The proposals are designed to “clarify the current provisions and resolve certain practical issues”, according to Guernsey’s Commerce and Employment Department, which is seeking comments no later than May 31 on the planned revisions to the law.
Marcus Leese, partner at offshore law firm Ogier’s Guernsey office, said many of the changes were aimed at simplifying and speeding up the process of incorporating a company.
He said: “In our view, the key proposals are the practical ones which go to make the day to day steps of incorporation, share issuance, transactions and corporate governance simpler, quicker and easier to undertake.”
In addition to making it a criminal offence for a company not to have a permanent office, proposals include removing a requirement for the founder member to sign the memorandum of incorporation, giving directors powers to issue shares, exempt open-ended funds from various certification provisions when issuing new shares and to “provide expressly that companies may provide financial assistance for the acquisition of their own shares.”
Standard review procedure
Leese said the consultation was part of a standard process of reviewing and revising new and existing laws to ensure they functioned smoothly and remained in line with company law developments globally.
Ogier is preparing a response to the consultation in which it will make several of its own recommendations, aimed chiefly at making Guernsey companies more attractive internationally.
These include a proposal to allow a Guernsey company to have a name comprising alternative or foreign letters or characters and to extend the definition of board of directors to include a committee acting with the authorisation of the full board in regard to certain decisions and transactions.
