Practice Note No.2 of 2011: Continuation of exempted companies, as companies under the International Companies Act [Cap 222]

The International Companies (Amendment) Act No. 11 of 2011(Amendment Act) that came into force on 11 August 2010 (effective date) makes provisions to bring under the International Companies Act [CAP 222], (IC Act], the exempted companies existing under the Companies Act[CAP191],(Companies Act).

This Amendment Act, has enabled to bring under one legislation, for registration, all companies that are formed exclusively for offshore operations.

Under section 95A of the IC Act, the exempted companies existing under the Companies Act, on the effective day, are taken to have been granted a provisional certificate of continuation to continue under the IC Act, and simultaneously cease to be subject to the Companies Act.

A provisional certificate of continuation with a validity period of 5 years from the effective date, establishing the new status of the company, is to be issued under subsection 95A, to each company that has been brought under the IC Act

Subsection 95A(5) of the IC Act allows  these companies after the end of 5 years, to apply for further  continuation as an IC, under a certificate of continuation issued under subsection 92(1).

Annual reporting continues to be a requirement under the IC Act, for the companies issued with the provisional certificate of continuation.  Under section 95C, these companies are required to forward to the Commission, a return in the prescribed form, on each anniversary of its registration under the Companies Act.

The form and contents of this annual return has been prescribed by Form of Annual Returns Regulation Order No. 34 of 2011. Schedule 1 to this Order sets out the form and contents of the annual return of a company that was an exempted company of a class specified in Schedule 3 of the Companies Act.

Schedule 2 to this Order sets out the form and contents of the annual return of a company that was an exempted company, other than an exempted company of a class specified in Schedule 3 of the Companies Act.

In completion of the forms of these returns, the signature of the Director is sufficient for the purposes of the certificate, and any reference to the” secretary”should be taken as inapplicable and be disregarded.

The fees chargeable under section 111 of the IC Act, are not applicable to the companies issued with the provisional certificate of continuation.  However under section 112A, these companies, must pay to the Commission an annual fee as specified in that section, upon each anniversary of its registration as a company under the Companies Act.

Any moneys paid as annual fee by a company issued with a provisional certificate of continuation, on or before 1 April 2011, for the year 2011, will be considered by the Commission as a part of the specified annual fee  payable under section 112A, in relation to that company , for the year 2011.

A company issued with a provisional certificate of continuation, that has already paid a part of the annual fee on or before 1 April 2011, for the year 2011, must upon the anniversary of its registration as a company under the Companies Act, pay to the Commission for the year 2011, an annual fee equal to the difference between the annual fee that would be payable under section 112A, and the fee already paid,

However if a company issued with a provisional certificate of continuation, whose date of anniversary of registration falls between 1 January and 1 April,   has already paid a part of the annual fee, on or before 1 April 2011, for the year 2011, the company must before 31 May 2011, pay to the Commission, an annual fee equal to the the difference between the annual fee that would be payable under section 112A and the fee already paid.

Paragraph 113(1)(c) of the IC Act applies on failure to pay the annual fee by a company issued with a provisional certificate of continuation. Under this provision, if a company issued with a provisional certificate fails to pay the annual fee within 30 days from the date on which the annual fee falls due, the Commission will within 7 days after the end of the period of 30 days send a notice to the company stating that the name of the company will be struck off the register if the company fails to pay the fee within 14 days from the date of the notice.

The Act also provides in subsection 113(2), that any company, that fails to pay the annual fee within 14 days from the date of the notice, will be struck off the register by the Commission.

However this provision is not applicable to a company in the process of being wound up or dissolved.

 

George Andrews

Commissioner

1 April 2011

 

Extract of INTERNATIONAL COMPANIES ACT CHAPTER 222

as amended by: International Companies (Amendment) Act 11 of 2010 (11 August 2010)

95A.    Continuation of existing exempted companies as companies under this Act

(1)       Despite anything in any other Act, on the effective date, an exempted company is taken to have been granted a provisional certificate of continuation under this section to continue as a company under this Act.

(2)       Despite anything in any other Act, on the effective date an exempted company ceases to be subject to the Companies Act [CAP 191].

(3)       The Commission must as soon as possible after the effective date issue to each exempted company, a provisional certificate of continuation.

(4)        A provisional certificate of continuation must:

(a)       be  in the  form approved by the Commission; and

(b)       remain in force for a period of 5 years.

(5)       If a company issued with a provisional certificate of continuation wishes to continue as a company incorporated under this Act after the end of the period of 5 years, the company must within 6 months before the date ending the period of 5 years, apply to  the Commission under subsection 92(1) for a certificate of continuation as a company under this Act

(6)       To avoid doubt, an application by a company under subsection 92(1) is an application for a new certificate of continuation.

(7)       The Commission must not take into account the fact that a company holds a provisional certificate of continuation under this section when determining an application for a continuation filed under subsection 92(2)

95B.    Effect of Provisional certificate of continuation

Upon the issue of a provisional certificate of continuation under subsection 95A(3):

(a)        the status of the company issued with the certificate is changed from an exempted company to to a company under this Act; and

(b)       section 94 applies mutatis mutandis in relation to the effect of the continuation of the company under this Act.

95C.    Annual return of a company issued with provisional certificate of continuation

A company issued with a provisional certificate of continuation, must upon each anniversary of its registration as a company under the Companies Act, forward the Commission a return in the form containing the particulars, prescribed by regulations.