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Jersey Business | FAQs

Business structuring and formations (Corporate Law)

I have decided to go into partnership with one of my fellow workers, do I need a formal partnership agreement?

If you are going into a business partnership  you should always have an agreement drawn up. The law governing partnerships of this type is pretty basic and as such you could be vulnerable should there be a dispute or disagreement with your partner.

I am setting up a company with some friends.  Can I rely on the Articles of Association to govern how the Company works?

Typically, the relationships between individual shareholders, and between shareholders and the company itself, are governed by the Articles of Association. In many cases, it will be sufficient to rely solely on the Articles to regulate the affairs of the company with a shareholders agreement. However Disputes are regrettably all too common among business partners. Failure to have an agreed mechanism in place in this regard can easily be fatal to a business. Agreements allow the parties to set out exactly how, and by whom, any disputes are to be settled. Deadlock provisions are also highly useful in this regard. If shareholders become locked into an intractable dispute, having a method to allow one party to buy out the shareholding of another can be the only possible way to sustain a business as a going concern.

What is a joint venture?

A joint venture is when two or more business entities or individuals combine to access or grow a particular market or set up a new undertaking or project.

Commercial Law

Employment Law for Business

Do have to provide my employees with an employment contract?

In Jersey, the Employment (Jersey) Law 2003 (as amended)  states that an employee must be provided with a written statement (of the terms of their employment) not later than 4 weeks after employment begins.

Do I have to provide my employees with a pay statement?

Yes. Under Jersey Law if you employ a member of staff you are required to issue your employee with itemised pay statements.  This includes if you employ students and part time staff.

Can I make an employee redundant if they are pregnant or on maternity leave?

If the reasons are valid you can fairly dismiss an employee who is pregnant or on maternity leave. However, if the redundancy is actually about the fact the employee is pregnant or on maternity leave then the dismissal will be automatically unfair.

Are the restrictive covenant clauses in my employment contract legal?

Possibly.  For the restrictive covenant clause to be ‘legal’ the following among other things must be considered (a) whether there are any legitimate business interests to protect; (b) the length of the restrictions; and (c) the geographical extent of the restrictions.

What is constructive dismissal?

Under Jersey law constructive dismissal is where you, fundamentally breach the contract of employment in some way.  This includes for example imposing a disciplinary or performance process that is grossly unfair and disproportionate; forcing a cut in salary or other benefits etc.

What is gross misconduct?

Gross misconduct can be any conduct where your employee has behaved in a way that represents a serious breach of the employment contract, making any continuing relationship with your employee impossible. For example where they have committed theft, refusing to obey legitimate instructions etc.  However be careful you cannot just sack someone on the spot, you will still need to follow a disciplinary process.

Am I obligated to provide a reference?

There is no legal obligation for you to provide  a reference. However you need to check the employment contract as you may be contractually obligated if your employee is a good leaver (ie not sacked for a gross misconduct etc).

Commercial Property

What is the ‘term’ of lease?

Under Jersey law, a commercial lease with a term of nine years or less may be dealt with without the formality of attending the Royal Court. These can be completed on any day by the parties executing the lease document itself. Leases for a term in excess of nine years must be passed before the Royal Court of Jersey on a Friday afternoon

What are service charges in a Jersey Commercial lease?

Service charges are levied by Jersey commercial landlords to recover the costs they incur in providing services to demised premises in Jersey.

What is an Assignment?

An assignment of a commercial lease is where the rights and obligations of the commercial lease are transferred in their entirety to a third-party tenant. On assignment, the new tenant would be obligated to pay the rent and be responsible for everything else set out under the lease direct to the landlord. In general terms, the old tenant would no longer be under an obligation to the Landlord.

What is a Sub-Lease?

A sub-lease of a commercial lease is a new (sub)lease between the tenant as a sub-landlord and the sub tenant. The lease that was signed between the landlord and the tenant remains in place.

Do I have to pay tax on my commercial lease?

Goods and Services Tax (‘GST’) may be payable on Commercial Leases. This is currently 5% on rental. There are exceptions to this. International Service Entities such as banks, trust companies and other financial institutions, who have been granted an exemption, will not incur GST.  Non-resident landlords are taxed at a rate of 20% on rental income derived from Jersey property.

Is there capital gains tax in Jersey?

There is no capital gains tax in Jersey.

Jersey Licencing

When can I make an Application?

No later than the 5th day of the month preceding a Jersey Licensing Assembly, you must make your application for the grant of a licence and deliver it to the Treasurer of the States. No later than the 15th day of the month preceding that in which the applications will be considered by the Licensing Assembly, the Treasurer of the States provides all the details of the application to the Bailiff, the Judicial Greffier, the Minister, the Chief Architect of the States, the Chief Fire Officer, the Chief Public Health Inspector and the Constable of the Parish.

What is the criteria for grating a licence?

No licence shall be granted to any individual who has not resided in Jersey throughout the 3 years immediately preceding the date of the application for the licence, unless the Jersey Licensing Assembly is satisfied that the individual is a fit and proper person to have charge of licensed premises. A licence shall not be granted to more than one person. A person may be granted, in respect of the same premises, licences of such categories as the Jersey Licensing Assembly shall consider appropriate. Save in the case of a sixth category licence, a person may not be granted a licence or licences in respect of more than one set of premises.

When does the Licencing assembly sit?

There are 4 general sittings of the Jersey Licensing Assembly every year. They take place in March, June, September and December. It is also possible for the Licensing Assembly to hold an extraordinary session if it thinks fit to do so.

Jersey Business for Sale and Purchase

What is due diligence?

This is a “fact finding” exercise about a target business; its accounts, its employees, its clients, its assets and liabilities and other relevant issues related to the target company.

What are warranties?

A warranty is in general terms a legally binding assurance (either express or implied) that a fact is or will be true.

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