The process of setting up an Isle of Man company is quite straightforward; Middleton Katz can guide you through this and also provide ongoing services such as registered office, registered agent / company secretary, local professional directors and administrative services.
To learn more about Middleton Katz and how we might help you – see here.
We have three separate Companies Acts in the Isle of Man: 2006 Act, 1931 Act and LLC Act. You can find information about them here.
Most clients tend to opt for a Company incorporated under the 2006 Act. This is because 2006 Act companies provide more flexibility in administration and are less onerous in their reporting requirements than their 1931 Act cousins. You can find information about 2006 Act Companies here.
Limited Liability Companies (LLCs) which are based on US legislation are less frequently used but have got some benefits for Americans, Manx residents or those looking for an asset protection vehicle. See here.
For all three types of Company, typically, a Corporate Services Provider (‘CSP’), such as Middleton Katz, will prepare and submit the documentation required to set up an Isle of Man company to the Isle of Man Companies Registry on behalf of the client. Usually (but not always), the CSP acts as agent for the client so the clients do not need to sign any of the paperwork themselves.
The documentation required to be filed at the Registry depends on the type of company to be registered and is detailed below
2006 Act Company – Memorandum of Association, Articles of Association (if not ‘Model’ articles).
1931 Act Company – Form 1, Memorandum of Association, Articles of Association.
LLC Act Company – Form L6 and Articles of Organisation.
The documentation is quite straightforward but of course there are internal company documents to be prepared following incorporation too. These include share certificates, directors’ consent letters, an operating agreement (LLC), the members’ register, the directors’ / secretaries’ registers as well as minutes of certain directors’ / subscribers’ meetings (as required).
Fees for incorporation and ongoing services vary between corporate service providers. In most cases, charges are calculated on the basis of fixed fees for set up costs and also for recurring items such as directors’ fees and registered office fees. Other time spent is usually charged in accordance with hourly billing rates.
Ours vary between £75+VAT and £175+VAT per hour depending upon the seniority of the staff required by the task in question.
Sometimes, where the work is predictable it is possible to arrange a fixed fee with your Corporate Service Provider. See here for our views on this.
All Isle of Man based financial Institutions licensed under the Financial Services Act 2008 including CSPs are required to comply with Anti Money Laundering legislation. In the Isle of Man guidance is set out in the Anti Money Laundering and Countering the Financing of Terrorism Handbook.
All CSPs operate their own policies but, subject to the requirements of the law, at Middleton Katz, we try to keep our ‘take on’ procedures as simple as possible…
In particular, we try to avoid providing our clients with numerous forms to complete – every case is different and we don’t think one size fits all – therefore, in practice – much of the required information (e.g. (b) and (c) below) is obtained in the natural course of the ‘take on’ and documented by us in the file accordingly.
In general terms we are required to hold information as follows:
(a) Documentary Requirements: The documentary requirements relate to the persons or entities that own the company – this is the usual passports / utility bills but can be a bit more involved where the new company is to be part of an existing corporate structure. We can be more specific once we know the proposed structure in more detail but it is worth mentioning that the certification requirements for passports and address confirmations are quite prescriptive.
(b) Background Information about the Client: We also require background information on the client – career history etc – usually this can be addressed by the introducer also these days it very often possible to fill in additional information from online sources such as LinkedIn. We also need to understand the source of funds and wealth of the client – of course this is more of a focus where the business will be substantially capitalised.
(c) Information about the Business: Finally – we require information about the nature of the business and it proposed development as well as details concerning expected turnover – and who the counter-parties are. – We would need this information to do our jobs as corporate administrators anyway so we don’t really see this as due diligence information – it’s more a matter of having a discussion so all the parties understand the requirements clearly.