) In any case where the Minister or the Commission may exercise a discretion under this Article, the decision of the Minister shall prevail.249

129 Powers of inspectors

(1) If inspectors appointed under Article 128 to investigate the affairs of a company think it necessary for the purposes of their investigation to investigate also the affairs of another body corporate which is or at any relevant time has been the company’s subsidiary or holding company, or a subsidiary of its holding company or a holding company of its subsidiary, they shall have power to do so; and they shall report on the affairs of the other body corporate so far as they think that the results of their investigation of its affairs are relevant to the investigation of the affairs of the first mentioned company.

(2) Inspectors so appointed may at any time in the course of their investigation, without the necessity of making an interim report, inform the Minister or the Commission as the case may be and the Attorney General of matters coming to their knowledge as a result of the investigation tending to show that an offence has been committed.250

(3) Where, for the purposes of paragraph (1) –

(a) the company is a cell company, that paragraph shall extend to any cell of the company, whether present or past; or

(b) the company is or was a cell of a cell company, that paragraph shall extend to its cell company and to any other cell of the cell company, whether past or present.251

130 Production of records and evidence to inspectors

(1) If inspectors appointed under Article 128 consider that any person is or may be in possession of information relating to a matter which they believe to be relevant to the investigation, they may require the person –

(b) to produce and make available to them all records in the person’s custody or power relating to that matter;

(d) otherwise to give them all assistance in connection with the investigation which the person is reasonably able to give, and it is that person’s duty to comply with the requirement.

(2) Inspectors may for the purposes of the investigation examine on oath any such person as is mentioned in paragraph (1), and may administer an oath accordingly.

(3) A person who, being required under paragraph (1) to answer any question which is put to him or her 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.252

(4) An answer given by a person to a question put to him or her in exercise of the powers conferred by this Article may not be used in evidence against him or her in any criminal proceedings except –

(a) proceedings in which the person 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

131 Power of inspectors to call for directors’ bank accounts

If inspectors appointed under Article 128 have reasonable grounds for believing that a director, or past director, of the company or other body corporate whose affairs they are investigating maintains or has maintained a bank account of any description, whether alone or jointly with another person and whether in Jersey or elsewhere, into or out of which there has been paid money which has been in any way connected with an act or omission, or series of acts or omissions, which constitutes misconduct (whether fraudulent or not) on the part of that director towards the company or other body corporate or its members, the inspectors may require the director to produce and make available to them all records in the director’s possession or under the director’s control relating to that bank account.

132 Authority for search

(1) Inspectors appointed under Article 128 may for the purpose of an investigation under that Article apply to the Bailiff for a warrant under this Article in relation to specified premises.

(2) If the Bailiff is satisfied that the conditions in paragraph (3) are fulfilled the Bailiff may issue a warrant authorizing a police officer and any other person named in the warrant to enter the specified premises (using such force as is reasonably necessary for the purpose) and to search them.

(3) The conditions referred to in paragraph (2) are –

(a) that there are reasonable grounds for suspecting that there is on the premises material (whether or not it can be particularised) which is likely to be of substantial value (whether by itself or together with other material) to the investigation for the purpose of which the application is made; and

(b) that the investigation for the purposes of which the application is made might be seriously prejudiced unless immediate entry can be secured to the premises.

(4) Where a person has entered premises in the execution of a warrant issued under this Article, the person may seize and retain any material, other than items subject to legal professional privilege, which is likely to be of substantial value (whether by itself or together with other material) to the investigation for the purpose of which the warrant was issued.

(5) In this Article, “premises” includes any place and, in particular, includes –

(a) any vehicle, vessel, aircraft or hovercraft;

(b) any offshore installation; and

133 Obstruction

Any person who wilfully obstructs any person acting in the execution of a warrant issued under Article 132 is guilty of an offence.

134 Failure to co-operate with inspectors

(1) If any person –

(a) fails to comply with a requirement under Article 130 or 131; or

(b) refuses to answer any question put to the person by the inspectors for the purpose of the investigation, the inspectors may certify the refusal in writing to the court.

(2) The court may thereupon inquire into the case and, after hearing any witness who may be produced against or on behalf of the alleged offender and any statement in defence, the court may punish the offender as if the person had been guilty of contempt of the court.

135 Inspectors’ reports

(1) The inspectors may, and if so directed by the Minister or the Commission shall –

(a) make interim reports; and

(b) on conclusion of their investigation make a final report, to the Minister or the Commission as the case may be.254

(2) The Minister or the Commission may –

(a) forward a copy of any report made by the inspectors to the company’s registered office;

(b) furnish a copy on request and on payment of the prescribed fee to –

(i) any member of the company or other body corporate which is the subject of the report,

(ii) any person whose conduct is referred to in the report,

(iii) the auditors of the company or that body corporate,

(iv) the applicants for the investigation,

(v) a relevant supervisory authority, or

(vi) any person whose financial interests appear to the Minister 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

(3) In this Article, “relevant supervisory authority” means an authority discharging in a country or territory outside Jersey supervisory functions corresponding to those of the Commission in respect of bodies corporate.256

136 Power to bring civil proceedings on behalf of body corporate

(1) If, from any report made or information obtained under this Part, it appears to the Minister or the Commission that civil proceedings ought in the public interest to be brought by a body corporate, the Minister or the Commission may bring those proceedings in the name and on behalf of the body corporate.257

(2) The Minister or the Commission shall at the expense of the States or the Commission as appropriate indemnify the body corporate against any costs or expenses incurred by it in or in connection with proceedings brought under this Article.258

(3) In any case where the Minister or the Commission may exercise a discretion under this Article, the decision of the Minister shall prevail.259

137 Expenses of investigating a company’s affairs

(1) The expenses of and incidental to an investigation by inspectors shall be defrayed in the first instance by the Minister or the Commission, but the following are liable to make repayment to the Minister or the Commission to the extent specified –

(a) a person who –

(i) is convicted in proceedings on a prosecution instituted as a result of the investigation, or

(ii) is ordered to pay the whole or any part of the proceedings brought under Article 136, may in the same proceedings be ordered to pay those expenses to the extent specified in the order;

(b) a body corporate in whose name proceedings are brought under that Article is liable to the amount or value of any sums or property recovered by it as a result of those proceedings;

(c) a body corporate which has been the subject of the investigation is liable except so far as the Minister or the Commission otherwise directs; and

(d) the applicant or applicants for the investigation (other than the registrar), is or are liable to the extent (if any) which the Minister or the Commission may direct.260

(2) For the purposes of this Article, costs or expenses incurred by the Minister or the Commission in or in connection with proceedings brought under Article 136 (including expenses incurred under paragraph (2) of it) are to be treated as expenses of the investigation giving rise to the proceedings.261

(3) A liability to repay the Minister or the Commission imposed by paragraph (1)(a) or (b) is (subject to satisfaction of the Minister’s or Commission’s right to repayment) a liability also to indemnify all persons against liability under sub-paragraph (c) or (d) of that paragraph; and a liability imposed by sub-paragraph (a) is (subject as mentioned above) a liability also to indemnify all persons against liability under sub-paragraph (b).262

(4) A person liable under paragraph (1) is entitled to a contribution from any other person liable under the same paragraph according to the amount of their respective liabilities under it.

(5) Expenses to be defrayed by the Minister or the Commission under this Article shall, so far as not recovered under it, be paid out of money provided by the States or the Commission as appropriate.263

(6) There shall be treated as expenses of the investigation, in particular, such reasonable sums as the Minister or the Commission may determine in respect of general staff costs and overheads.264

138 Inspectors’ report to be evidence

(1) A copy of a report of inspectors certified by the Minister or the Commission to be a true copy, is admissible in legal proceedings as evidence of the opinion of the inspectors in relation to a matter contained in the report.265

(2) A document purporting to be a certificate mentioned in paragraph (1) shall be received in evidence and be deemed to be such a certificate unless the contrary is proved.

139 Privileged information

Nothing in this Part requires the disclosure or production, to the Commission or to an inspector appointed by the Minister or the Commission –

(a) by a person of information or records which the person would in an action in the court be entitled to refuse to disclose or produce on the grounds of legal professional privilege in proceedings in the court except, if the person is a lawyer, the name and address of his or her client;

(b) by a company’s bankers (as such) of information or records relating to the affairs of any of their customers other than the company or other body corporate under investigation.266

140 Investigation of external companies

This Part applies to external companies and to bodies corporate which have at any time been external companies as if they were companies under this Law, but subject to such adaptations and modifications as may be specified in Regulations made by the States.

PART 20

UNFAIR PREJUDICE

141 Power for member to apply to court

(1) A member of a company may apply to the court for an order under Article 143 on the ground that the company’s affairs are being or have been conducted in a manner which is unfairly prejudicial to the interests of its members generally or of some part of its members (including at least the member) or that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial.

(2) The provisions of this Article and Articles 142 and 143 apply to a person who is not a member of a company but to whom shares in the company have been transferred or transmitted by operation of law, as those provisions apply to a member of the company; and references to a member or members are to be construed accordingly.

142 Power for Minister or the Commission to apply to court267

(1) If in the case of a company –

(a) the Minister or the Commission has received a report under Article 135; and

(b) it appears to the Minister or the Commission that the company’s affairs are being or have been conducted in a manner which is unfairly prejudicial to the interests of its members generally or of some part of its members, or that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial, the Minister or the Commission may apply to the court for an order under Article 143.268

(2) In any case where the Minister or the Commission may exercise a discretion under this Article, the decision of the Committee shall prevail.269

143 Powers of court

(1) If the court is satisfied that an application under Article 127E, 127S, 141 or 142 is well founded, it may make such order as it thinks fit for giving relief in respect of the matters complained of.270

(2) Without prejudice to the generality of paragraph (1), the court’s order may –

(a) regulate the conduct of the company’s affairs in the future;

(b) require the company to refrain from doing or continuing an act complained of by the applicant or to do an act which the applicant has complained it has omitted to do;

(c) authorize civil proceedings to be brought in the name and on behalf of the company by such person or persons and on such terms as the court may direct; and

(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.271

(3) If an order under this Article requires the company not to make any, or any specified, alterations in the memorandum or articles, the company shall not then without leave of the court make such alterations in breach of that requirement.

(4) An alteration in the company’s memorandum or articles made by virtue of an order under this Article is of the same effect as if duly made by resolution of the company, and the provisions of this Law apply to the memorandum or articles as so altered accordingly.

(5) The Act of the court recording the making of an order under this Article altering, or giving leave to alter, a company’s memorandum or articles shall, within 14 days from the making of the order or such longer period as the court may allow, be delivered by the company to the registrar for registration, and if a company fails to comply with this paragraph, the company is guilty of an offence.

PART 21

WINDING UP OF COMPANIES

Chapter 1 – Winding up of companies of limited duration272

144 Procedure – winding up of limited life companies273

(1) Where a limited life company is to be wound up and dissolved upon –

(a) the expiration of a fixed period of time; or

(b) the happening of some other event, specified in its memorandum or articles, and the period expires or the other event happens, the company shall thereupon be deemed to pass a special resolution for its winding up summarily.

(2) Within 21 days thereafter, a notice of the resolution so deemed to be passed shall be delivered to the registrar.

(3) If a statement of solvency is made in accordance with Article 146(2) within 28 days after the event referred to in paragraph (1), and is delivered to the registrar within 21 days after it is made, the limited life company shall continue to be wound up summarily in accordance with Chapter 2 of this Part.

(4) If a statement of solvency is not delivered to the registrar in accordance with paragraph (3), the limited life company shall be wound up in a creditors’ winding up in accordance with Chapter 4 of this Part and for that purpose Article 151 shall apply as though the opinion referred to in that Article had been recorded at the expiration of 28 days after the happening of the event referred to in paragraph (1).

144A Procedure – winding up of other companies of limited duration274

(1) Where a company (other than a limited life company) is to be wound up and dissolved upon the expiration of a fixed period of time specified in its memorandum or articles, and the period expires, the company shall deliver to the registrar within 21 days after that period has expired a notice stating –

(a) that the period has expired; and

(b) the date of expiration.

(2) If a company fails to comply with paragraph (1), any director, member or creditor of the company may, at any time after the expiration of the period of 21 days referred to in paragraph (1), deliver such a notice to the registrar.

(3) Where a notice is delivered to the registrar in accordance with paragraph (2), the director, member or creditor shall at the same time deliver a copy of the notice to the company.

(4) If a statement of solvency in accordance with Article 146(2) –

(a) has been made within 28 days before and is delivered to the registrar with a notice delivered in accordance with paragraph (1); or

(b) has been made and is delivered to the registrar within 28 days after a notice is delivered in accordance with paragraph (2), the company shall be wound up summarily in accordance with Chapter 2 of this Part.

(5) If, notice having been delivered in accordance with paragraph (1) or paragraph (2), a statement of solvency is not made and delivered to the registrar as provided in paragraph (4), the company shall be wound up in a creditors’ winding up in accordance with Chapter 4 of this Part and for that purpose the company shall be deemed to pass a resolution for a creditors’ winding up –

(a) where notice is delivered in accordance with paragraph (1), upon delivery of the notice to the registrar; and

(b) where notice is delivered in accordance with paragraph (2), upon the expiration of 28 days after the copy of the notice is delivered to the company.

Chapter 2 – Summary winding up275

145 Application of this Chapter

(1) This Chapter applies to the winding up of a company that –

(a) has no liabilities;

(b) has liabilities that have already fallen due or that fall due within 6 months after the commencement of the winding up, that it will be able to discharge in full within 6 months of the commencement of the winding up;

(c) has liabilities that will arise more than 6 months after the commencement of the winding up that it will be able to discharge in full as they fall die; or

(d) has a combination of the liabilities mentioned in sub-paragraph (b) and (c).

(2) A winding up under this Chapter is a summary winding up.

146 Procedure

(1) A company, not being a company in respect of which a declaration has been made and not recalled under the Désastre Law, may be wound up under this Chapter –

(a) in accordance with Article 144;

(b) in accordance with Article 144A; or

(2) That manner is firstly for the directors of the company to make a statement of solvency signed by each director that states that, having made full enquiry into the company’s affairs, each director is satisfied that –

(a) the company has no assets and no liabilities;

(b) the company has assets and no liabilities;

(c) the company will be able to discharge its liabilities in full within the 6 months after the commencement of the winding up;

(d) the company has liabilities that will fall due more than 6 months after the commencement of the winding up that it will be able to discharge in full as they fall due; or

(e) both sub-paragraphs (c) and (d) apply to the company, as the case may be.

(3) And secondly –

(a) for the company to pass, within 28 days after the statement of solvency has been signed by the directors, a special resolution that the company be wound up summarily; and

(b) for a copy of the special resolution to be delivered to the registrar in accordance with Article 100 together with the directors’ statement of solvency.

(4) A director is guilty of an offence if –

(a) he or she signs a statement of solvency when having no reasonable grounds for making the statement; and

(b) the statement is subsequently delivered to the registrar.

147 Commencement of summary winding up

A summary winding up under which assets of a company are to be distributed commences –

(a) where a limited life company has under Article 144(1) been deemed to pass a special resolution for winding up, upon its being deemed to have passed that resolution;

(b) where a company (other than a limited life company) whose existence is limited by a period of time is wound up pursuant to Article 144A, when a requirement of Article 144A(4) is complied with; and

150 Effect on status of company

(1) The corporate state and capacity of a company continues after the commencement of the company’s summary winding up until the company is dissolved.

(2) However, the company’s powers shall not be exercised except so far as may be required –

(a) to realise its assets;

(b) to discharge its liabilities; and

(3) Paragraph (2) is subject to Articles 154 and 186A.

151 Appointment of liquidator

(1) A company may, on or after the commencement of its summary winding up, by special resolution, appoint a person to be liquidator for the purposes of the winding up.

(2) On the appointment of a liquidator the directors cease to be authorized to exercise their powers in respect of the company and those powers may be exercised by the liquidator.

(3) Paragraph (2) is subject to –

(a) the resolution appointing the liquidator or any subsequent special resolution of the company providing otherwise; and

(b) Article 150.

(4) Article 83 applies to a liquidator appointed under this Article as it applies to a director.

152 Application of assets and dissolution

(1) The registrar shall register a statement delivered under Article 146 or paragraph (5) of this Article.

(2) On the registration by the registrar of a statement delivered under Article 146 that the company has no assets and no liabilities the company is dissolved.

(3) Where the statement delivered under Article 146 states that the company has assets and no liabilities the company shall, on the registration of the statement by the registrar, distribute its assets among its members according to their rights or otherwise as provided by its memorandum or articles.

(4) Where the statement delivered under Article 146 states that the company has liabilities, the company, after the registration of the statement by the registrar –

(a) shall satisfy those liabilities as they become due or within 6 months of that commencement, as the case may be; and

(b) if the directors of the company reasonably believe that the company is able to pay any remaining liabilities as they fall due, may then distribute its remaining assets among its members according to their rights or otherwise as provided by its memorandum or articles.

(5) As soon as a company has completed the distribution of its assets in accordance with paragraph (3) or paragraph (4), it shall deliver to the registrar a statement signed by each of the directors or, if the distribution has been completed by a liquidator appointed under Article 149, by the liquidator, stating that each director or the liquidator, having made full enquiry into the company’s affairs, is satisfied that the company has no assets and no liabilities.

(6) The company is dissolved on the registration of that statement.

(7) A director or liquidator who signs a statement delivered to the registrar under paragraph (5) without having reasonable grounds for stating that the company has no assets and no liabilities is guilty of an offence.

151 Effect of insolvency

(1) This Article applies if, after the commencement of a summary winding up of a company –

(a) a liquidator appointed in accordance with Article 149 forms the opinion; or

(b) no liquidator having been appointed under Article 149, the directors of the company form the opinion, that the company has liabilities that it will be unable to discharge within 6 months of the commencement of the winding up or, if they fall due after that date, as they fall due.

(2) The liquidator or directors shall record the opinion –

(a) in the case of a liquidator, in his or her records of the administration of the affairs of the company; or

(b) in the case of directors, in the minutes of a meeting of the directors.

(3) The liquidator or directors shall give each creditor of the company notice by post calling a meeting of the creditors to be held in Jersey not less than 14 days after the service of the notice and not more than 28 days after the opinion was recorded in accordance with paragraph (2).

(4) The notice shall contain the name of a person nominated as liquidator of the company for a creditors’ winding up.

(5) The liquidator or directors shall deliver a copy of the notice to the registrar.

(6) The liquidator or directors shall also give notice of the meeting of the creditors of the company by advertisement in the Jersey Gazette not less than 10 days before the day for which the meeting is called.

(7) Before the meeting the liquidator or directors shall furnish any creditor free of charge with such information concerning the affairs of the company as the creditor may reasonably request.

(8) At the meeting the liquidator or directors shall provide a statement as to the affairs of the company.

(9) The statement shall be verified by affidavit by the liquidator or by some or all of the directors.

(10) At the creditors’ meeting the liquidator shall preside if one has been appointed but otherwise a director nominated by the directors shall preside.

(11) From the day of the creditors’ meeting the winding up becomes a creditors’ winding up and this Law has effect as if the meeting were the meeting of creditors mentioned in Article 160 and Article 162 shall apply accordingly.

(12) A liquidator or director who, without reasonable excuse, fails to comply with any of his or her obligations under this Article is guilty of an offence.

152 Remuneration of liquidator

A liquidator appointed under Article 149 is entitled to receive from the company the remuneration –

(a) agreed between the liquidator and the company before his or her appointment;

(b) subsequently approved by the company in general meeting; or

153 Cesser of office by liquidator

A liquidator appointed under Article 149 –

(a) may be removed from office by a special resolution of the company; and

(b) shall vacate office if he or she ceases to be qualified to hold the office.

154 Termination of summary winding up

(1) Where –

(a) the summary winding up of a company has commenced;

(b) the company has not received any contribution from any present or past member pursuant to Article 192;

(d) the company is able to discharge its liabilities as they fell due; and

(e) termination of the winding up has been approved by a special resolution of the company, the documents described in paragraph (2) may be delivered to the registrar and thereupon the winding up shall forthwith terminate.

(2) The documents to be delivered to the registrar pursuant to paragraph (1) are –

(a) a certificate signed by all the directors of the company stating that –

(i) the company has received no contribution of the type mentioned in paragraph (1)(b),

(ii) the company has made no distribution of the type mentioned in paragraph (1)(c), and

(iii) the company is able to discharge its liabilities as they fell due; and

(b) a copy of the special resolution approving the termination of the winding up.

(3) Upon the termination of a winding up pursuant to paragraph (1) –

(a) any liquidator appointed for the purpose of the winding up shall cease to hold office; and

(b) the company and all other persons shall be in the same position, subject to paragraph (4), as if the winding up had not commenced.

(4) The termination of a winding up pursuant to paragraph (1) shall not affect the validity of anything duly done by any liquidator, director or other person, or by operation of law, before its termination.

(5) A director who signs a certificate delivered to the registrar pursuant to paragraph (1) without having reasonable grounds for believing that the statements in it are true is guilty of an offence.

154A Declaration under Désastre Law

(1) If –

(a) a summary winding up of a company has commenced; and

(b) a declaration is made in respect of the company under the Désastre Law, the winding up shall forthwith terminate.

(2) Upon the termination of the winding up pursuant to paragraph (1) –

(a) any liquidator appointed for the purpose of the winding up shall cease to hold office; and

(b) the company and all other persons shall be in the same position, subject to paragraph (3), as if the winding up had not commenced.

(3) The termination of a winding up pursuant to paragraph (1) shall not affect the validity of any thing duly done by any liquidator, director or other person, or by operation of law, before the termination.

Chapter 3 – Winding up on just and equitable grounds276

155 Power for court to wind up

(1) A company, not being a company in respect of which a declaration has been made (and not recalled) under the Désastre Law, may be wound up by the court if the court is of the opinion that –

(a) it is just and equitable to do so; or

(b) it is expedient in the public interest to do so.

(2) An application to the court under this Article on the ground mentioned in paragraph (1)(a) may be made by the company or by a director or a member of the company or by the Minister or the Commission.277

(3) An application to the court under this Article on the ground mentioned in paragraph (1)(b) may be made by the Minister or by the Commission.278

(4) If the court orders a company to be wound up under this Article it may –

(a) appoint a liquidator;

(b) direct the manner in which the winding-up is to be conducted; and

(5) The Act of the court ordering the winding up of a company under this Article –

(a) must be delivered by the company to the registrar within 14 days after it is made; and

(b) shall be recorded by the registrar when he or she receives it.

(6) If the company fails to comply with paragraph (5)(a), it and every officer of it in default is guilty of an offence.

Chapter 4 – Creditors’ winding up

156 Application of this Chapter

(1) This Chapter applies to the winding up of a company otherwise than under Chapter 1, 2 or 3 of this Part.

(2) A winding up under this Chapter is a creditors’ winding up.

157 Procedure

A company, not being one in respect of which a declaration has been made (and not recalled) under the Désastre Law, may be wound up under this Chapter if the company so resolves by special resolution.

158 Notice of winding up279

(1) If a company has passed a resolution for a creditors’ winding up, or is deemed under Article 144(4) or Article 144A(5) to have done so, the company must within 14 days give notice of that fact by advertisement in the Jersey Gazette.

(2) If the company fails to comply with paragraph (1), it and every officer of it in default are guilty of an offence.

159 Commencement and effects of creditors’ winding up280

(1) A creditors’ winding up is deemed to commence –

(a) at the time the resolution for winding up is passed, or is deemed under Article 144(4) or Article 144A(5) to have been passed; or

(b) where Article 151 applies, at the time the winding up becomes a creditors’ winding up, as the case may be, and where Article 148 has not previously had effect, the company must from the commencement of the winding up cease to carry on its business, except so far as may be required for its beneficial winding up.

(2) The corporate state and capacity of the company continue until the company is dissolved.

(3) A transfer of shares, not being a transfer made to or with the sanction of the liquidator, and an alteration in the status of the company’s members made after the commencement of the winding up, is void.

(4) After the commencement of the winding up no action shall be taken or proceeded with against the company except by leave of the court and subject to such terms as the court may impose.

160 Meeting of creditors in creditors’ winding up

(1) The company shall –

(a) not less than 14 days before the day on which there is to be held the company meeting at which the resolution for a creditors’ winding up is to be proposed, give by post to its creditors notice calling a meeting of creditors to be held in Jersey on the same day as, and immediately following the conclusion of, the company meeting and nominating a person to be liquidator for the purposes of a creditors’ winding up;

(b) give notice of the creditors’ meeting by advertisement in the Jersey Gazette not less than 10 days before the day for which that meeting has been called;

(c) during the period before the creditors’ meeting furnish creditors free of charge with such information concerning the company’s affairs as they may reasonably require.

(2) The directors shall –

(a) make out a statement as to the affairs of the company, verified by affidavit by some or all of the directors;

(b) lay that statement before the creditors’ meeting; and

(c) appoint a director to preside at that meeting, and the director so appointed shall attend the meeting and preside over it.

(3) If –

(a) the company without reasonable excuse fails to comply with paragraph (1);

(b) the directors without reasonable excuse fail to comply with paragraph (2); or

(c) a director without reasonable excuse fails to comply with paragraph (2), so far as requiring the director to attend and preside at the creditors’ meeting, the company, the directors or the director (as the case may be) is guilty of an offence.

161 Appointment of liquidator

(1) The creditors and the company at their respective meetings mentioned in Article 160 may nominate a person to be liquidator for the purpose of the winding up.

(2) Where a creditors’ meeting is called in accordance with Article 151, the person nominated to be liquidator in the notice calling the meeting shall be deemed, for the purposes of this Article, to have been nominated as aforesaid by the company.

(3) The person nominated by the creditors, or if no person is nominated by the creditors, the person nominated, or deemed to have been nominated, by the company is appointed liquidator with effect from the conclusion of the creditors’ meeting.

(4) In the case of different persons being nominated, a director, member or creditor of the company may, within 7 days after the date on which the nomination was made by the creditors, apply to the court for an order either –

(a) directing that the person nominated as liquidator by the company shall be liquidator instead of or jointly with the person nominated by the creditors; or

(b) appointing some other person to be liquidator instead of the person nominated by the creditors.

(5) A liquidator appointed under this Article shall within 14 days after the liquidator’s appointment give notice thereof signed by the liquidator to the registrar and to the creditors.

(6) A liquidator who fails to comply with paragraph (5) is guilty of an offence.

(7) Article 83 applies to a liquidator appointed under this Article as it applies to a director.

162 Appointment of liquidation committee

(1) A creditors’ meeting may appoint a liquidation committee consisting of not more than 5 persons to exercise the functions conferred on it by or under this Law.

(2) If a committee is appointed, the company may, in general meeting, appoint such number of persons not exceeding 5 as they think fit to act as members of the committee.

(3) The creditors may resolve that all or any of the persons so appointed by the company ought not to be members of the committee; and if the creditors so resolve –

(a) the persons mentioned in the resolution are not then, unless the court otherwise directs, qualified to act as members of the committee; and

(b) on an application to the court under this provision the court may appoint other persons to act as such members in place of the persons mentioned in the resolution.

163 Remuneration of liquidator, cesser of directors’ powers, and vacancy in office of liquidator

(1) A liquidator in a creditors’ winding up is entitled to receive such remuneration as is agreed between the liquidator and the liquidation committee or, if there is no committee, between the liquidator and the creditors or, failing any such agreement, as is fixed by the court.

(2) On the appointment of a liquidator in a creditors’ winding up, all the powers of the directors cease, except so far as the liquidation committee (or, if there is no committee, the creditors) sanction their continuance.

(3) The creditors may at any time remove a liquidator.

(4) If a vacancy occurs, by death, resignation or otherwise, in the office of a liquidator (other than a liquidator appointed by the court) the creditors may fill the vacancy.

164 No liquidator appointed

(1) This Article applies where a creditors’ winding up has commenced but no liquidator has been appointed.

(2) During the period before the appointment of a liquidator, the powers of the directors shall not be exercised except –

(a) with the sanction of the court;

(b) to secure compliance with Article 160; or

(3) If the directors, without reasonable excuse, fail to comply with this Article, they are guilty of an offence.

165 Costs of creditors’ winding up

All costs, charges and expenses properly incurred in a creditors’ winding up, including the remuneration of the liquidator, are payable out of the company’s assets in priority to all other claims.

166 Application of the law relating to désastre

(1) Subject to this Article and Article 165, in a creditors’ winding up the same rules prevail with regard to the respective rights of secured and unsecured creditors, to debts provable, to the time and manner of proving debts, to the admission and rejection of proofs of debts, to the order of payment of debts and to setting off debts as are in force for the time being with respect to persons against whom a declaration has been made under the Désastre Law with the substitution of references to the winding up for references to the désastre and references to the liquidator for references to the Viscount.281

(2) Any surplus remaining after payment of the debts proved in the winding up, before being applied for any other purpose, shall be applied in paying interest on those debts which bore interest prior to the commencement of the winding up in respect of the period during which they have been outstanding since the commencement of the winding up and at the rate of interest applicable apart from the winding up.

167 Arrangement when binding on creditors

(1) An arrangement entered into between a company immediately preceding the commencement of, or in the course of, a creditors’ winding up and its creditors is (subject to the right of appeal under this Article) binding –

(a) on the company, if sanctioned by a special resolution; and

(b) on the creditors, if acceded to by three-quarters in number and value of them.

(2) A creditor or contributory may, within 3 weeks from the completion of the arrangement, appeal to the court against it; and the court may thereupon, as it thinks just, amend, vary or confirm the arrangement.

168 Meetings of company and creditors

(1) If a creditors’ winding up continues for more than 12 months, the liquidator shall call a general meeting of the company and a meeting of the creditors to be held at the first convenient date within 3 months after the end of the first 12 months from the commencement of the winding up, and of each succeeding 12 months, or such longer period as the Commission may allow, and shall lay before the meetings an account of the liquidator’s acts and dealings and of the conduct of the winding up during the preceding 12 months.282

(2) If the liquidator fails to comply with this Article, the liquidator is guilty of an offence.

169 Final meeting and dissolution

(1) As soon as the affairs of a company in a creditors’ winding up are fully wound up, the liquidator shall make up an account of the winding up, showing how it has been conducted and the company’s property has been disposed of, and thereupon shall call a general meeting of the company and a meeting of the creditors for the purpose of laying the account before the meetings and giving an explanation of it.

(2) Each such meeting shall be called by not less than 21 days’ notice sent by post, accompanied by a copy of the liquidator’s account.

(3) Within 7 days after the date of the meetings (or, if they are not held on the same date, after the date of the later one) the liquidator shall make a return to the registrar of the holding of the meetings and of their dates and in the case of a public company a copy of the account.

(4) If the copy is not delivered or the return is not made in accordance with paragraph (3), the liquidator is guilty of an offence.

(5) If a quorum is not present at either such meeting, the liquidator shall, in lieu of the return required by paragraph (3), deliver a return that the meeting was duly called and that no quorum was present; and when that return is made the provisions of that paragraph as to the making of the return are, in respect of that meeting, deemed complied with.

(6) The registrar on receiving the account and, in respect of each such meeting, either of the returns mentioned above, shall forthwith register them, and at the end of 3 months from the registration of the return the company is deemed to be dissolved; but the court may, on the application of the liquidator or of another person who appears to the court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the court thinks fit.

(7) The person on whose application an order of the court under this Article is made shall, within 14 days after the making of the order, deliver to the registrar the relevant Act of the court for registration; and if that person fails to do so the person is guilty of an offence.

(8) If the liquidator fails to call a general meeting of the company or a meeting of the creditors as required by this Article the liquidator is guilty of an offence.

169A Procedure at creditors’ meeting283

(1) Except as otherwise provided by this Article, a creditor who has been given notice of a creditors’ meeting is entitled to vote at the meeting (either in person or by proxy) and any adjournment of it.

(2) The value of a creditor’s vote shall be calculated according to the amount of the creditor’s debt at the date of the commencement of the winding up.

(3) A debt for an unliquidated amount or a debt the value of which has not been ascertained does not give a creditor the right to vote at a creditors’ meetings but the chairman of the meeting may put upon the debt an estimated minimum value that entitles the creditor to vote.

(4) For a resolution to pass at a creditors’ meeting it must be supported by creditors the values of whose votes are at least half the value of the votes of the creditors who vote on the resolution.

(5) A creditors’ meeting is not competent to act unless there are present 3 creditors (or their proxies) or, if there are less than 3 creditors, all of the creditors (or their proxies), being in either case creditors entitled to vote.

170 Powers and duties of liquidator

(1) The liquidator in a creditors’ winding up may, with the sanction of the court or the liquidation committee (or, if there is no such committee, a meeting of the creditors) –

(a) pay a class of creditors in full;

(b) compromise any claim by or against the company.

(2) The liquidator may, without sanction, exercise any other power of the company as may be required for its beneficial winding up.

(3) The liquidator may –

(a) settle a list of contributories (and the list of contributories is prima facie evidence of the persons named in it to be contributories);

(b) make calls; and

(c) summon general meetings of the company for the purpose of obtaining its sanction by special resolution or for any other purpose the liquidator may think fit.

(4) The liquidator shall pay the company’s debts and adjust the rights of the contributories among themselves.

(5) The appointment or nomination of more than one person as liquidator shall declare whether any act to be done is to be done by all or any one or more of them, and in default, any such act may be done by 2 or more of them.

171 Power to disclaim onerous property

(1) Subject to this Article, the liquidator in a creditors’ winding up may, within 6 months after the commencement of the winding up, by the giving of notice, signed by the liquidator and referring to this Article and Article 172, to each person who is interested in or under any liability in respect of the property disclaimed, disclaim any onerous movable property, or any onerous immovable property situated outside Jersey, and may do so notwithstanding that the liquidator has taken possession of it, endeavoured to sell it or otherwise exercised rights of ownership in relation to it.

(2) For the purposes of this Article –

(a) onerous movable property is any –

(i) unprofitable contract, and

(ii) other movable property of the company which is unsaleable or not readily saleable or is such that it may give rise to a liability to pay money or perform any other onerous act;

(b) onerous immovable property is any immovable property of the company situated outside Jersey and having the characteristics mentioned in clause (ii) of paragraph (a).

(3) A disclaimer under this Article –

(a) shall operate so as to determine, as from the date of the disclaimer, the rights, interests and liabilities of the company in or in respect of the property disclaimed; but

(b) shall not, except so far as is necessary for the purpose of releasing the company from liability, affect the rights or liabilities of any other person.

(4) A person sustaining loss or damage in consequence of the operation of a disclaimer under this Article shall be deemed to be a creditor of the company to the extent of the loss or damage and accordingly may prove for the loss or damage in the winding up.

172 Powers of court in respect of disclaimed property

(1) This Article applies where the liquidator of a company has disclaimed property under Article 171.

(2) An application may be made to the court under this Article by –

(a) a person who claims an interest in the disclaimed property; or

(b) a person who is under a liability in respect of the disclaimed property, not being a liability discharged by the disclaimer.

(3) Subject to paragraph (4), the court may, on an application under this Article, make an order on such terms as it thinks fit for the vesting of the disclaimed property in, or for its delivery to –

(a) a person entitled to it or a trustee for such a person; or

(b) a person subject to a liability mentioned in paragraph (2)(b) or a trustee for such a person.

(4) The court shall not make an order by virtue of paragraph (3)(b) except where it appears to the court that it would be just to do so for the purpose of compensating the person subject to the liability in respect of the disclaimer.

(5) The effect of an order under this Article shall be taken into account in assessing for the purpose of Article 171(4) the extent of loss or damage sustained by a person in consequence of the disclaimer.

173 Unenforceability of liens on records

(1) Subject to paragraph (2), in a creditors’ winding up a lien or other right to retain possession of any records of a company shall be unenforceable to the extent that its enforcement would deny possession of those records to the liquidator.

(2) Paragraph (1) does not apply to a lien on documents which give a title to property and are held as such.

174 Reference of questions and powers to the Court

(1) The liquidator or a contributory or creditor may apply to the court to determine a question arising in a creditors’ winding up, or to exercise all or any of the powers which the court or the Viscount might exercise if a declaration had been made in relation to the company under the Désastre Law.

(2) The court, if satisfied that the determination of the question or the required exercise of power will be just and beneficial, may accede wholly or partially to the application on such terms and conditions as it thinks fit or may make such other order on the application as it thinks just.

(3) An Act of the court recording the making of an order under this Article staying the proceedings in the winding up shall, within 14 days after the making of the order, be delivered by the company, or otherwise as may be ordered by the court, to the registrar, who shall enter it in the registrar’s records relating to the company.

(4) If a company fails to comply with paragraph (3) it is guilty of an offence.

175 Appointment or removal of liquidator by the Court

(1) If for any reason there is, in a creditors’ winding up, no liquidator acting, the court may appoint a liquidator.

(2) The court may, on reason being given, remove a liquidator in a creditors’ winding up and appoint another.

176 Transactions at an undervalue and preferences

(1) Subject to this Article, where a company has at a relevant time –

(a) entered into a transaction with any person at an undervalue; or

(b) given a preference to any person, the liquidator in a creditors’ winding up may apply to the court for such order as the court thinks fit for restoring the position to what it would have been if the company had not entered into that transaction or given that preference, as the case may be.

(2) For the purposes of this Article, a company enters into a transaction with a person at an undervalue if the company –

(a) makes a gift to that person or it otherwise enters into a transaction with that person on terms for which there is no “cause”; or

(b) enters into a transaction with that person for a “cause” the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the “cause” provided by the company.

(3) For the purposes of this Article, a company gives a preference to a person if –

(a) that person is one of the company’s creditors or a surety or guarantor for any of the company’s debts or other liabilities; and

(b) the company –

(i) does anything, or

(ii) suffers anything to be done, which has the effect of putting that person into a position which in the event of the company going into insolvent liquidation will be better than the position the person would have been in if that thing had not been done.

(4) The court shall not make an order under this Article in respect of a preference given to any person unless the company which gave it was influenced in deciding to give it by a desire to produce in relation to that person the effect referred to in paragraph (3)(b).

(5) Subject to paragraph (6), the time at which a company enters into a transaction at an undervalue or gives a preference is a relevant time if the transaction is entered into or the preference given –

(a) in the case of a transaction at an undervalue, at a time in the period of 5 years ending with the date of commencement of the winding up;

(b) in the case of a preference which is not a transaction at an undervalue, at a time in the period of one year ending with that date.

(6) Subject to paragraph (7), where a company enters into a transaction at an undervalue or gives a preference at a time mentioned in paragraph (5)(a) or (b), that time is not a relevant time unless the company –

(a) is at that time unable to pay its debts as they fall due; or

(b) becomes unable to pay its debts as they fall due in consequence of the transaction or preference.

(7) Paragraph (6) shall not apply to a transaction at an undervalue which takes place less than 2 years before the date of commencement of the winding up.

(8) This Article shall not apply to a transaction entered into or a preference given before the Article comes into force.284

177 Responsibility of persons for wrongful trading

(1) Subject to paragraph (3), if in the course of a creditors’ winding up it appears that paragraph (2) applies in relation to a person who is or has been a director of the company, the court on the application of the liquidator may, if it thinks it proper to do so, order that that person be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company arising after the time referred to in paragraph (2).

(2) This paragraph applies in relation to a person if –

(a) at some time before the date of commencement of the winding up of the company that person –

(i) knew that there was no reasonable prospect that the company would avoid a creditors’ winding up, or

(ii) on the facts known to the person was reckless as to whether the company would avoid such a winding-up; and

(b) that person was a director of the company at that time.

(3) The court shall not make an order under paragraph (1) with respect to any person if it is satisfied that after either condition specified in paragraph (2)(a) was first satisfied in relation to the person that person took reasonable steps with a view to minimising the potential loss to the company’s creditors.

(4) On the hearing of an application under this Article, the liquidator may give evidence or call witnesses.

178 Responsibility for fraudulent trading

(1) If, in the course of a creditors’ winding up or where the court has made a declaration under the Désastre Law in relation to a company, it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of another person, or for a fraudulent purpose, the court may, on the application of the liquidator or, where such a declaration has been made, on the application of the Viscount, order that persons who were knowingly parties to the carrying on of the business in that manner are to be liable to make such contributions to the company’s assets as the court thinks proper.

(2) On the hearing of the application the liquidator or the Viscount may give evidence or call witnesses.

(3) Where the court makes an order under this Article or Article 177, it may give such further directions as it thinks proper for giving effect to the order.

(4) Where the court makes an order under this Article or Article 177 in relation to a person who is a creditor of the company, it may direct that the whole or part of a debt owed by the company to that person and any interest thereon shall rank in priority after all other debts owed by the company and after any interest on those debts.

(5) This Article and Article 177 have effect notwithstanding that the person concerned may be criminally liable in respect of matters on the ground of which the order under paragraph (1) is to be made.

179 Extortionate credit transactions

(1) This Article applies in a creditors’ winding up where the company is, or has been, a party to a transaction for, or involving, the provision of credit to the company.

(2) Subject to paragraph (5), the court may, on the application of the liquidator, make an order with respect to the transaction if the transaction is or was extortionate and was entered into in the period of 3 years ending with the commencement of the winding up.

(3) For the purposes of this Article, a transaction is extortionate if, having regard to the risk accepted by the person providing the credit –

(a) the terms of it are or were such as to require grossly exorbitant payments to be made (whether unconditionally or in certain contingencies) in respect of the provision of the credit; or

(b) it otherwise grossly contravened ordinary principles of fair dealing, and it shall be presumed, unless the contrary is proved, that a transaction with respect to which an application is made under this Article is or, as the case may be, was extortionate.

(4) An order under this Article with respect to a transaction may contain one or more of the following as the court thinks fit –

(a) provision setting aside the whole or part of an obligation created by the transaction;

(b) provision otherwise varying the terms of the transaction or varying the terms on which a security for the purposes of the transaction is held;

(c) provision requiring a person who is or was a party to the transaction to pay to the liquidator sums paid to that person, by virtue of the transaction, by the company;

(d) provision requiring a person to surrender to the liquidator property held by the person as security for the purposes of the transaction; and

(e) provision directing accounts to be taken between any persons.

(5) This Article shall not apply to a transaction entered into before the Article comes into force.285

180 Delivery and seizure of property

(1) Where a person has in his or her possession or control property or records to which a company appears in a creditors’ winding up to be entitled, the court may require that person forthwith (or within a period which the court may direct) to pay, deliver, convey, surrender or transfer the property or records to the liquidator.

(2) Where –

(a) the liquidator seizes or disposes of property which is not property of the company; and

(b) at the time of seizure or disposal the liquidator believes, and has reasonable grounds for believing, that the liquidator is entitled (whether in pursuance of an order of the court or otherwise) to seize or dispose of that property, the liquidator shall not be liable to any person in respect of loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by the negligence of the liquidator, and shall have a lien on the property, or the proceeds of its sale, for expenses incurred in connection with the seizure or disposal.

181 Liability in respect of purchase or redemption of shares

(1) This Article applies when a company is being wound up in a creditors’ winding up and –

(a) it has under Article 55 or 57 or Regulations made under Article 59 made a payment out of share premium account in respect of the redemption or purchase of any of its own shares (in this Article referred to as “the relevant payment”); and

(b) the aggregate amount of the company’s assets and the amounts paid by way of contribution to its assets (apart from this Article) is not sufficient for the payment of its liabilities and the expenses of the winding up.

(2) If the winding up commenced within one year of the date on which the relevant payment was made, then –

(a) the person from whom the shares were redeemed or purchased; and

(b) the directors at the time the payment was authorized except a director who shows that, on reasonable grounds, the director held the appropriate belief referred to in Article 55, are, so as to enable that insufficiency to be met, liable to contribute to the following extent to the company’s assets.286

(3) A person from whom any of the shares were redeemed or purchased is liable to contribute an amount not exceeding so much of the relevant payment as was made by the company in respect of the person’s shares; and the directors are jointly and severally liable with that person to contribute that amount.

(4) A person who has contributed an amount to the assets in pursuance of this Article may apply to the court for an order directing any other person jointly and severally liable in respect of that amount to pay the person an amount as the court thinks just and equitable.

(5) Article 192 does not apply in relation to liability accruing by virtue of this Article.

(6) The States may by Regulations make such modifications to this Article as appear to be reasonably necessary in consequence of any Regulations made under Article 59.

182 Resolutions passed at adjourned meetings

Where a resolution is passed at an adjourned meeting of a company’s creditors, the resolution is treated for all purposes as having been passed on the date on which it was in fact passed, and not as having been passed on any earlier date.

183 Duty to co-operate with liquidator

(1) In a creditors’ winding up each of the persons mentioned in paragraph (2) shall –

(a) give the liquidator information concerning the company and its promotion, formation, business, dealings, affairs or property which the liquidator may at any time after the commencement of the winding up reasonably require; and

(b) attend on the liquidator at reasonable times and on reasonable notice when requested to do so.

(2) The persons referred to in paragraph (1) are –

(a) those who are, or have at any time been, officers of the company;

(b) those who have taken part in the formation of the company at any time within one year before the commencement of the winding up;

(c) those who are in the employment of the company, or have been in its employment within that year, and are in the liquidator’s opinion capable of giving information which the liquidator requires.

(3) For the purposes of paragraph (2) “employment” includes employment under a contract for services (contrat de louage d’ouvrage).

(4) If a person without reasonable excuse fails to comply with an obligation imposed by this Article, the person is guilty of an offence.

184 Liquidator to report possible criminal offences

(1) If it appears to the liquidator in the course of a creditors’ winding up that any person has been guilty of an offence in relation to the company for which the person is criminally liable, the liquidator shall –

(a) forthwith report the matter to the Attorney General; and

(b) furnish the Attorney General with information and give the Attorney General access to, and facilities for inspecting and taking copies of, documents (being information or documents in the possession or under the control of the liquidator and relating to the matter in question) as the Attorney General requires.

(2) Where a report is made to the Attorney General under paragraph (1), the Attorney General may refer the matter to the Minister or the Commission for further enquiry; and the Minister or the Commission –

(a) shall thereupon investigate the matter; and

(b) for the purpose of the investigation may exercise any of the powers which are exercisable by inspectors appointed under Article 128 to investigate a company’s affairs.287

(3) If it appears to the court in the course of a creditors’ winding up that any person has been guilty as mentioned in paragraph (1), and that no report with respect to the matter has been made by the liquidator to the Attorney General under that paragraph, the court may (on the application of a person interested in the winding up or of its own motion) direct the liquidator to make such a report; and on a report being made accordingly this Article shall have effect as though the report had been made in pursuance of paragraph (1).

185 Obligations arising under Article 184

(1) For the purpose of an investigation by the Minister or the Commission under Article 184(2), an obligation imposed on a person by a provision of this Law to produce documents or give information to, or otherwise to assist, inspectors appointed as mentioned in that paragraph is to be regarded as an obligation similarly to assist the Minister or the Commission in the investigation.288

(2) An answer given by a person to a question put to the person in exercise of the powers conferred by Article 184(2) may be used in evidence against the person.

(3) Where criminal proceedings are instituted by the Attorney General following a report or reference under Article 184, the liquidator and every officer and agent of the company past and present (other than the defendant) shall give the Attorney General any assistance in connection with the prosecution which the person is reasonably able to give; and for this purpose “agent” includes a banker, advocate or solicitor of the company and a person employed by the company as auditor, whether or not that person is an officer of the company.

(4) If a person fails or neglects to give assistance as required by paragraph (3), the court may, on the application of the Attorney General, direct the person to comply with that paragraph; and if the application is made with respect to a liquidator, the court may (unless it appears that the failure or neglect to comply was due to the liquidator not having in the liquidator’s hands sufficient assets of the company to enable the liquidator to do so) direct that the costs shall be borne by the liquidator personally.

Chapter 5 – Provisions of general application

186 Distribution of company’s property289

(1) Subject to –

(a) any enactment as to the order of payment of debts; and

(b) in respect of protected cells companies, the provisions of Part 18D, a company’s property shall on a winding up be applied in satisfaction of the company’s liabilities pari passu.

(2) Unless the memorandum or articles otherwise provide any remaining property of the company shall be distributed among the members according to their rights and interests in the company.

187 Enforcement of liquidator’s duty to make returns, etc.

(1) If, in a winding up, a director or a liquidator who has defaulted in delivering a document or in giving any notice which the person is by law required to deliver or give fails to make good the default within 14 days after the service on the person of a notice requiring the person to do so the court has the following powers.

(2) On an application made by a creditor or contributory of the company, or by the registrar, the court may make an order directing the director or the liquidator to make good the default within the time specified in the order.

(3) The court’s order may provide that costs of and incidental to the application shall be borne, in whole or in part, by the director or the liquidator personally.

(4) Nothing in paragraph (1) prejudices the operation of any enactment imposing penalties on a director or a liquidator in respect of a default mentioned therein.

188 Qualifications of liquidator

(1) A person who is not an individual is not qualified to act as a liquidator.

(2) The Minister may prescribe the qualifications required for any person to act as a liquidator.

(3) An appointment made in contravention of this Article or any Order made under it is void; a person who acts as liquidator when not qualified to do so is guilty of an offence.

(4) A liquidator shall vacate office if the liquidator ceases to be a person qualified to act as a liquidator.

189 Corrupt inducement affecting appointment as liquidator

A person who gives or agrees or offers to give to a member or creditor of a company any valuable benefit with a view to securing his or her own appointment or nomination, or to securing or preventing the appointment or nomination of some person other than himself or herself, as the company’s liquidator, is guilty of an offence.

190 Notification by liquidator of resignation, etc.

(1) A liquidator who resigns, is removed or for any other reason vacates office shall within 14 days after the resignation, removal or vacation of office give notice thereof, signed by the liquidator, to the registrar and in the case of a creditors’ winding up (except where the removal is pursuant to Article 163(3)) to the creditors.

(2) A liquidator who fails to comply with paragraph (1) is guilty of an offence.

191 Notification that company is in liquidation

(1) When a company is being wound up, every invoice, order for goods or services or business letter issued by or on behalf of the company, or a liquidator of the company, being a document on or in which the name of the company appears, shall contain a statement that the company is in liquidation.

(2) In the event of failure to comply with this Article, the company and every officer of it who is in default is guilty of an offence.

192 Liability as contributories of present and past members290

(1) Except as otherwise provided by this Article, where a company is wound up, each present and past member of the company is liable to contribute to its assets to an amount sufficient for payment of its liabilities, the expenses of the winding up, and for the adjustment of the rights of the contributories among themselves.

(2) A past member of a particular class is not, as a member of that class, liable to contribute –

(a) unless it appears to the court that the present members of that class are unable to satisfy the contributions required to be made by them as such members;

(b) if he or she ceased to be a member of that class for 12 months or more before the commencement of the winding up; or

(3) A past or present guarantor member is not liable in that capacity to contribute unless it appears to the court that the past and present members in their capacity as the holders of limited shares are unable to satisfy the contributions required to be made by them as such members.

(4) A past or present member in his or her capacity as the holder of an unlimited share is not liable to contribute unless it appears to the court that the past and present members in their capacities as the holders of limited shares or as guarantor members are unable to satisfy the contributions required to be made by them as such members.

(5) A contribution shall not be required from a past or present member, as such a member, exceeding – (a) any amount unpaid on any limited shares in respect of which he or she is liable; or

(b) the amount undertaken to be contributed by him or her to the assets of the company if it should be wound up.

(6) A sum due to a member of the company, in his or her capacity as a member, by way of dividends, profits or otherwise is not in a case of competition between himself or herself and any other creditor who is not a member of the company, a liability of the company payable to that member, but any such sum may be taken into account for the purpose of the final adjustment of the rights of the contributors among themselves.

193 Bar against other proceedings in bankruptcy

The winding up of a company under this Law bars the right to take any other proceedings in bankruptcy except the right of a creditor or the company to apply for a declaration under the Désastre Law.

194 Disposal of records

(1) When a company has been wound up and is about to be dissolved, its records and those of a liquidator may be disposed of as follows –

(a) in the case of a summary winding up, in the way that the company by special resolution directs; and

(b) in the case of a creditors’ winding up, in the way that the liquidation committee or, if there is no such committee, the company’s creditors, may direct.

(2) After 10 years from the company’s dissolution no responsibility rests on the company, a liquidator, or a person to whom the custody of the records has been committed, by reason of any record not being forthcoming to a person claiming to be interested in it.

(3) The Commission may direct that for such period as it thinks proper (but not exceeding 10 years from the company’s dissolution), the records of a company which has been wound up shall not be destroyed.291

(4) A person who acts in contravention of a direction made for the purposes of this Article, is guilty of an offence.

PART 22

EXTERNAL COMPANIES

195 Power to make Regulations as to registration and regulation of external companies

(1) This Article applies to external companies.

(2) The States may by Regulations make provisions with respect to any of the following matters –

(a) the delivery to the registrar by an external company of –

(i) notice that it has become or ceased to be an external company,

(ii) particulars of its name, place and date of incorporation and its registered number in that place,

(iii) the address of its registered office or principal place of business, and

(iv) an address in Jersey at which a document may be served on it;

(b) requiring an external company to change the name under which it carries on business in Jersey, or which it uses in connection with an address in Jersey for the purposes of its business; and

(3) Regulations under this Article may provide for the payment of annual and other fees and for the imposition of fines and daily default fines for breaches of the Regulations.

(4) A person who passes off or represents an external company as incorporated in Jersey is guilty of an offence.

PART 23

REGISTRAR

196 Registrar and other officers

(1) For the purposes of the registration of companies under this Law, the Commission shall appoint an officer known as the registrar of companies and such other officers as may be necessary to assist the registrar in the exercise of the registrar’s functions under this Law.292

(2) Any functions of the registrar under this Law may, to the extent authorized by the registrar, be exercised by any officer on the staff of the Commission.293

(3) An officer appointed under this Article shall be an officer of the Commission.294

197 Registrar’s seal

The Commission may direct a seal or seals to be prepared for the authentication of documents required for or in connection with the registration of companies.295

198 Registered numbers

(1) The registrar shall allocate to every company a number, which shall be known as the company’s registered number.

(2) Companies’ registered numbers shall be in such form, consisting of one or more sequences of figures or letters as the registrar may from time to time determine.

(3) The registrar may upon adopting a new form of registered number make such changes of existing registered numbers as appear to the registrar necessary.

199 Size, durability, etc. of documents delivered to registrar

(1) For the purpose of securing that documents delivered to the registrar are of standard size, durable and easily legible, the Minister may prescribe requirements (whether as to size, weight, quality or colour of paper, size, type or colouring of lettering, or otherwise) as the Minister may consider appropriate; and different requirements may be prescribed for different documents or classes of documents.

(2) If a document is delivered to the registrar (whether an original document or a copy) which in the registrar’s opinion does not comply with the prescribed requirements applicable to it, the registrar may serve on a person by whom the document was delivered (or, if there are 2 or more such persons, on any of them) a notice stating the registrar’s opinion to that effect and indicating the requirements so prescribed with which in the registrar’s opinion the document does not comply.

(3) Where the registrar serves a notice under paragraph (2), then for the purposes of any enactment which enables a penalty to be imposed in respect of an omission to deliver to the registrar a document required to be delivered under that provision (and, in particular, for the purposes of any such enactment whereby such a penalty may be imposed by reference to each day during which the omission continues) –

(a) a duty imposed by that provision to deliver a document to the registrar is to be treated as not having been discharged by the delivery of that document; but

(b) no account is to be taken of days falling within the period beginning with the day on which the document was delivered to the registrar and ending with the 14th day after the date of service of the notice under paragraph (2).

200 Form of documents to be delivered to registrar

Where any Article of this Law requires a document to be delivered to the registrar, but the form of the document has not been prescribed, it shall be sufficient compliance with that requirement if –

(a) the document is delivered in a form which is acceptable to the registrar; or

(b) the information in question is delivered in material other than a document, being material which is acceptable to the registrar, and the document or information, as the case may be, is accompanied by the prescribed fee, if any.

201 Fees and forms

(1) The Minister may by Order require the payment to the registrar of such fees as may be prescribed in respect of –

(a) the performance by the registrar of such functions under this Law as may be specified in the Order, including the receipt by the registrar of any document under this Law which is required to be delivered to the registrar; and

(b) the inspection of documents or other material held by the registrar under this Law.

(2) The registrar may charge a fee for any services provided by the registrar otherwise than in pursuance of an obligation imposed on the registrar by this Law.

*(3) Where a fee is provided for or charged under this Article for the performance of an act or duty by the registrar, no action need be taken by the registrar until the fee is paid, and where the fee is payable on the receipt by the registrar of a document required to be delivered to the registrar, the registrar shall be deemed not to have received it until the fee is paid.

(4) The Minister may prescribe forms to be used for any of the purposes of this Law and the manner in which any document to be delivered to the registrar is to be authenticated.

(5) Unless otherwise provided by or under this Law, any document delivered to the registrar by a company pursuant to this Law shall be signed by an officer or the secretary of the company.

(6) Fees paid to the registrar shall form part of the income of the Commission.296

201A Keeping of records by registrar297

(3) The information that is contained in a document delivered to the registrar under this Law or to the Judicial Greffier under the Laws repealed by Article 223 and kept by the registrar may be recorded and kept by the registrar in any form –

(a) which is approved by the Commission;

(b) which is capable of being inspected; and

(4) The keeping by the registrar of a record of a document in accordance with paragraph (1) shall be sufficient compliance with any duty that the registrar has to keep the document.

202 Inspection and production of records kept by registrar299

(1) A person may inspect a record kept by the registrar.

(2) A person may require –

(a) a certificate of the incorporation of a company; or

(b) a certified or uncertified copy of a record, kept by the registrar, which the person is entitled to inspect or of any part of such a record.

(3) A certificate given under paragraph (2) shall be signed by the registrar and sealed with the registrar’s seal.

(4) A copy, certified in writing by the registrar in the manner described in paragraph (3) to be an accurate copy –

(a) of a record kept by the registrar; or

(b) of any part of such a record, shall be admissible in evidence in all legal proceedings as of equal validity with the original record and as evidence of any fact stated in it of which direct oral evidence would be admissible.

(5) Where a document purports on its face to be a copy of a record or part of a record, certified in either case in accordance with paragraphs (3) and (4), it shall be unnecessary for the purposes of paragraph (4) to prove the official position or handwriting of the registrar.

(6) The rights conferred by paragraphs (1) and (2) are subject to the following limitations –

(a) the right of inspection does not extend to an original document of which a record is kept in accordance with Article 201A(1);

(b) in relation to documents delivered to the registrar with a prospectus pursuant to a requirement of an Order made under Article 29, the rights shall be exercisable only during the period or with the permission specified in the Order; and

203 Enforcement of company’s duty to make returns

(1) If a company, having failed to comply with a provision of this Law which requires it to deliver to the registrar any document, or to give notice to the registrar of any matter, does not make good the failure within 14 days after the service of a notice on the company requiring it to do so, the court may, on an application made to it by a member or creditor of the company or by the registrar, make an order directing the company and any officer of it to make good the failure within a time specified in the order.

(2) The court’s order may provide that all costs of and incidental to the application shall be borne by the company or by any officers of it responsible for the failure.

(3) Nothing in this Article prejudices the operation of any Article imposing penalties on a company or its officers in respect of a failure mentioned above.

204 Destruction of records301

The registrar may destroy any record kept by the registrar –

(a) where it is an original document and the registrar has recorded and kept the information in it in accordance with Article 201A(1);

(b) where it has been kept for over 10 years and is or was comprised in or annexed or attached to the accounts or annual returns of a company; or

(c) where it relates only to a company that has been dissolved (whether under this Law or otherwise) more than 10 years previously.

205 Registrar’s powers to strike companies off register302

(1) If the registrar has reason to believe that a company is not carrying on business or is not in operation –

(a) the registrar may send to it a letter inquiring whether it is carrying on business or is in operation; and

(b) if the registrar receives an answer to the effect that the company is not carrying on business or is not in operation, or if the registrar does not within one month after sending the letter receive an answer, he or she 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, the registrar 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 6 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 6 months failed to comply with Article 150(4), he or she 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 3 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 paragraph (6) (a) or (b) (as the case may be) 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 or her at his or her last known place of business.

(11) Where –

(a) the name of a company is struck off the register under paragraph (7); and

(b) the company is a protected cell company, the registrar must also strike off the register the name of each cell (if any) of the company.303

205A Registrar may strike company off register at end of duration304

(1) 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 Article 144A(1) and (2) has not been delivered to the registrar, the registrar may proceed in accordance with paragraph (2).

(2) Where the registrar is entitled to proceed in accordance with this paragraph, the registrar may publish in the Jersey Gazette, and send to the company by post, a notice that at the end of 3 months from the date of that notice the name of the company mentioned in it will, unless reason is shown to the contrary, be struck off the register and the company will be dissolved.

(3) At the end of the period mentioned in the notice the registrar may, unless reason to the contrary is previously shown by the company or a member, creditor or liquidator of it, strike its name off the register, and shall publish notice of this in the Jersey Gazette; and on the striking off the company is dissolved; but the liability (if any) of every director and member of the company continues and may be enforced as if the company had not been dissolved.

PART 24

MISCELLANEOUS AND FINAL PROVISIONS

206 Form of company’s records

(1) The records, which a company is required by this Law to keep, may be kept in the form of a bound or loose-leaf book, or photographic film, or may be entered or recorded by a system of mechanical or electronic data processing or any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time.

(2) A company shall take reasonable precautions –

(a) to prevent loss or destruction of;

(b) to prevent falsification of entries in; and

(c) to facilitate detection and correction of inaccuracies in, the records required by this Law to be kept, and a company which fails to comply with the provisions of this paragraph is guilty of an offence.

207 Examination of records and admissibility of evidence

(1) If any record referred to in Article 206(1) is kept otherwise than in intelligible written form, any duty imposed on the company by this Law to allow examination of, or to furnish extracts from, such record shall be treated as a duty to allow examination of, or to furnish a copy of the extract from, the record in intelligible written form.

(2) The records kept by a company in compliance with this Law shall be admissible in the form in which they are made intelligible under paragraph (1) as prima facie evidence, before and after the dissolution of the company, of all facts stated therein.

208 Production and inspection of records where offence suspected

(1) If, on an application by the Attorney General, there is shown to be reasonable cause to believe that a person has, while an officer of a company, committed an offence in connection with the management of the company’s affairs and that evidence of the commission of the offence is to be found in any records of or under the control of the company, the court may make an order –

(a) authorizing a person named in it to inspect the records in question, or any of them, for the purpose of investigating and obtaining evidence of the offence; or

(b) requiring the secretary of the company or an officer of it named in the order to produce and make available the records (or any of them) to a person named in the order at a place so named.

(2) Paragraph (1) applies also in relation to records of a person carrying on the business of banking so far as they relate to the company’s affairs, as it applies to records of or under the control of the company, except that no order referred to in paragraph (1)(b) shall be made by virtue of this paragraph.

(3) The decision of the court on an application under this Article is not appealable.

209 Legal professional privilege

Where criminal proceedings are instituted by the Attorney General under this Law against any person, nothing in this Law is to be taken to require any person to disclose any information which the person is entitled to refuse to disclose on grounds of legal professional privilege in proceedings in the court.

210 Right to refuse to answer questions

A person may refuse to answer any question put to him or her pursuant to any provision of this Law if his or her answer would tend to expose that person, or the spouse of that person, to proceedings under the law of Jersey for an offence or for the recovery of any penalty.

211 Relief for private companies

The States may, by Regulations, provide that private companies, or private companies satisfying conditions specified in the Regulations, shall be exempt from compliance with any provision of this Law so specified or that any such provision shall apply to such companies with such modifications as may be so specified.

212 Power of court to grant relief in certain cases

(1) If in proceedings for negligence, default, breach of duty or breach of trust against an officer of a company or a person employed by a company as auditor it appears to the court that that officer or person is or may be liable in respect of the negligence, default, breach of duty or breach of trust, but that the person has acted honestly and that having regard to all the circumstances of the case (including those connected with his or her appointment) he or she ought fairly to be excused for the negligence, default, breach of duty or breach of trust, the court may relieve the person, either wholly or partly, from his or her liability on such terms as it thinks fit.

(2) If an officer or person mentioned in paragraph (1) has reason to apprehend that a claim will or might be made against the person in respect of negligence, default, breach of duty or breach of trust, he or she may apply to the court for relief; and the court on the application has the same power to relieve the person as it would have had if proceedings against him or her for negligence, default, breach of duty or breach of trust had been brought.

213 Power of court to declare dissolution of company void305

(1) Where a company has been dissolved under this Law or the Désastre Law, the court may at any time within 10 years of the date of the dissolution, on an application made for the purpose by –

(a) a liquidator of the company; or

(b) any other person appearing to the court to be interested, make an order, on such terms as the court thinks fit, declaring the dissolution to have been void and the court may by the order give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the company had not been dissolved.

(2) Thereupon such proceedings may be taken which might have been taken if the company had not been dissolved.

(3) The person on whose application the order was made shall within 14 days after the making of the order (or such further time as the court may allow), deliver the relevant Act of the court to the registrar for registration.

(4) A person who fails to comply with paragraph (3) is guilty of an offence.

(5) Paragraph (6) applies where –

(a) an order is made under this Article that declares that the dissolution of a company dissolved under Article 150 is void; and

(b) the company’s assets (if any) at the time of its dissolution were not sufficient for the discharge of all its liabilities at that time.

(6) The court on the application of a creditor of the company may order –

(a) a person to whom any assets were distributed under Article 150; and

(b) any director or liquidator who signed a statement delivered to the registrar under Article 146 or 150 that the company had no liabilities, to contribute to the company’s assets so as to enable the insufficiency mentioned in paragraph (5)(b) to be met.

(7) Paragraph (6)(b) does not include a person who shows that he or she had reasonable grounds for being satisfied when signing the statement mentioned in that paragraph that the company had no liabilities.

(8) A person mentioned in paragraph (6)(a) is liable to contribute an amount not exceeding the amount or value of the assets that were distributed to the person.

(9) A director or liquidator mentioned in paragraph (6)(b) may be ordered, jointly and severally with any other person who is liable to contribute under this Article, to contribute an amount not exceeding the insufficiency mentioned in paragraph (5)(b).

(10) Where a person has contributed an amount under this Article, the court may direct any other person who is jointly and severally liable to contribute under this Article to pay to him or her such amount as the court thinks just and reasonable.

(11) Article 192 does not apply in relation to liability accruing by virtue of this Article.

213A Recognition of status of foreign corporations306

(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 Jersey; 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.

214 Registration in the Public Registry

The Judicial Greffier shall register in the Public Registry all Acts and orders affecting immovable property made under this Law.

215 Punishment of offences307

(1) Schedule 1 has effect with respect to the way in which offences under this Law are punishable on conviction.

(2) In relation to an offence under a provision of this Law specified in the first column of Schedule 1 (the general nature of the offence being described in the second column) –

(a) the corresponding entry in the third column shows the maximum punishment by way of fine or imprisonment under this Law that may be imposed on a person convicted of the offence;

(b) the corresponding entry (if any) in the fourth column shows that a person convicted of the offence is also liable to a daily default fine;

(c) a reference in the third column to a period of years or months is a reference to a term of imprisonment of that duration; and

(d) a reference in the third or fourth column to a level is a reference to a fine of that level on the standard scale.

(3) In paragraph (2)(b), liability to a daily default fine means that if –

(a) a person has been convicted of the offence;

(b) the person is convicted of having again committed that offence; and

(c) on that subsequent occasion the contravention has continued for more than one day, then in addition to the person’s liability to a fine under paragraph (2)(a) on conviction in respect of that subsequent offence, he or she is liable to the fine specified in the fourth column of Schedule 1 for each day (other than the first day) on which the subsequent offence is proved to have continued.

(4) For the purposes of any Article of this Law where under or pursuant to this Law an officer of a company or other body corporate who is in default is guilty of an offence, the expression “officer in default” means any officer of the company or body corporate who knowingly and wilfully authorizes or permits the default, refusal or contravention mentioned in the Article.

218 Accessories and abettors308

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.

217 General powers of the court

(1) Where, on the application of the Attorney General or the registrar, the court is satisfied that any person has failed to comply with any requirement made by or pursuant to this Law, or has committed any breach of duty as an officer of the company, it may order that person to comply with that requirement or, so far as the breach of duty is capable of being made good, make good the breach.

(2) The court shall not make an order against any person under this Article unless the court has given that person the opportunity of adducing evidence and being heard in relation to the matter to which the application relates.

217A Limitation of liability309

(1) No person or body to whom this Article applies shall be liable in damages for anything done or omitted in the discharge or purported discharge of any functions under this Law or any enactment made, or purportedly made, under this Law unless it is shown that the act or omission was in bad faith.

(2) This Article applies to –

(a) the States;

(b) the Minister or any person who is, or is acting as, an officer, servant or agent in an administration of the States for which the Minister is assigned responsibility or who is an inspector appointed by the Minister under Article 128 or who is performing any duty or exercising any power on behalf of the Minister; and

(c) the Commission, any Commissioner or any person who is, or is acting as, an officer, servant or agent of the Commission or who is an inspector appointed by the Commission under Article 128 or who is performing any duty or exercising any power on behalf of the Commission.

219 Power to make Rules

Rules may be made in the manner prescribed by the Royal Court (Jersey)

Law 1948310 relating to the procedure to be followed by the court in giving effect to the provisions of this Law.

220 Orders

(1) The Minister may by Order make provision for the purpose of carrying this Law into effect and, in particular, but without prejudice to the generality of the foregoing, for prescribing any matter which may be prescribed by this Law.

(1A) The Minister shall consult the Commission before making any Order under this Law.311

(1B) In prescribing fees for the purposes of this Law, the Minister may take into consideration such matters as he or she thinks fit, and such fees may be prescribed so as to raise income in excess of the amount necessary to cover the expenses of the Minister and the Commission in discharging their respective functions under this Law.312

(2) The Subordinate Legislation (Jersey) Law 1960313 shall apply to Orders made under this Law.

220 General provisions as to Regulations and Orders

(1) Except insofar as this Law otherwise provides, any power conferred thereby to make any Regulations or Order may be exercised –

(a) either in relation to all cases to which the power extends, or in relation to all those cases subject to specified exceptions, or in relation to any specified cases or classes of case; and

(b) so as to make in relation to the cases in relation to which it is exercised –

(i) the full provision to which the power extends or any less provision (whether by way of exception or otherwise),

(ii) the same provision for all cases in relation to which the power is exercised or different provisions for different cases or classes of case, or different provisions as respects the same case or class of case for different purposes of this Law, or

(iii) any such provision either unconditionally or subject to any specified conditions.

(2) Without prejudice to any specific provision of this Law, any Regulations or Order under this Law may contain such transitional, consequential, incidental or supplementary provisions as appear to the States or the Minister, as the case may be, to be necessary or expedient for the purposes of the Regulations or Order.

221 Transitional provisions

(1) The transitional provisions in Schedule 2 shall have effect with regard to the Laws repealed by Article 223 and to existing companies.

(2) The States may, by Regulations, make provision for any other transitional matter connected with the coming into force of this Law.

223 Repeal

The Companies (Jersey) Law 1861 to 1968 are repealed.

224 Citation

This Law may be cited as the Companies (Jersey) Law 1991.

SCHEDULE 2

(Article 221)

TRANSITIONAL PROVISIONS

1 Interpretation

For the purposes of this Schedule –

“appointed day” means the day on which Article 223 comes into force;315

“1861 Law” means the Loi (1861) sur les Sociétés à Responsabilité Limitée316;

“former Laws” means the Laws repealed by Article 223;

“1968 Law” means the Companies (Supplementary Provisions) (Jersey) Law 1968317.

2 Company having no articles of association

Where, within 6 months before the appointed day, a memorandum of association of a company has been registered under Article 3 of the 1861 Law, but no articles of association have been presented for registration under Article 5 of that Law before the appointed day, the memorandum of association shall be null and the company shall not be incorporated under that Law.

3 Unconfirmed special resolution by existing company

Where –

(a) within 30 days before the appointed day the shareholders of a company have adopted a resolution in respect of which the conditions specified in paragraphs 1 and 2 of Article 27 of the 1861 Law have been complied with; but

(b) the resolution has not before the appointed day been confirmed in accordance with paragraph 3 of that Article, the resolution, if confirmed on or after the appointed day in the manner provided in paragraph 3 of that Article, shall be treated as a special resolution passed under this Law on the date when the resolution is confirmed.

4 Winding up and dissolution of existing company

Where on the appointed day an existing company has been dissolved pursuant to the former Laws but the winding up and liquidation of its affairs have not been completed, the winding up and liquidation shall proceed in the same manner and with the same incidents as if this Law had not been enacted.

5 Notices under Article 38A of 1861 Law

Where, before the appointed day, the Judicial Greffier has delivered to a company a notice under paragraph (1) of Article 38A of the 1861 Law, the provisions of paragraphs (2), (3), (6) and (7) of that Article shall continue in force after the appointed day for the purposes of giving effect to that notice.

6 Registration of documents under former laws

Where, under any provision of the former Laws, an obligation to register a document with, or that it be registered by, the Judicial Greffier is outstanding on the appointed day or where, after the appointed day, such an obligation arises under any provision of the former Laws which continues to have effect by virtue of Article 17 of the Interpretation (Jersey) Law 1954318, the obligation shall have effect with the substitution of a requirement to deliver the document to the registrar for registration for the requirement to register it with, or that it be registered by, the Judicial Greffier.

7 Records of existing companies

On the appointed day all documents and records relating to existing companies held by the court or by the Judicial Greffier pursuant to any of the provisions of the former Laws shall be delivered to the registrar.

8 Membership of existing company

(1) An existing company which, when Article 16 comes into force, has more than 30 members shall within 3 months deliver to the registrar a statement of that fact and the registrar shall thereupon issue a certificate of incorporation showing the company to be a public company.

(2) If a company fails to comply with sub-paragraph (1) it is guilty of an offence.

9 Public office of existing company

(1) When Article 67 comes into force, the public office of an existing company as notified to the Judicial Greffier for the purposes of Article 17 of the 1861 Law shall be deemed to be its registered office.

(2) An existing company which has not so notified the Judicial Greffier of the address of its public office, shall within 3 months of the coming into force of Article 67 –

(a) establish a registered office as required by that Article; and

(b) notify the registrar of the address of that office.

(3) If a company fails to comply with sub-paragraph (2) it is guilty of an offence.

10 Offences

(1) An offence committed before the appointed day under any of the provisions of the former Laws may, notwithstanding any repeal by this Law, be prosecuted and punished after that day as if this Law had not been enacted.

(2) A contravention of any provision of the former Laws committed before the appointed day shall not be visited with any more severe punishment under this Law than would have been applicable under that provision at the time of the contravention; but where an offence for the continuance of which a penalty was provided has been committed under any provision of the former Laws, proceedings may be taken under this Law in respect of the continuance of the offence on and after the appointed day in the like manner as if the offence had been committed under the corresponding provision of this Law.

11 References elsewhere to the former laws

(1) A reference in any enactment, instrument or document (whether express or implied, and in whatever phraseology) to a provision of the former Laws which is replaced by a corresponding provision of this Law is to be read, where necessary to retain for the enactment, instrument or document the same force and effect as it would have had but for the enactment of this Law, as, or as including, a reference to the corresponding provision by which it is replaced in this Law.

(2) The generality of sub-paragraph (1) is not affected by any specific conversion of references made by this Law, nor by the inclusion in any provision of this Law of a reference (whether express or implied, and in whatever phraseology) to the provision of the former Laws which is replaced by a corresponding provision of this Law.

12 Saving for Interpretation (Jersey) Law 1954

Nothing in this Schedule shall be taken as prejudicing Article 17 of the Interpretation (Jersey) Law 1954.319

Jersey Companies Act

COMPANIES (JERSEY) LAW 1991

PART 1

PART 2

PART 3

PART 4

PART 5

PART 6

PART 7

PART 8

PART 9

PART 10

PART 11

PART 12

PART 13

PART 14

PART 15

PART 16

PART 17208

PART 18

PART 18A

PART 18B

PART 18C

PART 18D245

PART 19

PART 20

PART 21

PART 22

PART 23

PART 24

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