A Guide To Distributions By A Jersey Company

Jersey is a popular place to establish companies because the Companies (Jersey) Law 1991 (the Law) is modern, flexible and modelled on English companies legislation.

This guide looks at the key things you need to know about the payment of distributions by a Jersey company (a company that is not an open ended investment company).

Dividends and distributions in Jersey

Being modelled on English companies legislation, the Law used to include provisions which implemented the maintenance of capital rule. This rule required a Jersey company to maintain its paid up share capital for the benefit of its creditors and limited the sources from which dividends could be paid to shareholders.

As a result, dividends could only be paid from profits (whether earned in the current financial year or previous ones) or distributable reserves.