Companies (Jersey) Law 1991

Revised Edition

13.125

Showing the law as at 1 January 2019

This is a revised edition of the law



Companies (Jersey) Law 1991

Arrangement

Article

PRELIMINARY   15

1                 Interpretation. 15

2                 Meanings of “subsidiary”, “wholly-owned subsidiary” and “holding body”. 20

2A             Further provisions relating to subsidiaries and holding bodies. 20

2B             Power of States to amend Part 1. 22

COMPANY FORMATION AND REGISTRATION   22

3                 Method of formation of a company. 22

3A             Public companies. 23

3B             Private companies. 23

3C             Limited companies. 23

3D             Unlimited companies. 23

3E              Par value companies. 24

3F              No par value companies. 24

3G             Guarantee companies. 24

3H             Limited life companies. 24

3I               Cell companies. 25

4                 Memorandum of association. 25

4A             Memorandum of company with shares. 25

4B             Memorandum of company with guarantor members. 26

4C             Memorandum or articles of company of limited duration. 26

5                 Articles of association. 27

6                 Standard Table. 27

7                 Documents to be delivered to registrar 28

8                 Registration. 29

9                 Effect of registration. 29

10              Effect of memorandum and articles. 30

11              Alteration of memorandum and articles. 30

12              Copies of memorandum and articles for members. 31

NAMES  31

13              Requirements as to names. 31

14              Change of name. 32

15              Power to require change of name. 32

PUBLIC COMPANIES AND PRIVATE COMPANIES  33

16              Change of status of public company. 33

17              Change of status of private company. 34

17A           Calculation of number of members. 36

17B           Effective date of change of status. 36

17C           Alteration of numbers. 36

17D           Power to abolish 30-member limit 36

CORPORATE CAPACITY AND TRANSACTIONS  37

18              Capacity of company. 37

19              No implied notice of public records. 37

20              Form of contracts. 37

21              Transactions entered into prior to corporate existence. 37

22              Company seals. 38

23              Official seal for use abroad. 38

24              Official seal for securities. 38

MEMBERSHIP AND SHARES  39

25              Definition of “member”. 39

26              Membership of holding company. 39

27              Minimum membership for carrying on business. 39

28              Prohibition of minors etc. 40

PROSPECTUSES  40

29              Prospectuses. 40

30              Compensation for misleading statements in prospectus. 40

31              Exemption from liability to pay compensation. 41

32              Recovery of compensation. 42

33              Criminal liability in relation to prospectuses. 42

SHARE CAPITAL  42

34              Nature and numbering of shares. 42

35              Rule of law relating to issue of shares at discount etc. abolished. 42

36                         43

37              Provision for different amounts to be paid on shares. 43

38              Alteration of capital of par value companies. 43

38A           Alteration of capital of no par value companies. 44

38B           Rate of exchange for currency conversions. 44

39              Share premium accounts for par value companies. 44

39A           Stated capital accounts for no par value companies. 45

39B           Relief from requirements to make transfers to share premium accounts and stated capital accounts  45

40              Power to issue fractions of shares. 46

40A           Conversion of shares in par value companies. 46

40B           Conversion of shares in no par value companies. 47

40C           Power of States to amend Part 8. 48

Register of Members and Certificates  48

41              Register of members. 48

42              Transfer and registration. 49

43              Certification of transfers. 50

44              Location of register of members. 51

45              Inspection of register 51

46              Declaration. 51

47              Rectification of share register 52

48              Trusts not to be entered on register 52

49              Overseas branch registers. 53

50              Share certificates. 54

51              Certificate to be evidence of title. 55

51A           Uncertificated securities. 55

CLASS RIGHTS  56

52              Variation of class rights. 56

53              Members’ right to object to variation. 57

54              Registration of particulars of special rights. 58

REDEMPTION AND PURCHASE OF SHARES  59

T55                    59

55              Power to issue redeemable shares. 59

57              Power of company to purchase its own limited shares. 61

58              Rule of law relating to financial assistance abolished. 62

58A           Treasury shares. 63

58B           Limits on number and nominal value of shares to be held as treasury shares. 65

58C           Redemption, purchase or cancellation under Part 11 not a reduction of capital 66

59              Power of States to amend Part 11. 66

REDUCTION OF CAPITAL  66

60              Forfeiture of shares. 66

61              Reduction of capital accounts. 66

61A           Solvency statement 67

61B           Registration of solvency statement and minute of reduction. 67

62              Application to Court for order of confirmation. 68

63              Court order confirming reduction. 69

64              Registration of Act and minute of reduction. 69

65              Liability of members on reduced shares. 70

66              Penalty for concealing name of creditor, etc. 71

66A           Power of States to amend Part 12. 71

ADMINISTRATION   71

67              Registered office. 71

67A           Relief from breach of duty in unavoidable circumstances. 72

67B           Review of registrar’s decision. 72

67C           Evidence of authorization. 73

68                         73

69              Company’s name to appear in its correspondence, etc. 73

70              Particulars in correspondence, etc. 73

71              Annual return. 73

72              Service of documents. 74

DIRECTORS AND SECRETARY   75

73              Directors. 75

74              Duties of directors. 76

74ZA        Persons connected with director for purposes of Article 74. 76

74A           Contracts with sole members who are also directors. 80

75              Duty of directors to disclose interests. 80

76              Consequences of failure to comply with Article 75. 81

77              Indemnity of officers and former officers. 82

78              Disqualification orders. 82

79              Personal responsibility for liabilities where person acts while disqualified. 83

80              Validity of acts of director 83

81              Secretary. 83

82              Qualifications of secretary. 84

83              Register of directors and secretaries. 84

84              Particulars of directors: natural persons. 85

84A           Particulars of directors: corporate directors. 85

85              Particulars of secretaries. 86

85A           Power of States to amend Part 14. 86

MEETINGS  86

86              Participation in meetings. 86

87              Annual general meeting. 86

88              Commission’s power to call meeting in default 87

89              Requisition of meetings. 88

90              Definition of special resolution. 89

91              Notice of meetings. 90

92              General provisions as to meetings and votes. 90

93              Representation of body corporate at meetings. 91

94              Power of court to order meetings. 92

95              Resolutions in writing. 92

95ZA        Circulation of written resolutions proposed by directors. 93

95ZB        Members’ power to require circulation of written resolution. 94

95ZC        Circulation of written resolution and statement 95

95A           Recording of decisions by sole member 96

96              Proxies. 96

97              Demand for poll 97

98              Minutes. 98

99              Inspection of minute books. 98

100            Filing of resolutions. 98

101            Resolution passed at adjourned meeting. 99

ACCOUNTS AND AUDITS  100

Interpretation – Part 16  100

102            Interpretation – Part 16. 100

Accounts  103

103            Accounting records. 103

104            Retention of records. 103

105            Accounts. 104

106            Publication of interim accounts. 105

107            Copies of accounts. 105

108            Delivery of accounts to registrar 105

109            Failure to comply with Article 103, 104, 105, 106, 107 or 108. 106

Recognized Auditors  106

110            Commission to maintain Register of Recognized Auditors. 106

111            Registration as a recognized auditor 107

112            Qualification under rules of recognized professional bodies. 110

Appointment of auditors and their functions  112

113            Appointment and removal of auditors. 112

113A        Auditor’s report 114

113B         Auditor’s duties and powers. 115

113C         False statements to auditors. 116

113D        Ineligibility to act as auditor 117

113E         Independence requirement 119

113F         Effect of lack of independence. 120

113G         Effect of appointment of a partnership. 120

Regulations and exemptions  121

113H        Power to amend Part 16. 121

113I          Power to make Regulations in respect of recognized auditors. 121

113J          Exemption from liability for damages. 122

Information  122

113K        Matters to be notified to the Commission. 122

113L         The Commission may require recognized auditors to give information. 123

Enforcement 123

113M        Commission to ensure compliance. 123

113N        Delegation of the Commission’s powers and duties. 124

113O        Enforcement of rules. 125

113P         Confidentiality. 126

113Q        Application of Part 19 to market traded companies. 127

DISTRIBUTIONS  128

114            Meaning of “distribution” in this Part 128

115            Restrictions on distributions. 128

115ZA     Order treating distribution as made in accordance with Article 115. 129

115A        Consequences of unlawful distribution. 130

115B         Power of States to amend Part 17. 130

TAKEOVERS  130

116            Takeover offers. 130

117            Right of offeror to buy out minority shareholders. 132

118            Effect of notice under Article 117. 133

119            Right of minority shareholder to be bought out by offeror 135

120            Effect of requirement under Article 119. 136

121            Applications to the court 136

122            Joint offers. 137

123            Associates. 138

124            Convertible securities. 139

124A        Power of States to amend Part 18. 139

COMPROMISES AND ARRANGEMENTS  139

125            Power of company to compromise with creditors and members. 139

126            Information as to compromise to be circulated. 140

127            Provisions for facilitating company reconstruction or amalgamation. 141

MERGERS  142

Chapter 1 – General 142

127A        Interpretation. 142

127B         Bodies eligible to merge. 143

127C         Bodies eligible to be merged bodies. 143

Chapter 2 – Members  144

127D        Merger agreement 144

127E         Resolutions and certificates. 145

127F         Approval of merger agreement 146

127FA      Simplified approval of mergers involving subsidiaries. 147

127FB      Objection by member 148

Chapter 3 – Creditors  149

127FC      Notice to creditors. 149

127FD      Company to apply to court if solvency statement not made. 150

127FE      Objection by creditor if all solvency statements made. 150

Chapter 4 – Commission  151

127FF       Consent of Commission required for mergers involving bodies other than companies  151

127FG      Fees, expenses and security. 154

127FH      Commission may require further information. 155

127FI       Decisions and appeals. 156

Chapter 5 – Registration  157

127FJ       Pre-registration steps: where all merging bodies are companies. 157

127FK      Pre-registration steps: where merged body is not a company. 158

127FL      Pre-registration steps: other cases. 159

127FM     Registration of notices as to merger 160

Chapter 6 – Final 161

127FN      Effect of completion of merger 161

127G         Offences relating to merger 162

127GA     Power of States to amend Part 18B.. 162

DEMERGERS  162

127GB     Demergers. 162

CONTINUANCE  163

127H        Bodies corporate which are eligible for continuance. 163

127I          Restrictions on continuance. 163

127J          Security for Commission’s expenses under this Part 164

127K        Application to Commission for continuance within Jersey. 165

127L         Articles of continuance. 166

127M        Proposed name. 166

127N        Determination of application to Commission for continuance within Jersey. 166

127O        Issue of certificate of continuance within Jersey. 167

127P         Effect of issue of certificate of continuance within Jersey. 167

127Q        Approval by company and members of proposal for continuance overseas. 168

127R         Notice to creditors of application to Commission for authorization to seek continuance overseas  169

127S         Objections by members to continuance overseas. 169

127T         Application to Commission for authorization to seek continuance overseas. 170

127U        Determination of application to Commission for authorization to seek continuance overseas  171

127V        Effect of continuance overseas. 172

127W       Statements of solvency in respect of continuance. 172

127X         Provisions relating to continuance. 173

127Y        Offences relating to continuance. 173

cell companies  174

Chapter 1 – General provisions  174

127YA     Application by cell company for creation of cells. 174

127YB     Memorandum and articles of cells. 174

127YC     Creation of cells. 175

127YD     Status of cells. 176

127YDA Requirements in relation to secretaries, directors, registered offices and registers  177

127YE     Annual return in respect of cells. 177

127YF          178

127YG     Accounts of cell companies. 178

127YH     Incorporation of a cell independent of a cell company. 178

127YI Transfer of cell 179

127YIA   Company may become cell of cell company. 182

127YJ      Application of Part 21 to cell companies. 185

127YL     Names of incorporated cell companies. 186

127YM    Restriction on alteration of memorandum or article. 186

127YN     Power of States to amend Part 188

T127YN  188

Chapter 2 – Protected cell companies  188

127YO     Interpretation. 188

127YP     Status of cells of protected cell companies. 188

127YQ     Membership of protected cell company. 189

127YR     Additional duties of directors of protected cell companies. 189

127YS      Names of protected cell companies. 190

127YT     Liability of protected cell company and its cells. 190

127YU     Protection of cellular and non-cellular assets of protected cell companies. 192

127YV     Effect of commencement of summary winding up of protected cell company. 194

127YW    Court may determine liability of protected cells companies. 194

INVESTIGATIONS  194

128            Appointment of inspectors. 194

129            Powers of inspectors. 194

130            Production of records and evidence to inspectors. 195

131            Power of inspectors to call for directors’ bank accounts. 196

132            Authority for search. 196

133            Obstruction. 197

134            Failure to co-operate with inspectors. 197

135            Inspectors’ reports. 197

136            Power to bring civil proceedings on behalf of body corporate. 198

137            Expenses of investigating a company’s affairs. 198

138            Inspectors’ report to be evidence. 199

139            Privileged information. 199

140            Investigation of external companies. 199

UNFAIR PREJUDICE  200

141            Power for member to apply to court 200

142            Power for Minister or the Commission to apply to court 200

143            Powers of court 200

Economic substance test  201

143A        Power for Minister for Treasury and Resources to apply to Court 201

143B         Powers of court 201

WINDING UP OF COMPANIES  202

Chapter 1 – Winding up of companies of limited duration  202

144            Procedure – winding up of limited life companies. 202

144A        Procedure – winding up of other companies of limited duration. 202

Chapter 2 – Summary winding up  203

145            Application of this Chapter 203

146            Procedure. 203

147            Commencement of summary winding up. 204

148            Effect on status of company. 204

149            Appointment of liquidator 205

150            Application of assets and dissolution. 205

151            Effect of insolvency. 206

152            Remuneration of liquidator 207

153            Cesser of office by liquidator 207

154            Termination of summary winding up. 207

154A        Declaration under Désastre Law.. 208

Chapter 3 – Winding up on just and equitable grounds  208

155            Power for court to wind up. 208

Chapter 4 – Creditors’ winding up  209

156            Application of this Chapter 209

157            Procedure. 209

158            Notice of winding up. 210

159            Commencement and effects of creditors’ winding up. 210

160            Meeting of creditors in creditors’ winding up. 210

161            Appointment of liquidator 211

162            Appointment of liquidation committee. 212

163            Remuneration of liquidator, cesser of directors’ powers, and vacancy in office of liquidator 212

164            No liquidator appointed. 212

165            Costs of creditors’ winding up. 213

166            Application of the law relating to désastre. 213

167            Arrangement when binding on creditors. 213

168            Meetings of company and creditors. 213

169            Final meeting and dissolution. 214

169A        Procedure at creditors’ meeting. 215

170            Powers and duties of liquidator 215

171            Power to disclaim onerous property. 215

172            Disclaimer of contract leases. 216

173            Powers of court in respect of disclaimed property. 216

174            Unenforceability of liens on records. 217

175            Appointment or removal of liquidator by the court 217

176            Transactions at an undervalue. 217

176A        Giving of preferences. 219

176B         Definitions relating to transactions at an undervalue and preferences. 222

177            Responsibility of persons for wrongful trading. 223

178            Responsibility for fraudulent trading. 224

179            Extortionate credit transactions. 224

180            Delivery and seizure of property. 225

181            Liability in respect of purchase or redemption of shares. 225

182            Resolutions passed at adjourned meetings. 226

183            Duty to co-operate with liquidator 226

184            Liquidator to report possible misconduct 227

185            Obligations arising under Article 184. 228

185A        Termination of creditors’ winding up. 229

185B         Declaration under Désastre Law.. 229

186            Distribution of company’s property. 230

Chapter 5 – Provisions of general application  230

186A        References to the Court 230

187            Enforcement of liquidator’s duty to make returns, etc. 231

188            Qualifications of liquidator 231

189            Corrupt inducement affecting appointment as liquidator 231

190            Notification by liquidator of resignation, etc. 231

191            Notification that company is in liquidation. 232

192            Liability as contributories of present and past members. 232

193            Bar against other proceedings in bankruptcy. 233

194            Disposal of records. 233

194A        Power of States to amend Part 21. 233

EXTERNAL COMPANIES  233

195            Power to make Regulations as to registration and regulation of external companies  233

REGISTRAR   234

196            Registrar and other officers. 234

197            Registrar’s seal 234

198            Registered numbers. 234

199            Size, durability, etc. of documents delivered to registrar 235

200            Form of documents to be delivered to the registrar 235

201            Fees and charges. 235

201A        Keeping of records by registrar 236

202            Inspection and production of records kept by registrar 236

203            Enforcement of company’s duty to make returns. 237

204            Destruction of records. 237

205            Registrar’s powers to strike companies off register 237

205A        Registrar may strike company off register at end of duration. 239

MISCELLANEOUS AND FINAL PROVISIONS  240

206            Form of company’s records. 240

207            Examination of records and admissibility of evidence. 240

208            Production and inspection of records where offence suspected. 240

209            Legal professional privilege. 241

210            Right to refuse to answer questions. 241

211            Relief for private companies. 241

212            Power of court to grant relief in certain cases. 241

213            Power of court to declare dissolution of company void. 242

213A        Recognition of status of foreign corporations. 243

214            Registration in the Public Registry. 243

215            Punishment of offences. 243

216            Accessories and abettors. 244

217            General powers of the court 244

217A        Limitation of liability. 245

218            Power to make Rules. 245

219            Orders. 245

220            General provisions as to Regulations and Orders. 245

221            Transitional provisions. 246

223            Repeal 246

224            Citation. 246

Punishment of Offences  247

TRANSITIONAL PROVISIONS  258

1                 Interpretation. 258

2                 Company having no articles of association. 258

3                 Unconfirmed special resolution by existing company. 258

4                 Winding up and dissolution of existing company. 258

5                 Notices under Article 38A of 1861 Law.. 259

6                 Registration of documents under former laws. 259

7                 Records of existing companies. 259

8                 Membership of existing company. 259

9                 Public office of existing company. 259

10              Offences. 260

11              References elsewhere to the former laws. 260

12              Saving for Interpretation (Jersey) Law 1954. 260

 

Supporting Documents

Table of Legislation History. 261

Table of Renumbered Provisions. 264

Table of Endnote References. 266

 


Companies (Jersey) Law 1991[1]

A LAW to provide for the incorporation, regulation and winding up of companies, and for connected purposes[2]

Commencement [see endnotes]

PART 1

PRELIMINARY

1        Interpretation

(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;

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;

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

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;

“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 1998[3];

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;

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;

Désastre Law” means the Bankruptcy (Désastre) (Jersey) Law 1990[4];

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;

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;

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

guarantor member” means a member of a company (whether or not it is a guarantee company) whose liability in his 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;

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

incorporated limited partnership” means an incorporated limited partnership as defined in Article 1 of the Incorporated Limited Partnerships (Jersey) Law 2011[5];

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

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;

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

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

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

Minister” means the Chief Minister;

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;

“nominal capital account”, in relation to a company, means a share capital account of the company to which are credited amounts up to the nominal value of the shares issued by the company;

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

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

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; and

(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;

paid up” includes credited as paid up;

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

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

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;

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;

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

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

“published” means –

(a)     in respect of a fee payable by virtue of this Law, published by the Commission in accordance with Article 15(5)[6] of the Financial Services Commission (Jersey) Law 1998; and

(b)     in any other case, published by the Commission in a manner likely to bring it to the attention of those affected,

and “publish” shall be interpreted accordingly;

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;

separate limited partnership” means a separate limited partnership as defined in Article 1 of the Separate Limited Partnerships (Jersey) Law 2011[7];

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;

treasury share” means a share held as a treasury share under Article 58A(1);

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

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

year” means a calendar year.[8]

(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’associations[9];

(c)     do not include a Scottish firm;

(d)     do not include a limited liability partnership registered under the Limited Liability Partnerships (Jersey) Law 2017[10];

(e)     do not include an incorporated limited partnership.[11]

(3)     The Minister may by Order amend the definition of “prospectus” in paragraph (1).[12]

2        Meanings of “subsidiary”, “wholly-owned subsidiary” and “holding body”[13]

(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 body corporate that is a holding body.[14]

(5)     [15]

2A     Further provisions relating to subsidiaries and holding bodies[16]

(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.

2B     Power of States to amend Part 1[17]

The States may amend this Part by Regulations.

PART 2

COMPANY FORMATION AND REGISTRATION

3        Method of formation of a company[18]

(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 published 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.[19]

(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)     a minor;

(b)     a person lacking capacity, for and on behalf of whom another person is acting by authority of a lasting power of attorney conferred under Part 2 of the Capacity and Self-Determination (Jersey) Law 2016[20];

(c)     a person in respect of whom a delegate is appointed under Part 4 of the Capacity and Self-Determination (Jersey) Law 2016. [21]

(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

(c)     having, in respect of the liability of all or any of its members, no limit.

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

(a)     a par value company;

(b)     a no par value company; or

(c)     a guarantee company.

(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 companies[22]

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 companies[23]

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 companies[24]

(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 companies[25]

(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

(c)     no person is a guarantor member of the company.

(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 companies[26]

A company is a par value company if –

(a)     it is registered with share capital;

(b)     its shares are expressed as having nominal value; and

(c)     either –

(i)      its memorandum states that it is a par value company, or

(ii)      it is a company which was registered under this Law before the commencement of this Article,

whether or not it also has guarantor members.

3F     No par value companies[27]

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 companies[28]

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 companies[29]

(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, mental disorder, 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.[30]

(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 companies[31]

(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

(c)     a limited company or an unlimited company.

4        Memorandum of association[32]

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

(2)     The memorandum shall state –

(a)     the name of the company;

(b)     whether it is a public company or a private company;

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

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

(e)     the name and address of the registered office or principal office of each subscriber which is a person other than a natural person.[33]

(3)     The memorandum shall be signed by or on behalf of each subscriber, in the presence of at least one witness who shall attest the signature and insert his or her own name and address.

(4)     If a memorandum is permitted under the Electronic Communications (Jersey) Law 2000[34] 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.[35]

4A     Memorandum of company with shares[36]

(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.[37]

(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 members[38]

(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

(c)     adjustment of the rights of the contributories among themselves.

(3)     Where a company is to be registered with a memorandum which provides for guarantor members the memorandum shall also state, against the name of each person who subscribes as a guarantor member –

(a)     that he 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 duration[39]

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 association[40]

(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 2000[41] 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.[42]

6        Standard Table[43]

(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 published particulars; and the statement shall be signed by or on behalf of the subscribers of the memorandum.[44]

(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 who is a natural person –

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

(b)     any former forenames or surname;

(c)     the director’s business or usual residential address;

(d)     the director’s nationality;

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

(f)      the director’s date of birth.[45]

(3A)   Where the company is a public company, the statement shall specify the following particulars with respect to each of its directors which is a corporate director –

(a)     the name under which the corporate director is registered;

(b)     the address of the corporate director’s registered office;

(c)     where the corporate director is not a company registered in Jersey, the country or territory in which the corporate director is registered; and

(d)     the registered number (if any) of the corporate director.[46]

(3B)   In paragraph (3A) –

(a)     “corporate director” means a body corporate fulfilling the requirements of Article 73(4); and

(b)     with respect to a corporate director which is not a company registered in Jersey, “registered” shall be construed as reference to registration, or an equivalent procedure, under the laws governing incorporation in the jurisdiction in which the corporate director is incorporated.[47]

(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.[48]

8        Registration[49]

(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 of a company’s memorandum the registrar shall issue a certificate that the company is incorporated.[50]

(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.[51]

(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.[52]

(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.[53]

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 articles[54]

(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.[55]

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 published maximum, as the company may require.[56]

(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”.[57]

(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.[58]

(3A)   Despite paragraph (2), the name of a public company that is a limited company may end with the words “public limited company” or the abbreviation “PLC” or “plc”.[59]

(3B)   A company which is registered with a name ending with the words “public limited company” or the abbreviation “PLC” or “plc” may, in setting out or using its name for any purpose under this Law, do so –

(a)     in full or in the abbreviated form; and

(b)     in any combination of capital or lower case characters,

as it prefers.[60]

(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.[61]

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.[62]

(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 COMPANIES[63]

16      Change of status of public company[64]

(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.

(7)     Within 28 days after a company receives a notice of a direction made by the Commission under paragraph (2) in relation to the company –

(a)     a member of the company may appeal to the court on the ground that the direction was unreasonable having regard to all the circumstances of the case; and

(b)     the company, or a member of the company, may appeal to the court on the ground that a condition imposed by the direction was unreasonable having regard to all the circumstances of the case.[65]

(8)     Within 28 days after a company receives a notice of a direction made by the Commission under paragraph (4) in relation to the company, the company, or a member of the company, may appeal to the court on the ground that the direction was unreasonable having regard to all the circumstances of the case.[66]

(9)     On hearing an appeal under this Article –

(a)     if the appeal is against a direction imposed by the Commission, the court may confirm or reverse the direction made by the Commission; or

(b)     if the appeal is against a condition specified in a direction made by the Commission, the court may confirm, vary or revoke the condition and, in any case, add a new condition to the conditions specified in the direction.[67]

(10)    On hearing an appeal under this Article the court may make such order as to the costs of the appeal as it thinks fit.[68]

17      Change of status of private company[69]

(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)     A private company shall be subject to this Law as though it were a public company if –

(a)     otherwise than in accordance with a direction under Article 16(2), it enters the name of a 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;

(b)     it circulates a prospectus relating to its securities; or

(c)     it is a market traded company within the meaning of Part 16.[70]

(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)     [71]

(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.[72]

(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.

(9)     Within 28 days after a company receives a notice of a direction, or an amendment of the terms of a direction, made by the Commission under paragraph (7) in relation to the company –

(a)     a member of the company may appeal to the court on the ground that the direction was unreasonable having regard to all the circumstances of the case; and

(b)     the company, or a member of the company, may appeal to the court on the ground that a term imposed by the direction, or an amendment to a term of the direction, was unreasonable having regard to all the circumstances of the case.[73]

(10)    On hearing an appeal under this Article –

(a)     if the appeal is against a direction imposed by the Commission, the court may confirm or reverse the direction made by the Commission; or

(b)     if the appeal is against a term imposed by a direction made by the Commission, the court may confirm, vary or revoke the term and, in any case, add a new term to the terms imposed by the direction.[74]

(11)    On hearing an appeal under this Article the Court may make such order as to the costs of the appeal as it thinks fit.[75]

17A   Calculation of number of members[76]

(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, a subsidiary of the company, the holding company of the company or a subsidiary of the holding company; or

(b)     who, having been a director or in the employment of the company or any other body corporate within sub-paragraph (a) –

(i)      was at the same time a member of the company or of any other such body corporate, and

(ii)      has continued to be such a member since ceasing to be a director or in its employment.[77]

(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   Effective date of change of status[78]

Where a company alters its memorandum as mentioned in Article 16 or 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; and the altered status has effect from the date on which the certificate of incorporation which is appropriate to the altered status is issued.[79]

17C   Alteration of numbers[80]

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.[81]

17D   Power to abolish 30-member limit[82]

The States may by Regulations amend any provision of Articles 3(3) and 16 to 17C that limits the number of persons who may apply to form a private company or the number of members that a private company may have or treats a company as a public company if the number of its members exceeds a particular number.

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 seals[83]

(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 abroad[84]

(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 securities[85]

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.[86]

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.[87]

(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

(b)     it shall not acquire further shares in the holding company, except as provided in paragraph (3A).[88]

(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.[89]

(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.[90]

(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.[91]

(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.[92]

28      Prohibition of minors etc.

A person mentioned in Article 3(6)(a) to (c) 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.[93]

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.[94]

(2)     Such an Order may provide for the payment of fees for the purposes of the Order.[95]

(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      Rule of law relating to issue of shares at discount etc. abolished[96]

(1)     This Article applies to the issue of shares at a discount and the application of shares or capital money in payment of a commission, discount or allowance.

(2)     The repeal of the former Articles 35 and 36 by Article 7(1) of the Companies (Amendment No. 11) (Jersey) Law 2014[97] shall not cause anything to which this Article applies to be rendered unlawful by reason of any rule of law which had ceased to have effect by virtue of, or had been modified by, the former Articles 35 and 36.

(3)     In this Article, “the former Articles 35 and 36” means Articles 35 and 36 of this Law, as those Articles were in force immediately before they were repealed by Article 7(1) of the Companies (Amendment No. 11) (Jersey) Law 2014.

36      [98]

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.[99]

38      Alteration of capital of par value companies[100]

(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.[101]

(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

(c)     they nevertheless remain denominated in the former currency.[102]

(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 companies[103]

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

(c)     to divide all or any of its shares (whether issued or not) into more shares.

38B   Rate of exchange for currency conversions[104]

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 companies[105]

(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.

(1A)   An amount may be transferred by the company to a share premium account from any other account of the company other than the capital redemption reserve or the nominal capital account.[106]

(2)     A share premium account may be expressed in any currency.

(3)     A share premium account may be applied by the company for any of the following purposes –

(a)     in paying up unissued shares to be allotted to members as fully paid bonus shares;

(b)     in writing off the company’s preliminary expenses;

(c)     in writing off the expenses of and any commission paid on any issue of shares of the company;

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

(e)     in the making of a distribution in accordance with Part 17.[107]

(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 companies[108]

(1)     Every no par value company shall maintain a separate account, to be called a stated capital account, for each class of issued share.

(2)     A stated capital account may be expressed in any currency.

(3)     There shall be transferred to the stated capital account for the class of share concerned –

(a)     the amount of cash received by the company for the issue of shares of that class; and

(b)     the value, as determined by the directors, of the “cause” received by the company, otherwise than in cash, for the issue of shares of that class.[109]

(3A)   An amount may be transferred by the company to a stated capital account from any other account of the company.[110]

(4)     A stated capital account may be applied by the company for any purpose for which a share premium account may be applied by a par value company.[111]

39B   Relief from requirements to make transfers to share premium accounts and stated capital accounts[112]

(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 shares[113]

(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.

(4)     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 companies[114]

(1)     A par value company may convert its shares into no par value shares by altering its memorandum in accordance with this Article.

(2)     The power conferred by paragraph (1) –

(a)     may only be exercised by converting all of the company’s shares into no par value shares;

(b)     may only be exercised by a special resolution of the company and, if there is more than one class of issued shares, with the approval of a special resolution passed at a separate meeting of the holders of each class of shares; and

(c)     may be exercised whether or not the issued shares of the company are fully paid.

(3)     The special resolution of the company –

(a)     shall specify the number of no par value shares into which each class of issued shares is to be divided;

(b)     may specify any number of additional no par value shares which the company may issue; and

(c)     shall make such other alterations to the memorandum and articles as may be requisite in the circumstances.

(4)     Upon converting its shares under this Article, the company –

(a)     shall transfer, from the share capital account for each class of shares to the stated capital account for that class, the total amount that has been paid up on the shares of that class; and

(b)     shall transfer any amount standing to the credit of a share premium account or capital redemption reserve to the stated capital account for the class of share which would have fallen to be issued if that amount had been applied in paying up unissued shares allotted to members as fully paid bonus shares.

(5)     On the conversion of a company’s shares under this Article, any amount which is unpaid on any share immediately before the conversion remains payable when called or due.

40B   Conversion of shares in no par value companies[115]

(1)     A no par value company may convert its shares into par value shares by altering its memorandum in accordance with this Article.

(2)     The power conferred by paragraph (1) –

(a)     may only be exercised by converting all of the company’s shares into par value shares;

(b)     may only be exercised by a special resolution of the company and, if there is more than one class of issued shares, with the approval of a special resolution passed at a separate meeting of the holders of each class of shares; and

(c)     may be exercised whether or not the issued shares of the company are fully paid.

(3)     For the purpose of a conversion of shares under this Article, each share of a class shall be converted into a share which –

(a)     confers upon the holder, as nearly as possible, the same rights as were conferred by it before the conversion; and

(b)     has a nominal value specified in the special resolution of the company, being a value not exceeding the amount standing to the credit of the stated capital account for that class divided by the number of shares of that class in issue.

(4)     The special resolution of the company shall make such alterations to the memorandum and articles as may be requisite in the circumstances.

(5)     Upon converting its shares under this Article, the company –

(a)     shall, to the extent that the amount standing to the credit of the stated capital account for each class of shares equals the total nominal amount of the shares of the class into which those shares are converted, transfer the amount to the share capital account; and

(b)     shall, to the extent (if any) that the amount exceeds that total nominal amount, transfer it to the share premium account for that class.

(6)     On the conversion of a company’s shares under this Article, any amount which is unpaid on any share immediately before the conversion remains payable when called or due.

40C   Power of States to amend Part 8[116]

The States may amend this Part by Regulations.

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;

(c)     where he or she is a guarantor member –

(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.[117]

(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).[118]

(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

(c)     the transfer is made in accordance with an Order made under Article 51A.[119]

(1A)   Notwithstanding anything in its articles, a company shall not register an instrument of transfer of shares which is a transaction to which the Taxation (Land Transactions) (Jersey) Law 2009 applies unless there is produced to the company the LTT receipt issued under Article 9 of that Law in respect of the transaction, or a copy of that receipt, certified in the manner prescribed under that Law.[120]

(1B)   If a company fails to comply with paragraph (1A), the company and every officer of it who is in default is guilty of an offence.[121]

(2)     Paragraphs (1) and (1A) do 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.[122]

(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.[123]

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;

(c)     a certification is deemed to be signed by a person if –

(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 published maximum, as the company may require.[124]

(2)     A person may –

(a)     in the case of any company, on payment of such sum (if any), not exceeding the published 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.[125]

(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.[126]

(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.[127]

(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 registers[128]

(1)     A public company which transacts business in any country, territory or place outside Jersey may cause to be kept there a register of –

(a)     members who are resident in that country, territory or place; and

(b)     all or any of its other members.[129]

(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

(c)     if the keeping of the register is discontinued, of its discontinuance.

(4)     A company which keeps an overseas branch register –

(a)     shall cause to be kept, at the place where its register of members is kept, a duplicate of the overseas branch register;

(b)     shall cause to be transmitted to its registered office a copy of every entry in the overseas branch register, as soon as may be after it is made; and

(c)     shall cause every entry in the overseas branch register to be duly entered in the duplicate, as soon as may be after it is made in the overseas branch register.

(5)     An overseas branch register and its duplicate shall be parts of the company’s register of members for the purposes of this Law, and shall be kept in the same manner as the register of members is to be kept under this Law.

(6)     The shares to which an overseas branch register relates shall be distinguished from those to which the register of members relates and, while an overseas branch register is kept, no transaction in respect of any shares to which it relates shall be registered or otherwise entered in any other register except its duplicate.

(7)     If a company discontinues the keeping of an overseas branch register, it shall thereupon cause all entries in it to be transferred –

(a)     to any other overseas branch register which is kept by it in the same country, territory or place; or

(b)     to its register of members.

(8)     Subject to the provisions of this Law, a company may by its articles provide as it thinks fit for the keeping of an overseas branch register.

(9)     The 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

(c)     prescribe other conditions relating to the keeping of overseas branch registers.

(10)    In the event of a failure to comply with any of paragraphs (3), (4), (5), (6) and (7), or with any Order made under paragraph (9), the company is guilty of an offence.

50      Share certificates[130]

(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.[131]

(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.[132]

(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

(c)     prohibit the issue of certificates in respect of any such shares.[133]

(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.[134]

(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.[135]

51A   Uncertificated securities[136]

(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 –

(i)      the transmission of title to securities by operation of law,

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

(iii)     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 –

(i)      the consequences of their insolvency, bankruptcy or incapacity, and

(ii)      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) –

(i)      the modification or exclusion of any provisions of any enactment or rule of law,

(ii)      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 1988[137], and

(iv)     other securities of any description;

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

(c)     references to a transfer of title include a transfer by way of security.

PART 10

CLASS RIGHTS

52      Variation of class rights[138]

(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

(c)     do not apply in respect of a conversion of shares in accordance with Article 40A or 40B.

(2)     If provision for the variation of the rights of any class of members is made in the memorandum or articles, or by the terms of admission to membership, those rights may only be varied in accordance with those provisions.

(3)     If no such provision is made, the rights may be varied if but only if the following persons consent in writing, namely –

(a)     in the case of any class of par value shares, the holders of not less than 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 variation[139]

(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.[140]

(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.[141]

(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.[142]

(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.[143]

(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.[144]

(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.[145]

(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.[146]

(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.[147]

(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

T55   [148]

55      Power to issue redeemable shares[149]

(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 that is not an open-ended investment company shall be capable of being redeemed from any source, but only if they are fully paid up.[150]

(5)     The redeemable limited shares of a no par value company that is not an open-ended investment company shall be capable of being redeemed from any source, but only if they are fully paid up.[151]

(6)     [152]

(7)     [153]

(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 authorizing the redemption 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 –

(i)      the prospects of the company and to the intentions of the directors with respect to the management of the company’s business, and

(ii)      the amount and character of the financial resources that will in their view be available to the company,

the company will be able to –

(A)    continue to carry on business, and

(B)     discharge its liabilities as they fall due,

until the expiry of the period of 12 months 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.[154]

(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 of the company authorizing the redemption 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.[155]

(12A) A payment for the redemption of shares in accordance with this Article may be made in cash or otherwise than in cash (or partly in cash and partly otherwise than in cash).[156]

(13)    [157]

(14)    [158]

(15)    [159]

(16)    A company may, by special resolution, apply a capital redemption reserve in issuing shares to be allotted as fully paid bonus shares.[160]

(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 (other than shares it intends to hold as treasury shares under Article 58A(2)(d)), it may issue shares up to the nominal amount of the shares to be redeemed as if those shares had never been issued.[161]

(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 1968[162] 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.

(21)    Any shares redeemed under this Article (other than shares that are, immediately after being purchased or redeemed, held as treasury shares) are treated as cancelled on redemption.[163]

57      Power of company to purchase its own limited shares[164]

(1)     A company may purchase its own limited shares (including any redeemable shares) including by the purchase of depositary certificates in respect of such shares.[165]

(2)     A purchase under this Article, other than a purchase by a company which is a wholly-owned subsidiary of another company, shall be sanctioned by a special resolution of the company.[166]

(3)     However, if the shares or depositary certificates in respect of 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)     the shares shall not carry the right to vote on the resolution sanctioning the purchase or approving that contract.[167]

(4)     If 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 5 years after the passing of the resolution, on which the authority to purchase is to expire.[168]

(4ZA) If depositary certificates in respect of shares are to be purchased, the resolution authorizing the purchase shall specify –

(a)     the maximum number of depositary certificates to be purchased;

(b)     the maximum and minimum prices which may be paid; and

(c)     a date, not being later than 5 years after the passing of the resolution, on which the authority to purchase is to expire.[169]

(4A)   For the purposes of paragraphs (4)(b) and (4ZA)(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.[170]

(5)     Paragraphs (2), (3), (4) and (4ZA) do not apply to an open-ended investment company.[171]

(5A)   If depositary certificates in respect of shares are purchased under this Article the shares shall (unless they are, immediately after the purchase of the depositary certificates, held as treasury shares) be treated as cancelled on purchase.[172]

(6)     Article 55 applies to the purchase by a company under this Article of its own shares (including by the purchase of depositary certificates) as it applies to the redemption of redeemable shares.[173]

(7)     A company may not make a purchase under this Article if as a result of the purchase there would no longer be a member of the company holding shares other than redeemable shares or treasury shares.[174]

(8)     In this Article and Article 58A “depositary certificate” means an instrument (whatever it is called and whether it is held in paper or electronic form) which confers on a person a right or rights (other than an option or a security interest) in respect of a share or shares held by another person.[175]

58      Rule of law relating to financial assistance abolished[176]

(1)     This Article applies to any thing which would have been unlawful by reason of any rule of law, if that rule had not ceased to have effect by virtue of, or had not been modified by, the former Article 58.

(2)     The repeal of the former Article 58 by Regulation 5 of the Companies (Amendment No. 2) (Jersey) Regulations 2008 shall not cause anything to which this Article applies to be rendered unlawful by reason of any rule of law which had ceased to have effect by virtue of, or had been modified by, the former Article 58.

(3)     A transaction that was –

(a)     authorized by a company before the repeal of the former Article 58 by Regulation 5 of the Companies (Amendment No. 2) (Jersey) Regulations 2008;

(b)     a transaction of the kind to which paragraph (1) of the former Article 58 applied;

(c)     lawful under paragraph (2) or (3) of the former Article 58; and

(d)     taken under the Law, as in force immediately before the repeal, to not be a distribution for the purposes of Part 17,

shall not be a distribution for the purposes of Part 17.

(4)     [177]

(5)     [178]

(6)     In this Article, “the former Article 58” means Article 58 of this Law, as that Article was in force immediately before it was repealed by Regulation 5 of the Companies (Amendment No. 2) (Jersey) Regulations 2008.

58A   Treasury shares[179]

(1)     A company may hold as treasury shares any of the limited shares that it has redeemed or purchased under this Part (including by the purchase of depositary certificates), to the extent that –

(a)     it is not prohibited, by its memorandum or articles of association, from holding shares as treasury shares; and

(b)     it is authorized by a resolution of the company to hold the shares as treasury shares.[180]

(2)     A company that holds shares as treasury shares may –

(a)     cancel the shares;

(b)     sell the shares;

(c)     transfer the shares for the purposes of or under an employees’ share scheme; or

(d)     hold the shares without cancelling, selling or transferring them.

(3)     While shares are held by a company as treasury shares –

(a)     the company shall not, for the purposes of Articles 71, 89 and 92(2) be treated as being a member or as holding shares in the company;

(b)     the company shall not exercise any voting rights attaching to the shares;

(c)     if a provision of this Law (other than Article 58B) requires –

(i)      a proportion of votes attaching to shares held in the company to be obtained, or

(ii)      a proportion of the holders of shares of the company, (which may include persons representing by proxy other holders of shares of the company) to consent or not to consent,

in order for a resolution to be passed or an action or decision to be taken or not to be taken by any person, the shares held as treasury shares shall not for the purposes of that provision be taken into account in determining –

(A)    the total number of shares held in the company, or

(B)     whether such a proportion has been attained;

(d)     the company shall not make or receive any dividend, or any other distribution (whether in cash or otherwise) of the company’s assets (including any distribution of assets to members on a winding up), in respect of those shares;

(e)     the rights in respect of the shares shall not be exercised by or against the company;

(f)      the obligations in respect of the shares shall not be enforceable by or against the company; and

(g)     any purported exercise or enforcement of a right, obligation or requirement referred to in sub-paragraph (b) to (f) is void.

(4)     Nothing in paragraph (3) shall prevent –

(a)     an allotment of shares as fully paid bonus shares in respect of treasury shares; or

(b)     the payment of any amount payable on the redemption of redeemable shares that are held as treasury shares.

(5)     Article 55(17) (including that Article as applied by Article 57(6)) –

(a)     shall not apply in relation to any shares that are, immediately after being purchased or redeemed, held as treasury shares;

(b)     shall, on and from the day on which any shares held as treasury shares are cancelled under paragraph (2)(a), apply to such shares as if references in Article 55(14), (15) and (17) to a redemption of shares were references to the cancellation of the shares under this Article.[181]

(6)     If under paragraph (2)(a) a par value company is about to cancel limited shares, it may issue shares up to the nominal amount of the shares to be cancelled as if those shares had never been issued.

(7)     Any shares allotted as fully paid bonus shares in respect of shares held as treasury shares by a company shall be treated for the purposes of this Law as if they were purchased by the company at the time they were allotted.

(8)     If shares are held by a company as treasury shares –

(a)     the register kept under Article 41 shall include an entry relating to the number of shares held as treasury shares; and

(b)     the annual return provided under Article 71 shall include an entry relating to the number of shares held as treasury shares on 1st January in the year of the return.

(9)     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, civil partners or surviving civil partners or minor children or minor step-children of such employees or former employees.[182]

58B   Limits on number and nominal value of shares to be held as treasury shares[183]

(1)     A company may hold as treasury shares so many shares in the company that it has redeemed or purchased under this Part as it thinks fit –

(a)     if another person holds at least one non-redeemable share in the company; or

(b)     where the articles of the company specify that –

(i)      more than one non-redeemable share in the company, or

(ii)      a specified proportion of non-redeemable shares in the company,

is required to be held by one or more persons other than the company if the company is to hold shares as treasury shares, if that number or proportion of shares in the company are held by one or more other persons.

(2)     If –

(a)     a company holds shares as treasury shares;

(b)     the articles of the company do not specify that –

(i)      more than one non-redeemable share in the company, or

(ii)      a specified proportion of non-redeemable shares in the company,

is required to be held by one or more persons other than the company if the company is to hold shares as treasury shares; and

(c)     on any day there ceases to be any person who holds at least one non-redeemable share in the company,

the company shall, within 12 months after the day, dispose of to another person or persons at least one non-redeemable share in the company.

(3)     If –

(a)     a company holds shares as treasury shares;

(b)     the articles of the company specify that –

(i)      more than one non-redeemable share in the company, or

(ii)      a specified proportion of non-redeemable shares in the company,

is required to be held by one or more persons other than the company if the company is to hold shares as treasury shares; and

(c)     on any day there ceases to be any person who holds at least that number, or proportion, of non-redeemable shares in the company,

the company shall, within 12 months after the day, dispose of to another person or persons that number, or proportion, of non-redeemable shares in the company.

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

58C   Redemption, purchase or cancellation under Part 11 not a reduction of capital[184]

The redemption, purchase or cancellation by a company under this Part of its shares is not for the purposes of Part 12 a reduction of capital.

59      Power of States to amend Part 11[185]

The States may amend this Part by Regulations.

PART 12

REDUCTION OF CAPITAL

60      Forfeiture of shares[186]

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 accounts[187]

(1)     A company may reduce its capital accounts in any way.[188]

(1A)   A reduction of capital shall be sanctioned by a special resolution of the company.[189]

(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)     Subject to paragraphs (4) and (5), every reduction of capital shall either –

(a)     be supported by a solvency statement (see Articles 61A and 61B); or

(b)     be subject to confirmation by the court (see Articles 62 to 64).[190]

(4)     Paragraph (3) does not apply to a reduction of capital by extinguishing or reducing a capital account maintained in respect of unlimited shares.[191]

(5)     Paragraph (3) does not apply to 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 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.[192]

(6)     A reduction of capital supported by a solvency statement shall be treated for all purposes in the same way as one that has been confirmed by an order of the court.[193]

61A   Solvency statement[194]

(1)     A reduction of capital is supported by a solvency statement if the directors of the company authorizing the reduction make a solvency statement not more than 15 days before the special resolution sanctioning the reduction is passed.

(2)     A “solvency statement” is a statement that the directors making it have formed the opinion –

(a)     that, as at the date of the statement, the company is able to discharge its liabilities as they fall due; and

(b)     that, having regard to –

(i)      the prospects of the company and the intentions of the directors with respect to the management of the company’s business, and

(ii)      the amount and character of the financial resources that will in their view be available to the company,

the company will be able to –

(A)    continue to carry on business, and

(B)     discharge its liabilities as they fall due,

until the expiry of the period of 12 months immediately following the date of the statement or until the company is dissolved under Article 150, whichever first occurs.

(3)     A director who makes a solvency statement without having reasonable grounds for the opinion expressed in it is guilty of an offence.

61B   Registration of solvency statement and minute of reduction[195]

(1)     Where a reduction of capital is supported by a solvency statement, the company shall, within 15 days after the special resolution is passed, deliver to the registrar –

(a)     a copy of the solvency statement; and

(b)     a minute showing in respect of the company the information specified in paragraph (2).

(2)     The information to which paragraph (1) refers is –

(a)     the amounts of the capital accounts;

(b)     the number of shares into which the share capital is to be divided and, in the case of a par value company, the amount of each share;

(c)     in the case of a par value company the amount (if any), at the date of the registration of the solvency statement and minute under paragraph (3), 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.

(3)     The registrar shall register the solvency statement and minute, and thereupon the resolution for reducing the capital shall take effect.

(4)     The registrar shall certify the registration of the solvency statement and minute and the certificate –

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

(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.

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

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.[196]

(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 (whether in cash or otherwise) 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).[197]

(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 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 (whether in cash or otherwise) 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.[198]

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).[199]

(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.[200]

(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. [201]

(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.[202]

(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

(c)     aids, abets or is privy to any such concealment or misrepresentation,

the officer is guilty of an offence.

66A   Power of States to amend Part 12[203]

The States may amend this Part by Regulations.

PART 13

ADMINISTRATION

67      Registered office[204]

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

(2)     A company does not comply with the requirement in paragraph (1) unless the occupier of the premises that are the registered office authorizes for the time being their use for that purpose.

(3)     The registrar may, by notice in writing served on the applicants for the incorporation of a company, refuse to incorporate it if he or she is not satisfied that the occupier of the premises that are to be the registered office of the company authorizes their use for that purpose.

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

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

(6)     If the registrar, by notice in writing served on the company, informs it that the registrar is no longer satisfied that the occupier of the premises that are the company’s registered office authorizes their use for that purpose, the company shall within 14 days change its registered office by giving notice to the registrar.

(7)     Subject to paragraph (8), a change of registered office under paragraph (5) or (6) 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.

(8)     The registrar may, by notice in writing served on a company, refuse to register a notice given by the company under paragraph (5) or (6) if he or she is not satisfied that the occupier of the premises that are to be the registered office of the company authorizes their use for that purpose.

(9)     If default is made in compliance with any requirement of or made under this Article, the company and every officer of it who is in default are each guilty of an offence.

67A   Relief from breach of duty in unavoidable circumstances[205]

Where a company unavoidably ceases to perform any duty to keep at its registered office or make available for public inspection there any document, in circumstances in which it was not practicable to give prior notice to the registrar of a change in its registered office, but –

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

(b)     gives notice under Article 67(5) to the registrar of the change of its registered office within 14 days of doing so, and that the change is made for the purposes of this Article,

and the registrar registers the notice, the company shall not be treated as having failed to comply with that duty.

67B   Review of registrar’s decision[206]

(1)     Within 28 days after the applicants for the incorporation of a company receive notice under Article 67(3) that the registrar refuses to incorporate the company, the applicants may appeal to the court on the ground that the registrar’s decision was unreasonable having regard to all the circumstances of the case.

(2)     Within 28 days after a company receives notice under Article 67(6) that the registrar is no longer satisfied that the occupier of the premises that are the company’s registered office authorizes their use for that purpose, the company may appeal to the court on the ground that the registrar’s decision was unreasonable having regard to all the circumstances of the case.

(3)     Within 28 days after a company receives notice under Article 67(8) that the registrar refuses to register a notice of change of registered office given by the company under paragraph (5) or (6) of that Article, the company may appeal to the court on the ground that the registrar’s decision was unreasonable having regard to all the circumstances of the case.

(4)     On hearing the appeal, the court –

(a)     may confirm or reverse the decision of the registrar; and

(b)     may make such order as to the costs of the appeal as it thinks fit.

67C   Evidence of authorization[207]

The Minister may prescribe information that is to be provided to the registrar to show that an occupier of premises authorizes the use of the premises as a company’s registered office.

68      [208]

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

(c)     negotiable instruments and letters of credit purporting to be signed by or on behalf of the company.

(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 return[209]

(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 Articles 84 and 84A 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.[210]

(2)     Where the company has converted any of its shares into stock, the return shall give the corresponding information in relation to that stock, stating the amount of stock instead of the nominal value or number of shares (as the case may be).

(3)     The return must contain such other information and be verified in such manner as may be specified in a notice published by the Commission.[211]

(4)     The registrar shall not provide to any person a copy of a return made under this Article by a public company unless that person has delivered to the registrar a declaration under Article 46 in respect of the return.

(5)     A company on filing a return required by this Article must pay the published fee and any late filing fee.[212]

(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(7); or

(c)     in the case of an existing company if no office is registered, by sending it by post –

(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      Directors[213]

(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 such a person as mentioned in Article 3(6)(b) or (c); or

(c)     is disqualified for being a director under this or any other enactment.[214]

(4)     A body corporate shall not be a director of a company unless –

(a)     the body corporate is a company, wherever incorporated, that is permitted under the terms of its registration under the Financial Services (Jersey) Law 1998[215] to act as, or fulfil the requirements of, a director; and

(b)     the body corporate has no director that is a body corporate.[216]

(4A)   An incorporated limited partnership shall not be a director of a company.[217]

(4B)   A separate limited partnership shall not be a director of a company.[218]

(4C)   A limited liability partnership shall not be a director of a company.[219]

(5)     [220]

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.[221]

(3)     Furthermore, no act or omission of a director shall be treated as a breach of paragraph (1) if –

(a)     a resolution, or (if the articles so require) special resolution, authorizing or ratifying the act or omission is passed otherwise than by all of the members of the company and in accordance with paragraphs (4) and (5); and

(b)     after the act or omission the company will be able to discharge its liabilities as they fall due.[222]

(4)     Where the resolution authorizing or ratifying the act or omission is proposed as a written resolution, neither the director (if a member of the company) nor any member connected with the director shall be treated for the purposes of Article 95(1B) and (1C) as a member entitled to vote on the resolution.[223]

(5)     Where the resolution authorizing or ratifying the act or omission is proposed at a meeting, it is passed only if the necessary majority is obtained disregarding votes in favour of the resolution by the director (if a member of the company) and any member connected with him; but this does not prevent the director or any such member from attending, being counted towards the quorum or taking part in the proceedings at any meeting at which the decision is considered.[224]

(6)     The Minister may by Order disapply paragraphs (3) to (5) in relation to any class of company.[225]

74ZA Persons connected with director for purposes of Article 74[226]

(1)     The following persons (and only those persons) are connected with the director for the purposes of Article 74(4) and (5) –

(a)     members of the director’s family (see paragraph (2));

(b)     a foundation incorporated under the Foundations (Jersey) Law 2009[227] under which the director or a person who, by virtue of sub-paragraph (a), is connected with the director is a beneficiary;

(c)     any other body corporate with which the director is connected (as defined in paragraph (3));

(d)     a person acting in his capacity as trustee of a trust –

(i)      the beneficiaries of which include the director or a person who by virtue of sub-paragraph (a), (b) or (c) is connected with him, or

(ii)      the terms of which confer a power on the trustees that may be exercised for the benefit of the director or any such person,

other than a trust for the purposes of an employees’ share scheme or a pension scheme;

(e)     a person acting in the capacity of a partner –

(i)      of the director, or

(ii)      of a person who, by virtue of sub-paragraph (a), (b), (c) or (d), is connected with the director;

(f)      a firm that is a legal person under the law by which it is governed (including a limited liability partnership, a separate limited partnership and an incorporated limited partnership) and in which –

(i)      the director is a partner,

(ii)      a partner is a person who, by virtue of sub-paragraph (a), (b), (c) or (d) is connected with the director, or

(iii)     a partner is a firm in which the director is a partner or in which there is a partner who, by virtue of sub-paragraph (a), (b), (c) or (d), is connected with the director; and

(g)     where the company is a fund –

(i)      a person connected with the establishment or promotion of the fund, and

(ii)      any person who is accustomed to acting in accordance with the directions of a person referred to in clause (i), whether given directly or indirectly (but disregarding advice given in a professional capacity).[228]

(2)     The members of the director’s family are –

(a)     the director’s spouse or civil partner;

(b)     any other person (whether of a different sex or the same sex) with whom the director lives as partner in an enduring family relationship, other than a grandparent or grandchild, sister, brother, aunt or uncle, or nephew or niece;

(c)     the director’s children or step-children;

(d)     any children or step-children of a person within paragraph (b) (and who are not children or step-children of the director) who live with the director and have not attained the age of 18; and

(e)     the director’s parents.

(3)     A director is connected with a body corporate (other than a foundation incorporated under the Foundations (Jersey) Law 2009[229] or an incorporated limited partnership) if, but only if, the director and the persons connected with the director together –

(a)     have an interest in shares comprised in the equity share capital of that body corporate of a nominal value equal to at least 20% of that share capital; or

(b)     are entitled to exercise or control the exercise of more than 20% of the voting power at any general meeting of that body.

(4)     For the purposes of paragraph (3)(a) –

(a)     the reference to an interest in shares includes any interest of any kind whatsoever in shares;

(b)     any restraints or restrictions to which the exercise of any right attached to the interest is or may be subject shall be disregarded;

(c)     it is immaterial that the shares in which there is an interest are not identifiable;

(d)     persons having a joint interest in shares are deemed each to have that interest;

(e)     a person is taken to have an interest in shares if the person enters into a contract to acquire them;

(f)      a person is taken to have an interest in shares if –

(i)      the person has a right to call for the delivery of the shares to, or to the order of, the person, or

(ii)      the person has a right to acquire an interest in shares or is under an obligation to take an interest in shares,

whether the right or obligation is conditional or absolute (but not if it is a right or obligation to subscribe for shares);

(g)     a person is taken to have an interest in shares if, not being the registered holder, the person is entitled –

(i)      to exercise any right conferred by the holding of the shares, or

(ii)      to control the exercise of any such right;

(h)     a person is taken to have an interest in shares if a body corporate is interested in them and –

(i)      the body corporate or its directors are accustomed to act in accordance with the person’s directions or instructions, or

(ii)      the person is entitled to exercise or control the exercise of more than one-half of the voting power at general meetings of the body corporate;

(i)      a person is taken to have an interest in shares if the person is a beneficiary under a foundation incorporated under the Foundations (Jersey) Law 2009[230] which is interested in them; and

(j)      where an interest in shares is comprised in property held on trust, every beneficiary of the trust is taken to have an interest in the shares unless –

(i)      it is an interest in reversion or remainder and a person is entitled to receive income from the trust property comprising shares for that person’s or another’s life, or

(ii)      the person holds the shares as a bare trustee or as a custodian trustee.

(5)     A person ceases to have an interest in shares by virtue of paragraph (4)(e) or (f) –

(a)     on the shares being delivered on the person’s order to another person –

(i)      in fulfilment of a contract for their acquisition by the other person, or

(ii)      in satisfaction of a right of the other person to call for their delivery;

(b)     on a failure to deliver the shares in accordance with the terms of such a contract or the terms on which such a right falls to be satisfied; or

(c)     on the lapse of the person’s right to call for delivery of the shares or to acquire an interest in the shares or of the person’s obligation to take an interest in the shares.

(6)     For the purposes of paragraph (4)(g) a person is taken to be entitled to exercise or control the exercise of a right conferred by the holding of shares if the person –

(a)     has a right (whether subject to conditions or not) the exercise of which would make the person so entitled; or

(b)     is under an obligation (whether or not so subject) the fulfilment of which would make the person so entitled.

(7)     A person is not by virtue of paragraph (4)(g) taken to be interested in shares by reason only that the person –

(a)     has been appointed a proxy to exercise any of the rights attached to the shares; or

(b)     has been appointed by a body corporate to act as its representative at any meeting of the company or of any class of its members.

(8)     For the purposes of paragraph (4)(h), where –

(a)     a person is entitled to exercise, or control the exercise, of more than one-half of the voting power at general meetings of a body corporate; and

(b)     the body corporate is entitled to exercise, or control the exercise, of any of the voting power at general meetings of another body corporate,

the voting power mentioned in sub-paragraph (b) is taken to be exercisable by the person.

(9)     The reference in paragraph (3)(b) to voting power the exercise of which is controlled by the director or a person connected with the director includes voting power the exercise of which is controlled by a body corporate controlled by the director or person.

(10)    Shares in a company held as treasury shares, and any voting rights attached to such shares, are disregarded for the purposes of paragraph (3).

(10A) In paragraph (1)(g) “fund” means –

(a)     a scheme or arrangement which would be a collective investment fund under Article 3 of the Collective Investment Funds (Jersey) Law 1988[231] but for the fact that it does not acquire capital by means of an offer to the public of units for subscription, sale or exchange as described in that Law;

(b)     a certified fund within the meaning of the Collective Investment Funds (Jersey) Law 1988;

(c)     a recognized fund within the meaning of the Collective Investment Funds (Jersey) Law 1988; or

(d)     an unregulated fund within the meaning of the Collective Investment Funds (Unregulated Funds) (Jersey) Order 2008[232].[233]

(11)    The Minister may by Order amend this Article.

74A   Contracts with sole members who are also directors[234]

(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.[235]

(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.[236]

(2B)   Any disclosure at a meeting of the directors shall be recorded in the minutes of the meeting.[237]

(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. [238]

(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 orders[239]

(1)     If it appears to the Minister, the Commission, or 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;

(b)     be a member of the council of a foundation incorporated under the Foundations (Jersey) Law 2009[240] or in any other way directly or indirectly be concerned or take part in the management of such a foundation; or

(c)     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, the Commission, or the Attorney General may apply to the court for an order to that effect against the person.

(2)     The court may, on such an application, make the order applied for if it is satisfied that the person’s conduct in relation to a body corporate makes the person unfit to be concerned in the management of a body corporate.

(3)     An order under paragraph (2) shall be for such period, not exceeding 15 years, as the court directs.

(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 disqualified[241]

(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);

(c)     is an advocate or solicitor of the Royal Court; or

(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;

(c)     the Association of Chartered Certified Accountants;

(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.[242]

(3)     The Minister may by Order amend paragraph (2) by adding, deleting or substituting any body.[243]

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, 84A and 85.[244]

(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 published maximum, as the company may require.[245]

(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.[246]

(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: natural persons[247]

The register kept by a company under Article 83 shall contain the following particulars with respect to each director who is a natural person –

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

(b)     any former forenames or surname;

(c)     the director’s business or usual residential address;

(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. [248]

84A   Particulars of directors: corporate directors[249]

(1)     The register kept by a company under Article 83 shall contain the following particulars with respect to each corporate director –

(a)     in the case of a corporate director which is a company registered in Jersey, the company’s name and registered number and the address of its registered office;

(b)     in the case of any other corporate director, its corporate name, the place where it is incorporated, its registered number (if any) and the address of its registered office in that place; and

(c)     in either case, the date on which the corporate director became (and, where appropriate, the date on which it ceased to be) a director.

(2)     In paragraph (1) –

(a)     “corporate director” means a body corporate fulfilling the requirements of Article 73(4); and

(b)     with respect to a corporate director which is not a company registered in Jersey, ‘registered’ shall be construed as reference to registration, or an equivalent procedure, under the laws governing incorporation in the jurisdiction in which the corporate director is incorporated.

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.

85A   Power of States to amend Part 14[250]

The States may amend this Part by Regulations.

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 public company and every relevant private 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.[251]

(2A)   In this Article “relevant private company” means a private company –

(a)     which is required to hold annual general meetings by provision made in its articles after the coming into force of the Companies (Amendment No. 11) (Jersey) Law 2014[252]; or

(b)     in whose case a requirement for the holding of annual general meetings was imposed by provision made in its articles before the coming into force of that Law and confirmed by a special resolution passed after the coming into force of that Law and remaining in effect.[253]

(2B)   Any requirement for the holding of annual general meetings imposed by provision made in the articles of a private company before the coming into force of the Companies (Amendment No. 11) (Jersey) Law 2014 is of no effect unless confirmed by special resolution passed after the coming into force of that Law and remaining in effect.[254]

(3)     In the case of a public company, not more than 18 months, and in the case of a relevant private company, not more than 22 months shall elapse between the date of one annual general meeting and the date of the next.[255]

(4)     If all members of a public company or relevant 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.[256]

(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; or

(b)     if any member of the company gives written notice to the company determining the agreement.[257]

(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.[258]

(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.[259]

(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.[260]

(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.[261]

(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.[262]

(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 the majority specified in paragraph (1A) of the 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 14 days’ notice, specifying the intention to propose the resolution as a special resolution, has been duly given.[263]

(1A)   The majority to which paragraph (1) refers is –

(a)     two-thirds, if the articles of the company do not specify a greater majority; or

(b)     if the articles specify a greater majority than two-thirds (or unanimity), that greater majority (or unanimity).[264]

(1B)   Where the articles make different provision in relation to different descriptions of special resolutions, the reference in paragraph (1A) to the majority specified by the articles (or unanimity) is to the majority specified by the articles in relation to special resolutions of the description of the special resolution concerned (or unanimity, if that is what is so specified).[265]

(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 14 days’ notice has been given.[266]

(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 14 days’ notice in writing.[267]

(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 by 14 days’ notice in writing.[268]

(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 90 per cent of the total voting rights of the members who have that right, or, if the articles require a greater majority of such persons (or unanimity), by that greater majority (or unanimity).[269]

92      General provisions as to meetings and votes[270]

(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;

(c)     at a meeting (other than an adjourned meeting) of any class of members –

(i)      in the case of a class of par value shares, the quorum shall be persons holding or representing by proxy not less than 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 or persons as it thinks fit to act as its representative or representatives 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.[271]

(2)     Where the body corporate authorizes only one person, the person 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.[272]

(3)     Where the body corporate authorizes more than one person, any one of them is entitled to exercise the same powers on behalf of the body corporate which they represent as that body corporate could exercise if it were an individual member or creditor of the company.[273]

(4)     Where the body corporate authorizes more than one person and more than one of them purport to exercise a power under paragraph (3) –

(a)     if they purport to exercise the power in the same way, the power is treated as exercised in that way; and

(b)     if they do not purport to exercise the power in the same way, the power is treated as not exercised.[274]

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.[275]

(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.[276]

(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.[277]

(1B)   Anything which may be done at a meeting of a company or at a meeting of any class of its members may be done by a resolution in writing passed by all the members of the company 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.[278]

(1C)   In the case of a resolution which is –

(a)     proposed as a written resolution by the directors of a company; or

(b)     required to be circulated by a company by Article 95ZB,

if the company’s articles provide that 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 passed by a specified majority of the members 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, paragraph (1B) has effect as if the reference to all the members were to that majority of the members.[279]

(1D)   The majority specified by the articles of a company in relation to a special resolution may not be less than two-thirds.[280]

(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 may be sent or submitted to members in hard copy or electronic form or in such other manner as the company’s articles may provide.[281]

(3A)   A resolution under this Article shall be deemed to be passed when all the members have, or (where paragraph (1C) applies) the specified majority of the members has, signified agreement to the resolution.[282]

(3B)   A member signifies agreement to a resolution under this Article when the company receives from the member (or from someone acting on the member’s behalf) a document (sent or submitted in hard copy or electronic form or in such other manner as the company’s articles may provide) which –

(a)     identifies the resolution to which it relates; and

(b)     indicates agreement to the resolution.[283]

(3C)   A member’s agreement to a written resolution, once signified, may not be revoked.[284]

(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 or Articles 95ZA to 95ZC 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.[285]

95ZA Circulation of written resolutions proposed by directors[286]

(1)     This Article applies to any resolution proposed as a written resolution by the directors of a company, other than one passed by all the members of the company who, at the date when the resolution is deemed to be passed, would be entitled to vote on the resolution if it were proposed at a meeting.

(2)     The company must send or submit a copy of the resolution to every eligible member.

(3)     The company must do so –

(a)     by sending copies at the same time (so far as reasonably practicable) to all eligible members; or

(b)     if it is possible to do so without undue delay, by submitting the same copy to each eligible member in turn (or different copies to each of a number of eligible members in turn),

or by sending copies to some members in accordance with sub-paragraph (a) and submitting a copy or copies to other members in accordance with sub-paragraph (b).

(4)     The copy of the resolution must be accompanied by a statement informing the member –

(a)     how to signify agreement to the resolution; and

(b)     as to the date by which the resolution must be passed if it is not to lapse.

(5)     If the company fails to comply with paragraph (2), (3) or (4), the company and every officer of it in default commits an offence.

(6)     A resolution to which this Article applies lapses if it is not passed before the end of –

(a)     the period specified for this purpose in the articles; or

(b)     if none is specified, the period of 28 days beginning with the circulation date.

(7)     The agreement of a member to such a resolution is ineffective if signified after the end of that period.

(8)     For the purposes of this Article an “eligible member” is a member who, at the circulation date, would be entitled to vote on the resolution if it were proposed at a meeting.

(9)     In this Article the “circulation date” means the date on which copies of the resolution are sent or submitted to members in accordance with this Article (or, if copies are sent or submitted to members on different days, the first of those days).

(10)    The validity of a resolution, if passed, is not affected by a failure to comply with this Article.

95ZB Members’ power to require circulation of written resolution[287]

(1)     The members of a company may require the company to circulate a resolution that may properly be proposed and is to be proposed as a written resolution.

(2)     For the purposes of paragraph (1) a resolution may properly be proposed as a written resolution unless –

(a)     it would, if passed, be ineffective (whether by reason of inconsistency with any provision of, or made under, any Law or the company’s constitution or otherwise);

(b)     it is defamatory of any person; or

(c)     it is frivolous or vexatious.

(3)     Where the members require a company to circulate a resolution they may require the company to circulate it with a statement of not more than 1,000 words on the subject matter of the resolution.

(4)     A company is required to circulate a resolution and any accompanying statement once it has received requests that it do so from members representing not less than the requisite percentage of the total voting rights of all members entitled to vote on the resolution.

(5)     The “requisite percentage” is 10% or such lower percentage as is specified for this purpose in the company’s articles.

(6)     A request –

(a)     may be made in hard copy form or electronic form or in such other manner as the company’s articles may provide;

(b)     must identify the resolution and any accompanying statement; and

(c)     must be authenticated by the person or persons making it.

95ZC Circulation of written resolution and statement[288]

(1)     A company that is required under Article 95ZB to circulate a resolution must send or submit to every eligible member –

(a)     a copy of the resolution; and

(b)     a copy of any accompanying statement.

(2)     The company must do so –

(a)     by sending copies at the same time (so far as reasonably practicable) to all eligible members; or

(b)     if it is possible to do so without undue delay, by submitting the same copy to each eligible member in turn (or different copies to each of a number of eligible members in turn),

or by sending copies to some members in accordance with sub-paragraph (a) and submitting a copy or copies to other members in accordance with sub-paragraph (b).

(3)     The company must send or submit the copies (or, if copies are sent or submitted to members on different days, the first of those copies) not more than 21 days after it becomes subject to the requirement under Article 95ZB to circulate the resolution.

(4)     A copy of the resolution must be accompanied by a statement informing the member –

(a)     how to signify agreement to the resolution; and

(b)     as to the date by which the resolution must be passed if it is not to lapse.

(5)     If the company fails to comply with paragraph (2), (3) or (4), the company and every officer of it in default commits an offence.

(6)     A resolution which is required to be circulated by the company by Article 95ZB lapses if it is not passed before the end of –

(a)     the period specified for this purpose in the articles; or

(b)     if none is specified, the period of 28 days beginning with the circulation date.

(7)     The agreement of a member to such a resolution is ineffective if signified after the end of that period.

(8)     The validity of a resolution, if passed, is not affected by a failure to comply with this Article.

(9)     The expenses of the company in complying with this Article must be paid by the members who requested the circulation of the resolution unless the company resolves otherwise.

(10)    Unless the company has previously so resolved, it is not bound to comply with this Article unless there is deposited with or tendered to it a sum reasonably sufficient to meet its expenses in doing so.

(11)    The company is not required to circulate a copy of a statement if, on an application by the company or any other person, the court is satisfied that the rights conferred by Article 95ZB and this Article are being abused.

(12)    The court may order the members who requested the circulation of the statement to pay the whole or part of the company’s costs on an application under paragraph (11) even if they are not parties to the application.

95A   Recording of decisions by sole member[289]

(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 before the beginning of the period commencing 48 hours before a meeting or adjourned meeting in order that the appointment may be effective.[290]

(4A)   In calculating the period mentioned in paragraph (4) no account shall be taken of any part of a day that is not a working day.[291]

(4B)   For the purposes of paragraph (4A) “working day” means a weekday (within the meaning of Part 1 of the Schedule to the Public Holidays and Bank Holidays (Jersey) Act 2010[292]) other than –

(a)     a day specified in that Schedule as a day which is to be observed as a public holiday; or

(b)     a day noted in that Schedule as a day which is by custom observed as a general holiday.[293]

(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.[294]

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.[295]

(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.[296]

(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.[297]

(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 published 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.[298]

(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.[299]

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 published maximum, as the company may require.[300]

(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.[301]

(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 any late filing fee.[302]

(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.[303]

PART 16[304]

ACCOUNTS AND AUDITS

Interpretation – Part 16

102    Interpretation – Part 16[305]

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

“accounts” means accounts prepared in accordance with Article 105;

“auditor” means –

(a)     in the case of an individual, an individual who is a member of a recognized professional body and is permitted by that body to engage in public practice;

(b)     in the case of a partnership, a partnership that is a qualified partnership and where each of the persons who is responsible to it for examining or reporting on the accounts of a company pursuant to Article 113, is an individual who is a member of a recognized professional body and is permitted by that body to engage in public practice;

(c)     in the case of a body corporate, a body corporate that is controlled by auditors and where each of the persons who is responsible to it for examining or reporting on the accounts of a company pursuant to Article 113, is an individual who is a member of a recognized professional body and is permitted by that body to engage in public practice;

(d)     in respect of a company that is not a market traded company, an individual or firm authorized by the Commission under Article 113D(6) to carry out an audit of the company;

“controlled by auditors”, in respect of a body corporate, means a body corporate where –

(a)     individuals who are members of a recognized professional body or auditors that fall within paragraph (b) or (c) of the definition “auditor”;

(b)     partnerships accepted by a recognized professional body as being qualified for appointment as auditors of companies incorporated in the United Kingdom;

(c)     bodies corporate accepted by a recognized professional body as being qualified for appointment as auditors of companies incorporated in the United Kingdom;

(d)     individuals who hold a qualification to audit accounts under the law of a European Economic Area member state other than the United Kingdom or the Republic of Ireland,

or any combination of persons mentioned in sub-paragraphs (a), (b), (c) and (d) –

(e)     constitute more than half the number of members of the body corporate;

(f)      hold more than half the voting rights of each class of members of the body corporate;

(g)     who are individuals, make up more than half the number of directors of the body corporate; or

(h)     hold more than half of the voting rights in the board of directors, committee or other management body of the body corporate;

“Directive” means Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments as for the time being in force;

“exempt company” means –

(a)     a company that is an issuer exclusively of debt securities admitted to trading on a regulated market –

(i)      prior to 31st December 2010, the denomination per unit of which is at least €50,000 or, in the case of debt securities denominated in another currency, equivalent, at the date of issue, to at least €50,000, or

(ii)      on or after 31st December 2010, the denomination per unit of which is at least €100,000 or, in the case of debt securities denominated in another currency, equivalent, at the date of issue, to at least €100,000; or

(b)     an open-ended investment company –

(i)      that holds a permit as a functionary specified in Group 1 of Part 2 of the Schedule to the Collective Investment Funds (Jersey) Law 1988[306],

(ii)      in relation to which a certificate granted under Article 8B of the Collective Investment Funds (Jersey) Law 1988 is in force, or

(iii)     that is an unregulated fund within the meaning of the Collective Investment Funds (Unregulated Funds) (Jersey) Order 2008[307];

“firm” means an entity, whether or not a legal person, that is not an individual and includes a body corporate, a corporation sole, a partnership, and an unincorporated association;

“market traded company” means –

(a)     a company whose transferable securities have been admitted to trading on a regulated market; or

(b)     a company in respect of which transferable securities have been admitted to trading on a regulated market,

but does not include an exempt company;

“partnership” includes –

(a)     a firm of a similar character to a partnership formed under the law of a country or territory outside Jersey; and

(b)     a limited liability partnership that is registered under the Limited Liability Partnerships (Jersey) Law 2017[308] or a firm of a similar character to a limited liability partnership formed under the law of a jurisdiction outside Jersey,

but does not include any such partnership that is a body corporate;

“professional oversight body” means a body designated by an Order made under Article 113N;

“qualified partnership” means a partnership –

(a)     in which more than half of its partners are any of, or any combination of, the following –

(i)      individuals who are members of recognized professional bodies,

(ii)      partnerships that are themselves auditors as defined in paragraph (b) of the definition “auditor”,

(iii)     bodies corporate that are themselves auditors as defined in paragraph (c) of the definition “auditor”,

(iv)     individuals who hold a qualification to audit accounts under the law of a European Economic Area member state other than the United Kingdom or the Republic of Ireland; and

(b)     in which more than half 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);

“recognized auditor” means a firm or an individual whose name appears on the Register of Recognized Auditors;

“recognized professional body” means any of the following bodies –

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

(b)     the Institute of Chartered Accountants of Scotland;

(c)     the Association of Chartered Certified Accountants;

(d)     the Institute of Chartered Accountants in Ireland;

“Register of Recognized Auditors” means the Register kept by the Commission under an Order made under Article 110(1);

“regulated market” has the same meaning as in the Directive (see Article 4.1(14) of the Directive);

“rules”, in respect of a recognized professional body, means the rules of the body as to –

(a)     the eligibility of persons for appointment as auditors; and

(b)     the conduct of audit work,

that are binding on persons acting as auditors under this Part and, where Article 112(6) applies, includes rules published by the Commission in accordance with that Article;

“transferable securities” has the same meaning as in the Directive (see Article 4.1(18) of the Directive).[309]

(1A)   In this Part, unless the context otherwise requires, ‘partnership’ does not include an incorporated limited partnership or a separate limited partnership.[310]

(2)     For the purposes of any Article of this Part where under or pursuant to this Part an officer of an auditor or of a recognized auditor who is in default is guilty of an offence, the expression “officer of the auditor in default” means any officer, director, partner or member of the auditor or of the recognized auditor who knowingly and wilfully authorizes or permits the default, refusal or contravention mentioned in the Article.

(3)     The Minister may, by Order, amend a definition in this Article.

Accounts

103    Accounting records[311]

(1)     A company must keep accounting records that are sufficient to show and explain its transactions.

(2)     The records must be 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.

104    Retention of records[312]

(1)     A company’s accounting records must –

(a)     be kept at such place as the directors think fit; and

(b)     be open at all times to inspection by the company’s officers and its 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 must –

(a)     be sent to, and kept in, Jersey; and

(b)     be open at all times to inspection by the company’s officers and its secretary.

(3)     The returns must 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.

(4)     Except as provided by Article 194 (winding up of company), the accounting records that a company is required by Article 103 to keep must be preserved by it for at least 10 years from the date on which they are made.

105    Accounts[313]

(1)     Except as provided by paragraph (11), the directors of a company must prepare accounts for a period of not more than 18 months –

(a)     beginning on the date the company was incorporated; or

(b)     if the company has previously prepared a profit and loss account, beginning at the end of the period covered by the most recent accounts.

(2)     The accounts must be prepared –

(a)     in the case of a market traded company, in accordance with generally accepted accounting principles prescribed for the purposes of this provision; or

(b)     in any other case, in accordance with any generally accepted accounting principles.

(3)     The accounts of a company must specify the generally accepted accounting principles that have been adopted in their preparation.

(4)     The accounts of a company that is required by Article 113(1) to appoint an auditor must give a true and fair view of, or be presented fairly in all material respects so as to show –

(a)     the company’s profit or loss for the period covered by the accounts; and

(b)     the state of its affairs at the end of the period,

and must otherwise comply with any other requirements of this Law.

(5)     A company’s accounts must be –

(a)     approved by the directors; and

(b)     signed on their behalf by one of them.

(6)     The accounts for a financial period of a company must –

(a)     be prepared, and, if required under this Part, be examined and reported upon by an auditor; and

(b)     subject to paragraph (8), be laid before a general meeting of the company together with a copy of any auditor’s report on them.

(7)     The actions mentioned in paragraph (6) must be taken –

(a)     in the case of a public company, within 7 months; or

(b)     in the case of a private company, within 10 months,

after the end of the financial period of the company covered by the accounts.

(8)     Paragraph (9) applies if, at the end of a financial period of a company –

(a)     the company is a private company that is not a relevant private company within the meaning given by Article 87(2A); or

(b)     an agreement under Article 87(4) dispensing with the holding of an annual general meeting has effect in the case of the company.[314]

(9)     The company is not obliged to lay the accounts for the financial period or a copy of any auditor’s report on them before a general meeting of the company unless a member of the company, not later than 11 months after the end of the financial period covered by the accounts, by written notice given to the company, requires the company to do so.

(10)    In such a case the general meeting of the company must be held within 28 days after –

(a)     the receipt of the notice by the company; or

(b)     the approval of the accounts by the directors,

whichever last occurs.

(11)    For the purposes of this Article, the directors of a holding company need not prepare separate accounts under paragraph (1) if consolidated accounts for the company are prepared, unless required to do so by the members of the company by ordinary resolution.

106    Publication of interim accounts[315]

A company must not publish interim accounts, whether or not audited, unless the accounts have been prepared –

(a)     in the case of a market traded company, in accordance with generally accepted accounting principles prescribed for the purposes of Article 105(2)(a); or

(b)     in any other case, in accordance with any generally accepted accounting principles.

107    Copies of accounts[316]

(1)     This Article applies where a member of a company who has not previously been furnished with a copy of its latest accounts makes a written request to the company to be furnished with a copy of those accounts together with a copy of any auditor’s report on them.

(2)     The company must, without charge and within 7 days of the request being made to it, furnish to the person the accounts requested together with any auditor’s report on them.

108    Delivery of accounts to registrar[317]

(1)     Where the directors of a public company are required to produce accounts for the company under Article 105(1), the directors must, for each financial period of the company, deliver to the registrar –

(a)     a copy of the company’s accounts for the period signed on behalf of the directors by one of them;

(b)     a copy of the auditor’s report on the accounts; and

(c)     if any of the documents is not in English, a copy of it in English, certified to be a correct translation.

(2)     The documents must be delivered to the registrar within 7 months after the end of the financial period to which they relate.

(3)     If a public company becomes a private company during a financial period –

(a)     paragraph (1) applies in relation to the company in respect of that period; but

(b)     the requirement in the paragraph to deliver accounts is to be taken to have been satisfied if the accounts relate to either all of the financial period (including a period when the company was no longer a public company) or to only the part of the financial period during which the company was a public company.

(4)     Paragraph (5) applies if, not later than one month before the end of the period mentioned in –

(a)     Article 105(1), 105(7) or 105(9); or

(b)     paragraph (2) of this Article,

a written application is made to the Commission for an extension of the period.

(5)     The Commission may, by written notice to the company, extend the period if it is satisfied that a special reason for doing so exists.

(6)     If the Commission does so, it must send a copy of the notice to the registrar.

(7)     A company must pay the published fee and any late filing fee on filing documents under this Article.

109    Failure to comply with Article 103, 104, 105, 106, 107 or 108[318]

If a company fails to comply with Article 103, 104, 105, 106, 107 or 108 –

(a)     the company; and

(b)     in the case of a public company, each officer of the company in default,

is guilty of an offence.

Recognized Auditors

110    Commission to maintain Register of Recognized Auditors[319]

(1)     The Minister must make an Order requiring the Commission to keep a register, to be known as the Register of Recognized Auditors, of persons –

(a)     who under Article 112 are auditors qualified to be recognized auditors; and

(b)     who have applied and have been approved by the Commission to have their names entered on the Register of Recognized Auditors.

(2)     The Order must require that the entry on the Register of Recognized Auditors in respect of each recognized auditor must contain –

(a)     the name and address of the recognized auditor;

(b)     in the case of an individual, the name of the recognized professional body the recognized auditor is a member of; and

(c)     in the case of a firm, the specified information relating to each of the persons who is responsible to the firm for examining or reporting on the accounts of a market traded company pursuant to Article 113A,

and may require each entry to contain other specified information.

(3)     The Order may impose such obligations on –

(a)     recognized professional bodies;

(b)     any professional oversight body;

(c)     persons qualified or approved to be recognized auditors,

as the Minister considers necessary to achieve the objectives for which the Register of Recognized Auditors is established.

(4)     The Order may also include –

(a)     provisions requiring that specified entries on the Register of Recognized Auditors be open to inspection at times and places specified or determined in accordance with the Order;

(b)     provisions enabling a person to require a certified copy of specified entries on the Register of Recognized Auditors;

(c)     provisions authorizing the charging of published fees for inspecting the Register of Recognized Auditors and for the provision of certified copies of entries in it,

but may also prescribe circumstances in which entries on the Register of Recognized Auditors shall not be made open for inspection or made available as certified copies.

(5)     A person qualified or approved to be a recognized auditor –

(a)     who fails to comply with an obligation imposed under paragraph (3)(c); or

(b)     if the obligation is to provide information, who knowingly or recklessly provides information that is false or misleading in a material particular,

is guilty of an offence.[320]

(6)     In this Article “specified” means specified by Order made under this Article.

111    Registration as a recognized auditor[321]

(1)     Persons who under Article 112 are auditors qualified to be recognized auditors may apply to have their name entered on the Register of Recognized Auditors –

(a)     by applying to the Commission in the manner published by the Commission; and

(b)     by paying the published fee.

(2)     The Commission may refuse to enter the name of a person on the Register of Recognized Auditors if the Commission is satisfied that the person is not competent to act as a recognized auditor.

(3)     The Commission may –

(a)     when entering the name of a person on the Register of Recognized Auditors; or

(b)     at any subsequent time,

make the registration of the person subject to the person complying with such conditions and limitations as the Commission considers appropriate, details of which the Commission must enter on the Register.

(4)     The Commission may amend the conditions and limitations –

(a)     at any time on the Commission’s own volition; or

(b)     on the application of the recognized auditor.

(5)     The Commission may suspend or revoke the registration of a person as a recognized auditor if –

(a)     in the opinion of the Commission, the recognized auditor is no longer competent or is not a fit and proper person to act as a recognized auditor;

(b)     the recognized auditor has breached any condition or limitation imposed under paragraph (3);

(c)     the recognized auditor is found guilty of an offence under paragraph (16) or (17);

(d)     the recognized auditor has failed to pay a fee mentioned in paragraph (18) or Article 113M(4);

(e)     the recognized auditor has breached any of the rules mentioned in Article 112(1) that apply to the auditor;

(f)      the recognized auditor fails, within a reasonable time, to provide information required by the Commission pursuant to Article 113L or is found guilty of an offence under Article 113L(4); or

(g)     in the opinion of the Commission, the continued registration of the recognized auditor may adversely affect a company of which the recognized auditor is auditor or any other person.

(6)     The Commission may, under paragraph (5), suspend the registration of a person as a recognized auditor –

(a)     for a specified period; or

(b)     until, on the application of the recognized auditor, the auditor satisfies the Commission that the suspension may be revoked.

(7)     If a person who is a recognized auditor requests the Commission to suspend or revoke the person’s registration as a recognized auditor, the Commission must comply with the request and may publish –

(a)     the name of the person;

(b)     details of the action it took in respect of the person; and

(c)     the reason why it took that action.

(8)     The suspension of the registration of a person under paragraph (7) shall be –

(a)     for a specified period; or

(b)     if no period is specified, until the recognized auditor applies to the Commission for the registration to be restored.

(9)     The Commission must remove the name of a recognized auditor from the Register of Recognized Auditors if the Commission is satisfied that the recognized auditor is no longer an auditor who under Article 112 is an auditor qualified to be a recognized auditor.

(10)    If the Commission –

(a)     refuses to enter the name of a person on the Register of Recognized Auditors on an application made under paragraph (1);

(b)     makes the registration of a person subject to conditions and limitations under paragraph (3);

(c)     amends conditions and limitations under paragraph (4)(a);

(d)     refuses to amend any condition or limitation on an application made under paragraph (4)(b);

(e)     suspends or revokes the registration of a person as a recognized auditor under paragraph (5);

(f)      refuses to revoke the suspension of the registration of a person as a recognized auditor on an application under paragraph (6)(b); or

(g)     removes the name of a recognized auditor from the Register under paragraph (9),

the Commission must, within 7 days of doing so, serve a notice on the applicant or recognized auditor, as the case may be.

(11)    The notice must –

(a)     specify the action taken by the Commission;

(b)     set out the reasons why the Commission took the action; and

(c)     advise the applicant or recognized auditor of the applicant’s or auditor’s right, under paragraph (12), to appeal to the court against the action taken by the Commission.

(12)    Where the Commission has served a notice on a person under paragraph (10) –

(a)     the person upon whom the notice was served may, within 28 days of the service of the notice or within such longer period as the court may approve, appeal to the court against the action taken by the Commission, as specified in the notice, on the ground that it was unreasonable for the Commission to take the action in all the circumstances of the case; but

(b)     unless the court orders otherwise, if the person does appeal the action taken by the Commission and specified in the notice is not stayed and shall continue to have effect.

(13)    The court may, on an appeal under paragraph (12), make such order as it considers appropriate.

(14)    Paragraph (15) applies if the Commission –

(a)     makes the registration of a person subject to conditions and limitations under paragraph (3);

(b)     amends conditions and limitations under paragraph (4);

(c)     suspends or revokes the registration of a person as a recognized auditor under paragraph (5); or

(d)     removes the name of a recognized auditor from the Register of Recognized Auditors under paragraph (9),

and the period for making an appeal under paragraph (12) has expired and no appeal was made or, if made, was unsuccessful or withdrawn.

(15)    The Commission may publish –

(a)     the name of the person or recognized auditor;

(b)     details of the action it took in respect of the person or recognized auditor; and

(c)     the reason why it took that action.

(16)    An auditor must inform the Commission of any material change in any information that was supplied by the auditor to the Commission –

(a)     at the time the auditor applied to become a recognized auditor; or

(b)     at any subsequent time in compliance with this paragraph,

and, if the auditor fails to do so as soon as practicable but in any event within 1 month of the change, the auditor and each officer of the auditor in default is guilty of an offence.

(17)    A person is guilty of an offence if the person knowingly or recklessly provides information for the purpose of paragraph (1)(a), (4)(b) or (6)(b) that is false or misleading in a material particular.

(18)    A recognized auditor must pay any published fee imposed on recognized auditors.

112    Qualification under rules of recognized professional bodies[322]

(1)     An auditor is qualified to be a recognized auditor if the auditor is bound by –

(a)     rules governing the conduct of the audit of market traded companies issued by a recognized professional body and approved by the Commission; or

(b)     if no such rules have been issued by a recognized professional body, or, if issued, have not been approved by the Commission, rules governing the conduct of the audit of market traded companies published by the Commission.

(2)     The Minister must make an Order prescribing what any rules approved or published by the Commission under paragraph (1) must provide for before the Commission may approve or publish them.

(3)     The Order may, in particular, require that the rules –

(a)     are adequate to ensure that an auditor is a fit and proper person;

(b)     are adequate to prevent a person –

(i)      who is not an auditor, or

(ii)      where an auditor is a firm – who is not an officer, director, partner, member or employee of the firm,

from being able to exert influence over the way in which an audit of a market traded company is conducted in circumstances in which that influence would be likely to affect the independence or integrity of the audit;

(c)     are adequate to ensure that –

(i)      audit work carried out under this Part is carried out properly and with integrity, and

(ii)      an auditor is not appointed in circumstances in which the auditor has an interest that is likely to conflict with the proper conduct of the audit;

(d)     cover –

(i)      the technical standards to be applied in audit work carried out under this Part, and

(ii)      the manner in which those standards are to be applied in practice;

(e)     are designed to ensure that an auditor maintains an appropriate level of competence;

(f)      contain provisions to ensure that an auditor who carries out audit work takes any steps required to enable the performance of the work to be monitored;

(g)     where they relate to –

(i)      the grant and withdrawal of eligibility for appointment as auditor, and

(ii)      the discipline the body exercises,

are fair and reasonable and include adequate provision for appeals;

(h)     contain provisions designed to ensure an auditor must take reasonable steps to be able to meet claims arising out of audit work carried out under this Part;

(i)      contain provisions designed to ensure that the Commission or a professional oversight body can conduct investigations in relation to an auditor and has the right to take appropriate action.

(4)     The Commission must not approve the rules of a recognized professional body unless it has satisfied itself that the body –

(a)     has adequate arrangements and resources for the effective monitoring and enforcement of compliance with its rules;

(b)     has effective arrangements for the investigation of complaints against auditors, and against itself in respect of matters arising out of its functions under the rules;

(c)     promotes and maintain high standards of integrity in the conduct of audit work;

(d)     will cooperate, by the sharing of information or otherwise, with the Minister, the Commission and any other authority, body or person having responsibility for the qualification, supervision or regulation of auditors, whether in Jersey or elsewhere; and

(e)     will carry out a quality assurance review of each recognized auditor at least once in any period of 3 years.

(5)     An Order made under paragraph (2) may, in particular, provide for the Commission to withdraw its approval of the rules of a recognized professional body if at any time it is satisfied that the body –

(a)     has failed to comply with any obligation placed on it by an Order made under Article 110(3);

(b)     has ceased to have or is not using any of the arrangements or resources mentioned in paragraph (4)(a);

(c)     has ceased to have or is not using any of the arrangements mentioned in paragraph (4)(b);

(d)     has not promoted or has not maintained the standards mentioned in paragraph (4)(c);

(e)     has failed to cooperate in the manner mentioned in paragraph (4)(d);

(f)      has failed to meet the requirements of paragraph (4)(e); or

(g)     has failed to give notification or supply information when required to do so under Article 113K.

(6)     The rules published by the Commission under paragraph (1)(b) shall be the rules of the recognized professional body that are applicable to the eligibility of a member of the body to be appointed to be a statutory auditor under section 1212(1) of the Companies Act 2006 of the United Kingdom, amended as necessary to make them –

(a)     applicable to Jersey and the auditing of the accounts of market traded companies in accordance with this Part; and

(b)     comply with any additional relevant requirement of an Order made under paragraph (2).

Appointment of auditors and their functions

113    Appointment and removal of auditors[323]

(1)     A company must appoint an auditor to examine and report in accordance with this Law upon its accounts if –

(a)     it is a public company;

(b)     its articles so require; or

(c)     a resolution of the company in general meeting so requires.

(1A)   A company of a class specified in an Order made by the Minister may disapply the requirement imposed by paragraph (1) in relation to a financial period of the company by a resolution passed before the date by which the actions mentioned in Article 105(6) are required by Article 105(7) to be taken in relation to the accounts of the company for that financial period.[324]

(1B)   A resolution under paragraph (1A) must be passed by all members of the company entitled to vote in general meeting.[325]

(1C)   A resolution under paragraph (1A) is rescinded once the company has received requests for its rescission from –

(a)     members holding not less than 10 per cent in nominal value of the issued share capital (or any class of such share capital) of the company, or (if the company is a no par value company) not less than 10 per cent of the number of the company’s issued shares (or any class of issued shares), excluding any shares held as treasury shares; or

(b)     if the company does not have share capital, members whose liability as members is in the aggregate not less than 10 per cent of the total liability of all members of the company (or any class of members).[326]

(1D)   The rescission by paragraph (1C) of a resolution under paragraph (1A) in relation to a financial period has effect only if the requests required by paragraph (1C) have been received before the end of the period of 3 months beginning with the date on which the resolution was passed.[327]

(1E)   Where a resolution under paragraph (1A) in relation to a financial period is rescinded, the actions mentioned in Article 105(6) in relation to the accounts of the company for that financial period must be taken by –

(a)     the date by which they are required to be taken by Article 105(7); or

(b)     the date 3 months after that on which the resolution is rescinded,

whichever is later.[328]

(1F)   The Minister may by Order modify or disapply any one or more of paragraphs (1B) to (1E) in relation to any class of company.[329]

(2)     If the company is a market traded company –

(a)     the auditor appointed under paragraph (1) must be a recognized auditor; and

(b)     an audit of the company’s accounts by any other person is of no effect for the purposes of this Part.

(3)     Except as provided by paragraphs (5) and (6), a company that is required by this Article to appoint an auditor must at each annual general meeting appoint an auditor to hold office from the conclusion of that meeting to the conclusion of the next annual general meeting.

(4)     The directors or (failing the directors) the company in general meeting may, at any time before the first annual general meeting, appoint an auditor to hold office to the conclusion of that meeting.

(5)     If a company that is required by this Article to appoint an auditor dispenses with the holding of an annual general meeting under Article 87(4) any auditor then in office shall continue to act and be taken to have been re-appointed for each succeeding financial period until –

(a)     the conclusion of the next annual general meeting; or

(b)     the company in general meeting resolves that the appointment of the auditor be brought to an end.

(6)     If –

(a)     a company that has dispensed with the holding of an annual general meeting becomes bound to appoint an auditor; and

(b)     there is no auditor in office,

the directors must appoint an auditor to continue to act until the conclusion of the next annual general meeting.

(7)     The directors or the company in general meeting may fill any casual vacancy in the office of auditor and fix the auditor’s remuneration.

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

(9)     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.

(10)    A company that fails to comply with paragraph (1) and each officer of the company in default is guilty of an offence.

113A Auditor’s report[330]

(1)     The auditor of a company that is required to appoint an auditor under Article 113 must make a report to the company’s members on the accounts of the company examined by the auditor.

(2)     The report must state whether, in the opinion of the auditor, the accounts –

(a)     have been properly prepared in accordance with this Law; and

(b)     give a true and fair view or, alternatively, are presented fairly in all material respects.

(3)     The report must –

(a)     state the name of the auditor; and

(b)     be signed and dated.

(4)     If –

(a)     the auditor is an individual, the report must be signed by the auditor; or

(b)     the auditor is a firm, the report must be signed in his or her name by the individual in the firm who is responsible to it for examining and reporting on the accounts, for and on behalf of the auditor.

(5)     The fact that an individual signs an audit report does not make the individual liable to any civil liability to which the individual would not otherwise be liable.

113B Auditor’s duties and powers[331]

(1)     This Article applies to companies that are required to appoint an auditor under Article 113.

(2)     The auditor of a company must, in preparing an audit report, carry out such investigations as will enable the auditor to form an opinion as to –

(a)     whether proper accounting records have been kept by the company;

(b)     whether proper returns adequate for the audit have been received from branches not visited by the auditor; and

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

(3)     If the auditor is of the opinion –

(a)     that proper accounting records have not been kept by the company;

(b)     that proper returns adequate for the audit have not been received from branches not visited by the auditor; or

(c)     that the company’s accounts are not in agreement with its accounting records and returns,

the auditor must, in each such case, state that fact in the report produced by the auditor.

(4)     The auditor of the company –

(a)     has a right of access to the company’s records at all times; and

(b)     is entitled to require any relevant person such information and explanations as the auditor thinks necessary for the performance of the auditor’s duties.[332]

(4A)   Each of the following is a “relevant person” for the purposes of this Article and Article 113C –

(a)     any person who is, or at any relevant time was, an officer or the secretary of the company;

(b)     any person who is, or at any relevant time was, an employee of the company and who appears to possess information which the auditor thinks necessary for the performance of the auditor’s duties; and

(c)     any person who holds or is accountable for, or who at any relevant time held or was accountable for, any of the company’s records and who appears to possess such information.[333]

(4B)   Any information or explanation provided by a person in response to a requirement under paragraph (4)(b) may not be used in evidence against the person in criminal proceedings except proceedings for an offence under Article 113C(2).[334]

(4C)   Nothing in paragraph (4)(b) compels a person to provide any information or explanation which the person would be entitled to refuse to provide in proceedings in court on the ground of legal professional privilege.[335]

(5)     The auditor of a company is entitled –

(a)     to receive notice of, and to attend, any meeting of members of the company; and

(b)     at any such meeting, to be heard on any part of the business of the meeting that concerns the auditor.

(6)     The auditor of a company must mention in an audit report any failure to obtain from the company any information or explanation that, to the best of the auditor’s knowledge and belief, was necessary for the audit.

(7)     An auditor of a company may resign from office by depositing at the company’s registered office –

(a)     a written notice of resignation; and

(b)     a statement under paragraph (9).

(8)     The notice operates to bring the auditor’s term of office to an end –

(a)     on the date on which the notice is deposited; but

(b)     if a later date is specified in the notice, on that later date.

(9)     When, for any reason, an auditor of a company ceases to hold office the auditor must 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 that the auditor considers should be brought to the notice of the members or creditors of the company; or

(b)     if there are such circumstances, a statement setting out those circumstances.

(10)    A company that receives a statement mentioned in paragraph (9)(b) must, within 14 days of receiving the statement, send a copy of it –

(a)   &