Lezanne Kretschmer, newly appointed Head of Company Secretarial Services at Aspida Group, highlights some of the key changes made recently to the Guernsey Companies Law and takes stock of how Aspida can support clients to navigate the ever-changing statutory landscape and the duties and responsibilities imposed on directors.
The changes made to the Companies (Guernsey) Law, 2008 (“the Law”), by the Companies (Guernsey) Law, 2008 (Miscellaneous Amendments) Ordinance 2021, came into effect on 1 May 2021 and continues to positively promote the competitiveness of Guernsey as a reputable international financial centre of choice.
At Aspida we focus on helping our clients define, manage and mitigate their risks, as well as provide them with operational support, thereby taking a practical and pragmatic approach in all our offerings, allowing our clients to focus on what’s important to them and grow their business.
Overseeing and advising on corporate governance related matters is one aspect of business covered by the Aspida Business Advisory Team of experts through their provision of Board Advisory Services.
Aspida’s Board Advisory Service includes the provision of a full suite of services, such as governance health checks and advising on practical steps that can be taken to ensure that you are in compliance with the recent Companies Law changes. For more details visit https://aspidagroup.com/services/corporategovernance/boardadvisory/ .
In addition to complying with the Guernsey Company Law requirements, Aspida’s Doug Mackay has previously explained how Aspida can support clients with the practical application of the Guernsey Economic Substance Rules and how these rules could operationally impact on the governance of your board (in case you missed it, watch it again here).
Herewith a summary of some of the recent key changes to the Guernsey Companies Law:
Company name change
Section 25: allowing a company to change its name by any other means as may be specified in its articles, as an alternative to passing a special resolution.
Director meetings
Section 153(2): deeming of a meeting of directors to be held in the place in which the chairman is present, is subject to the company’s memorandum and articles, or a resolution of the company’s board.
Notice of general meetings
Section 210(1)(b): notice of a general meeting which is to be held entirely electronically must state the means and manner by which persons may attend.
Conversion of PCC into non-cellular company
Section 52A: a poll of the holders of cell shares to be held or demanded on a proposal to convert a cell of a protected cell company into a non-cellular company, in addition to the current provision for written consent or a show of hands.
Amalgamations and migrations
Section 69(2)(b): in the case of an amalgamated body corporate which is a new company, the requirement of section 15(3) of the Law that the founder member shall subscribe to the memorandum of the company will be satisfied where at least one founder member of the company subscribes.
Section 84(1)(b): in the case of an amalgamated body corporate which is a company which is migrating to Guernsey, the requirement of section 15(3) of the Law that the founder member shall subscribe to the memorandum of the company will be satisfied where at least one founder member of the company as proposed immediately after registration as a Guernsey company subscribes.
Court sanction for compromise or arrangement
Section 110(1): defining the meaning of a majority in number representing “75% in value” needed to agree a proposed compromise or arrangement before the court would consider sanctioning such compromise or arrangement. The new definition provides that the reference to “75% in value” mentioned in subsection (1) means:
Directors of ICC and its ICs
Sections 136 and 143: allow divergence between the membership of the board of directors of an incorporated cell that of its incorporated cell company, provided that at least one of the directors of an incorporated cell shall also be a director of its incorporated cell company.
Qualification for appointment as auditor
Section 260: widen the scope of which partnerships or body corporates are qualified for appointment as auditor of a Guernsey company; inserts a power for the Committee for Economic Development (the “Committee”) to authorise partnerships and body corporates to audit the accounts of companies; and inserts a power for the Committee to make regulations prescribing a fee payable to the Committee by any person or body making an application for authorisation.
Conversion into stock
Section 283: a company’s shares may not be converted into stock.
Offer of shares in lieu of dividends
Section 306: companies may make an offer of shares in lieu of dividends to shareholders by publication in La Gazette Officielle, or in any other manner allowed by the company’s articles, should the law of the jurisdiction in which the shareholder is resident prohibit or restrict the making of an offer of shares in lieu of dividends.
‘Off-market’ acquisition of own shares
Sections 314 and 317(2): member approval of certain actions relating to ‘off-market’ acquisition by a company of its own shares need only be by ordinary resolution rather than special resolution. Members will also only be required to authorise the minimum and maximum amounts to be paid rather than the terms of the acquisition, where acquisition of the shares is for the purpose of an employee share scheme. The member whose shares are to be acquired is excluded from voting on the resolution except where that member is the sole shareholder in that company.
Takeovers
Section 337: a notice to acquire shares in a company takeover to be issued as soon as the requisite 90% threshold has been reached. It also makes further provision relating to shares which will not be taken into account in calculating the 90% threshold.
Registrar of Companies
Sections 17 (application for incorporation), 27 (reservation of company name), 30 (registered office), 83 (application for registration as a Guernsey company – migration) and 97 (application for transfer of registration): the Registrar of Companies may specify the form of certain applications without prescribing the form by regulations and to provide that the Registrar of companies may destroy documents received or issued by, or on behalf of, the Registrar where a copy in electronic form is retained.
Explore how Aspida can support your Board Advisory needs:
NED Forum
The team at Aspida are always looking for ways to assist directors, trustees, businesses and charities and in 2011 created the Non-Executive Directors Forum (https://www.thenedforum.com/). This forum has since gone on to become a leading independent body looking after the interests of directors involved in the finance sector and has been a significant success with membership extending outside of the finance sector.
Board Advisory Services provided by Aspida
Should you have any questions on the recent changes to the Law or would like to explore our service offering and solutions to best fit the needs of your business, please do not hesitate to contact the Aspida Corporate Governance team at info@aspidagroup.com or visit https://aspidagroup.com/services/corporategovernance/boardadvisory/
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