New options to switch corporate structure

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The Companies Amendment Bill 2020, which paves the way for a company operating under the provision of the Companies Act 2006 to re-register as one operating under the provisions of the Companies Act 1931, as well as introducing a small number changes to address issues identified by MoneyVal in its 2016 report were approved by Tynwald in March. The Bill now goes for Royal Assent before returning to Tynwald for Enactment later in the year.

For companies looking the switch structures, the changes will introduce a straightforward administrative process that requires the agreement of members holding at least 75% of the voting rights of each class of share in issue to approve the re-registration. There is no requirement for debtors or creditors to agree to the change as it does not create a new legal entity or prejudice the continuity of the company.

Companies incorporated under the Companies Act 2006 have a number of options for capital structures and governance not available under the Companies Act 1931. Any 2006 Act company considering switching to a 1931 Act company must ensure that it can be structured appropriately, there are no exceptions for re-registered companies.

In additional the Bill introduces new requirements companies operating under the Companies Act 1931, and the Limited Liability Companies Act 1996 to maintain and make available at their registered office a copy of the company’s memorandum and articles, or articles of organization and other documents. These documents are already available for a small fee from the Companies Registry, and the Registry fully expects it will remain the primary source of this type of information.

Finally, the Bill introduces a requirement for companies incorporated under the Companies Act 2006 to notify the Companies Registrar within one month of a change of directorship of the company. Currently, 2006 Act Companies are only required to notify such changes via their annual return.  The Registry is mindful that this will create an additional administrative requirement for companies, and it therefore intends to hold off the introduction of this requirement until improvements to its online service have been implemented.

Michael Crowe, CEO, Finance Isle of Man commented "This is great news for the CSP/TSP Industry and e-gaming sector, this change will help facilitate their growth on the Island. Finance Isle of Man continue to work collaboratively alongside Industry and the Government to prepare our industry for future growth."

The Bill can be viewed and downloaded from the Tynwald website

 

 

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