In 2015, Gibraltar will celebrate its 40th anniversary as an European Union member state and decided to amend its Companies Law that has been lingering behind the latest business practices. At the beginning of March, Gibraltar enacted its new Companies Act redacted in 2014. The Gibraltar Companies Act was last updated in 1930, which is why in 2010 a modernization of the company legislation was decided.
The new Companies Law comprises several amendments directed to the improvement of the legislation and bringing it in line with the needs of major regulatory bodies, such as the Companies Register, the Gibraltar Society of Accountants and the Gibraltar Funds and Investments Association that have evolved over time. The new Companies Act was also brought in line with EU Directives and the Companies Act of England and Wales.
One of the biggest changes refers to the manner documents will be executed. The new law specifies deeds and documents will be executed by a Gibraltar company’s director and a witness or by two authorized signatories only.
Based on the UK model, the new Gibraltar Companies Act also introduced a “whitewash” provision regarding financial assistance. According to this new provision, financial assistance from a holding company incorporated in Gibraltar for the parent company in another country will no longer be possible. The only way a holding company will financially assist its parent company will be through the “whitewash” provisions. Gibraltar private companies will give financial aid, if its net assets are not reduced and, if reduced, only to the extent of their reduction.
Under the new Companies Act, Gibraltar companies will benefit from e-filing options and will also be allowed to publish certain information on web portals. The communication channels between a company and its shareholders have also been improved. Shareholders may use electronic communication facilities in order for information to be delivered in a more effective and timely manner. The Companies Registrar may also impose certain requirements relating to the form, authentication and delivery of documents.