Imminent Changes will Further Modernise Guernsey Company Law

(Update Issue Number 8 Autumn/Winter 1996)

Corporate managers and administrators are poised to welcome a number of imminent changes to Guernsey's company legislation designed to increase the Island's competitiveness as an international finance centre.

The changes are due to come into effect on 1 January by ordinances enacted by the Island's parliament under The Companies (Enabling Provisions) (Guernsey) Law 1996 (which has now obtained Royal Assent).

A key change involves the introduction of Protected Cell Companies which are expected to be of particular interest to the managers of umbrella funds (i.e. those comprising several classes of investment fund) and to the promoters and managers of 'rent-a-captive' insurance companies and deferred variable annuity captives. The important feature of PCCs is that their assets will be legally segregated into two or more classes (cells) each of which will stand alone as far as creditors are concerned, thus avoiding any danger of