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1931 Act Companies

All companies incorporated under the Companies Act 1931 are designated as either public companies or private companies. A public limited company (PLC) may offer  its shares or debentures for sale to the general public and must, on an annual basis, deliver audited accounts to the Companies Registry. A private company may not offer shares or debentures to the public and, unless it is a subsidiary of a public company incorporated in the Isle of Man, it is not required to deliver audited accounts to the Companies Registry on an annual basis.

Incorporation

Should you choose to incorporate the company yourself, you will first need to obtain approval of your proposed company name from the Companies Registry. 

Once your chosen name has been approved, you will need to complete the following documents and send them to the Companies Registry with the appropriate fee payable.

Form 1

Provides full particulars of the companies first directors and secretary and the intended address of the companies first registered office, which must be situated in the Isle of Man. The company must have a minimum of two directors, one of whom may also be the company secretary. Corporate directors are not permitted under Manx Law. Corporate secretaries are permitted subject to other restrictions.

Articles of Association 

This document is effectively a contract between the company and its members and sets out the rules for the operation of a company’s internal affairs.

The Companies (Memorandum and Articles of Association) Regulations 1988, as amended, provide draft specimens of Memorandum and Articles of Association appropriate for different types of company. They are not mandatory, but are usually adopted in part or in full. Many companies specifically exclude the tables, and opt instead to have full form Memorandum and Articles of Association which incorporate clauses from the tables. This avoids the necessity of having to refer to the tables in addition to the Memorandum and Articles of Association.

The tables are:

Table A: Articles of Association of a company limited by shares

Table B: Memorandum of Association of a company limited by shares

Table C: Memorandum and Articles of Association of a company limited by guarantee

Table D: Memorandum and Articles of Association of a company limited by guarantee and having a share capital

Table E: Memorandum and Articles of Association of an unlimited company having a share capital

Public Company Requirements

Incorporation of a public company is broadly similar to the incorporation of any other type of company. The principal differences are as follows:

  • The company name must end in either the words 'Public Limited Company' or the abbreviated forms of PLC or P.L.C.
  • The Memorandum must state that it is a public company.
  • The company secretary must be qualified in one of the ways specified in section 19(4)(a) to (e) of the Companies Act 1982.
  • The Single Member Companies Act 1993 does not apply to public companies – they must have a minimum of two members at all times.

The Memorandum and Articles of Association must comply with the Companies (Memorandum and Articles of Association) Regulations 1988 and the requirements of the Companies Act.

The Form 1 should be completed in the same way as for any other Manx incorporated company.

While there is no minimum share capital required to incorporate a public company, this will be affected by the proposed name of the company. As with all company names, some words or phrases may be deemed to require a higher than normal share capital or to imply a licensable activity. In such cases, conditions may be set which the company will be expected to fulfil before the name is approved.

Once incorporated, the company will also need to lodge a Prospectus or Statement in Lieu of Prospectus if it intends to offer shares or debentures to the public. The prospectus must state the matters specified in Part I of the Fourth Schedule of the Companies Act and set out the reports specified in Part II of that Schedule. If a Statement in Lieu of Prospectus is to be presented, the document must be in the form set out in the Third Schedule of the Companies Act. For full details of the matters relating to the prospectus, readers are advised to consult either the relevant sections of the Companies Acts or a qualified professional. All fees due will be payable in accordance with the current Companies (Fees) Order.

Post incorporation structuring

If you are a director of the company, you should convene a first meeting of the Board of Directors to confirm the appointment of the company secretary and the situation of the company’s registered office. A Seal may be adopted, although there is no obligation for a company to have a Seal.

Day-to-day management powers of the company are vested in the directors to the extent that such powers are not reserved by the Articles of Association or the Companies Acts to General Meetings of the Members. The Articles of Association will determine how the directors meet and carry on their business.

Provision should also be made for the election and powers of the Chairman of the Board, Alternate Directors, Committees of Directors, meeting by electronic communications, voting rights, rotation of directors, power to fill a casual vacancy, disqualification of directors and conflicts of interest, etc.

Public Disclosure

The price of limited liability status is disclosure of certain information to the public. Disclosure is, in the main, by means of filing information with the Companies Registry as and when required by law. In addition, the law requires all companies to clearly display their full names in certain places and, to disclose certain information on their letterheads and other literature produced. This applies whether your company is big or small, trading or not.

The law requires you to display the company's name prominently, in legible characters, at the registered office and at every other office or place, to which the public has access, where it carries on business.

In the case of a company administered by the holder of a licence under the Financial Services Act 2008, who may administer a large number of companies, the CSP may, instead of having to display all the company names, display a notice at the registered office stating that members of the public are invited to inspect during business hours a list of companies having their registered offices at such address.

The company's name must also be clearly stated on all official documents including the company's letterheads.

In addition to the company's name, the following information must be disclosed on all official documents, including any such documents that are sent electronically. Therefore, if an email is an 'official document' sent by the company, it needs to include certain information.

  • The place of registration of the company (ie. that it is registered in the Isle of Man) and the number with which it is registered.
  • The address of its registered office.
  • If the company has been exempted from the requirement to include the word 'Limited' in its name, the fact that it is a limited company.
  • If there is a reference to the capital of the company, the reference must be to the paid up capital. If it is a Registered Charity, the fact that it is so and the Registration Number.
  • In respect of each director of the company:
    • Forename, or initials and surname.
    • Former forenames or surnames if different.

Details of directors may be omitted only if specific exemption has been applied for and obtained from the Companies Registry under section 144 of the Companies Act 1931.

Company directors

Every company must have at least two directors who must be individuals and at least one company secretary.

Corporate directors are not permitted. Individuals who are either disqualified from acting as a director or are undischarged bankrupts cannot take part in the formation, operation or management of companies in the Isle of Man, unless given leave to act by the court. There are additional restrictions relating to Public Limited Companies and, certain restrictions imposed upon individuals and companies who provide services with respect to the formation, sale, transfer, disposal and operation of companies under the Financial Services Act 2008.

Directors responsibilities

Being a director carries many responsibilities. Not only are you responsible for managing the company in accordance with the provisions of the Articles of Association, it is also your personal responsibility to ensure compliance with the Companies Acts. This includes filing information with the Registry as and when required to do so.

Directors liabilities

Unless personal guarantees have been provided, a director is not generally liable for the debts of a company. However, if an application is made to the court concerning a company in liquidation by the liquidator, a creditor, or a member of the company claiming that any of the directors have carried on the business of a company with intent to defraud or for any fraudulent purpose, the court may declare that the directors named by the court shall have unlimited liability for the debts of the company.

Shadow directors

A shadow director is a person under whose directions or instructions the directors are accustomed to act and carries the same responsibilities as those individuals formally appointed as directors.

You must file a form 9N containing relevant details of any change to the directors’ particulars (resignations, appointments, change of address etc) within 1 month of the change taking place.

Disqualified directors

 

Filing requirements

The most common documents filed with the Registry and the circumstances under which such documents must be filed are listed below. The list is by no means exhaustive.

If you are in doubt as to whether the Registry needs to be notified about a particular occurrence within your company or the time in which you must notify the Registry of such a change, please contact us. 

See also -

Annual Return

Filing Period: 1 month

The annual return is effectively a snapshot of the company on the anniversary of incorporation or, in the case of older companies, the anniversary of the last annual return. Due for filing within 1 month of its made up date, the annual return is the one document which every company must file on a yearly basis regardless of whether a company is trading or not. Failure to file an annual return may result in the officers of the company being prosecuted or even worse, the company being struck off the register.

Particulars contained within the return include

  • Details of authorised and issued share capital (Share issuing companies only).
  • Names and addresses of shareholders and changes in the previous year of shareholdings. (Share issuing companies only).
  • Names and addresses and certain other details of Directors*(and Alternate Directors) at the date of the return.
  • Names and addresses and certain other details of the company Secretary/Secretaries at the date of the return.
  • Audited accounts for the previous year (public companies only).
  • Accounts Compliance Declaration

*Note: A director of a company for these purposes is not only a person who has been formally elected as such, but also a person under whose directions or instructions the directors are accustomed to act. Such a person is termed a ‘Shadow Director’ and particulars of such a Shadow Director should also be included in Returns and Records.

Change of registered office

Filing Period: 1 calendar month during which no filing fee is payable.

If a company changes its registered office, it must notify the Registry within one calendar month of the date of the change. The registered office must be situated in the Isle of Man at all times and P.O. Box numbers are only accepted as long as they are within a recognised building.

Change in particulars of Directors or Secretary

Filing Period: 1 calendar month during which no filing fee is payable.

If there are any changes in the particulars of a director or secretary, notice of the change must be forwarded to the Registry within 1 month of the change taking place. Changes include appointment, resignation and changes of name or address.

Return of allotments

Filing Period: 1 calendar month during which no filing fee is payable. 

If all company issues new shares from its share capital, particulars of the allotment must be filed with the Registry within one calendar month of the issue. Where the shares are allotted over a range of dates, the filing period runs from the first date. Please note that this form is not intended to show transfers of already issued shares which should be shown on the next annual return due after the date of the transfer.

Resolutions

(No prescribed form)

Filing Period: 1 calendar month during which no filing fee is payable.

A resolution is an agreement made by a company’s directors or its member. The requirement under section 117 of the Companies Act 1931 to register certain resolutions only applies to members’ resolutions and not to directors’ resolutions. A printed copy of every special or extraordinary resolution passed must be filed with the Registry within one month of the date on which it is passed. Certain other types of resolution must also be submitted to this office: please refer to the Companies Act or a qualified professional for details. Ordinary resolutions do not have to be filed with the Registry except where changing a company name, increasing share capital or voluntarily winding up a company.

Notice of increase in share capital (Form 10, resolution also required)

Filing Period: 1 calendar month during which no filing fee is payable.

In notifying the Registry of any increase in capital, a Form 10 must be filed accompanied by a copy of the relevant resolution (see above). A Form 10 provides particulars of the amount of the new capital created, its breakdown and the rights, if any, attached to the new shares.

Mortgages (Forms 47, 47A, 47B, 47C or 48)

Filing Period: 1 calendar month. No fee payable.

Form 47 is commonly used for notification of the creation of a charge. However, where a company acquires property subject to an existing charge, a form 47B must be used. The relevant form must always be accompanied by the document creating the charge. If a company creates certain types of charges it must register particulars of the charge within one calendar month from the date of creation. Failure to deliver the charge within the time prescribed will result in the company having to petition the Court for an order directing that the charge be filed. Where a charge is created within the Isle of Man, the original charge document must be presented with the relevant statutory form. If the charge is created outside the Island, a certified copy of the charge document will suffice. This can be certified by anyone having an interest in the charge (including the solicitors or advocates), but not the company itself unless it does so under the company seal. See section 4 of the Companies (Forms) Order 1932 for further details.

From 1st November 2004 details of further particulars which supplement or vary the particulars of a registered charge may be forwarded to the Commission on a Form 47C, 8AF or L206 depending on the type of company involved. You do not have to do this, and if you do, ,there is no time limit within which it must be done . However, any interested person may update the public record if they so wish.

See also - PN7/2014, Company Charges and Mortgages

Memorandum of Satisfaction

Filing Period: None specified. Only effective from the date of delivery.

Once a mortgage has been paid in full or is partially satisfied, a Memorandum of Satisfaction should be submitted. It must be signed and declared by 2 directors or by a director and secretary of the company. These cannot be the same person. If the charge is over Manx property and the original charge document has been lodged with and recorded by the Deeds Registry, a receipt to cancel should already have been prepared and lodged with the Registrar of Deeds. If the charge is not recorded in the Deeds Registry (if, for example, it was secured on non-Manx property) then a separate proof of discharge will be required, usually from the lender.

Fees, forms and practice notes

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