Isle of Man Companies (Amendment) Act 2009

The Isle of Man Financial Supervision Commission has this week announced that the Isle of Man Companies (Amendment) Act will come into effect on the 1st September 2009.

The Amendment Act will affect the Companies Acts of 1931, 1982, 1992 and 2006 as well as the Limited Liabilities Companies Act 1996.  The key amendments to these Acts which will affect the day to day management of Isle of Man companies are as follows:

Changes to Accounting and Audit Provisions

The accountancy requirements under the Companies Act 1931 have been clarified to ensure newly incorporated companies must prepare financial statements for a period of no longer than 18 months from the date of incorporation and that the financial statements must be laid at least once in every calendar year before the members in a general meeting within 9 months of the financial year end for a private company and 6 months for a public company.

For Companies that exist under the Companies Act 2006, an element of uncertainty has now been clarified in that the accounting provisions now allow 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 that copies are remitted to the Registered Agent on demand at least annually.  This now adds some comfort in particular to accountants who were unsure as to whether they could hold original copies of the accounting records for 2006 Act companies or whether they should reside with the Registered Agent.

In addition to this, a company formed in accordance with the 2006 Act now grants any member or director of the company the power to require financial statements to be prepared if no statements have been produced for a consecutive period of 18 months or more.  The company has to accede to the request within 6 months of the demand.

The definition of who may audit an Isle of Man company has also been expanded and an auditor register may be created.

Registration of Charges

Companies will now be permitted to file a certified copy of the charge instrument or the original document thus removing a conflict that existed between the Companies Registry and Land Registry requirements.

Company Prospectuses

For Companies formed in accordance with the Companies Act 1931, the information contained in a prospectus must now include all matters that intended recipients could reasonably expect to find and replaces the previous specific list of information required.  A signed copy by all the directors named in the prospectus must be presented to the Financial Supervision Commission before its release.

Limited Liability Companies Act 1996

Changes to the Limited Liability Companies Act 1996 remove the provisions that provide for the automatic winding up of the company on the death, retirement, resignation, expulsion or dissolution of a member and permit this only if it is stated in the Articles of Organisation.  Similarly the changes remove the provision that provides for the automatic winding up of the company if within 60 days it fails to file a notice in the prescribed form on the death, retirement, resignation, expulsion or dissolution of a member.

Treasury shares

The Act has added new sections to the Companies Act 1992 and Companies Act 2006 which give the FSC powers to make Regulations that may in future allow a company to create treasury shares.

 

6th August 2009