Companies

We specialise in providing Isle of Man companies and entities.

We can provide standard “off the shelf” forms of company and in cases where this is not appropriate our parent company MannBenham Advocates Limited can assist in creating a bespoke solution.

The types of entity that we can provide are as follows:

  • A standard private company governed by the Companies Act 1931 limited by shares or guarantee (“a 1931 Act Company”).
  • A 2006 company being a new form of company governed by the 2006 Companies Act (“a 2006 Act Company”).
  • Hybrid Companies- a company limited by guarantee and having a share capital.
  • Public companies.
  • Partnerships- general or limited partnerships.
  • LLC- Limited Liability Company.

1931 Act Companies

This form of entity has for many years been the traditional form of company for many years however the 2006 Act Company is growing in popularity.

1931 Act Companies are designated as either public or private companies. Private companies are not permitted to offer their shares to the general public.

The key features of a 1931 Act Company are:

  • Minimum of 2 directors and a secretary
  • Corporate directors are not allowed

The 2006 Company

The Isle of Man Companies Act 2006 has created a new modern form of company known as the 2006 Act Company.

The 2006 Act Company is a modern, flexible and simplified corporate vehicle which does not have many of the traditional formalities of a company.

The key features of a 2006 Act Company include:

  • One Director, individual or corporate
  • A Registered Agent, instead of company secretary
  • More flexible annual returns
  • Unlimited corporate capacity, but restricted objects are permissible
  • No preclusion of financial assistance
  • Pre-incorporation contracts can be adopted
  • Simple merger and consolidation procedures
  • Simple transfer of domicile procedures
  • Protected Cell Companies are permissible
  • No requirement to hold Annual General Meetings
  • No authorized share capital
  • No requirement to maintain capital (subject to the company being solvent)
  • Reduced public registry filing requirements
  • No distinction between public and private company
  • No restriction on offering shares to the public

We can provide a Registered Agent, a corporate director and registered office facility to 2006 Act Companies.

Corporation Tax

The standard rate of corporation tax in the Isle of Man is 0%. A higher rate of 10% applies to income derived from banking business or income from land or property in the Isle of Man.

There is no capital gains tax on the Island.

The Isle of Man has double taxation agreements with the United Kingdom, Estonia, Malta and Belgium (not yet in force) and limited taxation agreements in respect of international shipping and/or aircraft with:

  • The United States
  • The Netherlands
  • Denmark
  • Finland
  • Greenland
  • Iceland
  • Norway
  • Sweden
  • The Faroe Islands
  • Germany
  • France

Companies Limited by Guarantee

A company limited by guarantee has no share capital and no shareholders. This form of company is essentially a mutual company used for charitable, quasi charitable, non profit or social purposes.

A member undertakes to guarantee a prescribed amount to the company and can be required to contribute this amount should the company go into insolvent liquidation.

Membership of a guarantee company is non-transferable and ceases on death or resignation.

Hybrid Companies – Companies limited by guarantee and having shares

Hybrid companies combine the features of companies limited by shares and companies limited by guarantee.

For example:

  • One or more classes of members contribute to the capital of the company as shareholders, and
  • One or more classes of members are elected into membership without taking up any shares and instead guarantee payment of a certain sum in the event of the company becoming insolvent.

The flexibility of this form of company has caused it to be used as a “foundation” as an alternative to a discretionary trust. Hybrid companies have also been used for proprietary clubs and resorts.

Partnerships

There are two types of Isle of Man partnership:

  • General partnership
  • Limited Partnership

Isle of Man partnerships have the following characteristics:

  • No more than 20 members unless exempted e.g. a practice of lawyers, accountants etc
  • The partnership is not a legal person in its own right as is the case with a company
  • Assets of the partnership must be held and applied exclusively for the partnership
  • The partnership agreement governs the rights and duties of the partners
  • Every partner is an agent of the partnership for the purpose of partnership business
  • Where a partner in the course of business causes loss or injury to a 3rd party the partnership is liable to the same extent as the individual partner and each partner is jointly and severally liable
  • Partners are jointly liable for the partnership debts

Isle of Man Limited partnerships have the following additional characteristics:

  • A limited partnership has a general partner with unlimited liability and one or more limited partners
  • The limited partners liability for the debts of the partnership is limited to the amount of capital or property the limited partner contributes to the partnership
  • A company can be a limited partner
  • Limited partnerships must be registered with the Financial Supervision Commission at the Companies Registry
  • Any changes to the registered documents must be notified to the Commission within a month
  • The limited partner does not take part in the management of the partnership

LLC – Limited Liability Company

The Isle of Man Limited Liability Companies Act 1996 is based on the Wyoming LLC model.

The following are some of the key features of a LLC:

  • The documents which govern the LLC are the articles of organisation and the operating agreement
  • The articles deal with matters such as:
    • the name of the LLC
    •  the identity of the members
    •  the capital introduced by each member
    •  the principles governing the admission of new members
    •  the ability of surviving members to continue the business in the event of the death, resignation, or otherwise of a member
  • The articles of organisation is a public document which is filed at the companies registry
  • The operating agreement is a private document entered into by the members, and deals with the internal governance of the LLC
  • There are no directors of an LLC and  the members manage the LLC directly
  • There is no limit on the number of members of a LLC
  • The members may appoint a manager. The powers of the manager are only those which are specifically given to him by the members
  • Members liability is limited to the amount of their capital contributions as declared in the articles of organisation
  • There is no requirement for an annual meeting or any formal meetings of members.
  • There is no provision for the auditing or filing of accounts. The Act requires the members to keep proper accounts
  • Charges on the assets of the LLC must be registered, as is the case with a company
  • An annual return is submitted each year, setting out the details of the members and any manager
The LLC is taxed on the Isle of Man as a partnership, and thus is a wholly transparent entity