The Gibraltar Companies Law has its sources in the Companies Act of 1930 which was based on the Companies Act of England and Wales. However, the Companies Act suffered major changes at the end of 2013 and a new Commercial Law was enforced in 2014. The Companies Act was modernized in order to adhere to the newest international standards on corporate governance, but also to include EU Directives. The new Companies Act was amended in order to correspond with other industry regulatory bodies among which the Gibraltar Companies House, the Fund and Investment Association and the Society of Accountants. The current version of the Companies Act is expected to streamline the companies incorporation procedures in Gibraltar and make the small territory more attractive for foreign investors.
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Company formation according to the Gibraltar Companies Act
The Companies Act requires all types of companies to be incorporated in Gibraltar to first draft the Memorandum and Articles of Association. The new form of the Memorandum has been shortened and will only include the name, the registered address, the authorized share capital and the liability of the company’s shareholders. The object of activity of a Gibraltar company has been removed from the Memorandum of Association, thus enforcing the idea a company’s objects of activity are unrestricted. The new Companies Act also contains 5 Model Articles of Association, enterprisers may select from when setting up a company in Gibraltar.
The most important change brought to the Commercial Code is the possibility of company re-registration. The Companies Act 2014 allows the following types of Gibraltar companies to change their form:
- · – from private companies to public ones,
- · – from public to Gibraltar private companies,
- · – from private limited to unlimited companies,
- · – from Gibraltar unlimited companies to limited ones,
- · – from Gibraltar company limited by shares to company limited by guarantee,
- · – from company limited by guarantee to company limited by shares.
Our agents in Gibraltar may provide you all the information about company re-registration.
The video below offers information on the Gibraltar Companies Act:
New provisions on company directors in Gibraltar
The Companies Law was also amended in order to provide for the direct appointment of directors in Gibraltar companies. Under the new Commercial Code, the director will be in charge with supervising the activities undertaken by the company and also includes other individuals who do not carry the name of directors. Managers could be included in this new category. Moreover, as of 2014 there is no distinction between the non-executive and the executive directors in Gibraltar. Both natural persons and corporate bodies can act as company directors in Gibraltar, nominee directors also being allowed under the new Companies Act. However, companies performing the role of directors in Gibraltar entities are not allowed to carry out restricted activities which fall under the supervision of the Financial Services Commission.
The secretary, according to the Companies Law in Gibraltar
All companies must have at least one secretary, according to the law. Under the current legislation, the company secretary can be a natural person or a company, just as in the case of directors. Moreover, the appointment of company secretaries is subject to the same regulations as when nominating the directors. The Companies Law also stipulates that the secretary must occupy the role upon the incorporation of the company in Gibraltar. Our Gibraltar company formation consultants also offer nominee secretary services to foreign investors opening companies here.
Accounting regulations for companies in Gibraltar
The Accounts Companies Act and The Consolidated Accounts Act have also been incorporated in the Gibraltar Companies Act 2014 removing any existing inconsistency in the three legislations. The new accounting regulations do not require Gibraltar companies to submit audited accounts anymore; company directors are allowed to draft and revise the balance sheets themselves. Companies may also submit their accounts with the Trade Register in other currencies, among which US Dollars, Euro and Swiss Francs.
In 2015, Gibraltar celebrated its 40th anniversary as an European Union member state and decided to amend its Companies Law that has been lingering behind the latest business practices. At the beginning of March, Gibraltar enacted its new Companies Act redacted in 2014.
The new Gibraltar Companies Act
The new Companies Law comprises several amendments directed to the improvement of the legislation and bringing it in line with the needs of major regulatory bodies, such as the Companies Register, the Gibraltar Society of Accountants and the Gibraltar Funds and Investments Association that have evolved over time. The new Companies Act was also brought in line with EU Directives and the Companies Act of England and Wales.
One of the biggest changes refers to the manner documents will be executed. The new law specifies deeds and documents will be executed by a Gibraltar company’s director and a witness or by two authorized signatories only.
Based on the UK model, the new Gibraltar Companies Act also introduced a “whitewash” provision regarding financial assistance. According to this new provision, financial assistance from a holding company incorporated in Gibraltar for the parent company in another country will no longer be possible. The only way a holding company will financially assist its parent company will be through the “whitewash” provisions. Gibraltar private companies will give financial aid, if its net assets are not reduced and, if reduced, only to the extent of their reduction.
Under the new Companies Act, Gibraltar companies will benefit from e-filing options and will also be allowed to publish certain information on web portals. The communication channels between a company and its shareholders have also been improved. Shareholders may use electronic communication facilities in order for information to be delivered in a more effective and timely manner. The Companies Registrar may also impose certain requirements relating to the form, authentication and delivery of documents.
For complete information about all the advantages of the new Companies Act, please contact our company registration agents in Gibraltar.