Comparison between those incorporated under 1931 to 2004 Companies Acts to those under Companies Act 2006
The rules for setting up companies in the Isle of Man changed a lot from the old Companies Acts of 1931 to 2004 to the newer Companies Act 2006. This comparison looks at the main differences and what they mean for businesses.
| Companies Acts 1931 to 2004 | Companies Act 2006 | |
| Confidentiality of Corporate Information | Corporate documents partially available for public inspection including the certificate of incorporation, memorandum and articles of association, the address of the registered office, register of directors, register of charges and annual return
Details of shareholders included on annual return and company’s register of members open to public inspection | Corporate documents partially available for public inspection including the certificate of incorporation, memorandum and articles of association, the address of the registered office, registered agent, register of charges and annual return
Filing of registers of members and of directors is optional, registers are public if filed Details of directors included on annual return |
| Directors and Officers | Minimum of 2 directors
Corporate director not permitted Company secretary required Alternate directors permitted | Minimum of 1 directors
Corporate director permitted (although a licensable activity) No company secretary required Alternate directors permitted |
| Shareholders | Minimum of 2; however private companies limited by shares or guarantee can be single member companies
Nominee shareholders permitted Details of shareholders appear on annual return Ultimate individual beneficial owner must be disclosed to service provider | Minimum of 1 Nominee shareholders permitted Filing of copy of register of members with Companies Registry optional Ultimate individual beneficial owner must be disclosed to service provider |
| Share Capital | No minimum stated capital
Shares must have nominal or par value Bearer shares not permitted Redeemable preference shares permitted Shares may be denominated in more than one currency | No minimum stated capital
Shares may be with or without a nominal or par value Bearer shares not permitted Shares may be denominated in more than one currency |
| Registered Office | Local registered [legal] office required
Documents required to be kept at the registered office include: register of directors and secretaries, register of members, register of charges, minute books, Annual Return, accounting records (unless directors have determined that they be kept elsewhere), memorandum and articles | Local registered [legal] office required
Documents required to be kept at the office of registered agent include: register of directors (or a copy thereof), register of members (or a copy thereof), register of charges (or a copy thereof), copies of all notices and documents filed in previous 6 years, accounting records (or copies of records if directors have determined that they be kept elsewhere), memorandum and articles signed by each subscriber, originals of any financial statements prepared Minutes of meetings and resolutions of both members and directors to be kept at office of registered agent or other such place as directors may determine |
| Residency Requirements | Resident directors/secretary not required. Whilst there is no requirement to engage the services of a local corporate service provider that holds an appropriate licence issued by the FSC, any company that has not engaged such services or is not otherwise exempt, is required to appoint a ‘nominated officer’, being an individual who is resident in the Isle of Man. There is a statutory obligation on the members of a company to provide the nominated officer with details of the beneficial owners of the shares if it is not them | Local registered agent required, registered agent must hold appropriate licence issued by the Isle of Man’s Financial Supervision Authority |
| Alteration of Capital of Companies | Company may, by ordinary resolution, increase, consolidate and divide, convert or subdivide share capital or cancel unissued shares
Notice of amendment to share capital must be filed with Companies Registry within one month of passing of resolution | No concept of authorised capital and no provisions for increase thereof
Directors may, by resolution, alter share capital in any way and, in particular, may consolidate and divide, redenominate or subdivide all or any such shares |
| Reduction of Share Capital | Special resolution to reduce share capital requires Court sanction
The special resolution for the reduction of share capital is effective only upon the registration of the Court order with Companies Registry | Resolution of the Directors to reduce its share capital in any way, provided that the Company will, immediately after the reduction, satisfy the statutory Solvency Test |
| Issue/Transfer of Shares | No governmental consent is required for the issuance, transfer, conversion or redemption of shares
Within one month of allotment of company shares, return of allotments to be filed with Companies Registry Transfer effected by registration of transfer on production of proper instrument of transfer to the company | No governmental consent is required for the issuance, transfer, conversion or redemption of shares
Transfer effected by registration of transfer on production of proper instrument |
| Accounting Requirements | Every company required to keep records of accounts sufficient to show and explain company’s transactions
Yearly requirement to lay accounts before company in general meeting subject to, in the case of private companies, members electing, by way of unanimous resolution, to dispense with this requirement Accounting records kept at registered office or at other such place as directors think fit. (If outside the Isle of Man, accounts and returns relating thereto are required to be kept at a place in the Isle of Man) All companies required to have accounts audited unless private company which satisfies audit exemption requirements | Every company required to keep reliable records of accounts
Accounting records to be kept at office of registered agent or such other place as directors think fit (if elsewhere, copies of the records are required to be kept at the office of registered agent) Originals of any financial statements prepared must be kept at office of registered agent Any director or member has right to demand that financial statements be prepared No audit requirement unless a company’s securities are listed or admitted to trade on a securities market or exchange |
| Amendment of Memorandum of Association | Amendment of memorandum or articles of association requires shareholder approval by special resolution
Where memorandum or articles of association amended, notice of amendment to be filed with Companies Registry within one month of resolution | Amendment of memorandum or articles of association requires shareholder approval by resolution
Subject to the memorandum, certain amendments to memorandum or articles of association may be effected by resolution of the Board Where memorandum or articles of association amended, notice of amended and restated memorandum or articles incorporating amendments to be filed with Companies Registry within one month of resolution |
| Quasi Partnership | Section 60(4) provides that at least one of the members of an Unlimited 2006 Company shall be an unlimited member. This is a hybrid provision allowing for a quasi-partnership with a general partner and a limited partner | |
| Annual Government Fees | £380 annual return fee | £380 annual return fee |
Disclaimer
The information and/or opinions contained in this article 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. Any reliance on such information and/or opinions is therefore solely at the user’s own risk and Odin Fiduciaries Limited (and its associates and subsidiaries) is not responsible for and does not accept any responsibility or liability in connection with any action taken or reliance placed upon such content.
