Companies Act 1982

Link to law: https://legislation.gov.im/cms/images/LEGISLATION/PRINCIPAL/1982/1982-0002/CompaniesAct1982_3.pdf
Published: 2015-11-01

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Companies Act 1982

c i e
AT 2 of 1982

COMPANIES ACT 1982

Companies Act 1982 Index


c AT 2 of 1982 Page 3

c i e
COMPANIES ACT 1982

Index Section Page

PART I – ACCOUNTS AND AUDIT 7

1 Accounting records ........................................................................................................ 7
2 Profit and loss account and balance sheet ................................................................... 9
2A Private companies: exemption from requirement to lay accounts before
general meeting ............................................................................................................. 10
2B Right of shareholders to require laying of accounts ................................................ 10
3 General provisions as to contents and form of accounts ........................................ 11
3A Additional provisions concerning presentation of accounts .................................. 13
4 Obligation to lay group accounts before holding company ................................... 13
5 Form of group accounts ............................................................................................... 15
6 Contents of group accounts ......................................................................................... 15
7 Financial year of holding company and subsidiary ................................................ 16
8 Signing of balance sheet ............................................................................................... 16
9 Accounts and auditors’ report to be annexed to balance sheet .............................. 17
10 Directors’ report to be attached to balance sheet ..................................................... 17
10A Actuary’s certificate to be attached to balance sheet of certain insurers .............. 18
11 Right to receive copies of balance sheets and auditors’ report .............................. 18
12 Appointment and remuneration of auditors ............................................................ 20
12A Resolution not to appoint auditors ............................................................................ 21
13 Provisions as to resolutions relating to appointment and removal of
auditors .......................................................................................................................... 22
14 Qualifications of individual for appointment as auditor ........................................ 23
14A Qualifications of partnership for appointment as auditor ...................................... 23
14B Qualifications of body corporate for appointment as auditor ............................... 23
14C Qualifications of limited liability company for appointment as auditor .............. 24
14D Disqualification from appointment as auditor ......................................................... 25
14E Authorisations by the Isle of Man Financial Services Authority ........................... 26
14F Power of Isle of Man Financial Services Authority to amend qualifications ....... 27
14G Register of auditors ...................................................................................................... 28
14H Sections 14 to 14G: supplementary ............................................................................ 30
Index Companies Act 1982


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15 Auditors’ report and right of access to books and to attend and be heard at
meetings ......................................................................................................................... 30
16 Construction of references to documents annexed to accounts............................. 31
17 [Amends Table A and Table C of Schedule 1 to the Companies Act 1931.] ........... 32
17A [Repealed] ...................................................................................................................... 32
17B Public oversight ............................................................................................................ 32
17C Regulations concerning accounts and audit ............................................................. 33
PART II – MANAGEMENT 34

18 Number of directors ..................................................................................................... 34
19 Secretary ........................................................................................................................ 35
20 Statement of first directors and secretary to be delivered on application for
registration of company .............................................................................................. 35
21 Notification of changes in directors and secretary, etc ........................................... 36
22 Registered office of company ..................................................................................... 37
23 Default in delivering notice of allotment .................................................................. 37
24 to 27 ........................................................................................................................................ 38
PART III – MISCELLANEOUS AND GENERAL 38

28 [Substitutes section 5 of the Companies Act 1931.] .................................................... 38
29 [Repealed]...... ................................................................................................................ 38
30 [Substitutes sections 46 and 46A for section 46 of the Companies Act 1931.] ........ 38
31 [Repealed]. ..................................................................................................................... 38
32 [Amends section 109 of the Companies Act 1931.] .................................................... 38
33 to 34 [Repealed] .............................................................................................................. 38
35 Publication ..................................................................................................................... 38
36 [Repealed]. ..................................................................................................................... 38
37 Interpretation ................................................................................................................ 38
38 Amendments ................................................................................................................. 39
39 [Repealed]. ..................................................................................................................... 39
40 Short title ....................................................................................................................... 39
SCHEDULE 1 41

ACCOUNTS 41
Balance Sheet 41

Profit and Loss Account 45

Modifications of and Additions to Requirements as to Company’s own

Accounts 47

Consolidated Accounts of Holding Company and Subsidiaries 49

Companies Act 1982 Index


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SCHEDULE 2 53

SCHEDULE 3 53

ENDNOTES 55

TABLE OF LEGISLATION HISTORY 55
TABLE OF RENUMBERED PROVISIONS 55
TABLE OF ENDNOTE REFERENCES 55

Companies Act 1982 Section 1


c AT 2 of 1982 Page 7

c i e
COMPANIES ACT 1982

Received Royal Assent: 10 March 1982
Passed: 6 April 1982
Commenced: 6 April 1982
AN ACT
to amend the law relating to companies and for connected purposes.
GENERAL NOTE:
The maximum fines in this Act are as increased by the Fines Act
1986 and by the Criminal Justice (Penalties, Etc.) Act 1993 s 1.
PART I – ACCOUNTS AND AUDIT

1 Accounting records

[P1976/69/12]
(1) Every company shall cause accounting records to be kept in accordance
with the provisions of this section.
(2) The accounting records shall be sufficient to show and explain the
company’s transactions.
(3) The accounting records shall be such as to —
(a) disclose, within a reasonable time and with reasonable accuracy,
the financial position of the company at any time; and
(b) enable the directors to ensure that any balance sheet or profit and
loss account prepared by them complies with the requirements of
section 3 (balance sheet to give a true and fair view of the
company’s state of affairs and profit and loss account to give a
true and fair view of the company’s profit or loss, etc.).
(4) The accounting records shall in particular contain —
(a) entries from day to day of all sums of money received and
expended by the company and the matters in respect of which the
receipt and expenditure takes place;
(b) a record of the assets and liabilities of the company; and
Section 1 Companies Act 1982


Page 8 AT 2 of 1982 c

(c) where the company’s business involves dealing in goods, the
statements mentioned in subsection (5).
(5) The statements referred to in subsection (4)(c) are —
(a) statements of stock held by the company at the end of each
financial year of the company;
(b) all statements of stocktakings from which any such statement as is
mentioned in paragraph (a) has been or is to be prepared; and
(c) except in the case of goods sold by way of ordinary retail trade,
statements of all goods sold and purchased showing the goods
and the buyers and sellers in sufficient detail to enable the goods
and the buyers and sellers to be identified.
(6) Subject to subsection (7), the accounting records shall be kept at the
registered office of the company or at such other place as the directors of
the company think fit and shall at all times be open to inspection by the
officers of the company.
(7) If accounting records are kept at a place outside the Island by a company,
accounts and returns with respect to the business dealt with in the
accounting records so kept shall be sent to, and kept at a place in the
Island and shall at all times be open to inspection by the officers of the
company.1

(8) The accounts and returns to be sent to the Island in accordance with
subsection (7) shall be such as to —
(a) disclose with reasonable accuracy the financial position of the
business in question at intervals not exceeding 6 months; and
(b) enable the directors to ensure that any balance sheet or profit and
loss account prepared by them under section 2 complies with the
requirements of section 3.
(9) Subject to any direction with respect to the disposal of any records kept
by a company given under any rules made under section 276 of the
principal Act (winding up rules), any accounting records which a
company is required by this section to keep shall be preserved by it —
(a) in the case of a private company, for 3 years from the date on
which they are made; and
(b) in any other case, for 6 years from the date on which they are
made.
(10) If a company fails to comply with any provision of subsections (1) to (7),
every officer of the company who is in default shall be guilty of an
offence unless he shows that he acted honestly and that in the
circumstances in which the business of the company was carried on the
default was excusable; and if any officer of the company fails to take all
reasonable steps for securing compliance by the company with
Companies Act 1982 Section 2


c AT 2 of 1982 Page 9

subsection (9) or has intentionally caused any default by the company
thereunder he shall be guilty of an offence.
(11) Any person guilty of an offence under this section shall be liable —
(a) on conviction on information to imprisonment for a term not
exceeding 2 years, or to a fine, or to both;
(b) on summary conviction, to imprisonment for a term not
exceeding 6 months, or to a fine not exceeding £5,000, or to both.
2 Profit and loss account and balance sheet

[P1948/38/148]
(1) Subject to subsection (2), the directors of every company shall at some
date not later than 18 months after the incorporation of the company and
subsequently once at least in every calendar year lay before the company
in general meeting a profit and loss account or, in the case of a company
not trading for profit, an income and expenditure account for the period,
in the case of the first account, since the incorporation of the company,
and, in any other case, since the preceding account, made up to a date
not earlier than the date of the meeting by more than —
(a) 9 months, in the case of a private company; or
(b) 6 months, in the case of a public company.2

(2) The Isle of Man Financial Services Authority, if for any special reason it
thinks fit so to do, may —
(a) in the case of any company, extend the period of 18 months;
(b) in the case of a private company, extend the period of 9 months
with respect to any year; or
(c) in the case of a public company, extend the period of 6 months
with respect to any year.3

(3) The directors shall cause to be made out in every calendar year, and to be
laid before the company in general meeting, a balance sheet as at the date
to which the profit and loss account or the income and expenditure
account, as the case may be, is made up.
(4) Subject to subsection (5), if any person being a director of a company fails
to take all reasonable steps to comply with the provisions of this section,
he shall be guilty of an offence and shall, in respect of each offence, be
liable —
(a) on conviction on information, to imprisonment for a term not
exceeding 2 years or to a fine, or to both;
(b) on summary conviction to imprisonment for a term not exceeding
6 months or to a fine not exceeding £5,000, or to both.
(5) In any proceedings under subsection (4) —
Section 2 Companies Act 1982


Page 10 AT 2 of 1982 c

(a) it shall be a defence to prove that the director had reasonable
grounds to believe and did believe that a competent and reliable
person was charged with the duty of seeing that the provisions of
this section were complied with and was in a position to
discharge that duty; and
(b) a person shall not be sentenced to imprisonment for such an
offence unless, in the opinion of the court dealing with the case,
the offence was committed wilfully.
2A Private companies: exemption from requirement to lay accounts before

general meeting

(1) This section shall apply to a private company which by provision in its
Articles so elects.
(2) The accounts and reports of a company to which this section applies
need not be laid before the company in general meeting.
(3) In respect of a company to which this section applies —
(a) the references in section 127(1) of the principal Act and in this Act
to the laying of accounts and documents required to be annexed
to the balance sheet before the company in general meeting; and
(b) the requirement in section 15(2) that the auditors’ report be read
before the company in general meeting;
shall be read as references to the sending of copies of the accounts
and the report to members and others under section 11(1).
(4) This section applies in relation to the laying of group accounts before a
holding company as it applies in relation to the laying of a company’s
own accounts.
(5) If, by reason of the amendment of the Articles of a company, the
accounts and reports of the company —
(a) cease to be required to be laid before the company in general
meeting; or
(b) will be required to be so laid,
the amendment shall have effect in respect of the accounts and
reports for the financial year in which the amendment takes effect
and subsequent financial years.4

2B Right of shareholders to require laying of accounts

(1) Where section 2A applies to a company, the copies of accounts and
reports sent out in accordance with section 11(1) shall be accompanied, in
the case of a member of the company, by a notice informing him of his
right to require the laying of the accounts and reports before a general
meeting.
Companies Act 1982 Section 3


c AT 2 of 1982 Page 11

(2) Section 11(5) (penalty for default) applies in relation to the requirement
in subsection (1) as to the requirements contained in that section.
(3) Before the end of the period of 28 days beginning with the day on which
the accounts and reports are sent out in accordance with section 11(l),
any member of the company may by notice in writing deposited at the
registered office of the company require that a general meeting be held
for the purpose of laying the accounts and reports before the company.
(4) If the directors do not within 21 days from the date of the deposit of such
a notice proceed duly to convene a meeting, the person who deposited
the notice may do so himself.
(5) A meeting so convened shall not be held more than 3 months from that
date and shall be convened in the same manner, as nearly as possible, as
that in which meetings are to be convened by directors.
(6) Where the directors do not duly convene a meeting, any reasonable
expenses incurred by reason of that failure by the person who deposited
the notice shall be made good to him by the company, and shall be
recouped by the company out of any fees, or other remuneration in
respect of their services, due or to become due to such of the directors as
were in default.
(7) The directors shall be deemed not to have duly convened a meeting if
they convene a meeting for a date more than 28 days after the date of the
notice convening it.5

3 General provisions as to contents and form of accounts

[P1948/38/149]
(1) Subject to section 3A, every balance sheet of a company shall give a true
and fair view of the state of affairs of the company as at the end of its
financial year, and every profit and loss account of a company shall give
a true and fair view of the profit or loss of the company for the financial
year.6

(2) A company’s balance sheet and profit and loss account shall comply with
the requirements of Schedule 1, so far as applicable thereto.
(3) Save as expressly provided in this section or in Part III of Schedule 1, the
requirements of subsection (2) and Schedule 1, shall be without prejudice
either to the general requirements of subsection (1) or to any other
requirements of this Act.
(3A) If in special circumstances compliance with the provisions of subsection
(2) is inconsistent with the requirement to give a true and fair view in
accordance with subsection (1), the directors must depart from that
provision to the extent necessary to give a true and fair view.7

(3B) Particulars of a departure under subsection (3A), the reasons for it and its
effect must be given in a note to the accounts.8

Section 3 Companies Act 1982


Page 12 AT 2 of 1982 c

(4) The court may, on the application or with the consent of a company’s
directors, modify in relation to that company any of the requirements of
this Act as to the matters to be stated in a company’s balance sheet or
profit and loss account (except the requirements of subsection (1)) for the
purpose of adapting them to the circumstances of the company.
(5) Subsections (1) and (2) shall not apply to a company’s profit and loss
account if —
(a) the company has subsidiaries; and
(b) the profit and loss account is framed as a consolidated profit and
loss account dealing with all or any of the company’s subsidiaries
as well as the company and —
(i) complies with the requirements of this Act relating to
consolidated profit and loss accounts; and
(ii) shows how much of the consolidated profit or loss for the
financial year is dealt with in the accounts of the company.
(6) Subject to subsection (7), if any person being a director of a company fails
to take all reasonable steps to secure compliance as respects any accounts
laid before the company in general meeting with the provisions of this
section and with the other requirements of this Act as to the matters to be
stated in accounts, he shall be guilty of an offence and shall, in respect of
each offence, be liable —
(a) on conviction on information, to imprisonment for a term not
exceeding 2 years or to a fine, or to both;
(b) on summary conviction to imprisonment for a term not exceeding
6 months or to a fine not exceeding £5,000 or to both.
(7) In any proceedings under subsection (6) —
(a) it shall be a defence to prove that the director had reasonable
grounds to believe and did believe that a competent and reliable
person was charged with the duty of seeing that the said
provisions or the said other requirements, as the case may be,
were complied with and was in a position to discharge that duty;
and
(b) a person shall not be sentenced to imprisonment for any such
offence unless, in the opinion of the court dealing with the case,
the offence was committed wilfully.
(8) For the purposes of this section and the following provisions of this Act,
except where the context otherwise requires —
(a) any reference to a balance sheet or profit and loss account shall
include any notes thereon or document annexed thereto giving
information which is required by this Act and is thereby allowed
to be so given; and
Companies Act 1982 Section 4


c AT 2 of 1982 Page 13

(b) any reference to a profit and loss account shall be taken, in the
case of a company not trading for profit, as referring to its income
and expenditure account, and references to profit or to loss and, if
the company has subsidiaries, references to a consolidated profit
and loss account shall be construed accordingly.
3A Additional provisions concerning presentation of accounts

(1) Unless regulations made under subsection (2) require compliance with
standards or the adoption of practices which are not consistent with
generally accepted accounting principles or practice, in determining how
amounts are presented within items within the profit and loss account
(or income and expenditure account) and balance sheet the directors of a
company must have regard to the substance of the reported transaction
or arrangement in accordance with generally accepted accounting
principles or practice.
(2) The Isle of Man Financial Services Authority may make regulations
which, in such circumstances and for such purposes as are prescribed,
require compliance with standards or the adoption of practices
recommended by a body specified in the regulations, and which may in
particular require compliance with standards or the adoption of practices
recommended by that body from time to time (that is, after as well as
before the making of the regulations).9

(3) Regulations under subsection (2) shall not come into operation unless
they are approved by Tynwald.
(4) In this section, “generally accepted accounting principles or practice”
means accounting standards and practices recommended by —
(a) the International Accounting Standards Board (International
Financial Reporting Standards);
(b) the Accounting Standards Board (United Kingdom Accounting
Standards) (UK GAAP); or
(c) the Financial Accounting Standards Board, the Government
Accounting Standards Board or the Federal Accounting Standards
Advisory Board (US GAAP).10

4 Obligation to lay group accounts before holding company

[P1948/38/150]
(1) Where at the end of its financial year a company has subsidiaries,
accounts or statements (in this Act referred to as “group accounts”)
dealing as hereinafter mentioned with the state of affairs and profit or
loss of the company and the subsidiaries shall, subject to subsection (2),
be laid before the company in general meeting when the company’s own
balance sheet and profit and loss account are so laid.
Section 4 Companies Act 1982


Page 14 AT 2 of 1982 c

(2) Notwithstanding anything in subsection (1) —
(a) group accounts shall not be required where the company is at the
end of its financial year the wholly owned subsidiary of another
body corporate incorporated in the Island; and
(b) subject to subsection (3), group accounts need not deal with a
subsidiary of the company if the company’s directors are of
opinion that —
(i) it is impracticable, or would be of no real value to members
of the company, in view of the insignificant amounts
involved, or would involve expense or delay out of
proportion to the value to members of the company; or
(ii) the result would be misleading, or harmful to the business
of the company or any of its subsidiaries; or
(iii) the business of the holding company and that of the
subsidiary are so different that they cannot reasonably be
treated as a single undertaking;
and, if the directors are of such an opinion about each of the company’s
subsidiaries, group accounts shall not be required.
(3) The approval of the Isle of Man Financial Services Authority shall be
required for not dealing in group accounts with a subsidiary on the
ground that the result would be harmful or on the ground of the
difference between the business of the holding company and that of the
subsidiary.11

(4) Subject to subsection (5), if any person being a director of a company fails
to take all reasonable steps to secure compliance as respects the company
with the provisions of this section, he shall be guilty of an offence and
shall, in respect of each offence, be liable —
(a) on conviction on information, to imprisonment for a term not
exceeding 2 years or to a fine or to both;
(b) on summary conviction, to imprisonment for a term not
exceeding 6 months or to a fine not exceeding £5,000 or to both.
(5) In any proceedings under subsection (4) —
(a) it shall be a defence to prove that the director had reasonable
grounds to believe and did believe that a competent and reliable
person was charged with the duty of seeing that the requirements
of this section were complied with and was in a position to
discharge that duty; and
(b) a person shall not be sentenced to imprisonment for an offence
under this section unless, in the opinion of the court dealing with
the case, the offence was committed wilfully.
(6) For the purposes of this section a body corporate shall be deemed to be
the wholly owned subsidiary of another if it has no members except that
Companies Act 1982 Section 5


c AT 2 of 1982 Page 15

other and that other’s wholly owned subsidiaries and its or their
nominees.
5 Form of group accounts

[P1948/38/151]
(1) Subject to subsection (2), the group accounts laid before a holding
company shall be consolidated accounts comprising —
(a) a consolidated balance sheet dealing with the state of affairs of the
company and all the subsidiaries to be dealt with in group
accounts;
(b) a consolidated profit and loss account dealing with the profit or
loss of the company and those subsidiaries.
(2) If the company’s directors are of opinion that it is better for the
purpose —
(a) of presenting the same or equivalent information about the state
of affairs and profit or loss of the company and those subsidiaries;
and
(b) of so presenting it that it may be readily appreciated by the
company’s members;
the group accounts may be prepared in a form other than that required
by subsection (1), and in particular may consist of more than one set of
consolidated accounts dealing respectively with the company and one
group of subsidiaries and with other groups of subsidiaries or of
separate accounts dealing with each of the subsidiaries, or of statements
expanding the information about the subsidiaries in the company’s own
accounts, or any combination of those forms.
(3) The group accounts may be wholly or partly incorporated in the
company’s own balance sheet and profit and loss account.
6 Contents of group accounts

[P1948/38/152]
(1) The group accounts laid before a company shall give a true and fair view
of the state of affairs and profit or loss of the company and the
subsidiaries dealt with thereby as a whole, so far as concerns the
members of the company.
(2) Where the financial year of a subsidiary does not coincide with that of
the holding company, the group accounts shall, unless the Isle of Man
Financial Services Authority on the application or with the consent of the
holding company’s directors otherwise directs, deal with the subsidiaries
state of affairs as at the end of its financial year ending with or last before
that of the holding company, and with the subsidiary’s profit or loss for
that financial year.12

Section 7 Companies Act 1982


Page 16 AT 2 of 1982 c

(3) Subject to subsection (4) and without prejudice to subsection (1), the
group accounts, if prepared as consolidated accounts, shall comply with
the requirements of Schedule 1 so far as applicable thereto, and if not so
prepared shall give the same or equivalent information.
(3A) If in special circumstances compliance with the provisions of subsection
(3) is inconsistent with the requirement to give a true and fair view in
accordance with subsection (1), the directors must depart from that
provision to the extent necessary to give a true and fair view.13

(3B) Particulars of a departure under subsection (3A), the reasons for it and its
effect must be given in a note to the accounts.14

(4) The Isle of Man Financial Services Authority may, on the application or
with the consent of a company’s directors, modify the requirements of
Schedule 1 in relation to that company for the purpose of adapting them
to the circumstances of the company.15

(5) Section 3A applies in respect of group accounts in the same way it
applies to the accounts of companies.16

7 Financial year of holding company and subsidiary

[P1948/38/153]
(1) A holding company’s directors shall secure that except where in their
opinion there are good reasons against it, the financial year of each of its
subsidiaries shall coincide with the company’s own financial year.
(2) Where it appears to the Isle of Man Financial Services Authority
desirable for a holding company or a holding company’s subsidiary to
extend its financial year so that the subsidiary’s financial year may end
with that of the holding company, and for that purpose to postpone the
submission of the relevant accounts to a general meeting from one
calendar year to the next, the Isle of Man Financial Services Authority
may on the application or with the consent of the directors of the
company whose financial year is to be extended direct that, in the case of
that company, the submission of accounts to a general meeting, the
holding of an annual general meeting shall not be required in the earlier
of the said calendar years.17

8 Signing of balance sheet

[P1948/38/155]
(1) Every balance sheet of a company shall be signed on behalf of the board
by two of the directors of the company.
(2) If any copy of a balance sheet which has not been signed as required by
this section is issued, circulated or published, the company and every
officer of the company who is in default shall be guilty of an offence and
shall be liable on summary conviction to a fine not exceeding £2,500.
Companies Act 1982 Section 9


c AT 2 of 1982 Page 17

9 Accounts and auditors’ report to be annexed to balance sheet

[P1948/38/156]
(1) The profit and loss account and, so far as not incorporated in the balance
sheet or profit and loss account, any group accounts laid before the
company in general meeting, shall be annexed to the balance sheet, and
the auditors’ report shall be attached thereto.
(2) Any accounts so annexed shall be approved by the board of directors
before the balance sheet is signed on their behalf.
(3) If any copy of a balance sheet is issued, circulated or published without
having annexed thereto a copy of the profit and loss account or any
group accounts required by this section to be so annexed, or without
having attached thereto a copy of the auditors’ report, the company and
every officer of the company who is in default shall be guilty of an
offence and shall be liable on summary conviction to a fine not exceeding
£2,500.
10 Directors’ report to be attached to balance sheet

[P1948/38/157]
(1) There shall be attached to every balance sheet laid before a company in
general meeting a report by the directors with respect to the state of the
company’s affairs, the amount, if any, which they recommend should be
paid by way of dividend, and the amount, if any, which they propose to
carry to reserves within the meaning of Schedule 1.
(2) The said report shall deal, so far as is material for the appreciation of the
state of the company’s affairs by its members and will not in the
directors’ opinion be harmful to the business of the company or of any of
its subsidiaries, with any change during the financial year in the nature
of the company’s business, or in the company’s subsidiaries, or in the
classes of business in which the company has an interest, whether as
member of another company or otherwise.
(3) Subject to subsection (4), if any person being a director of a company fails
to take all reasonable steps to comply with the provisions of subsection
(1), he shall be guilty of an offence and shall, in respect of each offence,
be liable —
(a) on conviction on information to imprisonment for a term not
exceeding 2 years or to a fine or to both;
(b) on summary conviction to imprisonment for a term not exceeding
6 months or to a fine not exceeding £5,000 or to both.
(4) In any proceedings under subsection (3) —
(a) if the proceedings are in respect of an offence under subsection
(1), it shall be a defence to prove that the director had reasonable
grounds to believe and did believe that a competent and reliable
Section 11 Companies Act 1982


Page 18 AT 2 of 1982 c

person was charged with the duty of seeing that the provisions of
that subsection were complied with and was in a position to
discharge that duty; and
(b) a person shall not be liable to be sentenced to imprisonment for
such an offence unless, in the opinion of the court dealing with
the case, the offence was committed wilfully.
10A Actuary’s certificate to be attached to balance sheet of certain insurers

(1) In the case of an insurance company which carries on long term business
there shall be attached to every balance sheet laid before the company in
general meeting a certificate in such form as is prescribed by regulations
made by the Isle of Man Financial Services Authority, which is signed by
the actuary to the company.18

(2) In this section —
“actuary to the company
” means the person appointed pursuant to section 18 of
the Insurance Act 2008;19

“long term business
” has the meaning given by section 54 of the Insurance Act
2008.20

(3) Subsections (3) and (4) of section 10 shall apply to this section as they
apply to that section.21

11 Right to receive copies of balance sheets and auditors’ report

[P1948/38/158; XIII p235/129]
(1) Subject to subsections (2) and (3), a copy of every balance sheet,
including every document required by law to be annexed thereto, which
is to be laid before a company in general meeting, together with a copy of
the auditors’ report, shall, not less than 14 days before the date of the
meeting, be sent to every member of the company (whether he is or is
not entitled to receive notices of general meetings of the company), every
holder of debentures of the company (whether he is or is not so entitled)
and all persons other than members or holders of debentures of the
company, being persons so entitled.22

(2) Subsection (1) is subject to the following provisions —
(a) in the case of a company not having a share capital, it shall not
require the sending of a copy of the documents aforesaid to a
member of the company who is not entitled to receive notices of
general meetings of the company or to a holder of debentures of
the company who is not so entitled;
(b) it shall not require a copy of those documents to be sent —
(i) to a member of the company or a holder of debentures of
the company, being in either case a person who is not
Companies Act 1982 Section 11


c AT 2 of 1982 Page 19

entitled to receive notices of general meetings of the
company and of whose address the company is unaware;
(ii) to more than one of the joint holders of any shares or
debentures none of whom are entitled to receive such
notices; or
(iii) in the case of joint holders of any shares or debentures
some of whom are and some of whom are not entitled to
receive such notices, to those who are not so entitled.
(3) If the copies of the documents mentioned in subsection (1) are sent less
than 14 days before the date of the meeting, they shall, notwithstanding
that fact, be deemed to have been duly sent if it is so agreed by all the
members entitled to attend and vote at the meeting.23

(4) Any member of a company, whether he is or is not entitled to have sent
to him copies of the company’s balance sheets, and any holder of
debentures of the company, whether he is or is not so entitled, shall be
entitled to be furnished on demand without charge with a copy of the
last balance sheet of the company, including every document required by
law to be annexed thereto, together with a copy of the auditors’ report on
the balance sheet.
(5) If default is made in complying with subsection (1) the company and
every officer of the company who is in default shall be guilty of an
offence and shall be liable on summary conviction to a fine not exceeding
£2,500.
(6) If, when any person makes a demand for any document with which he is
by virtue of subsection (4) entitled to be furnished, default is made in
complying with the demand within 14 days after the making thereof, the
company and every officer of the company who is in default shall be
guilty of an offence and shall be liable on summary conviction to a fine
not exceeding £2,500.24

(7) It shall be a defence to any proceedings under this section, to prove that
that person had already made a demand for and been furnished with a
copy of the document.
(8) The foregoing provisions shall not have effect in relation to a balance
sheet of a private company laid before it before the commencement of
this Act, and the right of any person to be furnished with a copy of any
such balance sheet and the liability of the company in respect of a failure
to satisfy that right shall be the same as they would have been if this Act
had not passed.
Section 12 Companies Act 1982


Page 20 AT 2 of 1982 c

12 Appointment and remuneration of auditors

[P1948/38/159]
(1) Every company shall at each annual general meeting appoint an auditor
or auditors to hold office from the conclusion of that, until the conclusion
of the next, annual general meeting.
(2) Subject to subsection (3), at any annual general meeting a retiring
auditor, however appointed, shall be reappointed without any resolution
being passed unless —
(a) he is not qualified for reappointment; or
(b) a resolution has been passed at that meeting appointing
somebody instead of him or providing expressly that he shall not
be reappointed; or
(c) he has given the company notice in writing of his unwillingness
to be reappointed.
(3) Where notice is given of an intended resolution to appoint some person
or persons in place of a retiring auditor, and by reason of the death,
incapacity or disqualification of that person or of all those persons, as the
case may be, the resolution cannot be proceeded with, the retiring
auditor shall not be automatically reappointed by virtue of this
subsection.
(4) Where at an annual general meeting no auditors are appointed or
reappointed, the Isle of Man Financial Services Authority, on the
application of any person, may appoint an auditor to fill the vacancy.25

(5) Subject to subsection (6), the first auditors of a company may be
appointed by the directors at any time before the first annual general
meeting, and auditors so appointed shall hold office until the conclusion
of that meeting.
(6) At the first annual general meeting —
(a) the company may remove any such auditors and appoint in their
place any other persons who have been nominated for
appointment by any member of the company and of whose
nomination notice has been given to the members of the company
not less than 14 days before the date of the meeting; and
(b) if the directors fail to exercise their powers under subsection (5)
the company in general meeting may appoint the first auditors,
and thereupon the said powers of the directors shall cease.
(7) The directors may fill any casual vacancy in the office of auditor, but
while any such vacancy continues, the surviving or continuing auditor or
auditors, if any, may act.
(8) The remuneration of the auditors of a company —
Companies Act 1982 Section 12


c AT 2 of 1982 Page 21

(a) in the case of an auditor appointed by the directors or by the Isle
of Man Financial Services Authority, may be fixed by the directors
or by the Isle of Man Financial Services Authority as the case may
be;26

(b) subject to the foregoing paragraph, shall be fixed by the company
in general meeting or in such manner as the company in general
meeting may determine.
(9) For the purposes of subsection (8) any sums paid by the company in
respect of the auditors’ expenses shall be deemed to be included in the
expression “remuneration”.27

12A Resolution not to appoint auditors

(1) A company may by special resolution make itself exempt from the
provisions of this Act relating to the audit of accounts in the following
cases —
(a) if the company has been dormant from the time of its formation,
by a special resolution passed before the first general meeting of
the company at which annual accounts are laid;
(b) if the company has been dormant since the end of the previous
financial year and is not required to prepare group accounts for
that year, by a special resolution passed at a general meeting of
the company at which the annual accounts for that year are laid.
(2) A company may not pass such a resolution if it is —
(a) a public company,
(b) a deposit taking or insurance company; or28

(c) a permitted person authorised to undertake investment business
or to provide services to collective investment schemes under the
Financial Services Act 2008.29

(3) A company is “dormant
” during a period in which no significant
accounting transaction occurs, that is, no transaction which is required
by section 1 to be entered in the company’s accounting records; and a
company ceases to be dormant on the occurrence of such a transaction.
For this purpose there shall be disregarded any transaction arising from
the taking of shares in the company by a subscriber to the memorandum
in pursuance of an undertaking of his in the memorandum.
(4) Where a company is, at the end of a financial year, exempt by virtue of
this section from the provisions of this Part relating to the audit of
accounts —
(a) section 11 (right to receive or demand copies of accounts and
reports) has effect with the omission of references to the auditors’
report; and
Section 13 Companies Act 1982


Page 22 AT 2 of 1982 c

(b) no copies of an auditors’ report need be laid before the company
in general meeting.
(5) Where a company which is exempt by virtue of this section from the
provisions of this Act relating to the audit of accounts —
(a) ceases to be dormant, or
(b) would no longer qualify (for any other reason) to make itself
exempt by passing a resolution under this section,
it shall thereupon cease to be so exempt.30

13 Provisions as to resolutions relating to appointment and removal of

auditors

[P1948/38/160]
(1) Notice of 21 days shall be required for a resolution at a company’s
annual general meeting appointing as auditor a person other than a
retiring auditor or providing expressly that a retiring auditor shall not be
reappointed.
(2) On receipt of notice of such an intended resolution as aforesaid, the
company shall forthwith send a copy thereof to the retiring auditor (if
any).
(3) Subject to subsection (4), where notice is given of such an intended
resolution as aforesaid and the retiring auditor makes with respect to the
intended resolution representations in writing to the company (not
exceeding a reasonable length) and requests their notification to
members of the company, the company shall, unless the representations
are received by it too late for it to do so —
(a) in any notice of the resolution given to members of the company,
state the fact of the representations having been made; and
(b) send a copy of the representations to every member of the
company to whom notice of the meeting is sent (whether before or
after receipt of the representations by the company);
and if a copy of the representations is not sent as aforesaid
because received too late or because of the company’s default, the
auditor may (without prejudice to his right to be heard orally)
require that the representations shall be read out at the meeting.
(4) Copies of the representations need not be sent out and the
representations need not be read out at the meeting if, on the application
either of the company or of any other person who claims to be aggrieved,
the court is satisfied that the rights conferred by this section are being
abused to secure needless publicity for defamatory matter; and the court
may order the company’s costs on an application under this section to be
paid in whole or in part by the auditor, notwithstanding that he is not a
party to the application.
Companies Act 1982 Section 14


c AT 2 of 1982 Page 23

(5) Subsections (3) and (4) shall apply to a resolution to remove the first
auditors by virtue of section 12(6) as it applies in relation to a resolution
that a retiring auditor shall not be reappointed.31

14 Qualifications of individual for appointment as auditor

(1) An individual is qualified for appointment as auditor of a company if the
individual is a member of a recognised accountancy body.
(2) An individual is also qualified for appointment as auditor of a company
if he or she is authorised by the Isle of Man Financial Services Authority
under section 14E to be so appointed.32
33

14A Qualifications of partnership for appointment as auditor

(1) A partnership is qualified for appointment as auditor of a company if all
of the partners are so qualified.
(2) A partnership is also qualified for appointment as auditor of a company
if —
(a) at least half in number of the partners are —
(i) individuals who are members of recognised accountancy
bodies, or are authorised under section 14E;
(ii) partnerships which are themselves qualified for
appointment as auditor of a company; or
(iii) bodies corporate or limited liability companies which are
qualified for appointment as auditor of a company;
(b) at least 50 per cent of the voting rights in the partnership and, if it
has a management body, in that body are held by persons
specified in paragraph (a); and
(c) each of the partners who examines or reports on the accounts of
the company pursuant to section 15, or who supervises the
examination of or report on such accounts, is an individual who is
a member of a recognised accountancy body or is authorised
under section 14E.
(3) A partnership is also qualified for appointment as auditor of a company
if the partnership is authorised by the Isle of Man Financial Services
Authority under section 14E to be so appointed.34
35

14B Qualifications of body corporate for appointment as auditor

(1) A body corporate is qualified for appointment as auditor of a company
if —
(a) each of the persons who are responsible to it for examining or
reporting on the accounts of the company pursuant to section 15,
or for supervising the examination of or report on such accounts,
Section 14 Companies Act 1982


Page 24 AT 2 of 1982 c

is an individual who is a member of a recognised accountancy
body or is authorised under section 14E; and
(b) the body corporate is controlled by persons or partnerships
specified in subsection (3).
(2) A body corporate is also qualified for appointment as auditor of a
company if it is authorised by the Isle of Man Financial Services
Authority under section 14E to be so appointed.36

(3) Subsection (1)(b) refers to —
(a) individuals who are members of recognised accountancy bodies,
or are authorised under section 14E;
(b) partnerships which are qualified for appointment as auditors of
companies, or are authorised under section 14E; and
(c) bodies corporate or limited liability companies which are
themselves qualified for appointment as auditors of companies, or
are authorised under section 14E.
(4) For the purposes of subsection (1), a body corporate is controlled by
persons or partnerships specified in subsection (3) if —
(a) they constitute at least half in number of the members of the body
corporate;
(b) they hold at least 50 per cent of the voting rights of each class of
members;
(c) at least half in number of the directors are individuals specified in
subsection (3)(a); or
(d) at least 50 per cent of the voting rights in the board of directors,
committee or other management body of the body corporate are
held by persons or partnerships specified in subsection (3).37

14C Qualifications of limited liability company for appointment as auditor

(1) A limited liability company is qualified for appointment as auditor of a
company if —
(a) each of the persons who are responsible to it for examining or
reporting on the accounts of the company pursuant to section 15,
or for supervising the examination of or report on such accounts,
is an individual who is a member of a recognised accountancy
body or is authorised under section 14E; and
(b) the limited liability company is controlled by persons or
partnerships specified in subsection (3).
(2) A limited liability company is also qualified for appointment as auditor
of a company if it is authorised by the Isle of Man Financial Services
Authority under section 14E to be so appointed.38

(3) Subsection (1)(b) refers to —
Companies Act 1982 Section 14


c AT 2 of 1982 Page 25

(a) individuals who are members of recognised accountancy bodies,
or are authorised under section 14E;
(b) partnerships which are qualified for appointment as auditors of
companies, or are authorised under section 14E; and
(c) bodies corporate or limited liability companies which are
themselves qualified for appointment as auditors of companies, or
are authorised under section 14E.
(4) For the purposes of subsection (1), a limited liability company is
controlled by persons or partnerships specified in subsection (3) if —
(a) they constitute at least half in number of the members of the
limited liability company; or
(b) they hold at least 50 per cent of the voting rights of each class of
members.39

14D Disqualification from appointment as auditor

(1) This section applies notwithstanding sections 14 to 14C.
(2) A person is disqualified from appointment as auditor of a company if the
person is —
(a) an officer, secretary or servant of the company;
(b) a partner or employee of an officer, secretary or servant of the
company;
(c) a person against whom a disqualification order under section 26
of the Companies Act 1992 is in force; or40

(d) a person who, on any ground described in paragraph (a), (b) or
(c), is disqualified from appointment as auditor of any other body
corporate which is —
(i) a subsidiary or holding company of the company; or
(ii) a subsidiary of the company’s holding company,
or who would be so disqualified if that other body
corporate were a company.
(3) A partnership is disqualified from appointment as auditor of a company
if any of the partners is —
(a) a person who is disqualified under subsection (2) from such an
appointment; or
(b) the company whose accounts are to be audited, or a holding
company or subsidiary of that company, or a subsidiary of any
such holding company.
(4) A body corporate is disqualified from appointment as auditor of a
company if —
Section 14 Companies Act 1982


Page 26 AT 2 of 1982 c

(a) any of the individuals specified in section 14B(1)(a) in relation to
that company, or any of its shareholders or directors, is a person
who is disqualified under subsection (2) from such an
appointment; or
(b) the company whose accounts are to be audited, or a holding
company or subsidiary of that company, or a subsidiary of any
such holding company, holds shares in the body corporate.
(5) A limited liability company is disqualified from appointment as auditor
of a company if —
(a) any of the individuals specified in section 14C(1)(a) in relation to
that company, or any of its members, is a person who is
disqualified under subsection (2) from such an appointment; or
(b) the company whose accounts are to be audited, or a holding
company or subsidiary of that company, or a subsidiary of any
such holding company, is a member of the limited liability
company.
(6) If a person or partnership —
(a) has been appointed as auditor of a company; and
(b) during his or her or its term of office becomes, to his or her or its
knowledge, disqualified from the appointment,
that person or partnership shall thereupon vacate the office and
give notice to the company that by reason of that disqualification
he, she or it has done so.41

14E Authorisations by the Isle of Man Financial Services Authority
42

(1) An applicant for authorisation under this section to be appointed as
auditor of a company (including a company within the meaning of the
Companies Act 2006 as well as a company within the meaning of this Act)
shall provide such information and documents in support of the
application as the Isle of Man Financial Services Authority may require.43

(2) The Isle of Man Financial Services Authority may give or may refuse to
give an authorisation under this section.44

(3) An authorisation under this section may be given subject to conditions.
(4) Where an authorisation has been given under this section, the Isle of Man
Financial Services Authority may at any time —
(a) revoke or suspend the authorisation;
(b) make that authorisation subject to conditions or further
conditions; or
(c) vary or revoke any condition.45

Companies Act 1982 Section 14


c AT 2 of 1982 Page 27

(5) Section 32 of the Financial Services Act 2008 (appeals to the Financial
Services Tribunal) shall apply in respect of a decision of the Isle of Man
Financial Services Authority under subsections (2) to (4) as it applies in
respect of a decision referred to in that section.46

(6) A person or partnership who is authorised to be appointed as auditor of
a company under this section shall, when required by the Isle of Man
Financial Services Authority, provide it with such information and
documents as the Isle of Man Financial Services Authority thinks
necessary for the purpose of enabling or assisting it to discharge its
functions under this section.47

(7) Failure to comply with a requirement under subsection (6) shall be
sufficient grounds for the exercise of the power conferred by subsection
(4)(a).48

14F Power of Isle of Man Financial Services Authority to amend

qualifications
49

(1) In sections 14 to 14D, “recognised accountancy body
” means —
(a) the Institute of Chartered Accountants in England and Wales;
(b) the Institute of Chartered Accountants of Scotland;
(c) the Institute of Chartered Accountants in Ireland;
(d) the Association of Chartered Certified Accountants;
(e) the Chartered Institute of Public Finance and Accountancy; or
(f) the Association of Authorised Public Accountants.
(2) Notwithstanding sections 14 to 14D, the Isle of Man Financial Services
Authority may by order —
(a) amend the definition of “recognised accountancy body
” in
subsection (1) by adding, deleting or substituting any body;
(b) provide that any individual, partnership, body corporate or
limited liability company of a class described in the order shall, on
such conditions as are specified in the order, be qualified for
appointment as auditor of a company; or
(c) amend section 14D(2)(a), (b) or (c) by adding, deleting or
substituting persons who are disqualified from such an
appointment, or by varying the circumstances in which persons
described in that paragraph are disqualified from such an
appointment.50

(3) An order under subsection (2) shall not come into operation unless it is
approved by Tynwald.51

Section 14 Companies Act 1982


Page 28 AT 2 of 1982 c

14G Register of auditors

(1) The Isle of Man Financial Services Authority may by regulations (in this
section referred to as “register regulations”) provide for the keeping by
it, in such circumstances and for such purposes as are prescribed, of
registers of —
(a) persons or bodies who are —
(i) qualified for appointment as auditor of companies
(including companies within the meaning of the Companies
Act 2006 as well as companies within the meaning of this
Act); and
(ii) appointed to act as auditor of such companies; and
(b) persons or bodies authorised under section 14E.52

(2) Register regulations may make provision in respect of any of the
following matters —
(a) when and by whom an application to be entered in a register
referred to in subsection (1) must be made;
(b) the form, content and manner of such an application;
(c) the payment of such application and periodical fees as are
prescribed;
(d) the circumstances in which an application for registration may be
refused or have conditions attached to it;
(e) the circumstances when registration may be —
(i) suspended;
(ii) withdrawn; or
(iii) made subject to conditions; and
(f) provisions establishing a tribunal to hear appeals pursuant to
subsection (3).
(3) Where register regulations provide for the refusal, suspension or
withdrawal of registration or for the imposing of conditions in respect of
a registration, the regulations must make provision enabling a person
who is aggrieved by a decision to refuse, suspend or withdraw
registration or to impose conditions in relation to a registration to appeal,
in accordance with rules made under section 8 of the Tribunals Act 2006,
to an appropriate tribunal.
(4) Register regulations may require —
(a) persons or bodies registered in a register referred to in subsection
(1); or
(b) companies which appoint a person or body referred to in
paragraph (a) as auditor,
Companies Act 1982 Section 14


c AT 2 of 1982 Page 29

to provide such information to the Isle of Man Financial Services
Authority in such manner and at such times as the regulations
prescribe.53

(5) Register regulations may require persons or bodies registered to comply
with standards of or to adopt practices recommended by a body
specified in the regulations, and may in particular require compliance
with standards or the adoption of practices recommended by that body
from time to time (that is, as well after as before the making of the
regulations).
(6) Register regulations may require persons or bodies registered in a
register referred to in subsection (1) to comply with prescribed
conditions —
(a) requiring such persons or bodies and their employees and
agents —
(i) to hold prescribed qualifications;
(ii) to be authorised to practice as an auditor by a recognised
accountancy body (within the meaning of section 14F);
(b) concerning the appropriate level of competence and suitability of
the employees and agents of that person or body;
(c) requiring such persons or bodies to provide the Isle of Man
Financial Services Authority with the names of persons who are to
sign audit reports on their behalf;54

(d) requiring such persons or bodies to confirm to the Isle of Man
Financial Services Authority that any person who is to sign an
audit report on behalf of that person or body —
(i) is authorised to practice as an auditor by a recognised
accountancy body (within the meaning of section 14F);
(ii) is competent to perform that function; and
(iii) is duly authorised to perform that function by the person
or body;55

(e) requiring such persons or bodies to confirm compliance with any
prescribed conditions to the Isle of Man Financial Services
Authority.56

(7) Register regulations may provide for —
(a) the keeping of registers in electronic form;
(b) the filing of documents in both paper and electronic form; and
(c) the inspection of the registers.
(8) Subsections (2) to (7) are without prejudice to the generality of subsection
(1).
Section 15 Companies Act 1982


Page 30 AT 2 of 1982 c

(9) Regulations under this section shall not come into operation unless they
are approved by Tynwald.57

14H Sections 14 to 14G: supplementary

For the purposes of sections 14 to 14G —
(a) “limited liability company
” means a company established under
the Limited Liability Companies Act 1996 or a company established
outside the Island but whose characteristics correspond to a
limited liability company established under that Act;
(b) a limited liability company is deemed not to be a body corporate;
(c) the expressions “holding company
” and “subsidiary
” have the
same meaning as in section 1 of the Companies Act 1974.58

15 Auditors’ report and right of access to books and to attend and be

heard at meetings

[P1967/81/14]
(1) The auditors of a company shall make a report to the members on the
accounts examined by them, and on every balance sheet, every profit and
loss account and all group accounts laid before the company in general
meeting during their tenure of office.
(2) The auditors’ report shall be read before the company in general meeting
and shall be open to inspection by any member.
(3) The report shall —
(a) except in the case of a company that is entitled to avail itself, and
has availed itself, of the benefit of any of the provisions of Part III
of Schedule 1, state whether in the auditors’ opinion the
company’s balance sheet and profit and loss account and (if it is a
holding company submitting group accounts) the group accounts
have been properly prepared in accordance with the provisions of
the Companies Acts 1931 to 1974 and this Act and whether in
their opinion a true and fair view is given —
(i) in the case of the balance sheet, of the state of the
company’s affairs as at the end of its financial year;
(ii) in the case of the profit and loss account (if it be not framed
as a consolidated profit and loss account), of the
company’s profit or loss for its financial year;
(iii) in the case of group accounts submitted by a holding
company, of the state of affairs and profit or loss of the
company and its subsidiaries dealt with thereby, so far as
concerns members of the company;
(b) in the said excepted case, state whether in the auditors’ opinion
the company’s balance sheet and profit and loss account and (if it
Companies Act 1982 Section 16


c AT 2 of 1982 Page 31

is a holding company submitting group accounts) the group
accounts have been properly prepared in accordance with the
provisions of the Companies Acts 1931 to 1974 and this Act.
(4) It shall be the duty of the auditors of a company in preparing their report
under this section, to carry out such investigations as will enable them to
form an opinion as to the following matters, that is to say —
(a) whether proper books of account have been kept by the company
and proper returns adequate for their audit have been received
from branches not visited by them; and
(b) whether the company’s balance sheet and (unless it is framed as a
consolidated profit and loss account) profit and loss account are in
agreement with the books of account and returns;
and if the auditors are of opinion that proper books of account
have not been kept by the company or that proper returns
adequate for their audit have not been received from branches not
visited by them, or if the balance sheet and (unless it is framed as
a consolidated profit and loss account) profit and loss account are
not in agreement with the books of account and returns, the
auditors shall state that fact in their report.
(5) Every auditor of a company shall have a right of access at all times to the
book and accounts and vouchers of the company, and shall be entitled to
require from the officers of the company such information and
explanation as he thinks necessary for the performance of the duties of
the auditors.
(6) If the auditors fail to obtain all the information and explanations which,
to the best of their knowledge and belief, are necessary for the purposes
of their audit, they shall state that fact in their report.
(7) The auditors of a company shall be entitled to attend any general
meeting of the company and to receive all notices of, and other
communications relating to, any general meeting which any member of
the company is entitled to receive, and to be heard at any general
meeting which they attend on any part of the business of the meeting
which concerns them as auditors.
(8) Section 326 of the principal Act shall have effect as if the provisions of
subsections (1) and (5) of this section were provisions of that Act
specified in Schedule 10 thereto.59

16 Construction of references to documents annexed to accounts

[P1948/38/163]
(1) Subject to subsection (2), references in this Part to a document annexed or
required to be annexed to a company’s accounts or any of them shall not
include the directors’ report or the auditors’ report.
Section 17 Companies Act 1982


Page 32 AT 2 of 1982 c

(2) Any information which is required by this Act to be given in accounts,
and is thereby allowed to be given in a statement annexed, may be given
in the directors’ report instead of in the accounts and, if any such
information is so given, the report shall be annexed to the accounts and
this Act shall apply in relation thereto accordingly, except that the
auditors shall report thereon only so far as it gives the said information.
17 [Amends Table A and Table C of Schedule 1 to the Companies Act

1931.]

17A [Repealed]
60

17B Public oversight

(1) The Isle of Man Financial Services Authority may make regulations (in
this section referred to as “public oversight regulations”) subjecting
auditors of companies to prescribed systems of —
(a) public oversight;
(b) quality assurance; and
(c) investigations and penalties.61

(2) Public oversight regulations apply in such circumstances and for such
purposes as are prescribed.
(3) Public oversight regulations may —
(a) prescribe criteria which systems referred to in subsection (1) must
meet;
(b) require auditors to comply with prescribed systems to deter,
correct and prevent inadequate audits;
(c) appoint one or more bodies (whether or not based in the Island)
to perform prescribed functions in respect of any of the matters
referred to in subsection (1);
(d) make any incidental or consequential provisions which the Isle of
Man Financial Services Authority considers appropriate.62

(4) Public oversight regulations may require compliance with standards or
the adoption of practices recommended by a body specified in the
regulations, and may in particular require compliance with standards or
the adoption of practices recommended by that body from time to time
(that is, as well after as before the making of the regulations).
(5) Public oversight regulations may require auditors to comply with
prescribed conditions requiring auditors —
(a) to be registered in a register kept by the Isle of Man Financial
Services Authority in accordance with regulations made under
section 14G;63

Companies Act 1982 Section 17


c AT 2 of 1982 Page 33

(b) to enter into contracts with bodies appointed to perform
prescribed functions in respect of any of the matters referred to in
subsection (1);
(c) to pay for the services of a body referred to in paragraph (b)
insofar as those services relate to the performance of prescribed
functions;
(d) to agree to be bound by the rules and disciplinary procedures of a
body referred to in paragraph (b), including rules and disciplinary
procedures imposed by that body from time to time (that is, as
well after as before the making of the regulations).
(6) Public oversight regulations may require bodies carrying out prescribed
functions to provide reports to the Isle of Man Financial Services
Authority in such circumstances and on such occasions as are prescribed
and in respect of such matters as are prescribed.64

(7) The Isle of Man Financial Services Authority may pay for the services of
a body appointed to perform prescribed functions in respect of any of the
matters referred to in subsection (1) insofar as —
(a) those services relate to the performance of prescribed
functions; and
(b) those services have not been paid for by the auditor concerned.65

(8) Subsections (3) to (6) are without prejudice to the generality of
subsection (1).
(9) Regulations under subsection (1) shall not come into operation unless
they are approved by Tynwald.66

17C Regulations concerning accounts and audit

(1) The Isle of Man Financial Services Authority may by regulations (in this
section referred to as “accounting regulations”) make such provisions as
appear to it to be appropriate in connection with the accounting records
and accounts of companies to which this Act applies and their audit.67

(2) Accounting regulations may make provision as to —
(a) the keeping of accounting records and accounts;
(b) the form, preparation, publication and certification of accounts;
(c) the accounting standards to be complied with when preparing
accounts;
(d) the form, preparation and publication of statements of, and
information relating to, the accounts;
(e) the time at which, and the manner and form in which, the
accounts and information relating to them shall be provided to the
auditor;
(f) the qualifications of auditors;
Section 18 Companies Act 1982


Page 34 AT 2 of 1982 c

(g) the jurisdictions in which auditors must or may be based or
resident;
(h) the duties of auditors;
(i) the practices to be adopted by auditors; and
(j) the time within which the accounts must be prepared.
(3) Accounting regulations may appoint one or more bodies (whether or not
based in the Island) to perform prescribed functions in respect of any of
the matters referred to in subsections (1) or (2).
(4) Accounting regulations may require compliance with standards or the
adoption of practices recommended by a body specified in the
regulations, and may in particular require compliance with standards or
the adoption of practices recommended by that body from time to time
(that is, as well after as before the making of the regulations).
(5) Accounting regulations may add to, modify or repeal provisions of the
Companies Acts 1931 to 2004 and may provide for any such provision to
have effect subject to such adaptations and modifications as appear to
the Isle of Man Financial Services Authority to be appropriate.68

(6) Accounting regulations may contain such supplementary, incidental and
transitional provisions as appear to the Isle of Man Financial Services
Authority to be appropriate.69

(7) Subsections (2) to (6) are without prejudice to the generality of
subsection (1).
(8) Regulations under subsection (1) shall not come into operation unless
they are approved by Tynwald.70

PART II – MANAGEMENT

18 Number of directors

(1) Every company whether registered before or after the commencement of
this Act shall have at least 2 directors.
(2) Any company, registered before the commencement of this Act, which
has less than 2 directors, shall so arrange its affairs that it has at least 2
directors by the end of the period of 12 months from the passing of this
Act.
(3) Subject to subsections (2) and (4), every company, and the remaining
director, shall, if to the knowledge of that director the number of
directors remains less than 2 for a period in excess of 3 months, be guilty
of an offence and shall be liable on summary conviction to a fine not
exceeding £5,000.
Companies Act 1982 Section 19


c AT 2 of 1982 Page 35

(4) In any proceedings for an offence under subsection (3) a remaining
director shall have a defence if he satisfies the court that he has taken all
reasonable steps to secure the appointment of a replacement director.
19 Secretary

[P1948/38/177(1), (2) and 179]
(1) Every company shall have a secretary.
(2) Anything required or authorised to be done by or to the secretary may, if
the office is vacant or there is for any other reason no secretary capable of
acting, be done by or to any assistant or deputy secretary or, if there is no
assistant or deputy secretary capable of acting, by or to any officer of the
company authorised generally or specially in that behalf by the directors.
(3) A provision requiring or authorising a thing to be done by or to a
director and the secretary shall not be satisfied by its being done by or to
the same person acting both as director and as, or in place of, the
secretary.
(4) It shall be the duty of the directors of a public company having a share
capital, when appointing the secretary of the company, not to appoint
anyone other than a person who in the opinion of the directors has
adequate knowledge and experience of the duties and responsibilities of
a company secretary and who either —
(a) on the day on which this Act comes into operation held the office
of secretary of the company or of a responsible assistant to that
secretary; or
(b) for at least three years of the five years immediately, preceding
the appointment has held the office of secretary of a public
company; or
(c) is a member of the Institute of Chartered Secretaries and
Administrators; or
(cc) is a member of the Chartered Institute of Management
Accountants; or71

(d) is a person qualified under section 14(l)(a) for appointment as
auditor of a public company; or
(e) is an advocate or has been called or admitted in England and
Wales or Scotland as a barrister, solicitor or advocate.72

20 Statement of first directors and secretary to be delivered on application

for registration of company

[P1976/69/21]
(1) With every memorandum delivered for registration under section 12 of
the principal Act there shall be delivered a statement in the prescribed
form containing the names and relevant particulars of —
Section 21 Companies Act 1982


Page 36 AT 2 of 1982 c

(a) the persons who are to be the first directors of the company; and
(b) the person who is, or the persons who are, to be the first secretary
or joint secretaries of the company.
(1A) The person presenting the statement required by this section must be
resident in the Island.73

(2) The relevant particulars mentioned above are —
(a) with respect to a person named as director, the particulars which
by section 143(l) of the principal Act are required to be contained
in the register kept under that section with respect to a director;
and
(b) with respect to a person named as secretary or as one of joint
secretaries, the particulars which by or under section 107(3) of the
principal Act are required to be contained in the annual return of
a company having a share capital with respect to the secretary or,
where there are joint secretaries, with respect to each of them.74

(3) The statement required by this section shall be signed by or on behalf of
the subscribers of the memorandum and shall contain a consent signed
by each of the persons named in it as a director, as secretary or as one of
joint secretaries to act in the relevant capacity.
(4) Where the memorandum is delivered by a person as agent for the
subscribers of the memorandum, the statement required by this section
shall specify that fact and the name and address of that person.
(5) The persons named in the statement required by this section as the
directors, secretary or joint secretaries of a company shall, on the
incorporation of the company, be deemed to have been respectively
appointed as the first directors, secretary or joint secretaries of the
company; and any appointment by any articles delivered with the
memorandum of a person as director or secretary of the company shall
be void unless he is named as a director or as secretary in the statement.
(6) If a statement complying with the requirements of this section is not
delivered as required by subsection (1) with any memorandum delivered
for registration under section 12 of the principal Act the Department
shall not register the memorandum or any articles delivered with it.75

21 Notification of changes in directors and secretary, etc

[P1976/69/22]
(1) [Amends section 143 of the Companies Act 1931.]
(2) Notwithstanding subsection (1) —
(a) where the memorandum of a company has been delivered for
registration under section 12 of the principal Act before the
coming into operation of section 20, section 143(2) of that Act, as
Companies Act 1982 Section 22


c AT 2 of 1982 Page 37

originally enacted, shall continue to apply so as to require that
company to send to the Department a return containing the
particulars of its first directors specified in the register required to
be kept under section 143; and76

(b) those subsections, as originally enacted, shall continue to apply in
relation to any change among a company’s directors or in any of
the particulars contained in that register which occurred before
the coming into operation of this section.
22 Registered office of company

[P1976/69/23]
(1) A company shall at all times have a registered office in the Island to
which all communications and notices may be addressed.77

(2) The intended situation of a company’s registered office on incorporation
shall be specified in the statement delivered prior to incorporation of the
company under section 20.
(3) Notice in the prescribed form of any change in the situation of a
company’s registered office shall be given within one month of the
change to the Department, who shall record the new situation.78

(4) If default is made in complying with subsection (1) or (3), the company
and every officer of the company who is in default shall be liable to a
default fine.
(5) Section 93 of the principal Act (which is superseded by this section) shall
cease to have effect, but notwithstanding its repeal by this Act —
(a) where the memorandum of a company has been delivered for
registration under section 12 of that Act before the coming into
operation of section 20, section 93 shall continue to apply so as to
require that company to send notice of the situation of its
registered office to the Department within the time there
mentioned; and79

(b) section 93 shall continue to apply in relation to any change in the
situation of a company’s registered office which occurred before
the coming into operation of this section.
(6) Section 20(6) shall apply as if the requirements of subsection (2) were
included among the requirements of that section.
23 Default in delivering notice of allotment

In case of default in delivering to the Department, within one month after the
allotment, any document required to be delivered by section 42 of the principal
Act, the company or any person liable for the default shall apply to the
Department which shall accept late delivery of the documents upon payment by
Section 28 Companies Act 1982


Page 38 AT 2 of 1982 c

the applicant of such fees as may be prescribed under section 283A of the
Companies Act 1931.80

24 to 27

[Amends sections 52, 79, 81 and 117 respectively of the Companies Act 1931.]
PART III – MISCELLANEOUS AND GENERAL

28 [Substitutes section 5 of the Companies Act 1931.]

29 [Repealed]......
81

30 [Substitutes sections 46 and 46A for section 46 of the Companies Act

1931.]

31 [Repealed].
82

32 [Amends section 109 of the Companies Act 1931.]

33 to 34 [Repealed]
83

35 Publication

Where any provision of the Companies Acts 1931 to 1974 requires the
publication of any document or notice in the London Gazette, the requirements
of that provision shall be deemed to be satisfied if the document or, as the case
may be, notice is published in 2 Island newspapers.
36 [Repealed].
84

37 Interpretation

In this Act —
“the 1974 Act
” means the Companies Act 1974;
“a company liable to pay Company Registration Tax
” ......85

“a company liable to pay Non-Resident Company Duty
” shall be construed in
accordance with the Non-Resident Company Duty Act 1986;86

“Department
” means the Department of Economic Development;87

“holding company
” has the meaning assigned to it by section 1(4) of the 1974
Act;
Companies Act 1982 Section 38


c AT 2 of 1982 Page 39

“subsidiary company
” has the meaning assigned to it by section 1(1) of the 1974
Act;
“the principal Act
” means the Companies Act 1931.
38 Amendments

(1) The enactments contained in the principal Act specified in column 1 of
Part I of Schedule 2 (being enactments broadly described in column 2 of
that Part) shall each have effect as if the maximum pecuniary penalty or
fine, were a penalty or fine not exceeding the amount specified in
column 4 of that Part instead of a penalty or fine not exceeding the
amount specified in column 3 of that Part.
(2) The daily pecuniary penalties or fines specified in column 3 of Part I of
Schedule 2 are hereby abolished and are replaced by the maximum
pecuniary penalties or fines specified in column 4.
(3) Part II of Schedule 2 shall have effect in relation to the transfer of certain
of the functions of the Governor under the Companies Acts 1931 to 1974
and to the other matters specified in that Part.
39 [Repealed].
88

40 Short title

This Act may be cited as the Companies Act 1982 and shall be construed as one
with the Companies Acts 1931 to 1974 and those Acts and this Act may be cited
together as the Companies Acts 1931 to 1982.
Companies Act 1982 Schedule 1



c AT 2 of 1982 Page 41

Schedule 1

ACCOUNTS

Sections 3, 6 and 10 [P1948/38/Sch 8]
PRELIMINARY

1. Paragraphs 2 to 11 apply to the balance sheet and 12 to 14 to the profit and loss
account, and are subject to the exceptions and modifications provided for by Part II in
the case of a holding company and by Part III in the case of companies of the classes
there mentioned; and this Schedule has effect in addition to the provisions of section
127 of the principal Act.
PART I – GENERAL PROVISIONS AS TO BALANCE SHEET

AND PROFIT AND LOSS ACCOUNT

Balance Sheet
2. The authorised share capital, issued share capital, liabilities and assets shall be
summarised, with such particulars as are necessary to disclose the general nature of the
assets and liabilities, and there shall be specified —
(a) any part of the issued capital that consists of redeemable
preference shares, and the earliest date on which the company has
power to redeem those shares;
(b) so far as the information is not given in the profit and loss
account, any share capital on which interest has been paid out of
capital during the financial year, and the rate at which interest has
been so paid;
(c) the amount of the share premium account and the amount of the
capital redemption reserve fund;
(d) particulars of any redeemed debentures which the company has
power to re-issue.
3. There shall be stated under separate headings, so far as they are not
written off —
(a) the preliminary expenses;
(b) any expenses incurred in connection with any issue of share
capital or debentures;
(c) any sums paid by way of commission in respect of any shares or
debentures;
Schedule 1
Companies Act 1982


Page 42 AT 2 of 1982 c

(d) any sums allowed by way of discount in respect of any
debentures; and
(e) the amount of the discount allowed on any issue of shares at a
discount.
4. (1) The reserves, provisions, liabilities and fixed and current assets shall be
classified under headings appropriate to the company’s business:
Provided that —
(a) where the amount of any class is not material, it may be included
under the same heading as some other class; and
(b) where any assets of one class are not separable from assets of
another class, those assets may be included under the same
heading.
(2) Fixed assets shall also be distinguished from current assets.
(3) The method or methods used to arrive at the amount of the fixed assets
under each heading shall be stated.
5. (1) The method of arriving at the amount of any fixed asset shall, subject to
sub-paragraph (2), be to take the difference between —
(a) its cost or, if it stands in the company’s books at a valuation, the
amount of the valuation; and
(b) the aggregate amount provided or written off since the date of
acquisition or valuation, as the case may be, for depreciation or
diminution in value;
and for the purposes of this paragraph the net amount at which
any assets stand in the company’s books at the commencement of
this Act (after deduction of the amounts previously provided or
written off for depreciation or diminution in value) shall, if the
figures relating to the period before the commencement of this
Act cannot be obtained without unreasonable expense or delay, be
treated as if it were the amount of a valuation of those assets
made at the commencement of this Act and, where any of those
assets are sold, the said net amount less the amount of the sales
shall be treated as if it were the amount of a valuation so made of
the remaining assets.
(2) Sub-paragraph (1) shall not apply —
(a) to assets for which the figures relating to the period beginning
with the commencement of this Act cannot be obtained without
unreasonable expense or delay; or
(b) to assets the replacement of which is provided for wholly or
partly —
(i) by making provisions for renewals and charging the cost of
replacement against the provision so made; or
Companies Act 1982 Schedule 1



c AT 2 of 1982 Page 43

(ii) by charging the cost of replacement direct to revenue; or
(c) to any investments of which the market value (or, in the case of
investments not having a market value, their value as estimated
by the directors) is shown either as the amount of the investments
or by way of note; or
(d) to goodwill, patents or trade marks.
(3) For the assets under each heading whose amount is arrived at in
accordance with sub-paragraph (1) there shall be shown —
(a) the aggregate of the amounts referred to in paragraph (a) of that
sub-paragraph; and
(b) the aggregate of the amounts referred to in paragraph (b) thereof.
(4) As respects the assets under each heading whose amount is not arrived
at in accordance with sub-paragraph (1) because their replacement is provided for as
mentioned in sub-paragraph (2)(b) there shall be stated —
(a) the means by which their replacement is provided for; and
(b) the aggregate amount of the provision (if any) made for renewals
and not used.
6. (1) Subject to sub-paragraph (2), the aggregate amounts respectively of
capital reserves, revenue reserves and provisions (other than provisions for
depreciation, renewals or diminution in value of assets) shall be stated under separate
headings.
(2) Sub-paragraph (1) —
(a) shall not require a separate statement of any of the said three
amounts which is not material; and
(b) the Isle of Man Financial Services Authority may direct that it
shall not require a separate statement of the amount of provisions
where it is satisfied that that is not required in the public interest
and would prejudice the company, but subject to the condition
that any heading stating an amount arrived at after taking into
account a provision (other than as aforesaid) shall be so framed or
marked as to indicate that fact.89

7. (1) There shall also be shown (unless it is shown in the profit and loss
account or a statement or report annexed thereto, or the amount involved is not
material) —
(a) where the amount of the capital reserves, of the revenue reserves
or of the provisions (other than provisions for depreciation,
renewals or diminution in value of assets) shows an increase as
compared with the amount at the end of the immediately
preceding financial year, the source from which the amount of the
increase has been derived; and
(b) where —
Schedule 1
Companies Act 1982


Page 44 AT 2 of 1982 c

(i) the amount of the capital reserves or of the revenue
reserves shows a decrease as compared with the amount at
the end of the immediately preceding financial year; or
(ii) the amount at the end of the immediately preceding
financial year of the provisions (other than provisions for
depreciation, renewals or diminution in value of assets)
exceeded the aggregate of the sums since applied and
amounts still retained for the purposes thereof;
the application of the amounts derived from the difference.
(2) Where the heading showing any of the reserves or provisions aforesaid is
divided into sub-headings, this paragraph shall apply to each of the separate amounts
shown in the sub-headings instead of applying to the aggregate amount thereof.
8. (1) There shall be shown under separate headings —
(a) the aggregate amounts respectively of the company’s trade
investments, quoted investments other than trade investments
and unquoted investments other than trade investments;
(b) if the amount of the goodwill and of any patents and trademarks
or part of that amount is shown as a separate item in or is
otherwise ascertainable from the books of the company, or from
any contract for the sale or purchase of any property to be
acquired by the company, the said amount so shown or
ascertained so far as not written off or, as the case may be, the said
amount so far as it is so shown or ascertainable and as so shown
or ascertained, as the case may be;
(c) the aggregate amount of any outstanding loans made under the
authority of provisos (b) and (c) of section 45(l) of the principal
Act;
(d) the aggregate amount of bank loans and overdrafts;
(e) the net aggregate amount which is recommended for distribution
by way of dividend.
(2) Nothing in sub-paragraph 1(b) shall be taken as requiring the amount of
the goodwill, patents and trademarks to be stated otherwise than as a single item.
(3) The heading showing the amount of the quoted investments other than
trade investments shall be sub-divided, where necessary, to distinguish the
investments as respects which there has, and those as respects which there has not,
been granted a quotation or permission to deal on a recognised stock exchange.
9. Where any liability of the company is secured otherwise than by operation of
law on any assets of the company, the fact that that liability is so secured shall be
stated, but it shall not be necessary to specify the assets on which the liability is
secured.
Companies Act 1982 Schedule 1



c AT 2 of 1982 Page 45

10. Where any of the company’s debentures are held by a nominee of or trustee for
the company, the nominal amount of the debentures and the amount at which they are
stated in the books of the company shall be stated.
11. (1) The matters referred to in this paragraph shall be stated by way of note,
or in a statement or report annexed, if not otherwise shown.
(2) The number, description and amount of any shares in the company
which any person has an option to subscribe for, together with the following
particulars of the option, that is to say —
(a) the period during which it is exercisable;
(b) the price to be paid for shares subscribed for under it.
(3) The amount of any arrears of fixed cumulative dividends on the
company’s shares and the period for which the dividends or, if there is more than one
class, each class of them are in arrear, the amount to be stated before deduction of
income tax, except that, in the case of tax free dividends, the amount shall be shown
free of tax and the fact that it is so shown shall also be stated.
(4) Particulars of any charge on the assets of the company to secure the
liabilities of any other person, including, where practicable, the amount secured.
(5) The general nature of any other contingent liabilities not provided for
and, where practicable, the aggregate amount or estimated amount of those liabilities,
if it is material.
(6) Where practicable the aggregate amount or estimated amount, if it is
material, of contracts for capital expenditure, so far as not provided for.
(7) If in the opinion of the directors any of the current assets have not a
value, on realisation in the ordinary course of the company’s business, at least equal to
the amount at which they are stated, the fact that the directors are of that opinion.
(8) The aggregate market value of the company’s quoted investments, other
than trade investments, where it differs from the amount of the investments as stated,
and the stock exchange value of any investments of which the market value is shown
(whether separately or not) and is taken as being higher than their stock exchange
value.
(9) The basis on which foreign currencies have been converted into sterling,
where the amount of the assets or liabilities affected is material.
(10) The basis on which the amount, if any, set aside for income tax is
computed.
(11) Except in the case of the first balance sheet laid before the company after
the commencement of this Act, the corresponding amounts at the end of the
immediately preceding financial year for all items shown in the balance sheet.
Profit and Loss Account
12. (1) There shall be shown —
(a) the amount charged to revenue by way of provision for
depreciation, renewals or diminution in value of fixed assets;
Schedule 1
Companies Act 1982


Page 46 AT 2 of 1982 c

(b) the amount of the interest on the company’s debentures and other
fixed loans;
(c) the amount of the charge for the Island’s income tax and other
Island taxation on profits, including, where practicable, as Island
income tax any taxation imposed elsewhere to the extent of the
relief, if any, from Island income tax and distinguishing where
practicable between income tax and other taxation;
(d) the amounts respectively provided for redemption of share capital
and for redemption of loans;
(e) the amount, if material, set aside or proposed to be set aside to, or
withdrawn from, reserves;
(f) subject to sub-paragraph (2), the amount, if material, set aside to
provisions other than provisions for depreciation, renewals or
diminution in value of assets or, as the case may be, the amount, if
material, withdrawn from such provisions and not applied for the
purposes thereof;
(g) the amount of income from investments, distinguishing between
trade investments and other investments.
(h) ......90

(2) The Isle of Man Financial Services Authority may direct that a company
shall not be obliged to show an amount set aside to provisions in accordance with sub-
paragraph (1)(f), if it is satisfied that that is not required in the public interest and
would prejudice the company, but subject to the condition that any heading stating an
amount arrived at after taking into account the amount set aside as aforesaid shall be
so framed or marked as to indicate that fact.91

13. If the remuneration of the auditors is not fixed by the company in general
meeting, the amount thereof shall be shown under a separate heading, and for the
purposes of this paragraph, any sums paid by the company in respect of the auditors’
expenses shall be deemed to be included in the expression “remuneration”.
14. (1) The matters referred to in this paragraph shall be stated by way of note,
if not otherwise shown.
(2) If depreciation or replacement of fixed assets is provided for by some
method other than a depreciation charge or provision for renewals, or is not provided
for, the method by which it is provided for or the fact that it is not provided for, as the
case may be.
(3) The basis on which the charge for Island income tax is computed.
(4) Except in the case of the first profit and loss account laid before the
company after the commencement of this Act the corresponding amounts for the
immediately preceding financial year for all items shown in the profit and loss account.
(5) Any material respects in which any items shown in the profit and loss
account are affected —
Companies Act 1982 Schedule 1



c AT 2 of 1982 Page 47

(a) by transactions of a sort not usually undertaken by the company
or otherwise by circumstances of an exceptional or non-recurrent
nature; or
(b) by any change in the basis of accounting.
14A. (1) The matters referred to in this paragraph shall be stated by way of note,
if not otherwise shown.
(2) There must be stated —
(a) any amount set aside or proposed to be set aside to, or withdrawn
or proposed to be withdrawn from, reserves;
(b) the aggregate amount of dividends paid in the financial year
(other than those for which a liability existed at the immediately
preceding balance sheet date);
(c) the aggregate amount of dividends that the company is liable to
pay at the balance sheet date; and
(d) the aggregate amount of dividends that are proposed before the
date of approval of the accounts, and not otherwise disclosed
under paragraph (b) or (c).
(3) In this paragraph, “balance sheet date
” means the date at which the
balance sheet was made up.92

PART II – SPECIAL PROVISIONS WHERE THE COMPANY IS A

HOLDING OR SUBSIDIARY COMPANY

Modifications of and Additions to Requirements as to Company’s own Accounts
15. (1) This paragraph shall apply where the company is a holding company,
whether or not it is itself a subsidiary of another body corporate.
(2) The aggregate amount of assets consisting of shares in, or amounts
owing (whether on account of a loan or otherwise) from, the company’s subsidiaries,
distinguishing shares from indebtedness, shall be set out in the balance sheet
separately from all the other assets of the company, and the aggregate amount of
indebtedness (whether on account of a loan or otherwise) to the company’s
subsidiaries shall be so set out separately from all its other liabilities and —
(a) the references in Part I of this Schedule to the company’s
investments shall not include investments in its subsidiaries
required by this paragraph to be separately set out; and
(b) paragraphs 5, 12(1)(a) and 14(2), shall not apply in relation to
fixed assets consisting of interests in the company’s subsidiaries.
(3) There shall be shown by way of note on the balance sheet or in a
statement or report annexed thereto the number, description and amount of the shares
in and debentures of the company held by its subsidiaries or their nominees, but
Schedule 1
Companies Act 1982


Page 48 AT 2 of 1982 c

excluding any of those shares or debentures in the case of which the subsidiary is
concerned as personal representative or in the case of which it is concerned as trustee
and neither the company nor any subsidiary thereof is beneficially interested under the
trust, otherwise than by way of security only for the purpose of a transaction entered
into by it in the ordinary course of a business which includes the lending of money.
(4) Subject to sub-paragraph (5), where group accounts are not submitted,
there shall be annexed to the balance sheet a statement showing —
(a) the reasons why subsidiaries are not dealt with in group accounts;
(b) the net aggregate amount, so far as it concerns members of the
holding company and is not dealt with in the company’s accounts,
of the subsidiaries’ profits after deducting the subsidiaries’ losses
(or vice versa) —
(i) for the respective financial years of the subsidiaries ending
with or during the financial year of the company; and
(ii) for their previous financial years since they respectively
became the holding company’s subsidiary;
(c) the net aggregate amount of the subsidiaries’ profits after
deducting the subsidiaries’ losses (or vice versa) —
(i) for the respective financial years of the subsidiaries ending
with or during the financial year of the company; and
(ii) for their other financial years since they respectively
became the holding company’s subsidiary;
so far as those profits are dealt with, or provision is made for those
losses, in the company’s accounts;
(d) any qualifications contained in the report of the auditors of the
subsidiaries on their accounts for their respective financial years
ending as aforesaid, and any note or saving contained in those
accounts to call attention to a matter which, apart from the note or
saving, would properly have been referred to in such a
qualification, in so far as the matter which is the subject of the
qualification or note is not covered by the company’s own
accounts and is material from the point of view of its members;
or, in so far as the information required by this sub-paragraph is not
obtainable, a statement that it is not obtainable.
(5) The Isle of Man Financial Services Authority may, on the application or
with the consent of the company’s directors, direct that in relation to any subsidiary
sub-paragraph (4) shall not apply or shall apply only to such extent as may be
provided by the direction.93

(6) Sub-paragraph 4(b) and (c) shall apply only to profits and losses of a
subsidiary which may properly be treated in the holding company’s accounts as
revenue profits or losses, and the profits or losses attributable to any shares in a
subsidiary for the time being held by the holding company or any other of its
subsidiaries shall not (for the purposes of paragraphs 15(4)(b) and (c)) be treated as
Companies Act 1982 Schedule 1



c AT 2 of 1982 Page 49

aforesaid so far as they are profits or losses for the period before the date on or as from
which the shares were acquired by the company or any of its subsidiaries, except that
they may in a proper case be so treated where —
(a) the company is itself the subsidiary of another body corporate;
and
(b) the shares were acquired from that body corporate or a subsidiary
of it;
and for the purpose of determining whether any profits or losses
are to be treated as profits or losses for the said period the profit
or loss for any financial year of the subsidiary may, if it is not
practicable to apportion it with reasonable accuracy by reference
to the facts, be treated by accruing from day to day during that
year and be apportioned accordingly.94

(7) Where group accounts are not submitted, there shall be annexed to the balance
sheet a statement showing, in relation to the subsidiaries (if any) whose financial years
did not end with that of the company —
(a) the reasons why the company’s directors consider that the
subsidiaries’ financial years should not end with that of the
company; and
(b) the dates on which the subsidiaries’ financial years ending last
before that of the company respectively ended or the earliest and
latest of those dates.
16. (1) The balance sheet of a company which is a subsidiary of another body
corporate, whether or not it is itself a holding company, shall show the aggregate
amount of its indebtedness to all bodies corporate of which it is a subsidiary or a fellow
subsidiary and the aggregate amount of the indebtedness of all such bodies corporate
to it, distinguishing in each case between indebtedness in respect of debentures and
otherwise.
(2) For the purposes of this paragraph a company shall be deemed to be a
fellow subsidiary of another body corporate if both are subsidiaries of the same body
corporate but neither is the other’s.
Consolidated Accounts of Holding Company and Subsidiaries
17. Subject to the following paragraphs of this Part, the consolidated balance sheet
and profit and loss account shall combine the information contained in the separate
balance sheets and profit and loss accounts of the holding company and of the
subsidiaries dealt with by the consolidated accounts, but with such adjustments (if
any) as the directors of the holding company think necessary.
18. Subject as aforesaid and to Part III, the consolidated accounts shall, in giving the
said information, comply, so far as practicable, with the requirements of this Act as if
they were the accounts of an actual company.
Schedule 1
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Page 50 AT 2 of 1982 c

19. Section 127 of the principal Act shall not, by virtue of paragraphs 17 and 18,
apply for the purpose of the consolidated accounts.
20. Paragraph 7 shall not apply for the purpose of any consolidated accounts laid
before a company with the first balance sheet so laid after the commencement of this
Act.
21. In relation to any subsidiaries of the holding company not dealt with by the
consolidated accounts —
(a) paragraph 15(2) and (3) shall apply for the purpose of those
accounts as if those accounts were the accounts of an actual
company of which they were subsidiaries; and
(b) there shall be annexed the like statement as is required by
paragraph 15(4) where there are no group accounts, but as if
references therein to the holding company’s accounts were
references to the consolidated accounts.
22. In relation to any subsidiaries (whether or not dealt with by the consolidated
accounts), whose financial years did not end with that of the company, there shall be
annexed the like statement as is required by paragraph 15(7) where there are no group
accounts.
PART III – EXCEPTIONS FOR SPECIAL CLASSES OF

COMPANY

23. (1) A discount company shall not be subject to the requirements of Part I
other than —
(a) as respects its balance sheet, those of paragraphs 2 and 3,
paragraph 4 (so far as it relates to fixed and current assets),
paragraph 8 (except sub-paragraph (1)(d)), paragraphs 9 and 10,
and paragraph 11 (except sub-paragraph (8) ); and
(b) as respects its profit and loss account, those of paragraph 13 and
paragraph 14(1), (4) and (5);95

but, where in its balance sheet capital reserves, revenue reserves
or provisions (other than provisions for depreciation, renewals or
diminution in value of assets) are not stated separately, any
heading stating an amount arrived at after taking into account
such a reserve or provision shall be so framed or marked as to
indicate that fact, and its profit and loss account shall indicate by
appropriate words the manner in which the amount stated for the
company’s profit or loss has been arrived at.96

(2) The accounts of a discount company shall not be deemed, by reason only of the
fact that they do not comply with any requirements of the said Part I from which the
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c AT 2 of 1982 Page 51

company is exempt by virtue of this paragraph, not to give the true and fair view
required by this Act.97

(3) In this paragraph —
“banking company
” ......98

“discount company
” means any company which satisfies the Isle of Man
Financial Services Authority that it ought to be treated for the purposes
of this Schedule as a discount company.99

24. ......100

25. (1) A company to which this paragraph applies shall not be subject to the
following requirements of this Schedule, that is to say —
(a) as respects its balance sheet, those of paragraph 4 (except so far as
the said paragraph relates to fixed and current assets) and
paragraphs 5, 6 and 7; and
(b) as respects its profit and loss account, those of paragraph 12(l)(a),
(e) and (f),
but a company taking advantage of this paragraph shall be subject, instead of the said
requirements, to any prescribed conditions as respects matters to be stated in its
accounts or by way of note thereto and as respects information to be furnished to the
Isle of Man Financial Services Authority or a person authorised by the Isle of Man
Financial Services Authority to require it.101

(2) The accounts of a company shall not be deemed, by reason only of the
fact that they do not comply with any requirements of Part I from which the company
is exempt by virtue of this paragraph, not to give the true and fair view required by
this Act.
(3) Subject to sub-paragraph (4), this paragraph applies to companies of any
class prescribed for the purposes thereof, and a class of companies may be so
prescribed if it appears to the Isle of Man Financial Services Authority desirable in the
Island’s interest.102

(4) If the Isle of Man Financial Services Authority is satisfied that any of the
conditions prescribed for the purposes of this paragraph have not been complied with
in the case of any company, it may direct that so long as the direction continues in force
this paragraph shall not apply to the company.103

26. Where a company entitled to the benefit of any provision contained in this Part
is a holding company, the reference in Part II to consolidated accounts complying with
the requirements of this Act shall, in relation to consolidated accounts of that company,
be construed as referring to those requirements in so far only as they apply to the
separate accounts of that company.
Schedule 1
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Page 52 AT 2 of 1982 c

PART IV – INTERPRETATION OF SCHEDULE

27. (1) In this Schedule, unless the context otherwise requires —
(a) “provision
” shall, subject to sub-paragraph (2), mean any amount
written off or retained by way of providing for depreciation,
renewals or diminution in value of assets or retained by way of
providing for any known liability of which the amount cannot be
determined with substantial accuracy;
(b) “reserve
” shall not, subject to sub-paragraph (2), include any
amount written off or retained by way of providing for
depreciation, renewals or diminution in value of assets or retained
by way of providing for any known liability;
(c) “capital reserve
” shall not include any amount regarded as free
for distribution through the profit and loss account and the
expression “revenue reserve” shall mean any reserve other than a
capital reserve;
(d) “liability
” in this paragraph, shall include all liabilities in respect
of expenditure contracted for and all disputed or contingent
liabilities.
(2) Where —
(a) any amount written off or retained by way of providing for
depreciation, renewals or diminution in value of assets, not being
an amount written off in relation to fixed assets before the
commencement of this Act; or
(b) any amount retained by way of providing for any known liability;
is in excess of that which in the opinion of the directors is reasonably
necessary for the purpose, the excess shall be treated for the purposes of
this Schedule as a reserve and not as a provision.
28. For the purposes aforesaid, “quoted investment
” means an investment as
respects which there has been granted a quotation or permission to deal on a
recognised stock exchange, or on any stock exchange of repute outside the Island and
the expression “unquoted investment
” shall be construed accordingly.

Companies Act 1982 Schedule 2



c AT 2 of 1982 Page 53

Schedule 2

PART I – INCREASE OF FINES

Section 38104

PART II – TRANSFER OF CERTAIN FUNCTIONS OF THE

GOVERNOR
105

Schedule 3
106

Companies Act 1982 Endnotes



c AT 2 of 1982 Page 55

ENDNOTES

Table of Legislation History

Legislation Year and No Commencement






Table of Renumbered Provisions

Original Current






Table of Endnote References

1
Subs (7) amended by Non-Resident Company Duty Act 1986 s 7 and by Companies
(Amendment) Act 2009 s 13. 2
Subs (1) substituted by Companies (Amendment) Act 2009 s 14. 3
Subs (2) substituted by Companies (Amendment) Act 2009 s 14 and amended by
SD2015/0090 as amended by SD2015/0276. 4
S 2A inserted by Companies Act 1992 Sch 4. 5
S 2B inserted by Companies Act 1992 Sch 4. 6
Subs (1) amended by Companies (Amendment) Act 2009 s 15(a). 7
Subs (3A) inserted by Companies (Amendment) Act 2009 s 15(b). 8
Subs (3B) inserted by Companies (Amendment) Act 2009 s 15(b). 9
Subs (2) amended by SD2015/0090 as amended by SD2015/0276. 10
S 3A inserted by Companies (Amendment) Act 2009 s 16. 11
Subs (3) amended by Financial Supervision Commission Act 1984 Sch 1 and by
SD2015/0090 as amended by SD2015/0276. 12
Subs (2) amended by Financial Supervision Commission Act 1984 Sch 1 and by
SD2015/0090 as amended by SD2015/0276. 13
Subs (3A) inserted by Companies (Amendment) Act 2009 s 17(a). 14
Subs (3B) inserted by Companies (Amendment) Act 2009 s 17(a). 15
Subs (4) amended by Financial Supervision Commission Act 1984 Sch 1, by
Companies (Amendment) Act 2009 s 17(b) and by SD2015/0090 as amended by
SD2015/0276. 16
Subs (5) added by Companies (Amendment) Act 2009 s 17(c). 17
Subs (2) amended by Financial Supervision Commission Act 1984 Sch 1, by
Companies Act 1992 Sch 2 and by SD2015/0090 as amended by SD2015/0276.
Endnotes
Companies Act 1982


Page 56 AT 2 of 1982 c

18
Subs (1) amended by Companies (Transfer of Functions) Act 2000 Sch 2 and by
SD2015/0090 as amended by SD2015/0276. 19
Definition of 'actuary to the company' amended by Insurance Act 2008 Sch 8. 20
Definition of 'long term business' amended by Insurance Act 2008 Sch 8. 21
S 10A inserted by Insurance Act 1986 Sch 5. 22
Subs (1) amended by Companies, etc. (Amendment) Act 2003 Sch 1. 23
Subs (3) amended by Companies, etc. (Amendment) Act 2003 Sch 1. 24
Subs (6) amended by Companies, etc. (Amendment) Act 2003 Sch 1. 25
Subs (4) amended by Financial Supervision Commission Act 1984 Sch 1 and by
SD2015/0090 as amended by SD2015/0276. 26
Para (a) amended by Financial Supervision Commission Act 1984 Sch 1 and by
SD2015/0090 as amended by SD2015/0276. 27
S 12 omitted by SD293/93 (as amended by SD283/94). 28
Para (b) substituted by Financial Services Act 2008 Sch 6. 29
Para (c) substituted by Financial Services Act 2008 Sch 6. 30
S 12A inserted by Companies Act 1992 Sch 4 and omitted by SD293/93 (as amended
by SD283/94). 31
S 13 omitted by SD293/93 (as amended by SD283/94). 32
Subs (2) amended by SD2015/0090 as amended by SD2015/0276. 33
S 14 substituted by Companies (Amendment) Act 2009 s 18. 34
Subs (3) amended by SD2015/0090 as amended by SD2015/0276. 35
S 14A inserted by Companies (Amendment) Act 2009 s 18. 36
Subs (2) amended by SD2015/0090 as amended by SD2015/0276. 37
S 14B inserted by Companies (Amendment) Act 2009 s 18. 38
Subs (2) amended by SD2015/0090 as amended by SD2015/0276. 39
S 14C inserted by Companies (Amendment) Act 2009 s 18. 40
By an earlier Act (Company Officers (Disqualification) Act 2009 Sch 4) s 14D(2)
amended thus: 'for "section 26 of the Companies Act 1992" substitute "section 4 or 5 of
the Company Officers (Disqualification) Act 2009" '. 41
S 14D inserted by Companies (Amendment) Act 2009 s 18. 42
S 14E heading amended by SD2015/0090 as amended by SD2015/0276. 43
Subs (1) amended by SD2015/0090 as amended by SD2015/0276. 44
Subs (2) amended by SD2015/0090 as amended by SD2015/0276. 45
Subs (4) amended by SD2015/0090 as amended by SD2015/0276. 46
Subs (5) amended by SD2015/0090 as amended by SD2015/0276. 47
Subs (6) amended by SD2015/0090 as amended by SD2015/0276. 48
S 14E inserted by Companies (Amendment) Act 2009 s 18. 49
S 14F heading amended by SD2015/0090 as amended by SD2015/0276. 50
Subs (2) amended by SD2015/0090 as amended by SD2015/0276. 51
S 14F inserted by Companies (Amendment) Act 2009 s 18. 52
Subs (1) amended by SD2015/0090 as amended by SD2015/0276. 53
Para (b) amended by SD2015/0090 as amended by SD2015/0276.
Companies Act 1982 Endnotes



c AT 2 of 1982 Page 57

54
Para (c) amended by SD2015/0090 as amended by SD2015/0276. 55
Para (d) amended by SD2015/0090 as amended by SD2015/0276. 56
Para (e) amended by SD2015/0090 as amended by SD2015/0276. 57
S 14G inserted by Companies (Amendment) Act 2009 s 18. 58
S 14H inserted by Companies (Amendment) Act 2009 s 18. 59
S 15 omitted by SD293/93 (as amended by SD283/94). 60
S 17A repealed by SD2015/0090 as amended by SD2015/0276. 61
Subs (1) amended by SD2015/0090 as amended by SD2015/0276. 62
Para (d) amended by SD2015/0090 as amended by SD2015/0276. 63
Para (a) amended by SD2015/0090 as amended by SD2015/0276. 64
Subs (6) amended by SD2015/0090 as amended by SD2015/0276. 65
Subs (7) amended by SD2015/0090 as amended by SD2015/0276. 66
S 17B inserted by Companies (Amendment) Act 2009 s 19. 67
Subs (1) amended by SD2015/0090 as amended by SD2015/0276. 68
Subs (5) amended by SD2015/0090 as amended by SD2015/0276. 69
Subs (6) amended by SD2015/0090 as amended by SD2015/0276. 70
S 17C inserted by Companies (Amendment) Act 2009 s 19. 71
Para (cc) inserted by Companies Act 1992 Sch 6. 72
Subs (4) amended by Companies Act 1986 s 34. 73
Subs (1A) inserted by Corporate Service Providers Act 2000 Sch 3. 74
Para (b) amended by Companies Act 1992 Sch 2. 75
Subs (6) amended by Companies (Transfer of Functions) Act 2000 Sch 1 and by
SD155/10 Sch 2. 76
Para (a) amended by Companies (Transfer of Functions) Act 2000 Sch 1 and by
SD155/10 Sch 2. 77
Subs (1) amended by Companies Act 1986 Sch 1. 78
Subs (3) amended by Companies (Transfer of Functions) Act 2000 Sch 1 and by
SD155/10 Sch 2. 79
Para (a) amended by Companies (Transfer of Functions) Act 2000 Sch 1 and by
SD155/10 Sch 2. 80
S 23 amended by Fees and Duties Act 1989 Sch 2, by Companies (Transfer of
Functions) Act 2000 Schs 1 and 2, by SD155/10 Sch 2 and by Interpretation Act 1976 s
16A. 81
S 29 repealed by Companies Act 1986 Sch 2. 82
S 31 repealed by Company Officers (Disqualification) Act 2009 Sch 5 with savings see
SD325/09. 83
Ss 33 and 34 repealed by Foreign Companies Act 2014 Sch. 84
S 36 repealed by Insurance Act 1986 Sch. 6. 85
Definition of 'a company liable to pay Company Registration Tax' repealed by
Companies Act 1992 Sch 6. 86
Definition of 'a company liable to pay Non-Resident Company Duty' inserted by
Companies Act 1992 Sch 6.
Endnotes
Companies Act 1982


Page 58 AT 2 of 1982 c

87
Definition of 'Department' inserted by SD155/10 Sch 2. 88
S 39 repealed by Statute Law Revision Act 1992 Sch 2. 89
Item (b) amended by Financial Supervision Commission Act 1984 s 1 and Sch 1 and
by SD2015/0090 as amended by SD2015/0276. 90
item (h) repealed by Companies (Amendment) Act 2009 s 20(1). 91
Subpara (2) amended by Financial Supervision Commission Act 1984 Sch 1 and by
SD2015/0090 as amended by SD2015/0276. 92
Para 14A added by Companies (Amendment) Act 2009 s 20(2). 93
Subpara (5) amended by Financial Supervision Commission Act 1984 Sch 1 and by
SD2015/0090 as amended by SD2015/0276. 94
Subpara (6) amended by Companies Act 1992 s 4. 95
Item (b) amended by Companies (Amendment) Act 2009 s 20(3). 96
Subpara (1) amended by Companies Act 1986 s 35. 97
Subpara (2) amended by Companies Act 1986 s 35. 98
Definition of 'banking company' repealed by Companies Act 1986 s 35. 99
Definition of 'discount company' amended by Financial Supervision Commission Act
1984 Sch 1 and by SD2015/0090 as amended by SD2015/0276. 100
Para 24 repealed by Insurance Act 1986 Sch 6. 101
Subpara (1) amended by Financial Supervision Commission Act 1984 Sch 1 and by
SD2015/0090 as amended by SD2015/0276. 102
Subpara (3) amended by Financial Supervision Commission Act 1984 s 1 and Sch 1
and by SD2015/0090 as amended by SD2015/0276. 103
Subpara (4) amended by Financial Supervision Commission Act 1984 s 1 and Sch 1
and by SD2015/0090 as amended by SD2015/0276. 104
Part I amended by Statute Law Revision Act 1983, by Companies Act 1986 Sch 2, by
Companies Act 1992 Sch 7, by Companies, etc. (Amendment) Act 2003 Sch 2, by
Company Officers (Disqualification) Act 2009 Sch 5 with savings (see SD325/09) and by
Foreign Companies Act 2014 Sch, and amends the following Act —Companies Act
1931 q.v. 105
Part II amended by GC155/91, by Financial Supervision Commission Act 1984 Sch 2,
by Treasury Act 1985 Sch 3 and by Company Officers (Disqualification) Act 2009 Sch 5
with savings (see SD325/09), and amends the following Act - Companies Act 1931 q.v. 106
Sch 3 repealed by Statute Law Revision Act 1992 Sch 2.