Jersey


5. Other forms/entities

a. General

i. Jersey companies

Jersey companies are used by residents and non-residents for many activities, such as investing in securities or property or acting as group holding vehicles. Strict regulations, including a robust authorisation process, apply to finance-industry-related activities.

There is no ultra vires doctrine and companies enjoy the powers of a natural person. However, directors are bound by the commonly accepted fiduciary duties of a director. Although private companies are not required to file accounts or have them audited, they must keep accounting records. A Jersey company requires a minimum of one director and a secretary; the secretary may be a corporate body. Corporate directors are not permitted at present, but the matter is under consideration. With payment of an extra fee to the company’s registrar, there is a fast-track incorporation process whereby, subject to name approval and proper documentation, registration is possible on a same-day basis as opposed to taking the normal three to five working days.

The limited life company (where the company’s life span and liquidation date are specified at the time of incorporation) was introduced by legislation in 1997. In 2002, legislation introduced other types of companies, including companies limited by guarantee and companies with shares of no nominal value. It permitted companies to be incorporated with one shareholder and facilitated the merger of two or more Jersey companies. It allowed companies incorporated in other jurisdictions to move to Jersey as Jersey-incorporated companies, and companies incorporated in Jersey to move elsewhere. Non-Jersey registered companies may legitimately base their activities in Jersey.

Limited partnerships are frequently used for private equity structures and the establishment of family limited partnerships is also on the increase. Legislation has provided a framework for the creation of Limited Liability Partnerships; that legislation is currently the subject of consultation with a view to making the product as useful and competitive as possible for local and international businesses.

ii. Funds

Jersey is an offshore finance centre for funds. The fund industry is supported by a robust regulatory framework which, together with new codes of practice, allows fund administrators to authorise their own fund offerings within set guidelines. The ‘expert fund’ regime introduced in 2004 offers a significantly reduced level of regulation of the fund vehicle and a streamlined authorisation process. ‘Expert funds’ may be established in a matter of days. The business consists of both Jersey-domiciled funds and funds administered in Jersey, but domiciled elsewhere. Where funds are to be marketed to the public in the UK, they must meet the criteria for recognised schemes or be approved in the UK. Jersey has been designated a recognised territory for both collective investment funds and insurance products.

The Expert Fund regime, with its streamlined regulatory approach, has made Jersey attractive as a domicile for alternative investment funds (property, private equity and hedge) targeted at sophisticated and/or high-net-worth investors.

Further enhancements to the regulatory regime have been implemented. Both the Expert Fund Guide and the Non-Domiciled Fund Guide (which introduced in 2004 a streamlined authorisation process for Jersey functionaries acting for certain non-Jersey domiciled funds) have recently been revised. In January 2007, responding to market pressure, a Listed Funds Guide was published. In February 2008, two classes of unregulated fund were introduced to allow institutional and other eligible investors less formality and greater flexibility.

In November 2007, the regulation of funds and functionaries of funds was substantially revised so as to simplify the administrative process for funds and functionaries still further, while continuing to maintain satisfactory levels of regulation consistent with international standards of good practice. The changes bring most functionaries within the scope of the Financial Services (Jersey) Law 1998 rather than leaving them under Collective Investment Funds (Jersey) Law 1988 where they previously sat. Fund administrators and other functionaries now need to obtain only a single licence to carry on ‘funds services business’ and are permitted to conduct their activities on a continuing basis without needing to obtain an additional permit each time they act for a different fund.

iii. Protected cell companies and incorporated cell companies

Legislation in Jersey permits the creation of cell companies, both incorporated cell companies (ICCs) and an enhanced version of the traditional protected cell company (PCC), and includes features that extend the scope of these companies for investment purposes.

The ICC involves formation of separate, legally recognised cells within the overall structure, with each cell established as a separate incorporated Jersey company. This is in contrast to the traditional PCC where all the cells combined create one legal entity and each cell is not treated as a separate legal personality.

b. Resources

i. Legislation

Financial Services (Jersey) Law 1998

Companies (Jersey) Law 1991

Income Tax (Jersey) Law 1961

Borrowing (Control) (Jersey) Law 1947

Collective Investment Funds (Jersey) Law 1988

Company Securities (Insider Dealing) (Jersey) Law 1988

Limited Partnerships (Jersey) Law 1994

Limited Liability Partnerships (Jersey) Law 1997

ii. Websites

Jersey Legal Information Board www.jerseylaw.je

Company Registry www.jerseyfsc.org


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