2006 Act Companies
The Isle of Man government's desire to reinforce the Island's position as one of the world's most respected and competitive international business centres led to the development and introduction of the Isle of Man Companies Act 2006.
The Act introduced the "New Manx Vehicle" (NMV) which is designed to offer flexibility and simplicity of use in today's fast moving environment.
As with 1931-2004 Act companies, there are five distinct types of NMV:
- Company limited by shares (can also be formed as a "Protected Cell Company")
- Company limited by guarantee
- Company limited by shares and guarantee
- Unlimited company authorised to issue shares
- Unlimited company without shares
The main features of an NMV are:
There is no requirement for a company to have an authorised share capital and so shares can be issued with or without a par value. There is also no capital duty on share allotment and issue of new shares. Other key features of the 2006 Act include:- shares may be issued as ordinary, redeemable, convertible, with preference rights, or non-voting rights; shares may be issued in any currency denomination; and there is no requirement to file returns for consolidation, division or increases in authorised share capital.
There is no prohibition under the 2006 Act for a company to declare and pay dividends or to purchase, redeem or otherwise acquire its own shares (subject to a solvency test).
Unlimited capacity to undertake any business or activity or enter into any transaction, powers can also be limited if required.
A Registered Agent is permitted in place of company secretary, all NMV's must have a Registered Agent and only a Registered Agent can incorporate an NMV. A Registered Agent must hold a relevant licence from the Isle of Man Financial Services Authority. Corporate Options Limited holds the necessary licence to act as a Registered Agent.
Necessary functions of a Registered Agent include making the application for the company's incorporation, maintaining the company statutory records, registers and documents at its office (or copies of these) and filing the company annual return amongst other duties.
All NMV's must have a registered office in the Isle of Man.
The use of sole directors is permitted under the 2006 Act and a sole director can also be a corporate entity providing it holds or is the subsidiary of a company holding a relevant licence from the Isle of Man Financial Services Authority. A 2006 company is not required to file the specifics of its directors on an ongoing basis as with 1931-2004 Act companies (these are only disclosed on the company annual return), although it may elect to file a register of directors and does not have to state the names of directors in official documents.
The requirements under the 2006 Act are less onerous than under the 1931-2004 Act. Accounting records must be maintained however there is no requirement for audit under the new Act unless the company is listed on a recognised stock exchange.
Charges may be registered at the Companies Registry within 1 month of the date of creation, however it is not mandatory to register charges, however charges not registered will mean that they will be void against a creditor or liquidator of the company.
Other features of the NMV include:
- Cost effectiveness (no company duty on authorised share capital as compared to 1931-2004 Act companies)
- No distinction between public and private companies
- Reduced compulsory registry filings
- No annual general meeting requirements
- Transfer of domicile procedure simplified
- Simplified offering document requirements
- Single members permissible
- Merger and consolidation procedures simplified
- Pre-incorporation contracts are permitted
- Introduction of protected cell companies for general business use
For more information please feel free to contact Lee or call 00 44 (0)1624 612888 or skype: corporateoptions.