Jersey Company Law Guide - Distributions

The Companies (Jersey) Law 1991, as amended, (the "Law") gives Jersey companies a considerable degree of flexibility to make distributions from a wide range of sources.

What is a distribution?

The Law defines a distribution as any distribution of a company's assets to its shareholders (in their capacity as shareholders), whether in cash or otherwise, other than:

• an issue of shares as fully or partly paid bonus shares;
• the redemption or purchase of the company's own shares;
• a reduction of share capital; or
• a distribution of assets to shareholders on a winding up.

What about guarantees to support a parent?

The Law only restricts or seeks to control distributions which reduce the net assets of a company and which would need to be accounted for in the accounts of the company.