News and Insights
6 October 2022
We offer standard form Jersey Legal Opinions at a fixed rate of £995 per Jersey Entity. The opinion is usually given within 24-48 hours of receiving all required documentation.
This article gives an overview of the matters relevant to the issuing of a Jersey legal opinion, the form and content of the legal opinion, and the practical steps to be taken when requesting a legal opinion.
What is a Jersey legal opinion?
A legal opinion is a formal letter signed by Jersey qualified counsel offering a legal analysis of matters relevant to a prospective transaction or step with binding legal consequences.
The primary purposes of a legal opinion are to:
- State counsel's views regarding the ability of a Jersey company, partnership or foundation or the trustees of a Jersey trust (together the Jersey Entity) to enter into and perform their obligations as recorded in the documents setting out a proposed agreement or arrangement (a Transaction Document).
- Inform the addressee of the legal effect of a Transaction Document.
- Identify such legal risks as the addressee may wish to consider further.
Structure and content
A legal opinion will generally organise the information supplied under the following headings:
- Background (for example, to make clear the opining law firm's role in the transaction).
- Definitions of material persons, provisions and documents.
- Opinion given. This will typically be limited to specific questions of law rather than addressing questions of fact.
- Documents examined (for example, the relevant Transaction Documents and the constitutional documents of the Jersey Entity).
- Enquiries made (for example, at the JFSC or with the Viscount of the Royal Court).
- Assumptions and Qualifications. Typically, these will relate to factual matters that the opinion provider has been informed of by third parties, which would not be efficient to double-check. Such issues are excluded from the scope of the opinion given. In many cases, matters covered by the assumptions will be addressed by appropriate warranties in the Transaction Documents.
What confirmations/opinions are usually provided in a Jersey legal opinion?
The contents of the opinions requested will vary depending upon the recipient's requirements, but the most common confirmations and opinions given relate to the following:
- Whether the Jersey Entity is duly incorporated or otherwise existing.
- Whether the Jersey Entity has the necessary corporate powers to undertake the deal recorded in the Transaction Document.
- Whether the Transaction Document has been duly executed.
- Whether entry into and performance of the deal recorded in the Transaction Document conflicts with its constitutional documents or any local law or regulations.
- Whether any authorisation, approval or consent of any public authority is necessary in connection with the entry into the Transaction Document, and if so, whether it has been obtained and is in full force and effect.
- Whether the obligations arising under the Transaction Documents are legal, valid, binding and enforceable obligations as a matter of Jersey law.
- Whether the Transaction Document needs to be registered, recorded, notarised or filed at any public office.
- Whether any stamp duty or equivalent documentary tax, registration fees or notarial fees are payable in connection with the Transaction Documents.
- Whether any withholding tax or other tax will be payable in connection with the Transaction Document.
- Whether the choice of governing law in the Transaction Document and its choice of court to determine disputes will be recognised and applied by the courts of Jersey.
- Whether the Jersey Entity or any asset has immunity from seizure or enforcement or legal proceedings.
- Whether any counterparty will be deemed to be resident or domiciled in Jersey owing to its entry into the Transaction Document.
Jersey Entity's constitutional documents
In order to provide such confirmations, reviews of the Jersey Entity's constitutional documents must be carried out by the counsel providing the opinion.
Where a Jersey company is entering into the Transaction Document, it is important to check, amongst other matters, the following:
- The provisions in the constitutional documents relating to directors' interests and whether, having declared them, they may proceed to count in the quorum for taking and voting on the required resolutions.
- Whether differences in class rights between the members of the Company may impact the opinions to be given or its entry into the Transaction Documents.
- Whether there are any restrictions on directors being resident or present in certain jurisdictions and whether this affects their ability to count in the quorum for taking and voting on the required resolutions.
- Whether telephone/electronic attendance is permitted at board meetings.
- Whether the requisite number of directors have been appointed to its board.
- Whether the constitutional documents of the Jersey Entity permit reliance upon a sole director and / or the use of written resolutions.
- Whether corporate directors may sit on the board of the Jersey Entity.
- Whether a minimum number of Jersey resident persons must be directors of the Jersey Entity.
- Whether there are restrictions in the constitutional documents of the Jersey Entity that might inhibit its performance of the deal recorded in the Transaction Document.
- Where Jersey security is to be taken over the shares in a Jersey company, could its constitution restrict the enforcement of such security?
Resolutions and authorisations
The Jersey lawyers will be expected to review the Jersey Entity's board minutes/corporate authorisations to check that the Jersey Entity has correctly approved the Transaction Documents.
When reviewing such approvals, the following checks should be undertaken:
- They should expressly refer to the Transaction Documents, and the Transaction Documents should be tabled and approved.
- They should describe or identify the directors or authorised persons who may execute the Transaction Document on behalf of the Jersey Entity.
Prior to issuing a Jersey legal opinion, it is usual for opining counsel to search or make enquires at the following publicly available sources of information:
- The records of the Jersey Entity maintained by the JFSC.
- The office of the Viscount (the executive officer of the Jersey courts).
- The Jersey Security Interests Register maintained by the Jersey Registrar of Companies by reference to the current name and registered number of the Jersey Entity.
In some transactions, it may also be necessary to request that confirmation is given by a representative of the Judicial Greffe in Jersey as to whether any application has been made to the Royal Court for an order that a creditors' or other winding up be launched in respect of the Jersey Entity.
When can opinions be issued?
Before issuing an opinion, the opinion provider must be provided with the following:
- Clear search results.
- A final form Transaction Document.
- Executed corporate authorisations covering the entering into of the Transaction Document.
Vibert's Corporate law team regularly provides legal opinions in relation to Jersey companies, foundations, trusts and limited partnerships.
For more information, please do not hesitate to contact us.