This Isle of Man Companies Act 1931 FAQ provides simple answers to frequently asked technical questions.
How many directors does my 1931 Act company require ?
s18 of the 1982 Act requires 1931 Act companies to have 2 directors. They must be natural persons – corporate directors are not permitted under the ‘31 Act. Under s19 it is an offence for a company to have less than 2 directors for more than 3 months.
What activities does my company have the power to undertake ?
S2(1) of Part 1 of the 1986 Act, 1931 Act provides companies with “all the rights, powers and privileges of an individual.” so they can do anything that a natural person can do. That said, you will need to check if the proposed activity is licenceable under our financial services legislation or is restricted by some other laws.
Does my 1931 Act company have a requirement to prepare accounts ?
Yes, under the 1931-2004 Act the accounting requirements are quite prescriptive – see Part 1 of the 1982 Act. Basically a company needs to prepare accounts under “generally accepted accounting principles or practice which is defined as UK GAAP / US GAAP or IFRS.
Does my Company require an Audit ?
Not necessarily….the Companies Act 1931 Companies (Audit Exemption) Regulations 2007 permits private companies to be exempt from Audit, subject to the following conditions:- (a) Agreement by 100% of the members and (b) at least two of the following three conditions being met: (i) turnover <£5.6m (ii) Balance sheet total <£2.8m (iii) <50 employees. Usually the audit exemption is included within the Articles.
Does my company need to hold an Annual General Meetings (‘AGM’) ?
Generally, yes see s111 of the 1931 Act which says, an AGM shall be held within 15 months of incorporation of the Company and then at least in every calendar year.
However, The Companies Act 1931 (Dispensation for Private Companies) (Annual General Meeting) Regulations 2010 permits private company to elect, via special resolution, to be dispensed from the requirement to hold annual general meetings.
How can the shareholders remove a Director ?
Notwithstanding anything in the Articles or any other agreements, s141A of the 1931 Act permits the shareholders to remove a director by the passing of a Special Resolution.
It’s still a pretty awkward process as notice for the meeting can’t be waived – even if all the shareholders agree and the director has a right to speak at the meeting.
What information is my company required to show on its letterheads and in Email correspondence ?
s94A & s144 of the 1931 Act requires that the following information is included within a business letter: (a) Company number and that it is registered in the Isle of Man (b) Registered office address (c) If the Company is a limited company that has been granted a licence omit the word Limited from its name (eg a Charity) then it must state that it is a limited company. (d) If the Company states its share capital, it must state the ‘paid up’ amount. (e) The names of each of the directors of the Company – and in certain limited cases their former names (if any). Note – Nationalities of directors are no longer required to be shown on letterheads.
What are the requirements for the company to validly execute official documents such as deeds on behalf of the Company ?
See s29A of Companies Act 1931. Some latitude has been introduced but the most sensible option is to have documents executed by two directors or director and the company secretary as per s29A(4).
Can I Re-register my 1931 Act Company as 2006 Act Company.
Yes, you can ! s16A allows a 1931 Act company to re-register under the 2006 Act. The process is straightforward and inexpensive.
How do I dissolve my 1931 Act Company ?
Solvent companies, which have ceased to operate and are no longer required may apply to be removed from the register by making an application to the Registrar of Companies pursuant to s273a of Companies Act 1931.
Alternatively, a liquidator can be appointed and a liquidation performed. Generally the s273 process is preferred as it’s far more straightforward and much less expensive.
For more relevant information see:-
Isle of Man 1931 Act and 2006 Act Companies compared.