The Isle of Man: Non-profit/For-profit Company Registry Requirements
Differences between Companies Act 2006 and Companies Act 1931
If you are familiar with the legislation you can incorporate a 1931 Act company yourself. If you are not familiar with the legislation you should speak with an Isle of Man accountant, Corporate Service Provider or registered agent, Advocate (lawyer) or knowledgeable professional. You need to ensure the company is set up and operates the way you want it to and that you are aware of the legal obligation associated with a company. There are also reporting obligations that can lead to late filing penalties if they are missed or to the company being removed from the register.
If you intend using a 2006 Act company you can still seek advice from an appropriate professional but the company must have a registered agent who is regulated by the Isle of Man Financial Services Authority and has to submit the incorporation papers. A list of regulated Corporate Service Providers is here
Some of the key features and differences of the Companies Act 2006 from Companies Act 1931 include:
- One Director, individual or corporate
- A Registered Agent, instead of company secretary
- More flexible annual returns
- Unlimited corporate capacity, but restricted objects are permissible
- No preclusion of financial assistance
- Pre-incorporation contracts can be adopted
- Simple merger and consolidation procedures
- Simple transfer of domicile procedures
- Protected Cell Companies are permissible
For further detail, please see:
Types of Companies
Companies may be:
- Limited by shares: Companies limited by guarantee do not have a share capital. Members are elected and can resign. Membership is not transferable. Members are usually required to pay a subscription which constitutes the basic capital of the company.
- Limited by guarantee: Companies limited by guarantee and having shares may have members who hold shares, and members who do not.
- Limited by guarantee and having a share capital (”hybrid companies”): Companies having a share capital with unlimited liability have a share capital in exactly the same way as a company limited by shares, but there is no limit to the liability of members.
- Having a share capital with unlimited liability
- an unlimited company with shares; or (Only within Companies Act 2006)
- an unlimited company without shares(Only within Companies Act 2006)
Private and Public Companies
The Companies Act 2006 does not distinguish between public and private companies. Under the Companies Acts 1931-2004 private companies are prohibited from offering their shares or debentures to the public. If such a company does offer its shares or debentures to the public it will be deemed to be a public company and it is obliged to comply with prescriptive prospectus requirements and file a copy of its prospectus or statement in lieu of prospectus with the Isle of Man Companies Registry within a prescribed time period. In addition, the name of a public company must end with the words “plc” or “public limited company”.
No such restrictions apply under the Companies Act 2006. All types of company can offer their shares or securities to the public, whether the names of such companies end with the words “Limited” or “public limited company” or otherwise.
Every company incorporated under the Companies Act 2006 is a legal entity in its own right separate from its members and continues in existence until it is dissolved. In addition, every type of company must at all times have at least one member.
Requirements for the registration of companies
A company is formed by one or more subscribers who sign the memorandum and articles of association, and, in the case of a company limited by shares, indicate, the number of shares which each subscriber agrees to take. In the case of a 1931 Act public company, or one which is unlimited, the minimum required number of subscribers is two. Upon incorporation, a certificate of incorporation is issued by the Companies Registry, and the company is in existence from that date.
A rough guide to the steps involved in incorporating a private company follows:
- It is advisable to obtain confirmation of the availability of the proposed name of the company from the Companies Registry.
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The duly executed memorandum and articles of association must be lodged with the Companies Registry.(Different for Companies Act 1931 and Companies Act 2006)
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A 1931 Act company must at the same time file a form setting out the details of the first directors and secretary, and the location of the first registered office;
- In due course, the Companies Registry will issue the certificate of incorporation.
The procedure for incorporating a 1931 Act public company is more onerous. In addition to the procedure for incorporating a 1931 Act private company, the following additional requirements are imposed.
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After incorporation, the Companies Registry issues the Certificate of Incorporation, but the company is still not permitted to offer its shares to the public unless and until,
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A prospectus has been led with the Companies Registry.