Reinstatement of Companies
Jersey companies can be dissolved either through
(a) formal procedures contained in the Companies (Jersey) Law 1991 (the “Companies Law”) or the Bankruptcy (Désastre) (Jersey) Law 1990 which laws provide for the solvent and insolvent winding up of Jersey companies or
(b) being “struck off” under the provisions of Article 205 of the Companies Law as a result of a failure to submit the annual fee and file the annual return to the Registrar of Companies (the “Registrar”) in Jersey.
If the Registrar has not received the necessary payment/annual return filing by the end of February in each year following the incorporation of the company, then a notice will be sent to the registered office of that company and if there is continued non-compliance for a further period of three months then, at the end of that period, the company will be “struck-off” the Register of Companies pursuant to Article 205 of the Companies Law (a gazette notice is subsequently published in Jersey disclosing these companies).
It is recognised that there will be circumstances when it is necessary for an interested party to seek the reinstatement of a dissolved Jersey company which is provided for by Article 213 of the Companies Law.
Examples of situations that give rise to an application under Article 213 are as follows:-
(a) as a result of the company being inadvertently “struck-off” (often because the company administrators have not been provided with funding for the annual fee in good time);or
(b) on discovery of further assets owned by a company that was dissolved under a solvent winding-up procedure (a summary winding -up) under the Companies Law; or
(c) on an application of a creditor of a company that has been dissolved where it is perceived that property is held by that company and available to satisfy the claim.
Pursuant to Article 213 of the Companies Law, the Royal Court may declare the dissolution void and order that the company be reinstated.
Who may apply?
The liquidator of the company as well as “any other person appearing to the court to be interested” may make an application for reinstatement. Both shareholders and creditors of the company would be interested parties under Article 213.
Preparation for application
The applicant will firstly need to contact the Jersey Financial Services Commission (the “JFSC”), advising of the intention to seek reinstatement of the company and to confirm whether the JFSC has any objection to the application.
In order for the JFSC to consider the matter and confirm that it has no objection to the application, it will request, amongst other things, the following:-
(a) a draft of the Representation (a form of court pleading and further details of which
are explained below);
(b) in the case of an application made by a shareholder/beneficial owner of the company, a signed letter of confirmation by the beneficial owner confirming certain matters in relation to the company, including any change in its beneficial ownership together with submission of all annual returns of the company that should have been filed but for the dissolution of the company together with outstanding annual filing fees and fines; and
(c) payment of the prescribed fee for the JFSC’s consideration of the application.
The applicant will also require confirmation from the Comptroller of Tax that he has no objection to the application. If there are Tax liabilities owed by the company, then they will have to be satisfied before the Comptroller will provide his confirmation that he has no objections to the reinstatement.
Where the applicant is a creditor, the JFSC will require an undertaking over the discharge of its fees and costs from the creditor and the Comptroller of Income Tax will need to be contacted in order that any tax claims against the company are considered as part of the approval process for the application.
Representation to the Royal Court
Following approval by the JFSC, the ‘Representation’ is filed by the ‘Representor’ (or on its behalf by its legal advisers) with the Judicial Greffe (the administrative arm of the court) for consideration by the Royal Court.
The Representation must include:-
(a) details of how the company came to be dissolved;
(b) why it is now needed to be reinstated; and
(c) information concerning the current activities of the company (if any).
The Representation must be accompanied by copy letters received by the applicants from the Income Tax Department and the JFSC confirming that they have no objection to the application (see above).
The application does not require an appearance before the Royal Court. However, it should be noted, the resulting “Act of Court” is a public document that may include detailed information in respect of the beneficial ownership of the company.
The reinstatement will come into effect on the date that the Act of Court is issued by the Royal Court. However, the Representor must send a copy of the Act of Court to the Registrar for registration by the Registrar within 14 days, otherwise the
Representor will be guilty of an offence.
Upon the issuing of the Act of Court, the dissolution of the company will be declared void.
Power of the Court to make additional orders
The Court has the power to include in the Act of Court such orders, give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the company had not been dissolved.
Article 213(1) of the Companies Law provides that the application must be brought within a 10-year limitation period commencing from the date when the company was dissolved. The result is that there is an absolute bar on the reinstatement of the company after this time.
How Parslows can help
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The information and opinion expressed in this briefing does not purport to be definitive or comprehensive and are not intended to provide professional advice. For specific advice, please contact Parslows, We are not responsible for, and do not accept any responsibility or liability in connection with, the content of this document or any reliance upon it.