Overview of IBC (International Business Company) Law

Comparison of Four Models

Company law based on English Common Law is the most frequent model for the classic offshore jurisdictions, such as the BVI, the Bahamas, Hong Kong and Belize. Company law in this type of jurisdiction is typically modeled on the UK Companies Act 1948.

The Companies Act 1948 draws from 1844, 1855, 1862, 1897, 1900 and 1929 Acts and many concepts, such as the acceptance of nominee shareholders, are based on 19 th Century Acts. The Joint Stock Companies Act 1856 introduced the Memorandum and Articles of Association and provided for incorporation by registration.

European corporate law is often based on French Law of 1864 and usually differentiates between the "share" company and the public company. The former is usually characterized by a lower initial capital and a smaller number of subscribers whilst the latter is allowed to issue securities that are publicly negotiable.

Incorporation procedures in Civil Law jurisdictions are different from those in Common Law countries:

• An amount of paid-up capital must be subscribed before incorporation
• A company's statutes are essentially a contract between the subscribers
• Procedures are more onerous than in Common Law countries
• Incorporation is facilitated by a notary
• Corporate law in Civil Law countries often splits the responsibility of boards of directors between an executive and a supervisory board
• Powers of directors may be curtailed
• Liquidation procedures are time consuming and complex
• A legal reserve may be required

US Corporate Law has been influenced by both English and Civil Law. Apart from differences in language, terminology and interpretation US Company Law differs from English Law in significant ways, including:

• US Corporations have officers in addition to directors
• By-laws are often adopted after incorporation
• Directors are often empowered to change by-laws

Company law in Liberia, Panama and Nevis has been influenced by US Law.

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