International Business Companies (Amendment) Act 2011
This Act (The “Act”), which was signed in December 2011, has repealed and replaced the relevant sections of the International Business Companies Act, 1994 (The “IBC Act”).
In line with many low-tax jurisdictions the Seychelles has legislated to tighten corporate governance for local companies. We consider below the changes in as far as they affect the maintenance of Accounting Records, Shareholders Registers, Directors and Officers Registers and Minutes, and the location of the Registered Office and Agent.
The Act has repealed and replaced section 65(1) of the IBC Act. The new section clarifies the documents or information that an IBC must keep in relation to accounting records, the location where such records must be kept and the time period for preserving such records. This amendment will be applied prospectively given that existing IBCs may not currently be complying with section 65(1)(e).
For clarification purposes, it should be noted that the legislation does not require an IBC to prepare or file accounts or financial statements.
The Registrar has taken note of the anomaly introduced by the new section 65(2)(d) of the Act whereby the 3 months timeframe captures the whole of section 65(1) and which does not reflect the spirit of the law. Whist the 3 months timeframe will not be enforced to remedy this matter the Registrar expects all IBCs to be complying with section 65(1)(d) by January 1st, 2013.
Section 65(1) of the IBC Act is replaced by provisions requiring an IBC to maintain proper accounting records that:
(a) are sufficient to show and correctly explain the IBC’s transactions;
(b) enable the financial position of the IBC to be determined with reasonable accuracy at any time; and
(c) enable for accounts of the IBC to be prepared.
The amendment goes on to state that the requirements of section 65(1) will not be met if the accounting records do not give a true and fair view of the IBC’s affairs and explain its transactions.
The accounting records must be maintained for a period of seven years from the date of completion of the transactions that they relate.
The accounting records must be kept at the registered office of the IBC or at such other place as the directors of the IBC may think fit.
Where the accounting records are kept at a place other than the registered office of the IBC, the IBC shall inform the registered agent in writing of the place at which the accounting records are kept.
The Act has amended section 28(1) of the IBC Act to require a copy of the share register of every IBC to be kept in the Seychelles. Previously the share register of an IBC could be maintained at the registered office of the IBC or such other place as determined by the directors of the IBC.
Whilst the current law does not provide a timeframe for existing IBCs to comply with this amendment, the Registrar expects all IBCs to be complying with section 28(3) by January 1st, 2013.
Register of directors and officers
The Act has amended section 65(2)(c) of the IBC Act in order to provide for the content of the register of directors and officers.
The amendment also requires the register to be kept in the Seychelles. The Registrar notes that the 3 months timeframe for compliance by existing IBCs is not practical. Whilst this timeframe will not be enforced, the Registrar expects all IBCs to be complying with section 65(2)(c) by January 1st, 2013.
For practical purposes, the Registrar will accept a copy of the register to be kept in Seychelles.
The contents of the register of directors and officers of an IBC are required to show the following information:
a. the name and address of each director or officer;
b. the date on which each person is appointed as a director or officer;
c. the date a person ceases to be a director or officer; and
d. such other information as prescribed by the Minister in the regulations.
Section 38 of the IBC Act is amended to require that the registered office of an IBC must be the same address as the address of the registered agent of the IBC. An IBC has three months in which to comply with this requirement.
Records of Minutes & Resolutions
Section 65(3) of the IBC Act is amended to require that the registered agent must be informed in writing to any change to the place at which copies of minutes of meetings and resolutions relating to the affairs of the IBC are kept where such place is not the registered office of the IBC.