1931 Companies are incorporated under the Isle of Man Companies Acts 1931-2004.
Here is the legislation.
It’s not terribly user friendly I’m afraid – it would be much better if they consolidated the whole thing like they did in the UK with the Companies Act 1985 – the Isle of Man 2006 Act is much more accessible.
Some Manx Advocates still favour 1931-2004 Act Isle of Man companies over the newer 2006 ones – one reason for this is that its older and therefore more ‘tried and tested’ – which in their view provides greater certainty.
Personally, I think the benefits of the newer 2006 Act over the 1931 Act far outweigh its disadvantages and I’d estimate that, as a business, we incorporate 10 times as many of the 2006 Act companies old ones.
For our clients, I’d say the key benefits of the 2006 Act companies are:
(i) Flexibility of the share capital – which enables straightforward restructuring where a court order would be required for a 1931 company.
(ii) Simplified rules concerning distributions – all reserves are distributable subject to a simple solvency test.
(iii) Simplified administration – many matters – such as the requirement to hold AGMs are left to the Articles and so can be tailored to the clients requirements. One significant difference to consider is that 2006 Companies require a licensed fiduciary – like ourselves – as a registered agent which adds to the cost – many local businesses continue to use the 1931 Act companies for exactly this reason.