ARTICLE · 02 JULY 2008

Jersey Company Law: Capital Maintenance Requirements Relaxed

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Jersey companies will no longer be tied to profits when making distributions to shareholders.

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Jersey companies will no longer be tied to profits when making distributions to shareholders. A significant relaxation of Jersey's capital maintenance regime will come into force on 27 June 2008 under Companies (Amendment No.9) (Jersey) Law 2008 (the 'Law') which was registered in the Royal Court of Jersey on Friday 20 June 2008.

Under the Law, distributions to shareholders may be made from any source of funds not just distributable profits, apart from nominal capital or capital redemption reserve in the case of par value companies. So Jersey companies may, for example, use their share premium account or (in the case of no-par value companies) stated capital accounts to make distributions.

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