Are you looking to penetrate the European market? Then, company formation in the Isle of Man can be your golden opportunity for expansion in Europe. The Isle of Man is a British Crown Dependency located in the Irish Sea and part of the British Isles archipelago.
But what makes the Isle of Man so attractive for business owners? Moody’s rating pegs the Isle of Man’s financial standing and economic growth as stronger than most of Europe. Moreover, Moody’s also assigns its economic strength an A3 rating, which implies a high wealth level, strong institutions, and low debt.
The consistent economic growth and business-friendly environment make the country a viable location for international expansion. So, if you are an entrepreneur considering offshore company formation, the Isle of Man is the way to go.
But a firm set up in this location has its own requirements, and one of them is knowing the proper company structure that fits your business requirements. This blog guides you on the numerous company structures in the Isle of Man that you can choose from to jumpstart your offshore company’s growth.
Isle of Man Company Structures
You can choose from the following company structures for an Isle of Man company set up:
Limited Partnership
It is one of the prominent structures for company registration in the Isle of Man. An Isle of Man limited partnership must be registered with the Companies Registrar; otherwise, it will be considered a general partnership in the eyes of the law.
Moreover, there must be no more than 20 members, and at least one general partner and at least one limited partner must be present. On top of that, a limited partner cannot withdraw their contribution or partake in the day-to-day management of the company.
Limited Liability Company
A limited liability company is another type of offshore company structure that you can choose in the Isle of Man. With quick setup, it is suitable for most types of businesses. Aside from this, it is a separate legal entity, and every member enjoys limited liability.
Foundations
You can also set up a foundation in the Isle of Man. It is a legal arrangement created to safeguard the assets or for a specific purpose. You require a class 4 license holder who also serves as the foundation’s registered agent. Moreover, the registered agent’s legal address must be the same as the foundation’s legal address. This is because the agent acts as the local link in the Isle of Man and helps prevent brass plate operations.
Foreign Company
A foreign company is any company that is registered in any jurisdiction outside of the Isle of Man and has business establishments or owns land in the Isle of Man. These companies must register under the Foreign Companies Act, 2014, or face hefty penalties.
1931 Act Company
The Isle of Man has two Companies Acts, 1931 and 2006, and a new firm can the formed under either. The ones registered under the 2006 Companies Act are known as the 2006 Act Company.
1931 Act Company can be incorporated as a company limited by shares or guarantee. It can also be hybrid and combine both aspects. However, it requires 75% voting majority to amend articles. Moreover, a private company must have “Limited” or “Ltd” as the designation, whereas a public company can have “public limited company” or “PLC” as the designation.
2006 Act Company
The company incorporated under the Companies Act 2006 is labeled as a 2006 Act Company. Firms can be incorporated as limited by shares, guarantee, or hybrid. Or it can be an unlimited company with or without shares. Moreover, the MoA and AoA are absolutely mandatory. Some of the significant differences between 1931 Act Companies and 2006 Act Companies are the majority rights. For the 2006 Act, the condition or majority is specified within the memorandum. Aside from this, there is no distinction between the designations such as ‘Limited’, ‘Ltd’, ‘Incorporated’, ‘Inc’, etc. Moreover, there is no distinction between public and private companies either.
There are numerous offshore company structures that you can choose from for company registration in the Isle of Man. Moreover, the requirements can vary considerably depending on the law applicable to your company type. In this case, hiring an offshore business consultant, such as Business Setup Worldwide, can ease the legal complexities.