Companies Act 1986

Link to law: https://legislation.gov.im/cms/images/LEGISLATION/PRINCIPAL/1986/1986-0045/CompaniesAct1986_2.pdf
Published: 2014-08-01

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Companies Act 1986

c i e
AT 45 of 1986

COMPANIES ACT 1986

Companies Act 1986 Index


c AT 45 of 1986 Page 3

c i e
COMPANIES ACT 1986

Index Section Page

PART I – CAPACITY, POWERS AND MEMORANDUM AND

ARTICLES 5

1 Application ...................................................................................................................... 5
2 Capacity, powers etc ...................................................................................................... 6
3 Restrictions of rights, powers and privileges ............................................................. 6
4 Validity of acts ................................................................................................................. 6
5 Requirements with respect to memorandum ............................................................. 7
6 Amendment of memorandum ...................................................................................... 8
7 Tables A, C, D and E ....................................................................................................... 9
8 Regulations ...................................................................................................................... 9
PART II – MISCELLANEOUS AMENDMENTS OF THE COMPANIES

ACTS 1931 TO 1982 9

9 [Companies Act 1931: ss .1, 28, 114, 162 & 164 and Schedule 1 amended] ............. 9
10 to 12 [Companies Act 1931 ss. 15, 18 and 19 amended] .................................................. 10
13 [Companies Act 1931 ss. 26, 27 and 110 amended] .................................................. 10
14 to 16 [Companies Act 1931 ss. 46A, 48 and 63 amended]............................................... 10
17 [ Companies Act 1931 s. 94A] inserted ...................................................................... 10
18 [Companies Act 1931 ss. 107, 108 and 143 amended] .............................................. 10
19 [Companies Act 1931 s. 134 amended] ...................................................................... 10
20 [Repealed] ...................................................................................................................... 10
21 [Repealed] ...................................................................................................................... 10
22 and 23 [Companies Act 1931 ss 163 and 164 amended] ................................................. 10
24 [Companies Act 1931 ss. 215 and 218 amended] ...................................................... 10
25 [Companies Act 1931 s 273 amended ........................................................................ 10
26 [Repealed] ...................................................................................................................... 11
27 Companies Act 1931: s. 174 amended and ss. 274A and 274B inserted ................ 11
28 Companies Act 1931: ss 283B and 283C inserted ..................................................... 11
29 and 30 [Repealed] .......................................................................................................... 11
31 [Companies Act 1931: s. 325 amended....................................................................... 11
32 [Repealed] ...................................................................................................................... 11
Index Companies Act 1986


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33 and 34 [Companies Act 1982: ss. 14 and 16 amended .................................................... 11
35 [Companies Act 1982: Schedule 1 amended] ........................................................... 11
36 Minor and consequential amendments and corrections......................................... 11
PART III – SUPPLEMENTAL 12

37 Interpretation ................................................................................................................ 12
38 Short title, construction and commencement ........................................................... 12
SCHEDULE 1 13

MINOR AND CONSEQUENTIAL AMENDMENTS AND CORRECTIONS 13
SCHEDULE 2 13

TABLE OF LEGISLATION HISTORY 15
TABLE OF RENUMBERED PROVISIONS 15
TABLE OF ENDNOTE REFERENCES 15

Companies Act 1986 Section 1


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c i e
COMPANIES ACT 1986

Received Royal Assent: 10 October 1986
Passed: 21 October 1986
Commenced: 1 January 1987
AN ACT
to make new provision in relation to the capacity, rights, powers and
privileges of companies; to make miscellaneous amendments to the Companies
Acts 1931 to 1982; and for connected purposes.
PART I – CAPACITY, POWERS AND MEMORANDUM AND

ARTICLES

1 Application

(1) This Part shall apply —
(a) subject to subsection (6), to every company incorporated after the
commencement of this Part; and
(b) to any other company which passes a special resolution pursuant
to subsection (3).
(2) Except as provided by this section, this Part shall not apply to any
company incorporated before the commencement of this Part.
(3) A company to which this Part does not apply may, by special
resolution —
(a) resolve that this Part shall apply to it; and
(b) alter the provisions of its memorandum and articles so that they
comply with this Part.
(4) Where the provisions of a company’s memorandum are altered pursuant
to subsection (3), subsections (2) to (13) of section 5 of the Companies Act
1931 (in this Act referred to as “the 1931 Act
”) shall apply with the
necessary modifications to such alteration as they apply to an alteration
to the objects of a company under subsection (1) of that section.
(5) Sections 2, 5, 8 and 11 of, and Schedule 1 to, the 1931 Act shall not apply
to a company to which this Part applies.
Section 2 Companies Act 1986


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(6) This Part shall not apply to a company incorporated after the
commencement of this Part if the memorandum and articles of that
company were, before such commencement, delivered to the Department
pursuant to section 12 of the 1931 Act.1

2 Capacity, powers etc

[NZ1955/63/15A]
(1) A company has the capacity and, subject to this Act, the rights, powers
and privileges of an individual.
(2) Without prejudice to the generality of subsection (1), a company may —
(a) issue and allot fully or partly paid shares in the company;
(b) issue debentures of the company;
(c) distribute any of the property of the company among the
members, in kind or otherwise;
(d) give security by charging uncalled capital;
(e) grant a floating charge on the undertaking or property of the
company;
(f) procure the company to be registered or recognised as a body
corporate in any place outside the Island;
(g) make provision in connection with the cessation of the whole or
part of the business of the company, or of any subsidiary of the
company, for the benefit of employees or former employees of the
company or of a subsidiary of the company or for the dependants
of such employees or former employees; and
(h) do any other act that it is authorised to do by any statutory
provision or rule of law.
(3) The power conferred by subsection (2)(g) may be exercised whether or
not it is in the best interests of the company.
(4) This section does not authorise a company to carry on any business or to
do any act in breach of any statutory provision.
3 Restrictions of rights, powers and privileges

A company shall not exercise any right, power or privilege that it is restricted by
its memorandum or articles from exercising, nor shall a company exercise any
of its rights, powers and privileges in a manner contrary to its memorandum
and articles.
4 Validity of acts

(1) Nothing done by a company and no conveyance or transfer of any
property, whether real or personal, to or by a company shall be invalid,
void, or unenforceable by reason only of the fact that the company was
Companies Act 1986 Section 5


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without capacity or power to do it, or to execute, or give, or take such
conveyance or transfer.
(2) Nothing in subsection (1) shall apply —
(a) in any proceedings against the company by any member of the
company, or where the company has issued a debenture or
debentures secured by a floating charge over all or any of the
company’s undertaking or property, by the holder of any of those
debentures or the trustee for the holder of those debentures —
(i) to prevent the doing of any act, or the conveyance or
transfer of any property to or by the company on the
ground that the company is without capacity or power to
do the thing or to execute or take such conveyance or
transfer; or
(ii) to obtain any other relief on the ground that the company
was without capacity or power to do such thing, or to
execute or take such conveyance; or
(b) in any proceedings by the company or any member of the
company against any officer or former officer of the company as a
result of any thing done by the company or the conveyance or
transfer of any property to or by the company on the ground that
the company was without capacity or power to do such thing or
to execute, give, or take such conveyance or transfer.
(3) In any proceedings to which subsection (2)(a)(i) applies to prevent the
doing of any act, or the conveyance or transfer of any property by or to
the company pursuant to any contract to which the company is a party,
the Court may on the application of any party to the contract (including
the company), in addition to making any order restraining or preventing
the company from performing the contract, make an order granting such
relief as the Court thinks just in respect of any loss or damage which may
be sustained as a result of the company being prevented from
performing the contract.
(4) Nothing in subsection (3) shall authorise the granting of relief in respect
of the loss of anticipated or future profits.
5 Requirements with respect to memorandum

(1) The form of the memorandum of association of a company shall be in
accordance with the forms prescribed by regulations made by the
Department or as near to such forms as circumstances permit.2

(2) The memorandum shall state —
(a) the name of the company, with “Limited” as the last word of the
name in the case of a company limited by shares or by guarantee;
and
Section 6 Companies Act 1986


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(b) whether the company is a private company or a public company;
(c) that all the requirements of this Act in respect of matters relating
to registration and of matters precedent and incidental thereto
have been complied with.
(3) The memorandum of a company limited by shares or by guarantee shall
also state that the liability of its members is limited.
(4) The memorandum of a company limited by guarantee shall also state
that each member undertakes to contribute to the assets of the company,
in the event of its being wound up while he is a member, or within 1 year
after he ceases to be a member, for payment of the debts and liabilities of
the company contracted before he ceases to be a member, and of the
costs, charges and expenses of winding up, and for the adjustment of the
rights of the contributories among themselves, such amount as may be
required, not exceeding a specified amount.
(5) In the case of a company having a share capital —
(a) the memorandum shall also, unless the company is an unlimited
company, state the amount of share capital with which the
company proposes to be registered, and the division thereof into
shares of a fixed amount;
(b) the memorandum shall also state the number of shares each
subscriber takes;
(c) no subscriber of the memorandum may take less than one share.
(6) The memorandum of a company shall not contain any provision with
respect to the rights, powers and privileges of the company except a
provision that restricts or prohibits the exercise by the company of any of
the rights, powers and privileges referred to in section 2(2).
(7) Notwithstanding subsection (6), where a charity is a company, its
memorandum of association shall state the charitable objects of the
company and accordingly the capacity, rights, powers and privileges of
the company shall be exercised only for the purpose of giving effect to
those objects.3

6 Amendment of memorandum

(1) A company may, by special resolution, alter the memorandum of the
company by altering, omitting, or inserting any provision that restricts or
prohibits the exercise by the company of any of the rights, powers and
privileges referred to in section 2(2) or by altering any statement made
under section 5(2)(b).4

(2) Where a company passes a resolution pursuant to subsection (1), it shall
within 1 month of the passing of the resolution deliver to the Department
a copy of its memorandum as altered.5

Companies Act 1986 Section 7


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(3) If default is made in complying with subsection (2), the company and
every officer of the company who is in default shall be liable to a default
fine.
(4) This section shall not prejudice sections 19, 50 and 62 of the 1931 Act.
7 Tables A, C, D and E

[P1985/6/8]
(1) Tables A, C, D and E are as prescribed by regulations made by the
Department.6

(2) In the case of a company limited by shares, if articles are not registered
or, if articles are registered, in so far as they do not exclude or modify
Table A, that Table (so far as applicable, and as in force at the date of the
company’s registration) constitutes the company’s articles, in the same
manner and to the same extent as if articles in the form of that Table had
been duly registered.
(3) If in consequence of regulations under this section Table A is altered or
revoked, the alteration or revocation does not affect a company
registered before the alteration or revocation takes effect.
(4) The form of the articles of association of —
(a) a company limited by guarantee and not having a share capital;
(b) a company limited by guarantee and having a share capital;
(c) an unlimited company having a share capital,
shall be respectively In accordance with Tables C, D or E, or as near to
that form as the circumstances permit.
(5) Section 5(6) shall apply to a company’s articles as it applies to its
memorandum.
(6) In the application of the 1931 Act to a company to which this Part
applies, any reference to Table A, C, D or E shall be construed as a
reference to that table as prescribed under this section.
8 Regulations

Regulations under this Part shall be laid before Tynwald.
PART II – MISCELLANEOUS AMENDMENTS OF THE

COMPANIES ACTS 1931 TO 1982

9 [Companies Act 1931: ss .1, 28, 114, 162 & 164 and Schedule 1 amended]

(1) [Amends section 1 of the Companies Act 1931.]
(2) [Amends section 28 of the Companies Act 1931.]
Section 13 Companies Act 1986


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(3) [Amends section 114 of the Companies Act 1931.]
(4) [Amends section 162 of the Companies Act 1931.]
(5) [Amends section 164 of the Companies Act 1931.]
(6) [Amends Schedule 1 to the Companies Act 1931.]
10 to 12 [Companies Act 1931 ss. 15, 18 and 19 amended]

13 [Companies Act 1931 ss. 26, 27 and 110 amended]

14 to 16 [Companies Act 1931 ss. 46A, 48 and 63 amended]

17 [ Companies Act 1931 s. 94A] inserted

18 [Companies Act 1931 ss. 107, 108 and 143 amended]

(1) (a) ......7

(b) to (d) [Amend section 107 of the Companies Act 1931.]
(2) to (4) [Amend sections 108 and 143 respectively of the Companies Act
1931.]
(5) [Repeals Schedule 6 to the Companies Act 1931.]
(6) [Repeals sections 14 and 21 of the Companies Act 1974.]
19 [Companies Act 1931 s. 134 amended]

20 [Repealed]
8

21 [Repealed]
9

22 and 23 [Companies Act 1931 ss 163 and 164 amended]

[Amend sections 163 and 164 respectively of the Companies Act 1931.]
24 [Companies Act 1931 ss. 215 and 218 amended]

(1) and (2) [Amend sections 215 and 218 respectively of the Companies Act 1931.]
25 [Companies Act 1931 s 273 amended

[Amends section 273 of the Companies Act 1931.]
Companies Act 1986 Section 26


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26 [Repealed]
10

27 Companies Act 1931: s. 174 amended and ss. 274A and 274B inserted

(1) Amends section 274 of the Companies Act 1931.]
(2) [Inserts sections 274A, 274B and 274C in the Companies Act 1931.]
28 Companies Act 1931: ss 283B and 283C inserted

(1) [Inserts sections 283B and 283C in the Companies Act 1931.]
(2) This section shall not have effect in respect of any document submitted to
the registrar before the day appointed for the commencement of this
section.
29 and 30 [Repealed]
11

31 [Companies Act 1931: s. 325 amended

(1) [Amends section 325 of the Companies Act 1931.]
(2) [Amends section 47 of the Partnership Act 1909.]
(3) This section shall not have affect in relation to any proceedings
commenced or instituted before the commencement of this section.
32 [Repealed]
12

33 and 34 [Companies Act 1982: ss. 14 and 16 amended

[Amend sections 14 and 19 respectively of the Companies Act 1982.]13

35 [Companies Act 1982: Schedule 1 amended]

(a) [Amends Schedule 1 to the Companies Act 1982.]
(b) ......14

36 Minor and consequential amendments and corrections

(1) The enactments referred to in Schedule 1 are amended in accordance
with that Schedule.
(2) ......15

Section 37 Companies Act 1986


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PART III – SUPPLEMENTAL

37 Interpretation

In this Act —
“the 1931 Act
” has the meaning given by section 1(4);
“the 1974 Act
” has the meaning given by section 18(6);
“the 1982 Act
” has the meaning given by section 33;
“Department
” means the Department of Economic Development;16

38 Short title, construction and commencement

(1) This Act may be cited as the Companies Act 1986 and shall be construed
as one with the Companies Acts 1931 to 1982 and those Acts and this Act
may be cited together as the Companies Acts 1931 to 1986.
(2) This Act shall come into operation on such day or days as the Treasury
may by order appoint and different days may be so appointed for
different provisions and different purposes.17

Companies Act 1986 Schedule 1



c AT 45 of 1986 Page 13

Schedule 1

MINOR AND CONSEQUENTIAL AMENDMENTS AND CORRECTIONS

Section 36(1)18

Schedule 2
19

Companies Act 1986
Error! No text of specified style in document.



c AT 45 of 1986 Page 15

Endnotes
Table of Legislation History

Legislation Year and No Commencement






Table of Renumbered Provisions

Original Current






Table of Endnote References

1
Subs (6) amended by Companies (Transfer of Functions) Act 2000 Sch 1 and by
SD155/10 Sch 2. 2
Subs (1) amended by Companies (Transfer of Functions) Act 2000 Sch 2 and by
SD155/10 Sch 2. 3
Subs (7) added by Companies Act 1992 Sch 5. 4
Subs (1) amended by Statute Law Revision Act 1989 Sch 1. 5
Subs (2) amended by Companies (Transfer of Functions) Act 2000 Sch 1 and by
SD155/10 Sch 2. 6
Subs (1) amended by Companies (Transfer of Functions) Act 2000 Sch 2 and by
SD155/10 Sch 2. 7
Para (a) repealed by Companies Act 1992 Sch 7. 8
S 20 repealed by Company Officers (Disqualification) Act 2009 Sch 5. 9
S 21 repealed by Companies, etc. (Amendment) Act 2003 Sch 2. 10
S 26 repealed by Companies, etc. (Amendment) Act 2003 Sch 2. 11
Ss 29 and 30 repealed by Foreign Companies Act 2014 Sch. 12
S 32 repealed by Summary Jurisdiction Act 1989 Sch 6. 13
See the Companies Act 1982, s 14. 14
Para (b) repealed by Companies Act 1992 Sch. 7. 15
Subs (2) repealed by Statute Law Revision Act 1992 Sch 2. 16
Definition of “Department” inserted by SD155/10 Sch 2. 17
ADO (ss 9, 11 to 17, 18(1)(a), (b), (d), 18(2), 18(3), 19 to 38, Sch 1, Sch 2 (except the
entries relating to s 29 of Companies Act 1982 and to the Financial Supervision Act
1984) 1/1/1987 (GC392/86); (remainder of s 18) 1/4/1987 (GC24/87); (remainder of Act)
1/6/1988 (GC73/88).
Error! No text of specified style in document.
Companies Act 1986


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18
Sch 1 amended by Companies (Transfer of Functions) Act 2000 Sch 3, and amends
the following Acts — Companies Act 1931 q.v. and Companies Act 1982 q.v. 19
Sch 2 repealed by Statute Law Revision Act 1992 Sch 2.