FREQUENTLY ASKED QUESTIONS
Questions on Corporate and Commercial Law
Q: What types of companies can be incorporated in The Bahamas?
In The Bahamas, companies can be incorporated under the Companies Act, 1992 (“Domestic Companies”) and under the International Business Companies, Act (“IBC’s”).
Q: What are the advantages of incorporating a company?
Some of the advantages of incorporating a company are to facilitate investments, to minimize risk, to purchase and hold property, including real property and other assets. Likewise, a company can enter into contracts and commence action to defend those contracts on its own behalf. A company can also be used for the purpose of establishing an investment fund.
Most importantly, a company can be incorporated with limited liability in that the liability of its members may be limited to the amount unpaid on their shares.
Q: What is the process for incorporating a Domestic Company?
Two or more persons are required to sign or subscribe to a memorandum (which is known as the company’s memorandum of association) in the presence of a witness. This memorandum (which is required to contain certain prescribed information) must be submitted to the Companies Registry for filing along with the requisite fees in order to incorporate the company. Upon the filing of the said memorandum and the payment of the requisite fees, the company will be issued a certificate of incorporation which certificate is conclusive evidence of the incorporation of the company.
Q: What is the process for incorporating an IBC?
An international business company is incorporated when the certificate of incorporation is issued, after the memorandum and articles of association have been filed at the Companies Registry. The memorandum of association is required to be subscribed by two persons in the presence of a witness. It is from the date of the certificate of incorporation that a body corporate comes into existence.
No person other than a bank or trust company licensed under the Banks and Trust Companies Regulation Act can incorporate an international business company unless such person is a Financial and Corporate Service Provider.
Q: Who can subscribe to the company’s memorandum of association?
In the case of Domestic Companies and IBC’s, any individual who has attained the age of majority can subscribe to the company’s memorandum of association; however, a person who is found to be of unsound mind or bankrupt is not eligible.
Q: Are there any restrictions on words that can comprise the name of a company?
The company’s name cannot contain the words “Assurance”, “Bank”, “Building Society” “Chamber of Commerce”, “Chartered”, “Cooperative”, “Imperial”, “Insurance”, “Muncipal”, “Royal” or “Trust” or a word conveying a similar meaning without the prior approval of the Registrar of Companies.
Q: Is there a requirement for Domestic Companies to have a minimum number of Directors?
A private company should have at least two (2) directors.
Q: Is there a requirement for an IBC to have a minimum number of Directors?
An IBC can have just one (1) director who may be an individual or a company.
Q: If I am “non-resident” for Bahamian exchange control purposes, can I hold or own shares in a Domestic Company?
Yes, however, the prior permission of the Central Bank of the Bahamas would be required before a person deemed “non-resident” for Bahamian exchange purposes can own shares in a Domestic Company.
Q: Can a person deemed “resident” for Bahamian exchange control purposes hold or own shares in an IBC?
Yes, however the prior permission of the Central Bank would be required.
Q: What are the annual fees payable by a Domestic Company?
Such companies are required to pay annual fees with the Companies Registry in the amount of $350.00 in the case of companies that are owned 60% or more by Bahamians and $1,000.00 in the case of companies that are owned less than 60% by Bahamians.
Q: What are the annual fees payable by IBC’s?
Such companies whose authorized share capital is $50,000 are required to pay annual fees in the amount of $350.00 and in cases where the authorized share capital is $50,001 and over the annual fee is $1,000.
Q: Is there an annual general meeting requirement?
Yes, but only for Domestic Companies.
Q: Is information regarding directors, officers or shareholders required to be filed or disclosed publicly?
For both Domestic Companies and IBC’s the directors and officers of the company are a matter of public record. Additionally, the names and addresses of the shareholders of Domestic Companies are also a matter of public record. However, in the case of IBC’s the names and addresses of its shareholders are not required to be publicly disclosed.
Q: Are amendments to the memorandum and articles of association of the company required to be filed with the Companies Registry?
Yes, in the case of both Domestic Companies and IBC’s amendments to the memorandum and articles of association are required to be filed with the Companies Registry. However, in the case of IBC’s, any amendment has to be filed with 28 days of the amendment and an amendment is not effective until it has been so filed.