The Isle of Man is a long standing popular and reputable jurisdiction for incorporation of offshore companies which has created a unique opportunity. The Isle of Man has legislation in place from 1931 for the incorporation of companies, but has however adapted to accommodate modern society and evolving requirements and now offers the newer less onerous act of 2006. The initial enthusiasm for the modern, extremely flexible and less onerous 2006 Act Companies has begun to slow over recent years. There are instances where a 1931 Act Company may be required due to tax planning and structuring. We have particularly found that some Banks are more favourable of the 1931 Act Companies due to the more stringent filing requirements. For instance, a 1931 Company must have a minimum of two directors, must file details of any changes to the directors and secretary (within one month of the changes) and it is mandatory to register any charges with the Companies Registry.
Following the recent enactment of the Companies (Amendment) Act 2021 it is now possible for Isle of Man companies incorporated under the Companies Act 2006 to re-register as Companies Act 1931 companies, something that previously did not seem to be a sensible or particularly useful idea, so whilst it has always been possible to re-register 1931 Act Companies as 2006 Act Companies, the process to convert in the opposite way has not previously been in place as it was not deemed necessary. This insight by the Isle of Man authorities into a possible gap that would once again strengthen its position as a top class jurisdiction has once again showed its ability to correctly predict the industries needs and adapted accordingly to deliver the best possible service.
The process is also straightforward for a private company, there are additional requirements where the Company is registered as a public company. Following notice to the Registered Agent of twenty eight days, unless a shorter notice period is agreed, the members of the Company can vote to re-register by way of Special Resolution passed by members holding 75% or more of the voting rights. The Special Resolution covers the approval of the re-registration to the 1931 Companies Act as well as approving the new Memorandum and Articles of Association.
The officers must submit the Special Resolution to the Companies Registry along with the updated Memorandum and Articles of Association, the re-registration form and a fee.
Once the above documents are processed by the Companies Registry a certificate of re-registration and also a certificate of de-registration under the 2006 Act are issued. The process is generally processed within a few days, particularly if the documents are submitted electronically.
It should be noted that the re-registration of the Company shall not be deemed to create a new legal entity, the legal status of the Company remains unchanged and the existing rights and liabilities of the Company will continue.
Should you wish to discuss the above or any related matter please do not hesitate to contact us