Companies (Demerger) (Jersey) Regulations 2018

Summary

These Regulations, made under the Companies (Jersey) Law 1991, create a statutory procedure allowing a Jersey company to demerge into two or more successor companies (either a survivor company plus new companies, or entirely new companies). They set out which companies are eligible to demerge, the mandatory contents and approval process for a demerger instrument, protections for members, creditors and employees, and offences for false statements made in connection with a demerger.

• Eligibility exclusions: Banks registered under the Banking Business (Jersey) Law 1991 and insurance permit holders cannot demerge or become a demerged company, nor can certain tax-classified companies (financial services companies taxed under Article 123D, utility companies, hydrocarbon oil companies, Schedule A taxpayers, high-net-worth individual owned companies, companies deducting tax under Article 41B/41E, large corporate retailers, GST-registered companies), or companies under criminal investigation or prosecution.
• Demerger instrument: The demerging company must execute a demerger instrument specifying the demerging and demerged companies, arrangements to complete the demerger, treatment of securities and payments to members/directors, and (for new companies) draft memorandum/articles and director details.
• Resolutions and certificates: Directors must pass a best-interests resolution and sign a certificate containing either a solvency statement or a statement about the prospect of obtaining court permission, before notice of the approval meeting is given.
• Member approval and objection: The demerger instrument must be approved by special resolution with prescribed notice and disclosure to members; dissenting members who did not vote in favour may object within 21 days of approval and apply to court within a further 21 days on grounds of unfair prejudice.
• Creditor protection: The demerging company must give written notice to creditors owed more than £25,000, publish the notice (in the Jersey Gazette or as the Commission permits) within a set time limit, and allow creditors to object or seek court orders restraining or modifying the demerger.
• Court involvement: If a solvency statement cannot be made, the company must apply to court for permission to demerge; creditors may also apply for court orders, and any resulting Act of court affecting the memorandum/articles must be delivered to the registrar within 14 days.
• Employment and retirement scheme effects: Employment contracts, collective agreements and recognition of representative bodies transfer to the demerged company and are protected from adverse changes or termination for one year after completion; contractual retirement scheme contribution obligations also transfer.
• Offences: It is an offence to knowingly or recklessly provide false, misleading or deceptive information or documents to the registrar or Comptroller, or to sign a certificate without reasonable grounds, punishable by up to 2 years imprisonment and a fine.

The Regulations came into force on 1 September 2018 and have since been amended (most recently with effect from 1 June 2026) to update certain provisions, including definitions, notice and publication requirements.

Key obligations

• Directors of a demerging company must pass a resolution, before notice of the approval meeting is given, stating whether the demerger is in the company's best interests and whether a solvency statement can properly be made or, if not, whether there is a reasonable prospect of obtaining court permission.
• Each director voting in favour must sign a certificate containing the solvency statement or court-permission-prospect statement and the grounds for it, before notice of the meeting is given.
• The demerging company must submit the demerger instrument for approval by special resolution, with notice accompanied by prescribed documents (copy/summary of instrument, proposed memorandum and articles, certificates, statement of material interests, and other information a member would reasonably require).
• The demerging company must make the demerger instrument and proposed memorandum and articles available for free inspection by members from the date notice of the meeting is given.
• A demerging company must send written notice to each creditor known to have a liquidated claim exceeding £25,000, during the period from first notice of the meeting until 21 days after approval.
• The demerging company must publish the contents of the creditor notice in the Jersey Gazette or another Commission-approved manner within the earlier of 21 days after approval or as soon as practicable after sending the last creditor notice.
• A member objecting to the demerger must serve notice of objection within 21 days after approval and, if applying to court, must do so within a further 21 days.
• The demerging company must deliver to the registrar, within 14 days after a court order affecting its memorandum or articles (or such longer period as the court allows), the Act of court recording that order.
• A demerged company must not, within one year after completion of the demerger, terminate recognition of a representative body that was recognised by the demerging company immediately before completion.
• Persons must not provide false, misleading or deceptive information or documents to the registrar or Comptroller in connection with a demerger application, and certificates must not be signed without reasonable grounds.

Applies to

Jersey companies (relevant Jersey companies), demerging companies, demerged companies, survivor companies, new companies, banks (excluded), insurance permit holders (excluded), financial services companies subject to Article 123D tax (excluded), utility companies (excluded), GST-registered companies (excluded), employers, employees, creditors, members/shareholders

Deadlines

• within 21 days after the date the demerger is approved: Deadline for a member to serve notice of objection to the demerger on the demerging company.
• within 21 days after the member served notice of objection: Deadline for the objecting member to apply to the court for relief.
• the period beginning with the date the first notice of meeting is given and ending 21 days after approval: Period during which the demerging company must send written notice to qualifying creditors (claims exceeding £25,000).
• the earlier of 21 days after approval or as soon as practicable after sending the last creditor notice: Time limit for publishing the contents of the creditor notice in the Jersey Gazette or other Commission-approved manner.
• within 14 days after the court order (or such longer period as the court allows): Deadline for the demerging company to deliver the Act of court to the registrar for registration.
• one year after the completion date of the demerger: Period during which changes to transferred employees' terms cannot be voided based on pre-demerger terms, and during which a demerged company cannot terminate recognition of a representative body.
• 1 September 2018: Commencement date of the Regulations.

Related documents

• This document is made under Companies (Jersey) Law 1991