Seychelles International Business Companies (Amendment) Bill, 2017 (the “Amendment Bill”)

Seychelles International Business Companies (Amendment) Bill, 2017 (the “Amendment Bill”)

This note is not intended to be a complete guide to all the changes but sets out the more important amendments. 

There are some changes which are not outlined but will require minor amendments to the relevant precedents. 

Commencement

The Amendment Bill amends the International Business Companies Act 2016 and comes into force with retrospective effect from 1 December 2016. 

This does cause problems for companies incorporated after 1 December 2016 but before the date of the Amendment Bill, and possibly for any actions they have taken. 

Company incorporation

(a) The restrictions contained in section 5(2) of the Act need to be included in the memorandum. 5(2)(b) has been amended because it didn’t work under the Act so that it now reads:
“own an interest in immovable property situated in Seychelles, or hold a lease of immovable property situated in Seychelles, except that it may hold a lease of Seychelles immovable property where books and records of the company are maintained;”

(b) There is also a new provision whereby IBCs are not deemed to be carrying on business in Seychelles:
“the company owns or manages a vessel registered in Seychelles under the Merchant Shipping Act and the vessel visits, carries out fishing activities….” etc. in Seychelles.

These two provisions will mean amending our standard memorandum. 

(c) A subscriber need not be the registered agent. Where the subscriber is not the registered agent, he becomes a member. A registered agent acting as subscriber need not become a member. 

Company names

In the Act, names had to end with “Limited”, “Corporation” or “Incorporated” (or Ltd, Corp, Inc (with or without a full stop)). 

This has now been extended to also include “Limited Liability Company” or “Company” (or LLC or Co (with or without a full stop)). 

Deemed director

The provisions relating to ‘de facto’ directors under the Act are being amended by the Amendment Bill. The reference is no longer to ‘de facto’ director but now is to a ‘deemed’ director: 

“If at any time a company does not have a director, any person who manages, or who directs or supervises the management of, the business and affairs of the company is deemed to be a director of the company for the purposes of this Act.”

Delegation of powers of directors to committees and agents

The delegation of directors’ powers provisions have been amended, which will necessitate a change to our standard M&A. 

Appointment of directors

(a) In the Act, there was a provision which stated that the subscribers should appoint the first directors within 9 months of incorporation. 

This now reads:

"(1) The subscriber or subscribers to the company’s memorandum or a majority of them shall appoint the company’s first director or directors –

(a) within nine months of the company’s incorporation; or
(b) in the case of a former Act company, within nine months of the Act commencement date.”;

So companies formed before 1 December 2016 have nine months from that date (end of August) to comply. 

(b) There is a new provision which requires directors, alternates and reserve directors, to consent in writing to their appointment. 

Register of directors

(a) In the register, you also now need to include for directors, alternates and reserve directors the date of birth and nationality. For corporate directors, you need to include date and place of incorporation. 
(b) As we knew from the guidelines, for a director’s address, you need to include the address for service of documents and his usual residential address (if this is different to the address for service of documents). Companies have 12 months from 1 December 2016 to comply with these additional requirements. 
(c) Subject to the transitional provisions, a company must file a copy of its register of directors within 30 days of the appointment of first directors or its continuation or conversion. (The fines have actually been reduced here for breach.) 

A copy of the register shall be kept by the Registrar and shall not be disclosed or made available in any manner to any person except:

"(a) in obedience to a court order;
(b) when compelled by the enforcement of law;
(c) subject to the Registrar’s satisfaction that the information is being sought for the purpose of fulfilling an obligation under the Anti-Money Laundering Act, to a reporting entity as defined under the Anti-Money Laundering Act;
(d) to the registered agent of a company to which the register relates; 
(e) to a specified third party upon authorisation of the registered agent or a director of a company to which the register relates.”

Directors’ details will therefore no longer appear in the certificate of official search. 

Annual return

There is a change to the content of the annual return and so we need to update our precedent. 

In addition:
“(6) In the case of a former Act company –
(a) an annual return for any year before 2018 provided by the company pursuant to section 171 shall contain either the information referred to in the Sixth Schedule of this Act or the information referred to in section 119 of the former Act; and
(b) an annual return for 2018 onwards provided by the company pursuant to section 171 shall contain the information referred to in the Sixth Schedule of this Act.”

Accounting records

The fines have changed for keeping the records and holding them at a particular location.

Continuations

There are some changes to the procedure for continuations outside of Seychelles. These will require amendments to our precedents. 

Striking off

The occasions when the Registrar may strike off a company have been extended to include contraventions under the 1994 Act (which is also a contravention of the 2016 Act) and fines imposed under the 1994 Act. 

Liquidator

There is a change to make it clear that a liquidator may be an individual or body corporate. 

There are also changes to the procedure which will require changes to our precedents. 

Duplicate certificates

You can get duplicate certificates of incorporation, continuation, dissolution etc. from the Registrar where lost, defaced or destroyed.

Production of records

This provision has been added:

“Without prejudice to the generality of section 173, a written notice given by the Registrar under subsection (1) may require the company to produce all or any of its records (as defined in section 173) or copies thereof to be held at the company’s registered office, including (without limitation) any of the following records kept outside Seychelles –

(a) accounting records;
(b) minutes and resolutions of members kept pursuant to section 125; and
(c) minutes and resolutions of directors kept pursuant to section 156.

Transitional provisions

(a) Under the Act, former Act companies had three months to comply with the Act in relation to (a) the keeping of registers and records; and (b) the furnishing of annual returns. This has changed to six months (this is the end of May 2017 by my calculation, which presumably will be a date which has passed after the Amendment Bill comes into force.)

Registers and records under (a) above has also be clarified as:
“the keeping of company records, provided that the aforesaid transitional compliance period shall not apply in relation to –

(i) keeping of the company’s register of members pursuant to section 104; 
(ii) subject to section 150(4A), keeping of the company’s register of directors pursuant to section 150; and
(iii) keeping of the company’s accounting records pursuant to section 174 and 175.”

(b) This transitional provision has also been added:

“If, as at the Act commencement date, the Registrar had commenced (but not completed) steps to strike off a former Act company under section 97 of the former Act, the company’s striking off may at the Registrar’s option –

(a) proceed and be completed in accordance with sections 97 of the former Act as if those provisions still applied; or
(b) be recommenced and effected in accordance with section 272 of this Act.”
(c) There was a transitional provision under the Act which stated that every company has twelve months from the Act commencement date to comply with: (i) section 152 (Filing of register of directors with the Registrar); and (ii) Part XX (Obligations of beneficial owners). 

This has changed to eighteen months and so the deadline is 31 May 2018 rather than 30 November 2017.

Fees

No fee is payable to the Companies Registry in respect of filing an extract resolution adopting a restated and amended memorandum and articles of a former Act company filed within 2 years of the Act commencement date. That is, only handling fee of the Registered Agent is payable.

If you have any further queries, please kindly contact your account manager for assistance.