If you are looking for a jurisdiction to incorporate your company, you may have come across the Isle of Man, a self-governing British Crown dependency in the Irish Sea. The Isle of Man offers a range of benefits for businesses, such as low taxation, political stability, robust legal system, and access to the UK and EU markets.
However, you may also have noticed that there are two types of companies that can be formed in the Isle of Man: 1931 to 2004 Act companies and 2006 Act companies. What is the difference between them and which one should you choose?
1931 Act Companies
The 1931 to 2004 Act companies are the traditional form of companies in the Isle of Man, based on the UK Companies Act 1929 and subsequent amendments.
The main advantage of the 1931 to 2004 Act companies is that they do not require an Isle of Man FSA approved licence holder to act as the registered agent and are therefore usually favoured by traditional private companies. The main disadvantage of the 1931 to 2004 Act companies is that they can be more time-consuming to maintain than the 2006 Act companies, due to their higher regulation and compliance requirements.
However, they are subject to more complex Incorporation process and documents (mem and arts) and compliance requirements than the 2006 Act companies, such as having to file annual accounts, appoint auditors, hold annual general meetings, and maintain a register of directors and shareholders. The 1931 to 2004 Act companies also have more restrictions on their share capital, such as having to issue par value shares, having a minimum authorized share capital, and having to obtain court approval for share buybacks and reductions.
2006 Act Companies
The 2006 Act companies are a newer form of companies in the Isle of Man, based on the International Business Companies Act of the British Virgin Islands. They are designed to be more flexible and modern than the 1931 to 2004 Act companies, with less regulation and compliance requirements. For example, they do not have to file annual accounts or appoint auditors, they can hold meetings anywhere in the world or by electronic means, and they can maintain their records in any language and format. The 2006 Act companies also have more freedom on their share capital, such as being able to issue shares with or without par value, having no minimum authorized share capital, and being able to buy back and reduce their shares without court approval.
However, unlike a 1931 Act company, one of the key requirements for a 2006 Act company is to have a registered agent in the Isle of Man. A registered agent is a person or entity that is authorised by the Isle of Man Financial Services Authority (FSA) to provide certain services to 2006 Act companies, such as:
- Incorporating and dissolving the company
- Maintaining the company’s statutory records and registers
- Filing any changes or updates to the company’s information with the FSA
- Receiving and forwarding any official correspondence or notices from the FSA or other authorities
- Providing a registered office address for the company
A registered agent is responsible for ensuring that the 2006 Act company complies with the applicable laws and regulations in the Isle of Man, and may be liable for any breaches or penalties incurred by the company. Therefore, it is important to choose a reputable and professional registered agent that can provide quality and reliable services to the company.
There are many benefits of having a registered agent for a 2006 Act company, such as:
- Saving time and hassle by outsourcing the administrative tasks to an expert
- Protecting the privacy and confidentiality of the company and its owners
- Enhancing the credibility and reputation of the company in the Isle of Man and abroad
- Accessing local knowledge and expertise on the Isle of Man’s legal and regulatory framework
- Avoiding any delays or errors in filing or communicating with the FSA or other authorities
Conclusion
In conclusion, a 2006 Act company is a versatile and convenient option for incorporating a company in the Isle of Man, but it does require a registered agent to handle its statutory obligations and provide essential services. A registered agent can add value and security to the company and its owners, and help them achieve their business goals in the Isle of Man.