News and Insights

As part of our series on the recent amendments to the Companies (Jersey) Law 1991, which came into effect on 1 June 2026, this “espresso" article explains why the requirement for a par value company to have an authorised share capital was removed.
 
Why was the authorised share capital requirement removed?
 
The change aims to modernise Jersey law and align it with English law, where the requirement had already been removed. The historical protections the cap provided are no longer considered necessary.
 
Prior to the recent amendments, a par value company was required to state its maximum authorised share capital in its memorandum of association (for example, £10,000 divided into 10,000 ordinary shares of £1.00 par value each). Issuing shares beyond that ceiling required a shareholder resolution to increase authorised capital first, creating an additional procedural step before any new issuance could proceed.
 
Par value companies are no longer required to include a maximum authorised share capital in their memorandum, although they may still choose to retain one. Existing companies will remain subject to any authorised share capital limit in their memorandum of association until shareholders pass a special resolution to remove or amend it.
 
What benefits will the removal of the requirement bring?
 
The most immediate practical benefit is the removal of the need to pass a shareholder resolution to increase authorised share capital before issuing new shares. For investment fund structures, joint ventures or group reorganisations where new equity needs to be issued at speed, this eliminates one procedural step and reduces the risk of deal timing being disrupted by the need to convene meetings or obtain written resolutions to increase the cap first.
 
The change also brings Jersey into line with competitor jurisdictions. Cayman Islands and BVI companies have long been able to issue shares without reference to a fixed authorised capital ceiling (subject to their own constitutional documents), giving them a perceived advantage in terms of administrative ease. Jersey companies can now offer the same flexibility.
 
For corporate administrators and financial services businesses, the reform should simplify the ongoing management of structures and save time and fees.