insolvency

Who is caught

The instruments indexed here govern the winding up and dissolution of the main Jersey legal vehicles, together with the regime controlling who may act as a liquidator or administrator. They are largely procedural codes that engage whenever a covered vehicle is being wound up or dissolved, whether solvently or insolvently. A separate group of documents are public statements about specific firms that have entered liquidation.

Vehicles and persons covered

• Companies: Public and private Jersey companies under the Companies (Jersey) Law 1991, and the individuals who act as their liquidators or administrators, are covered by the Companies (General Provisions) (Jersey) Order 2002.
• Foundations: Jersey foundations, their qualified council members, guardians, liquidators and creditors are covered by the Foundations (Winding up) (Jersey) Regulations 2009.
• Incorporated limited partnerships: ILPs, their general partners, liquidators and creditors are covered by the Incorporated Limited Partnerships (Jersey) Regulations 2011.
• Limited liability partnerships: LLPs, their partners, secretaries, dissolution managers and insolvency managers are covered by the Limited Liability Partnerships (Dissolution and Winding Up) (Jersey) Regulations 2018 and the JFSC guidance note on the 1997 Law.
• Enforcement subjects: The public statements concern named insurers and trust company businesses that entered liquidation, issued under the Insurance Business (Jersey) Law 1996 and the Financial Services (Jersey) Law 1998.

What brings a vehicle within scope is the occurrence of a dissolution or winding up trigger. For LLPs this includes automatic dissolution when the partnership ceases to have two or more partners, dissolution by act of a partner, or a Court order; foreign court orders winding up or dissolving an LLP are effective in Jersey only once recognised by the Royal Court.

Sources: Companies (General Provisions) (Jersey) Order 2002 · Foundations (Winding up) (Jersey) Regulations 2009 · Incorporated Limited Partnerships (Jersey) Regulations 2011 · Limited Liability Partnerships (Dissolution and Winding Up) (Jersey) Regulations 2018 · Guidance Note: Limited Liability Partnerships (Jersey) Law 1997 · Horizon Trustees (Jersey) Limited (2013-11-07) · Salsac Management Limited (2010-07-20) · Blue Swan Insurance (Jersey) Limited (2009-03-18) · Blue Swan Insurance (Jersey) Limited (2006-05-31) · Blue Swan Insurance (Jersey) Limited (2006-04-07)

Key duties

The duties are predominantly time-bound filing, notification and meeting obligations that arise during a winding up, plus a standing regime for the approval of liquidators and administrators. Many carry short fixed deadlines running from a triggering event.

Approval of liquidators and administrators

• Registration: Only individuals entered on the Viscount's Register of Approved Liquidators and Administrators (or a registered non-Jersey liquidator/administrator acting jointly with a Jersey-resident registrant) may act for a public company, a company in administration, or a company being wound up.
• Eligibility and bonding: Registration requires Jersey residence (or qualifying joint appointment), specified professional qualifications, a general bond of 750,000 pounds plus a specific bond of between 5,000 and 5,000,000 pounds per appointment, and an 800 pound registration/re-registration fee.
• Annual renewal: Registration expires after one year and must be renewed by re-application.
• Change of circumstances: A registrant must notify the Viscount within 21 days of any change that disqualifies them from registration.

Filing and notification deadlines

• Foundations, winding up event: The qualified council member must notify the registrar within 28 days that the winding up event has happened, the period expired, or the application been made.
• ILP summary winding up: General partners must sign a memorandum to wind up within 28 days after signing the statement of solvency, and deliver the memorandum and statement to the registrar within 21 days.
• LLP statement of dissolution: The last remaining partner, secretary or remaining partners (as applicable) must deliver a signed statement of dissolution to the registrar within 28 days of dissolution; a partner obtaining a dissolution order must deliver a copy within 28 days.
• Statutory demand: A creditor serving a statutory demand on a company must allow 21 days after service before applying to the Royal Court to wind it up.

Creditor meetings and liquidator duties

• Creditors' meeting notice: In an insolvent winding up, notice of a creditors' meeting must generally be given (for foundations, within 28 days of finding insolvency; for ILPs and foundations the meeting is held between 14 and 28 days after notice), with advertisement in the Jersey Gazette at least 10 days beforehand.
• Statement of affairs: For ILPs, the liquidator or general partners must give creditors requested information free of charge and present a statement of affairs verified by affidavit at the meeting.
• Notice of appointment: A foundation liquidator appointed in a creditors' winding up must notify each creditor within 14 days of appointment and gather in and distribute assets in a timely manner.
• Annual account: Where a foundation creditors' winding up runs beyond 12 months, the liquidator must call an annual creditors' meeting within 3 months of each anniversary and present an account.
• Disclosure in communications: A foundation or LLP in winding up must state that fact in all written communications, including electronic ones.

Records and standing LLP duties

• Record retention: Records of a dissolved foundation may be directed to be retained for up to 10 years; records of a dissolved LLP and its insolvency manager must be kept at least 10 years after cancellation of registration.
• Cooperation: Partners, officers and others must cooperate with an insolvency manager (and, for LLPs, the Minister, Commission or an inspector); failure to do so is an offence.
• LLP financial provision: The JFSC guidance note states every Jersey LLP must maintain a 5,000,000 pound financial provision from a bank or insurance company, applied pro rata in an insolvent winding up, failing which partners become liable to the full extent of their assets.
• LLP annual declaration: The designated partner must deliver an annual declaration to the Registrar before the end of February each year, listing every person who was a partner on 1 January.

Sources: Companies (General Provisions) (Jersey) Order 2002 · Foundations (Winding up) (Jersey) Regulations 2009 · Incorporated Limited Partnerships (Jersey) Regulations 2011 · Limited Liability Partnerships (Dissolution and Winding Up) (Jersey) Regulations 2018 · Guidance Note: Limited Liability Partnerships (Jersey) Law 1997

Exemptions and carve-outs

These instruments are procedural codes and provide few blanket exemptions from insolvency processes. The main distinctions are between solvent and insolvent routes rather than carve-outs from scope.

• Solvent and summary routes: An ILP may use summary winding up where it has no liabilities or can discharge its liabilities in full within (or after) six months, supported by a statement of solvency; foundations and LLPs likewise have solvent winding up procedures separate from the creditors' route.
• Conversion on insolvency: These lighter routes are not available where the entity is in fact insolvent: a solvent foundation winding up must convert to a creditors' winding up, and an LLP dissolution manager who finds the LLP insolvent must cease under Part 3 and proceed under Part 4.
• No LLP audit or accounts filing: The LLP guidance note states that no auditor appointment or filing of financial statements is required, though accounting records sufficient to show the financial position must be kept.
• Public statements: The individual notices about firms in liquidation are informational and expressly impose no new obligations on other regulated entities.

Sources: Foundations (Winding up) (Jersey) Regulations 2009 · Incorporated Limited Partnerships (Jersey) Regulations 2011 · Limited Liability Partnerships (Dissolution and Winding Up) (Jersey) Regulations 2018 · Guidance Note: Limited Liability Partnerships (Jersey) Law 1997 · Horizon Trustees (Jersey) Limited (2013-11-07) · Salsac Management Limited (2010-07-20) · Blue Swan Insurance (Jersey) Limited (2009-03-18) · Blue Swan Insurance (Jersey) Limited (2006-05-31) · Blue Swan Insurance (Jersey) Limited (2006-04-07)

Enforcement and penalties

The winding up regulations create criminal offences for false certification and for failing to meet procedural duties, while the company regime gives the Viscount investigative powers and the enforcement notices illustrate the Commission's public-statement and revocation powers.

Criminal offences

• False solvency certificates: For foundations and ILPs, signing and delivering a solvency (or no assets/no liabilities) certificate or statement without reasonable grounds is an offence punishable by up to 2 years imprisonment and a fine.
• Meeting and cooperation failures: An ILP liquidator or general partner who fails without reasonable excuse to comply with creditors' meeting obligations commits an offence carrying up to 2 years imprisonment and a fine; failure to cooperate with an LLP insolvency manager is also an offence.
• LLP penalty range: Breaches of LLP notice and filing duties range from a fine up to a level 3 fine, with up to 2 years imprisonment and a fine for the most serious breaches such as failure to cooperate, obstructing a search, or corrupt inducement.
• Late registration of Court Act: For ILPs, a person applying to void a dissolution must deliver the Royal Court's Act to the registrar within 14 days or face a fine.

Supervisory and enforcement powers

• Viscount oversight: The Viscount may investigate a liquidator's or administrator's conduct on complaint or own initiative, require information, documents and reports, and apply to the Court for relief.
• Court powers: The Royal Court may wind up entities (including on just and equitable grounds), order dissolution, and declare a dissolution void within 10 years.
• Public statements and revocation: The Commission has issued public statements under the Insurance Business Law and the Financial Services Law about firms in liquidation, and in the trust company cases indicated that registration would be revoked once winding up was complete.

Sources: Companies (General Provisions) (Jersey) Order 2002 · Foundations (Winding up) (Jersey) Regulations 2009 · Incorporated Limited Partnerships (Jersey) Regulations 2011 · Limited Liability Partnerships (Dissolution and Winding Up) (Jersey) Regulations 2018 · Guidance Note: Limited Liability Partnerships (Jersey) Law 1997 · Horizon Trustees (Jersey) Limited (2013-11-07) · Salsac Management Limited (2010-07-20) · Blue Swan Insurance (Jersey) Limited (2009-03-18) · Blue Swan Insurance (Jersey) Limited (2006-05-31) · Blue Swan Insurance (Jersey) Limited (2006-04-07)