30 July 2021
A consultation has been launched on proposed changes which would offer an additional option for how to wind up a company in Jersey.
Under the current rules, there are four principal ways in which a company can be ended:
- Bankruptcy Law: A creditor can apply to the court to request that the assets of a company are placed en désastre. The Viscount administers the process of collecting in and then distributing any assets.
- Summary Winding Up: Company directors sign a statement of solvency and pass a special resolution to wind up the company. Directors can carry out the winding up, or shareholders can appoint a liquidator.
- Creditors’ Winding Up: If company directors cannot sign a statement of solvency, members can pass a special resolution to wind up the company. Shareholders and creditors each nominate a liquidator. If contested, the liquidator nominated by the company leads the process.
- Court Winding Up: In certain circumstances, the Court can order a winding up where it is just and equitable or in the public interest to do so.
If the changes are introduced, a creditor, with a debt of £3,000 or more, having issued a demand for payment which has not been satisfied within 21 days, will be able to apply to the Court for the company to be wound up and for a liquidator to be appointed.
These changes will operate alongside existing procedures, therefore increasing the remedies available for creditors whilst ensuring safeguards are in place.
It will also mean that, when appropriate, specialist liquidators can be appointed who have particular experience in a business sector or in another jurisdiction if there are cross-jurisdictional factors to consider.
As part of the consultation, Islanders are also being asked to comment on accompanying proposals, which could:
- Enable creditors to seek the appointment of a provisional liquidator to ensure company assets are not disposed of before the full application is heard.
- Update the qualification criteria for Approved Liquidators, and widen the potential pool of Approved Liquidators.
- Introduce a Register of Approved Liquidators, which would require individuals to register annually
The Minister for External Relations and Financial Services, Senator Ian Gorst said: “Ensuring that Jersey’s provisions for winding up companies are modern, flexible and robust will benefit the local business community and the financial services industry, supporting our priority for Jersey to remain a desirable location to do business.
“We are grateful to those representatives from industry who have engaged with the government to draw up these proposals, and we would now like to hear from the wider business community on the suggested new process.”