Contact

Helen Wyatt

Helen Wyatt

Partner | Guernsey

Andrew Grant

Andrew Grant

Senior Associate | Guernsey

The last time travel to the Bailiwick was as restricted: Operating Guernsey companies during the Occupation (1940-1945)

11 June 2020

Guernsey's response (with the permission of the occupying Feldkommandant) and how it is, thankfully, more straightforward now!

There are numerous articles on how to hold board meetings during the COVID-19 pandemic when directors are unable to meet in Guernsey in person, for example this comprehensive piece by our colleagues.

However in this article we look at how Guernsey companies continued to operate during the period Guernsey was occupied by the German Forces in the Second World War, and how it is thankfully a lot more straightforward in 2020.

2020's issues, without 2020's solutions

The question of how a company can continue to practically operate when the directors of that company cannot physically meet in Guernsey is one we have been addressing with clients over the last few months. In 2020 with video and audio conferencing, the useful provisions of the Companies (Guernsey) Law, 2008 and with most companies' articles providing solutions, this has practically not been an issue for most Guernsey companies.

During the German occupation of the Channel Islands, it was obviously not possible for directors to dial in from London and the Kreigsmarine and the Luftwaffe provided more disruption than even the hungriest toddler interrupting a video call.

The 1908-1936 Companies Laws provided little help in this situation, at the time leaving the proceedings of directors entirely to the memorandum and articles of a company. In addition, the 1908-1936 Companies Laws required a minimum of seven members (and a quorum of five members for a general meeting) and that as a minimum qualification, a director must be a shareholder. So how did boards establish quorums and appoint new directors during the occupation, and how were general meetings conducted?

The 1941 supplementary law

Though it must have been quite low down on the list of matters requiring attention from the States and the Lieutenant Governor, the Loi supplémentaire à la Loi relative aux Sociétés Anonymes ou à Responsabilité Limitée 1941 was passed to deal with the myriad of issues faced by companies which were unable, as a result of the Occupation, to comply with the 1908-1936 Companies Laws and their memorandum and articles. The 1941 Law provided simply that the Court of Chief Pleas was empowered to prescribe the formalities which should be observed instead of those set out in the law of the time (or a company's memorandum or articles) relating to the appointment and qualification of directors, replacing absent directors and the holding of general meetings of such a company.

Interestingly, the 1941 Law was passed by the Civil Lieutenant Governor of the Island of Guernsey In exercise of the power conferred on him by an Order of the Commandant of the German Forces in occupation of the Bailiwick of Guernsey, and it did not receive royal assent, because of course that was not possible.

For the avoidance of doubt, the 1941 Law was repealed in 1947 and the requirements for a minimum of seven members, quorums of five member and that all directors be shareholders have long since been repealed. We are certain that our new Bailiff will not appreciate a raft of applications when the Court of Chief Pleas next meets in its now largely ceremonial capacity in October, so please get in contact with us if you want to talk through your company's practical operational options in 2020!

The key takeaway in researching this piece is that Guernsey's legislators, legal institutions and business community adapted to the situation in 1940 to come up with a practical solution despite the logistical problems each faced. This is what we must continue to do today in 2020.

 

 

 

 

 

 

Contact

Helen Wyatt

Helen Wyatt

Partner | Guernsey

Andrew Grant

Andrew Grant

Senior Associate | Guernsey

About Mourant

Mourant is a law firm-led, professional services business with over 60 years' experience in the financial services sector. We advise on the laws of the British Virgin Islands, the Cayman Islands, Guernsey, Jersey and Luxembourg and provide specialist entity management, governance, regulatory and consulting services.

Scroll To Top