Consultation on Company Mergers: Summary of Responses

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A decision made on 28 May 2010 to approve the issue of the summary of responses to the consultation on Company Mergers

Decision Reference: MD-E-2010-0098
Decision Summary Title :	Summary of Responses to consultation on Company Mergers		Date of Decision Summary:	27 May 2010
Decision Summary Author:	Director, Finance Industry Development		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	n/a
Written Report Title :	Summary of Responses to consultation on Company Mergers		Date of Written Report:	27 May 2010
Written Report Author:	Director, Finance Industry Development		Written Report : Public or Exempt?	Public
Subject: The issue of a response to the consultation on company mergers.
Decision(s): The Minister approved the issue of the response to the consultation on company mergers.
Reason(s) for Decision: Following the end of the consultation on whether the Companies (Jersey) Law 1991 should be amended to permit Jersey companies to merge directly with a wider range of bodies, the Economic Development Department is issuing a summary of responses.
Resource Implications: There are no cost or manpower implications for the States.
Action required: The Economic Development Department to take such steps as are necessary for the response to the consultation to be published on the States website.
Signature: Senator A.J.H.Maclean		Position: Minister for Economic Development
Date Signed:		Date of Decision (If different from Date Signed

Consultation on Company Mergers: Summary of Responses

MINISTER FOR ECONOMIC DEVELOPMENT

RESPONSE TO Consultation on COMPANY MERGERS

1. Issue and Recommendation

1.1. A public consultation was carried out in February-April 2010 on amending Part 18B of the Companies (Jersey) Law 1991 to permit the cross-border merger of Jersey companies with a wider range of bodies, including foreign companies. Following the end of the consultation period, the Economic Development Department is issuing a summary of responses.

1.2. It is recommended that the Minister approves the response to the consultation paper and that the response should be published on the States website.

1.3. There are no manpower or cost implications for the States.

2. Background

2.1. At present, it is only possible to directly merge a Jersey company with another Jersey company. However, the Companies (Amendment No.10) (Jersey) Law 2009 introduced an enabling provision into the Companies (Jersey) Law 1991 (“the Companies Law”) allowing the States to make Regulations to permit the cross-border merger of Jersey companies with companies and other bodies incorporated outside Jersey and also with bodies that are incorporated in Jersey but which are not companies.

2.2. In an increasingly globalized world, more and more business is conducted across national borders and there is a growing demand for Jersey companies to be able to merge directly with a wider range of bodies, in particular with foreign companies – something which is already permitted by some of our competitor jurisdictions such as Guernsey.

2.3. Although it is possible to merge a Jersey company with a foreign company indirectly by first bringing them into the same jurisdiction (either by continuing the Jersey company into the foreign jurisdiction or by continuing the foreign company into Jersey under Part 18C of the Companies Law) and then merging them (either under Part 18B of the Companies Law or the relevant foreign law), this procedure is more cumbersome than the direct merger process permitted in other jurisdictions and is also unsatisfactory in some circumstances for foreign fiscal purposes.

2.4. In order to ensure that Jersey’s company law remains market leading, it is intended to amend Part 18B of the Companies Law so as to permit the cross-border merger of Jersey companies (subject to appropriate safeguards) with any other body corporate, wherever incorporated. This will include foreign companies, foreign incorporated bodies and also bodies that are incorporated in Jersey but are not companies, such as foundations (once corresponding amendments have been made to the foundations legislation).

2.5. It is considered that the proposed amendments are necessary in order to strengthen the competitiveness of the Jersey company, one of the key tools used by the finance industry in the Island, which will help to maintain Jersey’s position as one of the most progressive jurisdictions in the world.

3. Recommendation

3.1. It is recommended that the Minister approves the response to the consultation paper and that the response should be published on the States website.

DIRECTOR, FINANCE INDUSTRY DEVELOPMENT

27 May 2010