The Isle of Man Companies Act 2006 (the Act) permits the incorporation of a new flexible and modern corporate vehicle known as the New Manx Vehicle (the NMV). NMVs can be incorporated in the Isle of Man since 1 November 2006 and, as it happens, Middleton Katz incorporated Company Number 1. The Act is a stand alone piece of legislation which allows NMVs to co exist alongside the existing Companies that were incorporated under the Companies Acts 1931-2004 (1931-2004 Act Companies).
You can find a lot more detailed information about the 2006 Isle of Man Companies Act and other entities that can be established under Manx law at www.isleofman-companies.com.
Types of NMV
(i) A company limited by shares
(ii) A company limited by guarantee
(iii) A company limited by share and guarantee
(iv) An unlimited company with shares
(v) An unlimited company without shares
NMVs incorporated as Limited companies will be permitted to have the following endings:
(i) Incorporated or Inc
(ii) Corporation or Corp
(iii) Limited or Ltd
(iv) Public Limited Company or PLC
Registered office and Agent
Each NMV will be required to have its registered office in the Isle of Man, and a registered agent who must be a holder of an appropriate license issued by the Isle of Man Financial Supervision Commission.
(i) Single Directors Permitted.
(ii) Corporate Directors – Only if the director is a holder – or a subsidiary of a holder – of an appropriate fiduciary license issued by the Isle of Man Financial Supervision Commission.
(iii) Written resolutions permitted; articles may permit a majority of directors as being sufficient for their approval.
(i) The ultra vires doctrine does not apply; this provides protection to persons dealing with NMVs in good faith.
(ii) Any person dealing with an NMV is deemed not to have notice of any document relating to the company, save for any registered charges.
(i) Single member companies permitted.
(ii) Simplified voting requirements, including the ability to hold telephonic or electronic meetings.
(i) Very flexible regime; bearer shares however are not permitted
(i) Straightforward requirements for offering documents
(i) 1931-2004 Act Companies had particular requirements for capital maintenance which meant in some commercial situations applications to the courts were required for corporate transactions. The NMV permits “distributions” to be made so long as after the distribution the company (i) is able to pay its debts as they become due in the normal course of business and (ii) the value of the assets exceed the liabilities.
The requirements imposed on an NMV are less onerous than those imposed on a 1931-2004 Act Company and in effect mean that a Company is required to keep reliable accounting records, but is not required to prepare financial statements – although our internal policies require that our client entities do.
Additionally, the 2006 Companies Act imposes a statutory obligations for certain documents to be held at the office of the Registered Agent. As well as corporate documents, statutory registers and accounts, this includes financial records. See sections 78 & 80 of the Isle of Man Companies Act 2006.
(i) Simplified filing requirements compared to 1931-2004 Act Companies
(ii) No requirement to file change of directors; share capital changes; allotments of shares.
(iii) A simple annual return is required to be filed which shows the directors that have served during the year.
(iv) The company can elect to file documents such as the offering memorandum, registers of directors and members but is not obliged to do so.
Corporate restructuring including transfer of domicile
(i) 1931-2004 Act Companies can convert to NMVs
(ii) NMVs can reregister as a different type of company
(iii) NMVs can continue in another country; and foreign companies can be continued as NMV’s
(iv) NMV’s can be merged and consolidated
(v) NMVs can converted from a company limited by shares to a protected Cell Company (PCC)