Financial Assistance In Jersey

The Companies (Jersey) Law 1991 (the "CJL") derives many of its provisions from the equivalent UK Companies Act. Article 58 of the CJL historically provided for a prohibition on unlawful financial assistance, similar to that set out in section 151 of the UK Companies Act. As in the UK, the consequences of the giving of unlawful financial assistance were severe. If a Jersey company gave financial assistance in contravention of the CJL, such company and any officer who was in default was guilty of a criminal offence. In addition, the transaction constituting the financial assistance would be unlawful and could therefore be void. This provision often proved problematic. However, with effect from 22 January 2008, the CJL has been amended and the giving of financial assistance is no longer unlawful in Jersey. This is a positive step, underlining Jersey's commitment to ensuring that its legal and regulatory framework are continually adapted so that Jersey remains in