Jersey Incorporated Companies - General Information

Introduction

The incorporation of limited companies in Jersey is dealt with by the Registrar of Companies, an officer within the Jersey Financial Services Commission and is subject to the provisions of the Companies (Jersey) Law 1991. Once incorporated, a Jersey company has all the powers of a natural person but the directors may be subject to any restrictions in its Memorandum or Articles of Association.

Names

Application should be made to the Commission, prior to incorporation, for the company's proposed name to be reserved. Detailed policies regarding names are shown on the reverse of the name application forms available from the Commission. Names must not be undesirable or misleading.

Use of the word "International" in a name is restricted and is to be used only by companies of stature, trading internationally.

There is a minimum share capital requirement also for use of the word. It is as follows:-
If used as the first word - £1,000,000
If used as the second word - £250,000
If used as the third word - £100,000.

Company names must end with "Limited", the abbreviation "Ltd", "avec responsibilité limitée", or the abbreviation "a.r.l.” The Registrar, even after incorporation, has power to require a change of name in certain circumstances subject to the right of appeal to the Royal Court.

Incorporation

Arrangements for incorporation are undertaken through an entity authorised to conduct by way of business, trust company business as defined in Article 2(4) (a) of the Financial Services (Jersey) Law 1998. A Certificate of Incorporation, once issued, is conclusive evidence of such incorporation.

Consents

Simultaneously with the submission of the incorporation papers, application needs to be made under the Control of Borrowing (Jersey) Order, 1958, for consent to the issue of shares. Certain details concerning the authorised share capital, ultimate beneficial ownership and proposed activities of the company are required to be made to the Commission, and declarations must be included to the effect that the proposed ultimate beneficial owners have not been involved in any insolvency or similar proceedings. Details of the beneficial owners are given to the Commission in strict confidence. Particular attention is given to the proposed purposes of a company by the Commission which works in conjunction with those submitting applications for consent so as to ensure that full "know your customer" principles are in operation and that the commercial and financial integrity of the Island is not put at risk.
A full and comprehensive description of proposed activities should therefore be given on incorporation as some activities may be regarded as "sensitive". A set of guidance notes as to the type of activities which may be sensitive is available from the Companies Registry at the Commission. It should be noted that some other activities may be deemed undesirable or inappropriate for companies based in Jersey.

Administration

All companies incorporated in Jersey must have a registered office in the Island and must maintain certain records in Jersey, such as a Register of Members, a Register of Directors and Secretary and minute books of directors and shareholders meetings.
It is not necessary for directors or shareholders to be resident in the Island, but many companies appoint one or more local directors in order to facilitate the holding of meetings in the Island, which need not give rise to a Jersey taxation liability if the company obtains "Exempt" status.
The majority of Jersey incorporated companies have members which hold the shares as nominees for the beneficial owners in order to facilitate administration.

Directors and Secretary

The law requires a director to act honestly and in good faith with a view to the best interest of the company. It also requires directors to exercise the care, diligence and skill that a reasonably prudent person would exercise in similar circumstances. Conflicts of interest must be disclosed to the company and the Royal Court has power to make an order requiring a director to account to his company for any profit or gain if he fails to do so.
A private company need only have one director but a public company must have at least two. There are limits to the indemnities which may be given by a company to directors and provisions allowing the Royal Court to disqualify unfit directors.
Every Jersey company must have a secretary and, in the case of a public company the secretary must be appropriately qualified.

Public and Private Companies

The certificate of incorporation indicates whether the company is public or private. Only a public company is permitted to circulate a prospectus offering its shares or other securities to the public. A public company must have at least two directors and must file annual audited accounts each year within a specified period. A private company may not increase the number of its members beyond thirty without becoming a public company but need not have an annual audit unless the members require it. The accounts of a private company, even if audited, need not be filed with the Registrar.

Summary

The company formation procedure in Jersey takes on average 10-14 days. The company will be incorporated using your chosen name.  ORCA will endeavour to keep the procedure as simple as possible but it must be kept in mind that the legal requirements are more difficult than in other jurisdictions such as Delaware, the Seychelles, Belize or the British Virgin Islands which are our four recommended locations. In some cases however a Jersey company can be the ideal vehicle and ORCA will administer the preparation and filing of all registration forms on your behalf. Once we receive the filing confirmation from the Jersey authorities, we will email you with the full registration details. We will then forward the all the official certificates and documentation by Courier to your preferred location. Keep in mind that companies incorporated in Jersey are subject to accounting and auditing which can add to operating expenses. Most other offshore jurisdictions for example Delaware, the Seychelles, Belize or the British Virgin Islands are exempted from this requirement. This can be an important issue regarding the traceability of funds. In the event that you need to have a company based close to the UK or Europe an alternative to a Jersey company might be a UK company which is wholly owned by a company in Delaware, the Seychelles, Belize or British Virgin Islands. To look at the option please contact we and we can run through the possibilities that will achieve your objectives.