Bahamas IBC Act -309 - Preliminary

Bahamas Formations Bahamas IBC Act -309 Bahamas IBC Act

CHAPTER 309

INTERNATIONAL BUSINESS COMPANIES

PART I - PRELIMINARY

An Act to provide for the incorporation, registration and operation of International Business Companies.

45 of 2000
19 of 2001
S.I. 128/2001

[Commencement 29th December, 2000]

PART I - PRELIMINARY

Short title

1.This Act may be cited as the International Business Companies Act, 2000.

Interpretation

2.(1) In this Act-

"agent" includes registered agent;

"Articles" means the Articles of Association of a company incorporated under this Act;

"authorised capital", in relation to a company, means the sum of the aggregate par value of all shares which the company is authorised by its Memorandum to issue plus the amount, if any, stated in its Memorandum as authorised capital to be represented by shares without par value which the company is authorised by its Memorandum to issue;

"capital", in relation to a company, means the sum of the aggregate par value of all the outstanding shares with par value of a company and shares with par value held by the company as treasury shares plus-

(a) the aggregate of the amounts designated as capital of all outstanding shares without par value of the company and shares without par value held by the company as treasury shares; and

(b) the amounts as are from time to time transferred from surplus to capital by a resolution of the directors;

"company" unless the context otherwise requires, means an International Business Company incorporated under this Act;

"Companies Act" means the Companies Act of The Bahamas;

"continued" means continued in accordance with Part VIII;

"court" means the Supreme Court or a Judge thereof;

"member" includes a person who holds shares in a company;

"Memorandum" means the Memorandum of Association of a company incorporated under this Act;

"Register" means the Register of International Business Companies maintained by the Registrar in accordance with section 15(1) ;

"registered agent" means the person who is at any particular time performing the functions of registered agent of a company incorporated under this Act;

"Registrar" means the Registrar of Companies;

"Registrar of Companies" means the Registrar General;

"securities" includes shares and debt obligations of every kind, and options, warrants and rights to acquire shares or debt obligations;

"surplus", in relation to a company, means the excess, if any, at the time of the determination, of total assets of the company over the sum of its total liabilities, as shown in the books of account plus its issued and outstanding share capital;

"treasury shares" means shares of a company that were previously issued but were repurchased, redeemed or otherwise acquired by the company and not cancelled.

(2) A company that is incorporated under the Companies Act or under the laws of a jurisdiction outside The Bahamas shall be a company incorporated under this Act if it is continued as a company incorporated under this Act and references to a "company incorporated under this Act" shall be construed accordingly.

(3) Unless otherwise defined in the Articles "resolution of directors" means-

(a) a resolution approved at a duly constituted meeting of directors or a Committee of directors of a company by affirmative vote of a simple majority or such larger majority as may be specified in the Articles of the directors present at the meeting who voted and did not abstain; or

(b) a resolution consented to in writing by a simple majority or such larger majority as may be specified in the Articles of all the directors or of all the members of the Committee of the directors, as the case may be, but where a director is given more than one vote in any circumstances he shall in the circumstances be counted for the purposes of establishing majorities by the number of votes he casts.

(4) Unless otherwise defined in the Articles "resolution of members" means-

(a) a resolution approved at a duly constituted meeting of the members of a company by the affirmative vote of-

(i) a simple majority, or such larger majority as may be specified in the Articles, of the votes of the shareholders present at the meeting and entitled to vote thereon and who voted and did not abstain; or

(ii) a simple majority, or such larger majority as may be specified in the Articles of the votes of the shareholders of each class or series of shares present at the meeting and entitled to vote thereon as a class or series and who voted and did not abstain and of a simple majority or such larger majority as may be specified in the Articles, of the votes of the remaining shareholders entitled to vote thereon present at the meeting and who voted and did not abstain; or

(b) a resolution consented to in writing by-

(i) a simple majority or such larger majority as may be specified in the Articles, of the shareholders entitled to vote thereon; or

(ii) a simple majority, or such larger majority as may be specified in the Articles, of the votes of the shareholders entitled to vote thereon as a class or series and of a simple majority, or such larger majority as may be specified in the Articles, of the votes of the holders of the remaining shares entitled to vote thereon.

PART II - CONSTITUTION OF COMPANIES

Incorporation

3.Subject to the requirements of this Act, two or more persons may, by subscribing to a Memorandum incorporate a company under this Act.

Persons who can incorporate International Business Companies

4.No person other than a bank of trust company licensed under the Banks and Trust Companies Regulation Act shall incorporate an International Business Company unless such person is licensed and approved under the Financial and Corporate Service Providers Act.

No criminal objects or purposes

5.A company shall not be incorporated under this Act-

(a) for the purposes of facilitating any criminal activity; or

(b) for any object or purpose which is prohibited by this Act or by any other law in force in The Bahamas.

Contravention of section 5

6.Where a company is incorporated under this Act for any criminal activity including drug trafficking or any relevant offence under the Proceeds of Crime Act or for any prohibited purpose the company shall forthwith be struck off the Register by the Registrar publishing notice to that effect in the Gazette but section 165(4) shall apply to such company for the purposes of liability: Provided that before being struck off, the Registrar shall give the company the opportunity of being heard within seven days before the striking off.

Personal liability

7.No member, director, officer, agent or liquidator of a company shall be liable for any debt, obligation or default of the company unless it is proved that he did not act in good faith or unless it is specifically provided in this Act or in any other law for the time being in force in The Bahamas and except in so far as he may be liable for his own conduct or acts.

Mode of limiting liability of members

8.The liability of the members of a company may, according to the Memorandum-

(a) be limited either to the amount, if any, unpaid on the shares respectively held by them (in this Act termed "a company limited by shares") ;

(b) be limited to such amount as the members may respectively undertake by the Memorandum to contribute to the assets of the company in the event of its being wound up (in this Act termed "a company limited by guarantee") ; or

(c) have no limit placed on the liability of its members (in this Act termed "an unlimited liability company") .

Company limited both by shares and by guarantee

9.Without affecting anything contained in this Act, a company may be limited both by shares and by guarantee and any reference in this Act, to a company limited by shares or to a company limited by guarantee shall so far as appropriate include a company limited both by shares and by guarantee.

Powers

10.Subject to any limitations in its Memorandum or Articles, this Act or any other law for the time being in force in The Bahamas, a company incorporated under this Act has the power, irrespective of corporate benefit, to perform all acts and engage in all activities necessary or conducive to the conduct, promotion or attainment of the objects or purposes of the company, including the power to do the following-

(a) issue registered shares but not shares issued to bearer;

(b) issue the following-

(i) voting shares;

(ii) non-voting shares;

(iii) shares that may have more or less than one vote per share;

(iv) shares that may be voted only on certain matters or only upon the occurrence of certain events;

(v) shares that may be voted only when held by persons who meet specified requirements;

(vi) no par value shares;

(vii) unnumbered shares;

(c) issue common shares, preferred shares, or redeemable shares;

(d) issue shares that entitle participation only in certain assets;

(e) issue options, warrants or rights, or instruments of a similar nature, to acquire any securities of the company;

(f) issue securities that, at the option of the holder thereof or of the company or upon the happening of a specified event, are convertible into, or exchangeable for, other securities in the company or any property then owned or to be owned by the company;

(g) purchase, redeem or otherwise acquire and hold its own shares;

(h) guarantee a liability or obligation of any person and to secure any of its obligations by mortgage, pledge or other charge, of any of its assets for that purpose; and

(i) protect the assets of the company for the benefit of the company, its creditors and its members and at the discretion of the directors, for any person having a direct or indirect interest in the company.

Validity of acts of company

11.(1) No act of a company and no transfer of real or personal property by or to a company is invalid by reason only of the fact that the company was without capacity or power to perform the act or to transfer or receive the property, but the lack of capacity or power may be pleaded in the following cases-

(a) in proceedings by a member against the company to prohibit the performance of any act or the transfer of real or personal property by or to the company; or

(b) in proceedings by the company, whether acting directly or through a receiver, trustee or other legal representative or through members in a derivative action, against the incumbent or former directors of the company for loss or damage due to their unauthorised act.

(2) For the purposes of subsection (1) (a) , the court may set aside and prohibit the performance of a contract if-

(a) the unauthorised act or transfer sought to be set aside or prohibited is being, or is to be, performed or made under any contracts to which the company is a party;

(b) all the parties to the contract are parties to the proceedings; and

(c) it appears fair and reasonable in the circumstances to set aside or prohibit the performance of the contract;

and in so doing the court may, in applying this subsection, award to the company or to the other parties such compensation as may be reasonable except that in determining the amount of compensation the court shall not take into account anticipated profits to be derived from the performance of the contract.

Name

12.(1) The word "Limited", "Corporation", "Incorporated", "Gesellschaft mit beschrankter Haftung", "Societe Anonyme" or "Sociedad Anonima" or its respective abbreviation "Ltd.", "Corp.", "Inc.", "GmbH", or "S. A." shall be at the end of the name of every company with limited liability, provided that a company incorporated under the laws of a jurisdiction outside The Bahamas and continued as a company incorporated under this Act may use the name designated in the Articles of continuation.

(2) The Minister may by Order add to the list of words and abbreviations contained in subsection (1) words and abbreviations which would indicate that a company is incorporated with limited liability.

(3) No company shall be incorporated under this Act under a name that-

(a) is identical with that under which a company in existence is already incorporated under this Act or registered under the Companies Act or so nearly resembles the name of another company as to be calculated to deceive, except where the company in existence gives its consent;

(b) contains, without express prior permission of the Registrar which permission may be withheld without assigning a ransom, the words "Assurance", "Bank", "Building Society", "Chamber of Commerce", "Chartered", "Cooperative", "Imperial", "Insurance", "Municipal", "Royal", "Trust", or a word conveying a similar meaning, or any other word that, in the opinion of the Registrar, suggests or is calculated to suggest the patronage of or any connection with Her Majesty or any member of the Royal Family or the Government of The Bahamas, a department thereof, a statutory corporation or board or a local or municipal authority;

(c) is indecent, offensive or, in the opinion of the Registrar is otherwise objectionable.

(4) A company may amend its Memorandum to change its name.

(5) Where a company is incorporated under a name that-

(a) is identical with a name under which a company in existence was incorporated under this Act or registered under the Companies Act; or

(b) so nearly resembles the name of another company in existence which was incorporated under this Act or registered under the Companies Act as to be calculated to deceive or confuse,

the Registrar may, whether or not the consent of the company in existence has been obtained pursuant to subsection (3) (a) , give notice to the last registered company to change its name and if it fails to do so within 60 days from the date of the notice the Registrar shall direct the company to change its name to such name as the Registrar deems appropriate, and the Registrar shall publish a notice of the change in the Gazette.

(6) Where a company is incorporated under a name that may be calculated to deceive the public, the Registrar may give notice to the company to change such name and if it fails to do so within 60 days from the date of the notice the Registrar shall direct the company to be removed from the Register.

(7) Subject to subsections (3) and (5) , where a company changes its name, the Registrar shall enter the new name on the Register in place of the former name, and shall issue a new certificate of incorporation indicating the change of name.

(8) A change of name does not affect any rights or obligations of a company, or render defective any legal proceedings by or against a company, and all legal proceedings that have been commenced against a company by its former name may be continued against it in its new name.

(9) Subject to subsection (3) , the Registrar may, upon a request made by any person and payment of the prescribed fee, reserve for 90 days a name for future adoption by a company under this Act.

Memorandum

13.(1) The Memorandum shall include the following particulars-

(a) the name of the company;

(b) the location in The Bahamas of the registered office of the company;

(c) the location in The Bahamas of the registered agent of the company;

(d) subject to subsection (2) , the objects or purposes for which the company is to be incorporated;

(e) the currency in which shares in the company shall be issued;

(f) in the case of a company limited by shares, a statement of the authorised capital of the company setting forth the aggregate of the par value, if any, that the company is authorised to issue and the amount, if any, to be represented by shares without par value that the company is authorised to issue;

(g) in the case of a company limited by guarantee, a statement that each member undertakes to contribute to the assets of the company, in the event of a winding up during the time that he is a member, or within one year afterwards, for payment of the debts and liabilities of the company contracted before the time at which he ceases to be a member, and of the costs, charges and expenses of winding up the company and for the adjustment of the rights of the contributories amongst themselves, such amounts as may be required, not exceeding an amount to be specified therein;

(h) in the case of a company limited both by shares and by guarantee, the statements referred to in paragraphs (f) and (g) ;

(i) in the case of an unlimited liability company, a statement that the liability of the members is unlimited;

(j) a statement of the number of classes and series of shares, the number of shares of each such class and series and the par value of shares with par value and that the shares may be without par value if this is the case;

(k) a statement of the designations, powers, preferences and rights, and the qualifications, limitations or restrictions of each class and series of shares that the company is authorised to issue, unless the directors are to be authorised to fix any such designations, powers, preferences, rights, qualifications, and in that case, an express grant of such authority as may be desired to grant to the directors to fix by resolution any such designations, powers, preferences, rights, qualifications, limitations and restrictions that have not been fixed by the Memorandum.

(2) For the purposes of subsection (1) (d) , if the Memorandum contains a statement either alone or with other objects or purposes that the object or purpose of the company is to engage in any act or activity that is not prohibited under any law for the time being in force in The Bahamas, the effect of that statement is to make all acts and activities that are not illegal part of the objects or purposes of the company, subject to any limitations in the Memorandum.

(3) The Memorandum shall be subscribed to by two persons in the presence of another person who shall sign his name as a witness.

(4) The Memorandum, when registered, binds the company and its members from time to time to the same extent as if each member had subscribed his name and affixed his seal thereto and as if there were contained in the Memorandum, on the part of himself, his heirs, executors and administrators, a covenant to observe the provisions of the Memorandum subject to this Act.

Articles

14.(1) The Articles shall be subscribed to by two persons in the presence of another who shall sign his name as a witness and such Articles shall be filed with the Registrar on the same date as the filing of the memorandum.

(2) The Articles, when registered, bind the company and its members from time to time to the same extent as if each member had subscribed his name and affixed his seal thereto and as if there were contained in the Articles, on the part of himself, his heirs, executors and administrators, a covenant to observe the provisions of the Articles, subject to this Act.

Registration

15.(1) The Memorandum and the Articles shall be registered by the Registrar in a register to be maintained byhim and to be known as the Register of International Business Companies.

(2) Upon the registration of the Memorandum, the Registrar shall issue a certificate of incorporation under his hand and seal certifying that the company is incorporated.

(3) An application for the registration of a company under this Act shall be in such form as may be prescribed and shall be accompanied by such documents as the Registrar may determine.

(4) The Registrar may prohibit the registration of a company where the minimum share capital is less than an amount stated by order of the Minister.

(5) The Registrar shall refuse to register a company if he is of the opinion that the Memorandum shows that its minimum share capital will be less than the amount required by the Minister by order under subsection (4) .

(6) Any person aggrieved by a decision of the Registrar under subsection (5) may appeal to the Minister whose decision shall be final.

(7) The Registrar shall not register the Memorandum or the Articles delivered to him unless he is satisfied that all requirements of this Act in respect of registration have been complied with and-

(a) a counsel and attorney engaged in the formation of the company; or

(b) the registered agent named in the Memorandum of the company to be the registered agent,

certifies in writing that the requirements of this Act in respect of registration have been complied with and the written certification delivered to the Registrar is sufficient evidence of compliance.

Certificate of Incorporation

16.Where the Registrar issues a certificate of incorporation of a company, the company is, from the date shown on the certificate of incorporation, a body corporate under the name contained in the Memorandum with the full capacity of an individual who is sui juris, subject to any limitations imposed by the Memorandum and to the provisions of this Act.

Certificate to be evidence of compliance

17.A certificate of incorporation of a company issued by the Registrar shall be prima facie evidence of compliance with all requirements of this Act in respect of incorporation.

Amendment of Memorandum or Articles

18.(1) Subject to any limitation in its Memorandum or Articles, a company may amend its Memorandum or Articles by a resolution of members or, where permitted by its Memorandum or Articles or by this Act, by a resolution of directors.

(2) A company that amends its Memorandum or Articles shall submit to the Registrar within fourteen days after any amendment a copy of the resolution of members or directors amending the Memorandum or Articles, as the case may be, authenticated, in accordance with subsection (1) of section 73, as a true copy of the resolution amending the Memorandum or Articles and the Registrar shall retain and register such copy of the resolution.

(3) An amendment to the Memorandum or Articles shall not have effect until it is registered by the Registrar.

Copies of Memorandum and Articles to members

19.A copy of the Memorandum and a copy of the Articles shall be given to any member who requests a copy on payment by the member of such amount as the directors may determine to be reasonably necessary to defray the costs of preparing and furnishing them.

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