Jersey - Company Migration to and from Jersey

Transcription

1 Jersey - Company Migration to and from Jersey Introduction The object of this Memorandum is to provide clients of Walkers with information on the process involving migration of Companies to and from Jersey. Migration to Jersey The Companies (Jersey) Law 1991 (the "1991 Law") provides that a body that is incorporated outside Jersey may apply to the Jersey Financial Services Commission (the "JFSC") for a certificate of continuance in Jersey if it is authorised to make such an application by the laws of the jurisdiction under which the body is incorporated. However, an application cannot be made in respect of a body corporate which: 1. is being wound up, or is in liquidation or is subject to a declaration under the Bankruptcy (Désastre) (Jersey) Law 1990 (the "Désastre Law"); 2. is insolvent; 3. has had a receiver, manager or administrator (by whatever name such person is called) appointed, whether by a court or in some other manner, in respect of any property of that body corporate; 4. has entered into a compromise or arrangement with a creditor (not being a compromise or arrangement approved by the JFSC) and that compromise or arrangement is in force; or 5. has an application pending before a court for the winding up or liquidation of that body corporate, or to have it declared insolvent, or for a declaration under the Désastre Law, or for the appointment of such a receiver, manager or administrator or for the approval of such a compromise or arrangement. Fees and Security All applications for continuance must be accompanied by an application fee, currently fixed at 500. The 1991 Law permits the JFSC to require a company to provide security for costs. However, it is our understanding that the JFSC will only exercise this right in exceptional circumstances. Applications An application submitted to the JFSC must be accompanied by:

2 Page 2 1. a certified copy of the constitutive documents of the body corporate: such certification to be made by an Advocate of the Royal Court of Jersey. However, the JFSC has indicated that it will accept a copy that has been certified by a regulated administrator of the body corporate; 2. articles of continuance: these will need to state those amendments to be made to the constitutive documents of the body corporate necessary to conform them to the laws of Jersey. The articles of continuance may also include any amendments which: have been approved by its members in the manner required by the 1991 Law for amendments to the memorandum or articles of a company (ie by special resolution); or would be permitted under the laws of Jersey if the body corporate were a company. 3. a statement of solvency signed by each person who is a director of the company, which states that, having made full inquiry into the affairs of the company, that director reasonably believes: that the company is and, if the application is granted, will upon the issue of a certificate of continuance be able to discharge its liabilities as they fall due; and that having regard to the prospects of the company, the intentions of the directors with respect to the management of the company's business and the amount and character of the financial resources that will in the directors' view be available to the company, the company will be able to: (i) (ii) continue to carry on business; and discharge its liabilities as they fall due, until the expiry of the period of twelve months immediately following the date on which the statement is signed. The above statement of solvency must also be signed by each person who is going to be a director of the company upon its continuance and shall state that the person so signing has no reason to believe that anything in the statement is untrue. Any director or person who is to be a director who makes a solvency statement without reasonable grounds for the opinion expressed therein shall be guilty of an offence. 4. the name under which it is proposed to continue the body corporate as a company incorporated under the 1991 Law. It should be noted that, as in an incorporation, the Registrar of Companies in Jersey has the right to reject any name which he considers to be misleading or otherwise undesirable; 5. in relation to every person who is a director of the body corporate at the date of the application or who is to be a director of it upon its continuance as a Jersey company, the following particulars must be specified: (c) (d) (e) present forenames and surname; any former forenames or surnames; business or usual residential address; nationality; business occupation (if any);

3 Page 3 (f) (g) date of birth; and the date on which he/she became a director. 6. in relation to each person who is a secretary of the body corporate at the date of the application or who is to be its secretary upon its continuance as a Jersey company, the following particulars must be specified: (c) in the case of an individual, his/her present forenames and surname, any former forenames or surname and his/her usual residential address; 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 in either case, the date on which he/she or it became the secretary; 7. such other information as the Registrar would require on an application to register the body corporate as a company under the 1991 Law. This will include the notice of the registered office; 8. such other documents and information as are prescribed or as the JFSC may require in respect of a particular application; and 9. the prescribed application fee. The 1991 Law also requires that the application shall be accompanied by evidence as to the following: 1. evidence that the body corporate is authorised, by the laws of the jurisdiction under which it is incorporated, to make the application to the JFSC; 2. where the constitution of the body corporate or the law of that jurisdiction requires that any authorisation be given for any application to the JFSC, evidence that such authorisation has been given; 3. evidence that if a certificate of continuance is issued under the 1991 Law, the body corporate will thereupon cease to be incorporated under the other jurisdiction; 4. evidence that if a certificate of continuance is so issued, the interests of the members and the creditors of the body corporate will not be unfairly prejudiced. The JFSC has indicated that it will accept letters from the creditors and members confirming that they are not materially prejudiced. This is in lieu of a certificate of a lawyer qualified to practice in the original jurisdiction of establishment of the body corporate. Note also that some jurisdictions, such as the British Virgin Islands, may not legally require shareholder sanction for continuance in Jersey. However, such sanction goes to evidence the absence of unfair prejudice; and 5. evidence that the body corporate is not prevented under the 1991 Law from making the application. In the past the JFSC has accepted such confirmation from qualified lawyers from the jurisdiction in which the body corporate was established. Consideration of Applications by JFSC If the JFSC is: 1. satisfied that the application complies with the 1991 Law (as set out above);

4 Page 4 2. informed by the Registrar that the proposed name of the company is not in his opinion in any way misleading or otherwise undesirable (and complies in all other respects with Article 13 of the 1991 Law); 3. satisfied that all other approvals and consents required under Jersey law have been given; and 4. satisfied that the application fee and its expenses have been paid, it may, in its absolute and unfettered discretion, grant the application. Our experience is that, provided that the application and supporting documentation are in order, the consideration by the JFSC will normally take five to ten days. Objections to Decisions of JFSC If so required, a company may apply to the JFSC for a statement in writing with the reasons for its decision to refuse an application for continuance in Jersey (which must be provided by the JFSC within fourteen days). In addition, a company, within one month after being informed of a decision by the JFSC to refuse its application, may appeal to the Royal Court on the ground that the decision was unreasonable having regard to all the circumstances of the case. The Royal Court has the power to confirm or reverse the decision of the JFSC. Granting of a Certificate of Continuance Once the JFSC has granted an application for a certificate of continuance as a company incorporated under the 1991 Law, the Registrar shall register the application, and those documents accompanying the application, and issue to the company a certificate of continuance that is signed by him and sealed with his seal. When the Registrar issues a certificate of continuance, he shall also immediately send a copy of it to the appropriate official or public body in the jurisdiction where the body corporate was originally incorporated. Effect of Granting of Certificate of Continuance Upon the issue of the certificate of continuance by the Registrar, the foreign body corporate becomes a Jersey company and hence will be governed by the provisions of the 1991 Law. The constitutive documents of the body corporate, as amended by the articles of continuance, will become the memorandum and articles for the company in Jersey. When a body corporate is continued as a Jersey company: 1. all property and rights to which the body corporate was entitled immediately before the certificate of continuance is issued are the property and rights of the Jersey company; 2. the Jersey company will continue to be subject to all criminal and civil liabilities, all contracts debts and other obligations, to which the body corporate was subject immediately before the certificate of continuance is issued; and 3. all actions and other legal proceedings which, immediately before the issue of the certificate of continuance, were pending by or against the body corporate may be continued by or against the Jersey company. Migration from Jersey The 1991 Law provides that a company that is incorporated in Jersey under the 1991 Law may apply to the JFSC for authorisation to seek continuance as a body incorporated under the laws of another jurisdiction, if the proposal to apply in that other jurisdiction for continuance there is approved by the company and its members. However, an application cannot be made in respect of a body corporate which:

5 Page 5 1. is being wound up, or is in liquidation or is subject to a declaration under the Bankruptcy (Désastre) (Jersey) Law 1990 (the " Désastre Law"); 2. is insolvent; 3. has had a receiver, manager or administrator (by whatever name such person is called) appointed, whether by a court or in some other manner, in respect of any property of that body corporate; 4. has entered into a compromise or arrangement with a creditor (not being a compromise or arrangement approved by the JFSC) and that compromise or arrangement is in force; or 5. has an application pending before a court for the winding up or liquidation of that body corporate, or to have it declared insolvent, or for a declaration under the Désastre Law, or for the appointment of such a receiver, manager or administrator or for the approval of such a compromise or arrangement. A proposal to apply in another jurisdiction for continuance shall be approved by special resolution of the Members of the company. Written notice to creditors is then required, unless all known creditors otherwise agree in writing, at least 21 days prior to making the application stating: 1. that the company intends to make the application and to which jurisdiction it proposes to seek continuance; and 2. that any creditor of the company who objects to the application may within 21 days of the notice give notice of his or her objection. The above notice is required to be published once in a newspaper in Jersey or in such other manner as the Court may on application direct. Fees and Security All applications for continuance must be accompanied by an application fee, currently fixed at 500. The 1991 Law permits the JFSC to require a company to provide security for costs. However, it is our understanding that the JFSC will only exercise this right in exceptional circumstances. Applications An application submitted to the JFSC must be accompanied by: 1. a certified copy of the Special Resolutions of the members of the company approving the continuance overseas; 2. a statement of solvency signed by each person who is a director of the company, which states that, having made full inquiry into the affairs of the company, that director reasonably believes: that the company is and, if the application is granted, will upon its incorporation under the laws of the other jurisdiction be able to discharge its liabilities as they fall due; and that having regard to the prospects of the company, the intentions of the directors with respect to the management of the company's business and the amount and character of the financial resources that will in the directors' view be available to the company if the application is granted,

6 Page 6 the company if incorporated under the laws of the other jurisdiction will be able to discharge its liabilities as they fall due. The above statement of solvency must also be signed by each person who is going to be a director of the company upon its continuance and shall state that the person so signing has no reason to believe that anything in the statement is untrue. Any director or person who is to be a director who makes a solvency statement without reasonable grounds for the opinion expressed therein shall be guilty of an offence; and 3. such other documentation as may be requested by the JFSC. The 1991 Law also requires that the application shall be accompanied by evidence as to the following: 1. that the laws of the jurisdiction in which the company proposes to continue allow its continuance there as a body corporate, incorporated under those laws; 2. that the laws of the jurisdiction in which the company proposes to continue provide that upon continuance of the company as a body corporate in that jurisdiction: (c) all property and rights of the company will become the property and rights of the body corporate; the body corporate will become subject to all criminal and civil liabilities, and all contracts, debts and other obligations, to which the company is subject; and all actions and other legal proceedings which are pending by or against the company may be continued by or against the body corporate; 3. unless all known creditors have agreed not to be given notice, confirmation that the Creditors' Notice has been given to all of the creditors of the company and either no creditor has applied to the Royal Court to restrain the application or any objection of any creditor has been determined in a way which does not prevent the JFSC from granting the application; 4. confirmation that no member of the company has applied to the Royal Court for an order on the grounds of unfair prejudice or any such application has been determined by the Royal Court in such a way which does not prevent the JFSC from granting the application; 5. confirmation that the company has complied with such other conditions as may be prescribed by the JFSC; and 6. confirmation that the company is not prevented by virtue of insolvency (or any of the other acts indicative of insolvency) from making the application. Upon receiving the application, the JFSC shall estimate the likely amount of its expenses in dealing with the application and has the power to request security for its fees in a manner it considers satisfactory.

7 Page 7 Consideration of Application by the JFSC Provided the JFSC is satisfied with the application, and all fees and expenses due to them have been paid, it may grant the application subject to certain conditions as it may specify in its decision. One standard condition which will be applied to each authorisation is that the Jersey Registrar of Companies is informed of the date on which the continuance will be, or is granted, in the jurisdiction in which the company proposes to continue, and that a copy of the Instrument of Continuance in the jurisdiction in which the company proposes to continue, certified to be a true copy, is delivered to the Registrar of Companies in Jersey. Objections to Decisions of JFSC If so required, a company may apply to the JFSC for a statement in writing with the reasons for its decision to refuse an application for continuance under the laws of another jurisdiction (which must be provided by the JFSC within fourteen days). In addition, a company, within one month after being informed of a decision by the JFSC to refuse its application, may appeal to the Royal Court on the ground that the decision was unreasonable having regard to all the circumstances of the case. The Royal Court has the power to confirm or reverse the decision of the JFSC. Effect of Continuance Overseas When a company is, in accordance with the terms of the authorisation of the JFSC, continued as a body corporate under the laws of the other jurisdiction to which the authorisation relates it shall cease to be a company incorporated under the 1991 Law and the Jersey Registrar of Companies shall on that day record that it has ceased to be so incorporated. Updated: 11 May 2015 For further information please refer to your usual contact or: Jersey - Nigel Weston, Partner nigel.weston@walkersglobal.com +44 (0) Jersey - Jonathan Heaney, Partner jonathan.heaney@walkersglobal.com +44 (0) The information contained in this memorandum is necessarily brief and general in nature and does not constitute legal or taxation advice. Appropriate legal or other professional advice should be sought for any specific matter. Walkers works in exclusive association with Taylors in Bermuda, a full service commercial law firm providing advice on all aspects of Bermuda law.