The Companies (Amendment) Bill 2008, when in force, will make a number of changes in relation to Isle of Man company law. The Bill should receive Royal Assent in late May or early June, following which it will be brought into operation by the Treasury. Accordingly, it should be in force by the middle of June 2009 or possibly earlier. A brief overview of the changes to be made by the Bill is set out below.
Prospectus rules (1931 Act companies)
The prospectus rules in Section 35 (1) and the Fourth Schedule of the Companies Act 1931 will be repealed. It will no longer be necessary for the contents of a prospectus issued by a 1931 Act company to comply with the Fourth Schedule. The new provisions will require a prospectus issued by a 1931 Act company to contain all material information that the intended recipients would reasonably expect to receive and of which the directors are aware or ought to have been aware having made reasonable enquiries. This requirement is the same as applies to 2006 Act companies. It will remain necessary to register a prospectus under Section 38 of the 1931 Act.
The requirement to deliver a statement in lieu of prospectus will be abolished.
The FSA will be given power to direct that a 1931 Act company amend its prospectus if the FSA considers a statement included in the prospectus is untrue or misleading or considers that the prospectus is in contravention of the statutory prospectus requirements.
Registration of Charges (1931 Act companies)
Two changes will be made in relation to 1931 Act companies. Firstly, it will be sufficient to register a certified copy of the charge rather than the original (at present registration of a certified copy is only permitted in the case of a charge created outside the Isle of Man comprising property situated outside the Isle of Man).
Secondly, registration of a charge will only be required if the company is beneficially interested in the property charged and controls or is able to charge the legal interest in the property. This will mean, for example, that a charge over trust property created by a company which is a trustee need not be registered. An equivalent change is made in relation to charges registrable by F registered companies.
Download the full article here: Companies (Amendment) Bill 2008
