31st July 2009
New Companies (Amendment) Act 2009 in operation from 1 September 2009
The Financial Supervision Commission ("the Commission") has announced that the Companies (Amendment) Act 2009 ("the Act") will come into force on 1 September 2009.
Because there are provisions of the Act that extend to all Isle of Man companies, this press release has been issued to inform stakeholders about the Act and some of the changes made by it.
This general note does not constitute legal advice and should not be relied on as such, nor should it be relied on as a substitute for reference to the Act. A copy of the Act can be can be purchased from the Tynwald Library or can be found on the Commission’s website at http://www.fsc.gov.im/doclibrary/legislation.xml. The Commission does not accept any liability for any loss or damage caused to any person relying on any information or omission in this notice.
Some changes under the Companies (Amendment) Act 2009
The information contained in a prospectus (for a company incorporated under the Companies Act 1931) must include all matters that intended recipients could reasonably expect to find, instead of the previous specific list of information required under Schedule 4 to the Companies Act 1931 (which has now been repealed).
A signed copy of the prospectus must be delivered to the Companies Registry for registration prior to its issue.
Where the Companies Registry becomes aware of false or misleading claims in the prospectus, it has the power to make a direction to amend the prospectus. This direction will be placed on the company’s public file.
Registration of charges
Companies will now be permitted to file a certified copy of the charge instrument or the original document. This removes a conflict that existed between the Companies Registry and Land Registry requirements.
Changes to accounting provisions
The requirements under the Companies Act 1931 are clarified to require (for newly incorporated companies) that the first financial statements must be prepared for a period of no longer than 18 months from the date of incorporation. The financial statements of a company must be laid at least once in every calendar year before the members in general meeting within 6 months of the financial year end for a public company and 9 months for a private company. This represents a reduction in the current time limit.
Accounting provisions under the Companies Act 2006 permit accounting records to be held at a place other than the Registered Agent’s office, provided the Registered Agent is kept informed of where the records are held and further, that copies are remitted to the Registered Agent on demand but at least annually.
In addition to this, any member or director of the company now has the power to require financial statements to be prepared. Where the company fails to accede to the request, a member has the right to have sight of the underlying accounting records.
The definition of who may audit an Isle of Man company has now been expanded.
Limited Liability Companies Act 1996
Changes to the Limited Liability Companies Act 1996 remove the provision that provides for the automatic winding up of the company within 60 days for failing to file a notice in the prescribed form on the death, dissolution, resignation etc of a member.
The Act has added a new section 25A of the Companies Act 1992 and section 58A of the Companies Act 2006. These sections give the Commission powers to make Regulations that could allow a company to create treasury shares. While the Commission currently has no intention to introduce treasury share Regulations, we would be interested to hear the views of any interested parties. Should there be sufficient interest shown in this area, consideration will be given to consulting further on whether to make treasury share Regulations.
Any queries regarding the above should be addressed to:
Adviser – Policy and Legal
Tel: (+44) or (0) 1624 689331