Simcocks Director, Alex Spencer, discusses the firm’s experience and expertise in providing Isle of Man legal opinions.
What is a legal opinion?
In banking and finance matters, a legal opinion is often sought to confirm the capacity and valid incorporation and existence of a legal entity. They are commonly sought in the context of loan and security transactions, property sale and purchase transactions and share sale and purchase transactions.
When might a client require a legal opinion from an Isle of Man advocate?
Where a transaction involves an Isle of Man entity / structure (for example an Isle of Man company, partnership or trust), a legal opinion may be required by, for example, a bank / lender or transaction counterparty, in respect of Isle of Man law to confirm, amongst other things, that the Isle of Man entity is duly incorporated and validly existing and that the documents being entered into by the Isle of Man entity have been correctly executed are binding and enforceable.
Legal opinions are commonly sought in the context of loan and security transactions, property sale and purchase transactions and share sale and purchase transactions.
Wouldn’t that information already be publicly available?
Whilst public registry searches are available, they reveal only limited information. For example, a company incorporated under the Isle of Man Companies Act 2006 is not required to notify changes in respect of its directors, nor is it required to file details of its members or share capital. In the case of trusts, there is no public register, and trust deeds are private.
It is customary to undertake searches at the Isle of Man Companies Registry and the High Court Rolls Office. The purpose of the Companies Registry search is to check, amongst other issues, whether or not a company is duly incorporated and validly existing, whether or not any mortgages or charges have been registered against the company’s file and whether or not any filings in respect of liquidation or winding-up have been made. The Rolls Office search is to reveal whether or not a company (or partner or trustee in relevant cases) is subject to litigation in the Isle of Man.
Isle of Man advocates often rely on a certificate from a director, registered agent, trustee or other relevant person to confirm information which either cannot be obtained from public records or to supplement the information which is publicly available.
In bank financing transactions, it is often a condition precedent to drawdown of the facility that a director of the relevant company provides a certificate confirming, amongst other matters, the solvency of the company in question and appending certain copy documents in relation to the company.
To read the full Q&A please download the PDF file here: Legal Opinions: What are they and why might you need one?