Jersey's flexible company law legislation is one factor which makes Jersey a popular choice for asset holding companies. One feature of that legislation is the ability to reinstate companies which have previously been dissolved. This briefing summarises the reinstatement process.
There are various reasons why a Jersey company may be removed from the Register of Companies, including, following the company's winding-up or bankruptcy (known as 'désastre') or as a result of being struck off following the company's failure to file a confirmation statement with the Jersey Financial Services Commission ("JFSC"). However, the Companies (Jersey) Law 1991 (the "Companies Law") and the Financial Services (Disclosure and Provision of Information) (Jersey) Law 2020 (the "Disclosure Law") each provide a procedure under which the dissolution of a Jersey company can subsequently be declared void, allowing it to be reinstated to the Register of Companies.
The process of reinstating a Jersey company is relatively straightforward and can often be completed within a few weeks. At Bedell Cristin, we have extensive experience advising clients on both contentious and non-contentious reinstatements, and we would be happy to guide you through the steps.
Overview of reinstatement
What is a reinstatement?
The process by which the dissolution of a Jersey company (which has been dissolved under the Companies Law, the Bankruptcy (Désastre) (Jersey) Law 1990 (the "Désastre Law") or the Disclosure Law) is declared void by the Royal Court (the "Court"), such that the company is treated as though it had never been dissolved.
Who can reinstate a Jersey company?
A liquidator of a Jersey company or other interested person (including a shareholder, director, secretary or creditor) can reinstate a company dissolved under the Companies Law or Désastre Law. A director or secretary of the company, or any other officer purporting to act in a similar capacity, a nominated person, the company itself, the Attorney General or a creditor may apply to reinstate a Jersey company dissolved under the Disclosure Law.
Are there any time limits which apply?
The Court will only make an order for the reinstatement of a Jersey company within 10 years of the date of the company's dissolution.
Common reasons for reinstating
Reinstatement of a Jersey company is often requested in the following circumstances:
- the company has been struck off by the JFSC following a breach of the requirement to file its annual confirmation statement.
- an interested party establishes that the company held an asset on dissolution, and seeks to recover that asset.
- a claimant wishes to bring an action against the company, or for the company (once reinstated) to bring a claim against, for example, its directors.
Where the company was wound up pursuant to Article 150 of the Companies Law (a voluntary or 'summary' winding up), a creditor may also wish to obtain an order that a director, liquidator, shareholder or other person should contribute to the assets of the reinstated company, so as to meet a particular liability (a "contributory order").
Powers of the Court
When approving the reinstatement of a Jersey company, the Court aims to restore the company and all other persons involved to the same position they would have been in if the company had not been dissolved.
In particular, the Court may make an order declaring the dissolution to have been void and may also give directions and make arrangements as necessary to ensure that the company and all parties involved are placed in a position as close as possible to the state they were in before the dissolution occurred.
Where an application for reinstatement is made by a creditor under the Companies Law, the Court may also make a contributory order.
The process to reinstate a Jersey company broadly involves the following steps:
- if relevant, liaising with the previous Jersey corporate administrator of the company to ensure that it will continue to provide administration services (typically, provision of registered office address, company officers and other administrative functions) after reinstatement. If the previous corporate administrator is unwilling to act, then further steps may need to be taken to appoint a new administrator;
- obtaining the consent of the Comptroller of Taxes (the "Comptroller") to the proposed reinstatement. This usually requires any Jersey outstanding tax, penalties and interest in respect of the company to have been paid, and outstanding tax returns and financial statements of the company, where relevant, may need to be filed;
- obtaining the JFSC's consent to the reinstatement. The JFSC will require, among other things, the filing of any outstanding annual returns or confirmation statements and payment of associated fees and penalties;
- if relevant, giving interested parties notice of the proposed reinstatement of the company, and inviting their response
- following the preceding steps, making a written ex parte application to the Court for reinstatement of the company. The application takes the form of a 'Representation' and should include:
- details of how the company came to be dissolved;
- why the company needs to be restored;
- information concerning the former activities of the company;
- the Comptroller and JFSC's non-objection letter; and
- if relevant, an affidavit signed by the applicant and other evidence.
The Representation must be signed by the applicant or by a Jersey advocate on behalf of the applicant and stamp duty is payable on the application.
- if the matter is contentious, a hearing date will be set for deciding the matter in Court and the Court may make orders convening other interested parties to that hearing. If the matter is non-contentious, the matter will be decided without the need for a Court hearing; and
- if approved, the Court will give an order declaring the dissolution of the company to have been void, and this order must be delivered to the JFSC for registration.
Reinstatements can be carried out relatively quickly, and applications are usually processed and completed within two to three weeks, provided that the Comptroller and JFSC are satisfied and do not raise any queries. If an application is urgent, the process can sometimes be expedited.
If you would like any further information, please get in touch with your usual Bedell Cristin contact or one of the contacts listed.