SIBA has called on the public to comment on a new companies act that seeks to reform and modernize Seychelles' companies legislation. The public has until the 25th February 2011 to provide its feedback. The proposed bill seeks to unify all of the various companies legislation into one comprehensive act.
The white paper and the proposed bill can be downloaded from the SIBA website through the following link http://www.siba.net/index.php?s=downloads.
Comments should be forwarded to the Ministry of Finance at firstname.lastname@example.org
A brief perusal of the bill reveals that it seeks to do away with the proprietary limited company, this despite the fact that the vast majority of Seychelles companies are proprietary limited companies. Proprietary limited companies, are companies formed by small groups of individuals, usually within a family circle or close network of friends, it gives the shareholders of these companies certain statutory protections, ensuring that the ownership and control of such companies stay within the family circle or close network of friends. The proposed bill, if passed, will remove all of these statutory protections. And although these may be catered for by amending such a companies' constitutional documents, it will require positive action from the shareholders of such companies to make such changes. Lots of problems will be caused to shareholders of proprietary companies if the proposed bill is passed as is.
Another significant change is that the proposed bill seeks to do away with the Registrar General's role as the Registrar of Companies and transfer that role to SIBA, or a successor organization to SIBA. The Registrar General maintains the register of ordinary companies in addition to the land register and other official registers (business names, register of deeds), located at Kignsgate House, it is a one-stop shop for inquiring into virtually all official local registers. SIBA is presently the Registrar of International Business Companies (IBC's), which is a company that is registered in Seychelles but is not allowed to engage in business in Seychelles (barring certain administrative functions), the IBC is used for wealth management purposes and as a part of complex holding structures. To transfer the ordinary companies registry functions to SIBA would cause several practical difficulties. If one wanted to ascertain if an ordinary company is in good standing and if it owns land or whether it owns certain business names, one will then have to deal with 2 separate registries to obtain such information. It's like having the hospital at Mont Fleuri and transferring the pharmacy to Roche Caiman. Bravo!
The Mutual and Hedge Fund Act 2008 was a failure. The Securities Act 2007 is also a failure. Both were being touted as brilliant pieces of legislation by SIBA. Both have failed to garner any significant business in Seychelles. Both led to our Members of National Assembly wasting their time and energy to raise their hands to pass it as legislation. But at least that was the limit of the damage it caused. The proposed bill, if passed, will have even more negative consequences. It also encroaches into areas that are the preserve of the Civil Code of Seychelles (laws on pledges, incapacity etc), which shows a lack of appreciation of Seychelles law from the bill's drafters and proponents.
The vast majority of the members of the Bar Association of Seychelles are against the proposed companies bill and virtually all of the older lawyers think that it is an abomination. The bill presents itself as a modern reform to our laws but actually creates more problems instead of solving any. The vast majority of SAOPRA (the association of corporate service providers, who deal in IBC registration and administration amongst other things) also think that the proposed bill is ill-conceived.
In an advert on the Nation of Tuesday, 15th February, SIBA also advertised that comments on a proposed Trust Bill 2011 and Corporate Service Providers Bill 2011 would also be welcomed from the public and that all of these bills are available from their website. But at the time of going to press (the Nation), none of these two bills were available for download. Yet, SIBA has placed a deadline of 25th February for the public to comment on these bills. Hey genuises, how can the public comment on the bills when you are not allowing the public access to them? (As of noon, 16/02/2011, the SIBA website is now stating that the two proposed bills "will be uploaded shortly").
The proposed companies bill should be thrown into the bin like the proposed LPA that SIBA was pushing for.
If the Government really wants to reform the company laws, this should be done with the consultation of the main stakeholders of the country. The business community should be engaged with the lawyers, accountants, corporate service providers and the tax authorities, at the very least. Areas needing change should be identified and then proposals for reform suggested. If a new act is needed, then so be it, if only certain amendments to the current laws are required, then let that be the solution. Only then should any draft bill/amendments be made, and even then, it should be drafted by proper qualified legal draftsmen.
These secret drafts in which the public is given only a week or two to comment on is a sham and is disgusting in a supposed democratic society.
The Robing Room is the official blog of the Seychelles Legal Environment Website (sites.google.com/site/theseychelleslegalenvironment), the only website about the Seychelles Legal Environment that is constantly updated.