Publisher Opus Operis releases a new book: “Offshore Companies – How to Register Tax-Free Companies in High-tax Countries” by Michael Magnusson, the author of the international bestseller “The Land without a Banking Law – How to Start a Bank with a Thousand Dollars(more…)

 

Panama signed another Tax Information Exchange Agreement (TIEA) the other week. So what does this mean? Panama has signed several of these in the past. According to lawmakers such as US Senator Carl Levin, the previous agreements were not sufficient and Panama needs to achieve further transparency.

Panama is desperately awaiting US approval of the Free Trade Agreement signed by the two countries in 2007 and will therefore agree to pretty much anything requested by the US. Year after year Panama has expected the agreement to be approved, but President Obama has yet to submit the treaty to Congress. While the Free Trade Agreement is a huge deal in Panama, it is less of a priority in the US. While US exports to Panama are not insignificant at USD 4 Billion, the US exports more to China in three weeks than it does to Panama in a year.

I have seen reports by some offshore incorporators dismissing the new TIEA as irrelevant as long as you have “compliant offshore structures”. What they typically mean is that you should engage their services to form several layers of legal structures, such as bearer share corporations owned by private interest foundations.  The reality is that nobody, and much less an American, should ever consider “hiding” untaxed money in a Panamanian bank. The bank secrecy was always a cosmetic feature in Panama. If a Panamanian bank has a slightest indication that you might be under investigation of any kind, including for tax evasion, they are likely to freeze your assets first and ask questions later, even though tax evasion is not even currently a crime in Panama.  Anyone touting Panama as a replacement for Switzerland has been watching the wrong movies.

It should also be considered that any US person who holds an account outside the US with a balance above USD 10,000.00 at any given time is required to file a Report of Foreign Bank and Financial Accounts (FBAR) with the IRS. It does not matter how many legal structures one would put between the US person and the account ownership. The bank will always require identification of the final beneficial owner. FBAR reporting applies even you would assign nominee directors, shareholders, signatories and all the rest. Any type of control or access to the funds will subject you to the FBAR reporting requirement.  Any attempt to conceal the ownership of funds may very well lead to accusations of money laundering even if the closest you ever got to money laundering was forgetting a five dollar bill in your pants before washing them.

Accounts subject to FBAR reporting include bank accounts, brokerage accounts, mutual fund holdings, trust accounts and any other type of non-US financial accounts. Failing to file FBARs can be a criminal offence subject to fines of up to $500,000 and prison terms of up to ten years. In civil FBAR cases each non-willful FBAR violation draws a $10,000 fine and each willful violation the greater of $100,000 or 50% of the amount in the account. Each year you failed to file counts as a separate violation.

The FBAR reporting requirement is of course not in any way specific to bank accounts in Panama, but reading about offshore providers dismissing the Panama-US TIEA made me think it was time to remind about this rather relevant requirement.

Michael Magnusson is a contributor on Bankers Press and author of several books including the International Bestseller “The Land Without A Banking Law – How to Start a Bank with a Thousand Dollars”. Visit www.michaelmagnusson.com for further information and book descriptions.

 

New Zealand is generally perceived as a high tax country and consequently has not been a target in the international campaign against offshore tax havens. However, New Zealand offers secretive zero tax structures for offshore activities and perhaps even more remarkable, the legal framework allows for virtually anyone to start a bank without being subject to any capital or qualification requirements. (more…)

 

Panama Securities Law by Carl Michael Magnusson.

The Panamanian Securities Commission allows brokers, investment advisors and others to take the licensing exams in English, but the Securities Act has up until now been available in Spanish only.

This is an English Translation of the Panamanian Securities Act whereby the National Securities Commission was created and the securities market is regulated in Panama. The law regulates investment advisors, brokers, administrators, custodians, public and private investment funds and investment companies. Including the following amendments: Public Law Nº 42 of October 2, 2000 Public Law Nº 29 of July 3, 2001 Public Law Nº 11 of January 30, 2002 Public Law Nº 45 of June 4, 2003 Public Law Nº 6 of February 2, 2005

Paperback: 174 pages

By Carl Michael Magnusson

ISBN-10: 1484163230

ISBN-13: 978-1484163238

Available on Amazon here

 

Auckland Skyline

The Financial Service Provider Register (FSPR) has registered 7,900 Financial Service Providers (FSPs) since the opening of the Register in August 2010. Any person or entity offering financial services in or from New Zealand must be registered in the FSPR. (more…)

 

NO. 10 OF 1995 EXEMPTED LIMITED PARTNERSHIP ACT

186

 

AN ACT TO ESTABLISH EXEMPTED LIMITED PARTNERSHIPS AND FOR CONNECTED

PURPOSES.

 

[Date of Assent - 29th. March, 1995]

Enacted by the Parliament of The Bahamas.

Short title and commencement.

1. - (1) This Act may be cited as the Exempted Limited Partnership Act, 1995.

(2) This Act shall come into operation on such day as the Minister may, by notice published in the Gazette,

appoint.

Interpretation. 2. In this Act -

“contribution” means cash, property or other assets which a partner contributes to the capital of an exempted

limited partnership (but shall not include any moneys lent by a partner to an exempted limited partnership);

“court” means the Supreme Court;

“exempted limited partnership” means a limited partnership registered under subsection (1) of section 9;

“general partner” means a person who is named as such in the statement filed pursuant to section 9 and if more than

one shall mean each general partner;

“insolvency of the exempted limited partnership” means that the general partner is unable to pay the debts and

obligations of the exempted limited partnership (otherwise than in respect of liabilities to partners on account of

their partnership interest) in the ordinary course of business as they fall due out of the assets of the exempted

limited partnership (without recourse to the separate assets of the general partner not contributed to the exempted

limited partnership) and “solvent” shall be construed accordingly;

“limited partner” means a person who has become a limited partner in accordance with subsection (2) of section 4 and

if more than one shall mean each limited partner;

“mortgage” means a legal mortgage by way of assignment and an equitable mortgage, charge or other form of security

interest;

“partner” means a limited partner or a general partner;

“partnership agreement” means any agreement of the partners which provides for the establishment of and regulates

the affairs of an exempted limited partnership, the conduct of its business and rights and obligations of the partners

amongst themselves;

“partnership interest” means the interest of a partner in an exempted limited partnership in respect of profit, capital

and voting or other rights, benefits or obligations to which he is entitled or subject pursuant to the partnership

agreement or this Act;

2 of 1990, 18 of 1992. “public in The Bahamas” excludes any International Business Company incorporated or continued under the

International Business Companies Act, 1989 or a foreign company registered pursuant to Part VI of the Companies

Act, 1992 or any such company acting as general partner of a partnership registered pursuant to subsection (1) of

section 9 or any director or officer of the same acting in such capacity;

“Registrar” means the Registrar of Exempted Limited Partnerships referred to in section 8.

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Provisions of Partnership

Act to apply. Ch.

281.

3. - (1) The provisions of the Partnership Act shall apply to an exempted limited partnership, except in 80 far as they

are as they are inconsistent with the express provisions of this Act.

Ch. 282. (2) The provisions of the Partnership Limited Liability Act shall not apply to an exempted limited partnership.

Constitution. 4. - (1) An exempted limited partnership may be formed for any lawful purpose or purposes to be carried out and

undertaken either in or from within The Bahamas or elsewhere upon the terms, with the rights and powers, and subject to the

conditions, limitations, restrictions and liabilities herein mentioned:

Provided that such exempted limited partnership shall not undertake business with the public in The Bahamas

other than so far as may be necessary for the carrying on of the business of that exempted limited partnership exterior to The

Bahamas.

(2) An exempted limited partnership shall consist of one or more persons called general partners who shall, in the

event that the assets of the exempted limited partnership are inadequate, be liable for all debts and obligations, of the

exempted limited partnership and one or more persons called limited partners who shall not be liable for the debts or obligations

of the exempted limited partnership, save as provided in the partnership agreement and to the extent specified in subsection

(2) of section 7 and subsection (2) of section 14 and provided also, that a general partner; without derogation from his

position as such, may take, in such exempted limited.partnership, in addition an interest as a limited partner.

(3) A general partner shall act at all times in good faith in the interest of the exempted limited partnership.

(4) A body corporate; with or without limited liability or a partnership (whether in the name, of such partnership

and whether or not an exempted limited partnership), may be a general or limited partner.

(5) Any one or more of the, limited partners and general partners of an exempted limited partnership may be resident,

domiciled, established, incorporated or registered pursuant to the laws of The Bahamas or outside The Bahamas provided

that at least one general partner shall -

(a) if an individual, be resident in The Bahamas; or

2 of 1990, 18 of 1992. (b) if a company, be incorporated under the International Business Companies Act, 1989 or under the

Companies Act, 1992 or registered pursuant to Part VI of the Companies Act, 1992.

Establishment. 5. No partnership limited or otherwise shall be an exempted limited partnership unless registered as such in

accor-dance with subsection (1) of section 9.

Name and registered

office.

6. - (1) Every exempted limited partnership shall have a name which shall include the words “Limited Partnership” or

the letters “L.P.” and which may include the name of any general partner or limited partner or any derivation thereof:

Provided that no exempted limited partnership shall have a name which, whether because it is identical or similar

to the name of any other entity or because it falsely suggests the patronage of or a connection with some person or authority

or because it suggests that the partnership is licensed whether in The Bahamas or elsewhere to carry on any type or class of

business when it is not in fact 80 licensed or because of any other reason, is calculated or likely to mislead.

(2) Any property of the exempted limited partnership which is conveyed to or vested in or held on behalf of any

one or more of the general partners or which is conveyed into or vested in the name of the exempted limited partnership shall

be held or deemed to be held by the general partner and if more than one then by the general partners jointly upon trust as an

asset of the exempted limited partnership in accordance with the terms of the partnership agreement.

(3) Any debt or obligation incurred by a general partner in the conduct of the business of an exempted limited

partnership shall be a debt or obligation of the exempted limited partnership.

(4) Every exempted limited partnership shall have a registered office situate in The Bahamas for the service of

process and to which all notices and communications may be addressed.

NO. 10 OF 1995 EXEMPTED LIMITED PARTNERSHIP ACT

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Modification of general

law

7. - (1) A limited partner shall not take part in the conduct of the business of an exempted limited partnership and all

letters, contracts, deeds, instruments or documents whatsoever shall be entered into by the general partner on behalf of the

exempted limited partnership.

(2) If a limited partner takes part in the conduct of the business of an exempted limited partnership in its dealings

with persons who are not partners, that limited partner shall be liable in the event of the insolvency of the.exempted limited

partnership for all debts and obligations of that exempted limited partnership incurred during the period that he 80 participates

in the conduct of the business as though he were for such period a general partner:

Provided always that he shall be rendered liable pursuant to the foregoing provision only to a person who transacts

business with the exempted limited partnership during such period with actual knowledge of such participation and who then

reasonably believed such limited partner to be a general partner.

(3) A limited partner does not take part in the conduct of the business of an exempted limited partnership within

the meaning of this section by doing one or more of the following -

(a) being a contractor for or an agent or employee of the exempted limited partnership or of a general partner

or acting as a director, officer or shareholder of a corporate general partner;

(b) consulting with and advising a general partner with respect to the business of the exempted limited

partnership;

(c) investigating, reviewing, approving or being advised as to the accounts or business affairs of the

exempted limited partnership or exercising any right conferred by this Act;

(d) acting as surety or guarantor for the exempted limited partnership either generally or in respect of specific

obligations;

(e) approving or disapproving an amendment to the partnership agreement; or

(f) voting as a limited partner on one or more of the following matters -

(i) the dissolution and winding up of the exempted limited partnership,

(ii) the purchase, sale, exchange, lease, mortgage, pledge, or other acquisition or transfer of any asset or

assets by or of the exempted limited partnership,

(iii) the incurring or renewal of indebtedness by the exempted limited partnership,

(iv) a change in the nature of the business of the exempted limited partnership,

(v) the admission, removal or withdrawal of a general or limited partner and the continuation of

business of the exempted limited partnership thereafter, or

(vi) transactions in which one or more of the general partners have an actual or potential conflict of

interest with one or more of the limited partners.

(4) Subsection (3) shall not import any implication that the possession or exercise of any other power by a limited

partner will necessarily constitute the taking part by such limited partner in the business of the exempted limited partnership.

(5) In the event of the dissolution of an exempted limited partnership its affairs shall be wound up by the general

partner unless the court otherwise orders on the application of any partner or creditor of the exempted limited partnership pursuant

to subsection (2) of section 15 or unless the business of the exempted limited partnership is assumed and continued in

accordance with the proviso to subsection (3) of section 15.

NO. 10 OF 1995 EXEMPTED LIMITED PARTNERSHIP ACT

189

(6) Subject to any express or implied term of the partnership agreement to the contrary and to subsection (3) of

section 15 -

(a) an exempted limited partnership shall not be terminated or dissolved by -

(i) a change in any one or more of the limited partners or general partners,

(ii) the assignment of the whole or part of the partnership interest of a limited partner,

(iii) the death or bankruptcy or dissolution or winding up of a limited partner,

(iv) the incapacity of a limited partner,

(v) any one or more of the limited partners granting a mortgage or charge or other form of security

interest over the whole or part of his partnership interest,

(vi) the sale, exchange, lease, mortgage, pledge or other transfer of any of the assets of the exempted

limited partnership;

(b) any difference arising as to matters connected with the business of the exempted limited partnership

shall be decided by the general partner and if more than one by a majority in interest of the general

partners;

(c) a person may, with the consent of the general partner, and if by assignment in accordance with subsection

(7)(a), become a limited partner without the consent of the existing limited partners;

(d) a limited partner shall not be entitled to dissolve the partnership by notice.

(7) A limited partner -

(a) may assign either absolutely or by way of mortgage the whole or any part of his partnership interest

and an assignee shall, to the extent of such assignment, be-come a limited partner with the rights and

subject to the obligations of the assignor (and, wholly or partly in place of and to the exclusion of the

assignor as the case may be) in accordance with the partnership agreement and this Act in respect of

he partnership interest or part thereof assigned:

Provided that such assignee shall not assume any liability of the assignor arising pursuant to

subsection (2) of this section or subsection (2) of section 14 and provided further that, notwithstanding

any term of the partnership agreement or any other agreement to the contrary, no such assignment

shall relieve the assignor of any liability arising pursuant to such subsections;

(b) subject to paragraph (a), may mortgage the whole or any part of his partnership interest and the

mortgagee shall serve written notice at the address of the registered office of the exempted limited

partnership of such mortgage together with a copy thereof and signed by the mortgagor and the

mortgagee and pay such fee, if any, as may be provided in the partnership agreement and the general

partner shall maintain or cause to be maintained at the registered office in writing on one or more sheets

whether bound or unbound a register of mortgages indicating the identity of the mortgagor and

mortgagee, the date of creation of the mortgage, the partnership interest or part thereof subject thereto

and the date of receipt of such notice.

(8) The register described in subsection (7) (b) shall be open to inspection by any person during all business hours

and any mortgage of the whole or any part of a partnership interest shall have priority according to the date of service of written

notice at the registered office mentioned in subsection (7) (b).

(9) If default is made by a general partner in the maintenance of the register mentioned in subsection (7) (b) each

NO. 10 OF 1995 EXEMPTED LIMITED PARTNERSHIP ACT

190

general partner in default shall upon summary conviction incur a penalty of twenty-five dollars for each day that such default

continues.

Registrar. 18 of 1992. 8. The Registrar of Companies referred to in section 2 of the Companies Act, 1992 shall be the Registrar of

Exempted Limited Partnerships.

Registration. 9. - (1) The registration of an exempted limited partnership shall be effected by payment to the Registrar of a registration

fee of such amount as the Minister shall from time to time by regulation prescribe and by filing with the Registrar a statement

signed, subject to subsection (6), by or on behalf of a general partner containing the following particulars -

(a) the name of the exempted limited partnership;

(b) the general nature of the business of the exempted limited partnership;

(c) the address in The Bahamas of the registered office of the exempted limited partnership;

(d) the term, if any, for which the exempted limited partnership is entered into or if for unlimited duration

a statement to that effect and the date of its commencement;

(e) the full name and address of the general partner and if more than one of each of them, specifying each

of them as a general partner and in the case of a corporate general partner there shall be filed with the

statement a certificate of incorporation and a certificate of good standing (or similar documents under

the laws of the jurisdiction of incorporation) or a certificate of good standing and a certificate of

registration under Part VI of the Companies Act, 1992;

18 of 1992. (f) a declaration that the exempted limited partnership shall not undertake business with the public in The

Bahamas other than so far as may be necessary for the carrying on of the business of that exempted

limited partnership exterior to The Bahamas.

(2) The Registrar shall maintain a record of each exempted limited partnership registered under this Act and all

the statements filed in relation to such exempted limited partnership, which records and statements shall be kept open to public

inspection during all usual business hours.

(3) The Registrar shall issue a certificate of registration under his hand and seal of office as soon as the registration

of the statement pursuant to subsection (1) has been effected.

(4) No limited partner of an exempted limited partnership formed after the commencement of this Act shall have

the benefit of limited liability until the date indicated on the certificate referred to in subsection (3) issued by the Registrar and

a partnership registered in accordance with subsection (1) of section 21 shall obtain the benefit of limited liability under this

Act with effect from such date but subject to subsection (2) of section 21.

(5) A certificate issued pursuant to subsection (3) shall be conclusive evidence that compliance has been made

with all the requirements of this Act in respect of the formation and registration of an exempted limited partnership but subject

to subsection (2) of section 21.

(6) If a person required by subsection (1) or subsections (1) or (2) of section 10 to execute and file a statement

fails to do 80, any other partner, and any assignee of a partnership interest, who is or may be affected by the failure or refusal,

may petition the court to direct such person as the court sees fit to-sign the statement and file the same on behalf of the person

in default.

(7) Notwithstanding subsections (1) and (3), the Registrar may refuse to accept the registration of an exempted

limited partnership and refuse to issue a certificate of such registration in any case where in his opinion the name of the proposed

exempted limited partnership is in contravention of the proviso to subsection (1) of section 6.

NO. 10 OF 1995 EXEMPTED LIMITED PARTNERSHIP ACT

191

Changes in registered

particulars.

10. - (1) Without prejudice to subsection (2), if during the continuance of an exempted limited partnership any change

is made or occurs in any matter specified in paragraphs (a) to (e) inclusive of the statement filed under subsection (1) of section

9 a statement signed, subject to subsection (6) of section 9, by a general partner specifying the nature of the change shall,

within sixty days of such change, be filed with the Registrar.

(2) A statement signed in accordance with subsection (1) in respect of any arrangement or transaction consequent

upon which any person will cease to be a general partner in any exempted limited partnership, shall, within fifteen days of

such arrangement or transaction, be filed with the Registrar and, until such statement is so filed, the arrangement or transaction

shall, for the purposes of this Act and the partnership agreement, be deemed to be of no effect.

(3) Save with the written consent of any person thereby affected no arrangement or transaction shall take effect to

the extent that it seeks to relieve or discharge a general partner from the obligations of a general partner with regard to any

debt or obligation of the exempted limited partnership to a person incurred before such arrangement or transaction takes

effect.

(4) If default is made in compliance with the requirements of this section, each general partner in default shall

incur a penalty of twenty-five dollars for each day that such default continues which penalty shall be a debt due to the Registrar

and such general partner shall indemnify any person who thereby suffers any loss.

(5) The name of an exempted limited partnership shall not be changed so as to contravene the proviso to.subsection

(1) of section 6 and the Registrar may refuse to accept a statement under subsection (1) of this section which in his opinion

seeks to effect such a change.

Register of limited

partnership interests.

11. - (1) The general partner shall maintain or cause to be maintained at the registered office of the exempted limited

partnership a register in writing on one or more sheets whether bound or unbound and there shall be set forth therein the name

and address, amount and date of the contribution or contributions of each partner and the amount and date of any payment

representing a return of any part of the contribution of any partner which register shall be updated within twenty-one business

days of any change in the particulars therein.

(2) The register described in subsection (1) shall be open to inspection by any person during all usual business

hours.

(3) The register described in subsection (1) shall be prima facie evidence of the matters which are by subsection

(1) directed to be inserted therein.

(4) If default is made in compliance with the requirements of this section each general partner in default shall

upon summary conviction incur a penalty of twenty-five dollars for each day that such default continues and shall indemnify

any person who thereby suffers any loss.

Right to account. 12. Subject to any express or implied term of the partnership agreement to the contrary each limited partner may

demand and shall receive from a general partner true and full information regarding the state of the business and financial

condition of the exempted limited partnership.

Proceedings. 13. - (1) Subject to subsection (2), legal proceedings by or against an exempted limited partnership may be instituted by

or against any one or more of the general partners only and no limited partner shall be a party to or be named in such proceedings:

Provided that if the court deems it just and equitable any person or a general partner shall have the right to join

in or otherwise institute proceedings against any one or more of the limited partners who may be liable pursuant to subsection

(2) of section 7 or to enforce the return of the contribution, if any, required by subsection (2) of section 14.

(2) A limited partner may bring an action on behalf of an exempted limited partnership if any one or more of the

general partners with authority to do so have without good cause refused to institute such proceedings.

NO. 10 OF 1995 EXEMPTED LIMITED PARTNERSHIP ACT

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Return of contributions

14. - (1) A limited partner shall not, on dissolution or otherwise, receive out of the capital of the exempted limited partnership

a payment representing a return of any part of his contribution to the partnership unless at the time of and immediately

following such payment the exempted limited partnership is solvent.

(2) For a period of six months from the date of receipt by a limited partner of any payment representing a return of

contribution or part thereof received by such limited partner in circumstances where the requirements of subsection (1) have

not been met such payment shall, in the event of the insolvency of the exempted limited partnership within that six months

period, be repayable by such limited partner with simple interest at the rate of ten percent per annum (calculated on a daily

basis) to the extent that such contribution or part thereof is necessary to discharge a debt or obligation of the exempted limited

partnership incurred during the period that the contribution represented an asset of the exempted limited partnership.

(3) In this section “receive” shall include the release of any obligation forming part of the capital contribution and,

in this context, liabilities to make repayments pursuant to subsection (2) shall be read to refer to due performance of such

obligations.

Dissolution. 15. - (1) An exempted limited partnership shall not be dissolved by an act of the partners until a notice of dissolution

signed by a general partner has been filed with the Registrar.

(2) On application by a partner or creditor, the court may decree dissolution of an exempted limited partnership

and may make such orders and give such directions for the winding up of its affairs as may be just and equitable.

(3) Notwithstanding subsection (1) and notwithstanding any express or implied term of the partnership agreement

to the contrary, the death, insanity, retirement, bankruptcy, commencement of liquidation proceedings, resignation, insolvency

or dissolution of the sole or last remaining general partner shall cause the immediate dissolution of the exempted limited

partnership which shall forthwith be wound up in accordance with the provisions of the partnership.agreement or such

orders as the court may decree pursuant to subsection (2):

Provided that if within ninety days of such date of dissolution the limited partners unanimously elect one or

more new general partners the business of the exempted limited partnership is not hereby required to be wound up but may be

assumed and continued as provided for in the partnership agreement or any subsequent agreement.

Inspection and certification.

16. - (l) Any person may inspect the records maintained by the Registrar or require a certified copy of he certificate of

registration, a certificate of good standing or a copy of or extract from any registered statement filed in relation to the

exempted limited partnership to be certified as a true copy by the Registrar on payment of such fees as the Minister may from

time to time by regulation prescribe.

(2) A certificate of registration, a certificate of good standing or a copy of or extract from a registered statement

filed with the Registrar issued pursuant this Act, if certified by the Registrar to be a true copy, shall be received in evidence in

all legal proceedings.

Exemptions. 17. - (1) An exempted limited partnership registered under this Act or a partner thereof shall not be subject to any business

license fee, income tax, capital gains tax or any other tax on income or distributions accruing to or derived from such

partnership or in connection with any transaction to which that partnership or partner, as the case may be, is a party.

Ch. 330. (2) The Exchange Control Regulations Act shall not apply to an exempted limited partnership registered under

this Act or to any transaction by a partner thereof:

Provided that the Exchange Control Regulations Act shall apply to a transaction by a partner who is a resident

of The Bahamas for Exchange Control purposes.

(3) No estate, inheritance, succession or gift tax, rate, duty, levy or other charge is payable by a partner or his

executors or administrators with respect to any interest in an exempted limited partnership.

Ch. 334. (4) Notwithstanding any provision of the Stamp Act, all instruments -

NO. 10 OF 1995 EXEMPTED LIMITED PARTNERSHIP ACT

193

(a) relating to transfers of property to or by an exempted limited partnership;

(b) relating to transactions in respect of the interests of an exempted limited partnership; and

(c) relating to other transactions relating to the business of an exempted limited partnership,

shall be exempt from the payment of stamp duty.

Ch. 175. (5) Notwithstanding any provisions of the Registration of Records Act -

(a) the partnership agreement of an exempted limited partnership; and

(b) all deeds and other instruments relating to -

(i) transactions in respect of interests in an exempted limited partnership, and

(ii) other transactions relating to the business of an exempted limited partnership,

shall be exempt from registration under that Act.

(6) The exemptions granted by this section shall remain in force for a period of fifty years from the date shown on

the certificate of registration issued pursuant to subsection (3) of section 9.

Regulations. 18. The Minister may from time to time make regulations in respect of exempted limited partnerships prescribing -

(a) the duties to be performed by the Registrar for the purposes of this Act;

(b) the forms to be used for the purposes of this Act;

(c) the fees payable to the Registrar in respect of filings or certifications or otherwise pursuant to this Act;

(d) generally, the conduct and regulation of registration under this Act and any matters incidental thereto.

Annual return. 19. - (1) An exempted limited partnership shall, on or before the 31st day of January in every year after the year in

which it was registered under this Act, file with the Registrar a return signed by or on behalf of a general partner certifying

that the exempted limited partnership has during the prior calendar year complied with subsection (1) of section g and that

there has been no breach of the declaration given in accordance with subsection (1) (f) of section 9 and pay to the Registrar an

annual fee of such amount as the Minister shall from time to time by regulation prescribe.

(2) If default is made in compliance with the requirements of subsection (1), each general partner shall incur a

penalty of ten dollars for each day that such default continues which penalty shall be a debt due to the Registrar save to the

extent that the Registrar may waive such penalty in his discretion.

Transactions with the

exempted limited partnership.

20. Subject to any express or implied term of the partnership agreement to the contrary and to the duty imposed

upon a general partner by Subsection (3) of section 4 a partner may lend money to, borrow from and transact other business

with the exempted limited partnership (80 that an asset, debt or obligation of the exempted limited partnership shall thereby

be created) and with or without interest or security as the general partner shall determine and shall have the same rights and

obligations with respect thereto as a person who is not a partner, provided that the obligations of the exempted limited partnership

to repay a debt to a general partner shall at all times be subordinated to the claims of secured and unsecured creditors

of the exempted limited partnership.

Re-registration. Ch.

281. Ch. 282.

21. - (1) Any partnership formed under the Partnership Act or the Partnership Limited Liability Act or any Act amending

or re-enacting the same shall not be affected by this Act but shall continue to be governed by such Act as the case may be

and any such partnership and any partnership established under the laws of a jurisdiction other than The Bahamas at any time

upon effecting such amendments to the partnership agreement as shall be necessary to comply with the provisions of this Act,

NO. 10 OF 1995 EXEMPTED LIMITED PARTNERSHIP ACT

194

if any, and upon paying a fee of such amount as the Minister may from time to time by regulation prescribe and upon filing

the statement required by subsection (1) of section 9 shall be registered in accordance with this Act and with effect from the

date indicated on the certificate of registration issued by the Registrar pursuant to subsection (3) of section 9 shall be governed

exclusively thereafter as an exempted limited partnership in accordance with the provisions of this Act.

Ch. 281. Ch. 282. (2) With effect from the date indicated on the certificate of registration described in subsection (1) the exempted

limited partnership and the partnership interests of the parties therein and their rights and liabilities as against any person who

is not a partner shall cease to be governed by the provisions of the Partnership Act or the Partnership Limited Liability Act or

the laws of such other jurisdiction, as the case may be, save in respect of any act or omission occurring before such date which

shall continue to be governed by such Acts or laws of such other jurisdiction and provided always without prejudice to the

foregoing generality that such registration shall not operate -

(a) to create a new legal entity;

(b) to affect the property previously acquired by or on behalf of the exempted limited partnership;

(c) to affect any act or thing done prior to such registration or the rights, powers, authorities, functions or

obligations of the exempted limited partnership, any partner or any other person prior thereto;

(d) to render defective any legal proceedings by or against the exempted limited partnership or any partner

or any other person and any legal proceedings that could have been continued or commenced by or

against the exempted limited partnership or any partner or any other person before its registration

hereunder may notwithstanding such registration be continued or commenced after such registration

and in respect of which such Acts or laws of such other jurisdiction shall be of application.

When license not

required. Ch. 287.

22. A person who acts as a general partner of an exempted limited partnership shall not by virtue solely of so acting

require a trust license under the Banks and Trust Companies Regulation Act.

 

The Companies Act 1992






































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































AN ACT TO CONSOLIDATE AND REVISE THE LAW RESPECTING THE


INCORPORATION, MANAGEMENT AND CONTROL OF COMPANIES.


Act No.18 of 1992


(as amended by Act No.24 of 1993, Act No.28 of 1994


and Act No.30 of 1995)


(Date of commencement-1st August, 1992)


Enacted by the Parliament of The Bahamas.


PART I


PRELIMINARY


Short title


1. (1) This Act may be cited as the Companies Act, 1992.


and commenc-


(2) This Act shall come into operation on such date as the Minister


ment.


may appoint by notice published in the Gazette.


Interpretation.


2. In this Act -


“affiliate” or “affiliated company” includes, in relation to another company, a


company that directly or indirectly controls, is controlled by, or is under


common control with, such other company; and hence is considered to be a


member of the same group of companies;


“approved form” means such forms as the Minister approves for the purposes of


this Act;


“articles” means the articles of association of a company which prescribe the


regulations of that company;


28 of 1994.


“authorized capital”, in relation to a company, means the sum of the aggregate


par value of all shares which the company is authorized by its memorandum


to issue plus the amount, if any, stated in its memorandum as authorized


capital to be represented by shares without par value which the company is


authorized by its memorandum to issue;


“Bahamian” means -


(a) a citizen of The Bahamas’ or


(b) as regards a company, a company registered under this Act, in


which not less than sixty per cent of its shares are beneficially


owned by Bahamians;


28 of 1994.


“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 plus -


(a) the aggregate of the amounts designated as capital of all


outstanding shares without par value of the company, and


(b) the amounts as are from time to time transferred from surplus


to capital by a resolution of directors;


“company” unless the context otherwise requires, means a company that is


-2-


incorporated or registered under this Act;


“court” means the Supreme Court;


“debenture” includes debenture stock, bonds and any other securities of a


company whether consisting of a charge on the assets of the company or not;


28 of 1994.


“existing company” means a company that was incorporated or registered under


an Act in force in The Bahamas prior to the commencement of this Act but


does not include a company incorporated under the International


2 of 1990.


Business Company Act, 1989;


Ch.279.


“former Act” means the Companies Act which was repealed by this Act;


“individual” means a natural person who has attained the age of majority in


accordance with the relevant law;


“member” means a member of a non-profit company or a member of a company


limited by guarantee or a shareholder of a company limited by shares or by


shares and guarantee;


“memorandum” means the memorandum of association of a company;


“non-profit company” means a company which satisfies the requirements of


section 170;


“officer” in relation to a company, means -


(a) the chairman or deputy chairman of the board of directors;


(b) the president, vice-president, managing director, general


manager, comptroller, secretary or treasurer; and


(c) any other individual who performs for the body corporate


functions similar to those normally performed by the holder


of any office specified in paragraph (a) or (b);


28 of 1994.


“parent company” means a company that owns at least fifty per cent of the


outstanding voting shares of each class or series of shares in another


company:


Provided that for the purposes of section 163 it means a company


that owns more than ninety percent of such shares as aforesaid;


“private company” means a company which is not a public company;


“prospectus” means prospectus, notice, circular, advertisement, or other


invitation, offering to the public for subscription or purchase any shares or


debentures of a company;


“public company” means a company whose shares or any class of whose shares


are intended for distribution to the public;


“Registrar” means the Registrar of Companies;


“Registrar of Companies” means the Registrar General;


“resolution of directors” means -


(a) a resolution approved by a duly constituted meeting of


-3-


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 all of the members of the committee, 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 a majority by the number of votes


he casts;


“resolution of members” or “resolution of the company” means -


(a) a resolution approved at a duly constituted meeting 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 members


voting at the meeting either in person or by proxy, or


(ii) a simple majority, or such larger majority as may be


specified in the articles, of the votes of the holders of


each class or series of shares voting at the meeting


either in person or by proxy;


(b) a resolution consented to in writing and supported by -


(i) a simple majority, or such larger majority as may be


specified in the articles, of the votes of the members,


or


(ii) a simple majority, or such larger majority as may be


specified in the articles, of the votes of the holders of


each class or series of shares;


“share” includes stock;


“shareholder” means a person who has acquired shares in a company incorporated


under this Act that is limited by shares;


28 of 1994.


“subsidiary company” means a company at least fifty per cent of whose


outstanding voting shares of each class or series of shares are owned by


another company:


Provided that for the purposes of section 163 it means a company


more than ninety percent of whose shares as aforesaid are owned by another


company.


28 of 1994.


“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


-4-


liabilities as shown in the books of account plus its issued and outstanding


share capital.


PART II


CONSTITUTION AND INCORPORATION OF COMPANIES


LEGAL FORMALITIES


Method of


3. (1) Subject to subsection (2), two or more persons may incorporate a


incorporation.


company with or without limited liability by signing a memorandum and submitting it to


28 of 1994.


the Registrar save that in the case of a non-profit company such signing of the memorandum


shall be by two or more individuals.


(2) No person who -


(a) is under the age of majority;


(b) has been found to be of unsound mind by a tribunal in The


Bahamas or elsewhere; or


(c) is an undischarged bankrupt,


may join in the incorporation of a company under this Act.


(3) If the memorandum submitted to the Registrar is accompanied by


a statutory declaration by a counsel and attorney that to the best of his knowledge and belief


no signatory to the memorandum is an individual described in subsection (2), the declaration


is, for the purposes of this Act, conclusive of the facts declared therein.


Mode of


4. The liability of the members of a company incorporated under this


limiting


Act may, according to the memorandum, be limited either to the amount, if any, unpaid


liability of


on the shares respectively held by them, or to such amount as the members may


members.


respectively undertake by the memorandum to contribute to the assets of the company in the


event of its being wound up.


Memorandum


5. Subject to section 13, where a company is incorporated on the


of company


principle of having the liability of its members limited to the amount unpaid on their


with limited


shares, hereinafter referred to as a company limited by shares, the memorandum shall


liability.


state -


(a) the name of the proposed company with the addition of the


word “Limited” or “Ltd.” as the last word in such name;


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


(c) that the liability of the members is limited;


(d) the amount of capital with which the company proposes to be


registered and subject to section 35(3), its division into a


stated number of shares of a certain fixed amount;


(e) that no subscriber may take less than one share;


(f) that each subscriber to the memorandum shall write opposite


his name the number of shares he takes; and


-5-


(g) the number of shareholders, the amount of share capital as


indicated by the number of shares and (where applicable) the


value of each share with which the company proposes to be


registered.


Memorandum


6. Where a company is formed on the principle of having no limit


of company


placed on the liability of its members, hereinafter referred to as an unlimited liability


with unlimited


company, the memorandum shall state -


liability.


(a) the name of the proposed company;


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


(c) where the company has a share capital -


(i) that the liability of the members is unlimited, and


(ii) that each subscriber is obliged to write opposite his


name the number of shares he takes; and


(d) the number of members and the amount of share capital (if


any) with which the company proposes to be registered.


Memorandum


7. Subject to section 13, where a company is formed on the principle


of company


of having the liability of its members limited to such amount as the members respectively


limited by


undertake to contribute to the assets of the company in the event of a winding up,


guarantee.


hereinafter referred to as a company limited by guarantee, the memorandum shall


state -


(a) the name of the proposed company with the addition of the


word “Limited” or “Ltd.” as the last word in such name;


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


(c) 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; and


(d) the number of members with which the company proposes to


be registered.


Company


8. (1) Without affecting anything contained in this Act, a company may


limited both


be limited both by shares and by guarantee and any reference in this Act to a company


by shares and


limited by shares or to a company limited by guarantee shall so far as appropriate include


by guarantee.


a company limited both by shares and by guarantee.


(2) The memorandum of a company limited both by shares and by


-6-


guarantee shall state the number of shares and the value of each share with which the


company proposes to be registered.


Signature


9. (1) The memorandum shall be signed by each subscriber in the


etc. of


presence of at least one witness who shall attest his signature.


memorandum.


(2) The memorandum shall, when registered, bind the company and


the shareholders to the same extent as if -


(a) each shareholder had subscribed his name and affixed his seal


thereto; and


(b) there were contained in the memorandum on the part of


himself, his heirs, executors and administrators, a covenant to


observe all the conditions of such memorandum, subject to


this Act.


(3) Where a company referred to in section 5, 6, 7 or 8 increases the


number of its shareholders or members or the amount of its share capital beyond the


registered number or amount as contained in the memorandum, notification of the increase


shall be given to the Registrar within fourteen days of the resolution authorizing the increase


and the Registrar shall thereupon record the increase.


Articles of


10. (1) Subject to subsection (2), articles signed by the subscribers to the


association.


memorandum shall be filed with the Registrar in respect of each company not later than six


months after the issue of the certificate of incorporation of the company.


(2) A company limited by shares may, instead of filing articles, notify


the Registrar in writing at the time of submission of its memorandum that it adopts the


First Schedule.


First Schedule either with or without modification.


(3) Modifications to the First Schedule shall be filed with the


Registrar.


(4) A company limited by shares which does not file articles within six


months from the date of filing its memorandum shall be deemed to have adopted the First


Schedule.


Signature


11. The articles, when registered, bind the company and the members


and effect


thereof to the same extent as if each member had subscribed his name and affixed his


of articles.


seal thereto, and there were contained in such articles a covenant, on the part of himself, his


heirs, executors and administrators to conform to all the regulations contained in such articles


subject to this Act; and all monies payable by any member to the company, in pursuance of


the conditions or regulations, shall be deemed to be a debt due from such member of the


company.


Restriction


12. (1) No company shall be incorporated under this Act under a name


on name of


that -


company.


(a) is identical with that under which an existing company is


already incorporated under the former Act or any other Act


-7-


concerned with the incorporation of companies or which so


nearly resembles such other name as to be calculated to


deceive or confuse except where the company in existence is


in the course of being dissolved or signifies its consent in


such manner as the Registrar approves;


(b) contains, without express prior permission of the Registrar


which permission may be withheld without assigning a


reason, the words “Assurance”, “Bank”, “Building Society”,


“Chamber of Commerce”, “Chartered”, “Cooperative”,


“Imperial”, “Insurance”, “Municipal”, “Royal”, or a word


conveying a similar meaning, or any other word that, in the


opinion of the Registrar, suggests or is calculated to suggest -


(i) the patronage of the Government of The Bahamas or


a Minister of the Government of The Bahamas,


(ii) a connection with any Ministry or Department of the


Government of The Bahamas,


(iii) a connection with any local authority or a statutory


board; or


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


otherwise objectionable.


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


(a) is identical with a name under which a company in existence


is already incorporated; or


(b) so nearly resembles the name of another company in existence


which is already incorporated, as to be calculated to deceive


or confuse,


the Register may, whether or not the consent of the company in existence has been obtained


pursuant to paragraph (a) of subsection (1), give notice to the last registered company to


change its name and if it fails to do so within sixty 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.


28 of 1994.


(3) A company may amend its memorandum to change its name.


28 of 1994.


(4) Subject to subsections (1) and (2), where a company changes its


name the Registrar shall enter the new name in the register of companies in place of the


former name and shall issue a new certificate of incorporation indicating the change of name.


28 of 1994.


(5) A change of name shall not affect any rights or obligations of the


company or render defective any legal proceedings by or against the company and all legal


proceedings that have been commenced by or against the company in its former name may


-8-


be continued in its new name.


Requirements


13. Subject to section 14, the word “Limited”, or the abbreviation


as to name.


“Ltd.” must be part of the name of every company incorporated under this Act with limited


liability, but a company may use and may be legally designated by either the full or the


abbreviated form.


Exclusion of


14. (1) Where the Minister is satisfied that an association is about to be


“Limited”


incorporated as a limited liability company for the purpose of promoting objects that are


from name of


religious, charitable, educational, scientific, historical, fraternal, literary, sporting,


companies.


artistic or athletic, and that the profits (if any) and other income are to be applied to the


promotion of those objects, or that there is a prohibition of any dividend or refund of


contribution to its members, the Minister may be licence authorize that the association


be incorporated without the word “Limited” in its name.


28 of 1994.


(1a) Where it is proved to the satisfaction of the Minister -


(a) that the objects of a company incorporated as a limited


liability company are restricted to those specified in


subsection (1) and to objects incidental or conducive thereto;


and


(b) that, by its constitution, the company is required to apply its


profits, if any, or other income in promoting its objects, and


is prohibited from paying any dividend to its members,


the Minister may by licence authorize the company to make, by resolution, a change in its


name, including or omitting the word “limited” and subsection (1b) shall apply to a change


of name under this subsection.


(1b) Where a company changes its name under subsection (1a) the


company shall notify the Registrar of such change and the Registrar shall enter the new name


in the register of companies in place of the former name, and shall issue a new certificate of


incorporation indicating the change of name.


(2) A licence by the Minister under this section may be granted on


such conditions and subject to such regulations as the Minister thinks fit, and those


conditions and regulations shall be binding on the company, and shall, if the Minister so


directs, be inserted in the memorandum and articles or in one of those documents.


(3) An association to which a licence is granted, on incorporation, is


entitled to enjoy all the privileges of limited companies and be subject to all their obligations,


except those of using the “Limited” as any part of its name and of publishing its name and


of sending lists of members and directors and other officers to the Registrar.


(4) A licence under this section may at any time be revoked by the


Minister, and upon revocation the Registrar shall enter the word “Limited” at the end of the


name of the company as it appears in the register and the exemptions and privileges granted


by this section shall cease to apply to the company, but before a licence is revoked by the


-9-


Minister, he shall inform the company of his intention and shall afford the company an


opportunity of being heard in opposition to the intended revocation.


(5) This section applies to a non-profit company as incorporated in


accordance with Part VI of this Act.


Reserving


15. (1) A person may apply in the approved form to the Registrar for the


name.


reservation of a name set out in the application as -


(a) the name of an intended company; or


(b) the name to which an existing company proposes to change its


name.


(2) If the Registrar is satisfied as to the bona fides of the application


and that the proposed name by which the intended company or existing company could be


registered is not such as to contravene the provisions of this Act, he shall reserve the


proposed name for a period of six weeks from the date of the lodging of the application.


(3) If at any time while the name is so reserved, application is made


to the Registrar for an extension of that period and the Registrar is satisfied as to the bona


fides of the application, he may grant an extension for a further period of six weeks.


(4) During the period for which a name is reserved, no company,


other than the intended company or an existing company in respect of which the name is


reserved, may be registered under this Act, whether originally or on change of name, under


the reserved name or under any other name that, in the opinion of the Registrar, so closely


resembles the reserved name as to be calculated to deceive or confuse.


(5) The reservation of a name under this section in respect of an


intended company or an existing company does not in itself entitle the intended company or


existing company to be registered by that name, either originally or on change of name.


Incorporation


Certificate of


16. (1) Upon receipt of a memorandum in conformity with the


incorporation


requirements of this Act, the Registrar shall issue a certificate of incorporation in the


and


approved form; and such a certificate shall be conclusive proof of the incorporation of


consequences


the company named in the certificate.


thereof.


(2) From the date of incorporation mentioned in the certificate, the


subscribers to the memorandum together with such other persons as may from time to time


become members of the company, shall be a body corporate by the name contained in the


memorandum capable of exercising all the functions of an incorporated company, and having


perpetual succession and a common seal, with power to hold lands, but with such liability


on the part of the members to contribute to the assets of a company in the event of its being


wound up.


(3) A copy of a memorandum or articles filed and registered in


accordance with this Act or any extract therefrom certified under the hand and seal of the


-10-


Registrar as a true copy shall be received in evidence in any court in The Bahamas without


further proof.


Registered


17. (1) A company incorporated under this Act shall at all times maintain


office.


a registered office in The Bahamas.


28 of 1994.


(2) The address of the registered office if not submitted for


registration with the memorandum shall be submitted to the Registrar for registration


within thirty days from the date of incorporation of the company.


28 of 1994.


(3) The directors of the company may change the address of the


registered office of the company which change shall be notified to the Registrar.


Company


18. (1) A company shall prepare and maintain at its registered office


records.


records containing -


(a) a copy of the memorandum and articles and all amendments


thereto;


(b) minutes of meetings and resolutions of shareholders of the


company;


(c) copies of any notice that is required under this Act; and


(d) any register or such like document that is required under this


Act.


Register of


19. The Registrar shall maintain a register in which shall be entered


companies.


the following particulars -


(a) the name of the company;


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


(c) the amount of capital of the company, the number of shares


into which it is divided and either the nominal value of each


share or that the shares are shares of no par value;


(d) the names, addresses and occupations of the subscribers to the


memorandum and the number of shares taken by each


subscriber;


(e) the date of execution of the memorandum;


(f) the date of the filing of the memorandum;


(g) the number assigned to the company; and


(h) in the case of a company limited by guarantee or which has no


limit placed on the liability of its members, a statement that


such a company is limited by guarantee or is unlimited, as the


case may be.


Copies of


20. (1) A company shall send to every member at his request and, on


memorandum


payment of such sum as the company may prescribe, a copy of, the memorandum and


and articles


articles.


to be given


(2) Where any alteration is made in the memorandum or articles,


-11-


to members.


every copy issued after the date of alteration shall be in accordance with such alteration.


Publication


21. Every company incorporated or registered under this Act shall


of name.


have its name -


(a) painted or affixed and shall keep such name painted or affixed


on the outside of every office or place in which the business


of the company is carried on, or in any corridor, passage or


hallway adjacent or proximate thereto, in a conspicuous


position, in letters easily legible;


(b) engraved in legible characters on its seal;


(c) typed, printed or stamped in legible characters on all notices,


advertisements and other official publications of the


company;


(d) typed, printed or stamped in all bills of exchange, promissory


notes, endorsements, cheques and orders for money or goods


purporting to be signed by or on behalf of such company; and


(e) typed, printed or stamped on all bills of parcels, invoices,


receipts and letters of credit of the company.


Pre-incorporation


22. (1) Except as provided in this section, a person who enters into a


contracts.


written contract in the name of or on behalf of a company before it is incorporated is


personally bound by the contract and is entitled to the benefits of the contract.


(2) Within a reasonable time after the company is incorporated, it


may, by any action or conduct signifying its intention to be bound thereby, adopt a written


contract entered into in its name or on its behalf before it was incorporated.


(3) When a company adopts a contract under subsection (2) -


(a) the company is bound by the contract and is entitled to the


benefits thereof as if the company had been in existence at the


date of the contract and been a party to it; and


(b) a person who purported to act in the name of the company or


on its behalf ceases, except as provided in subsection (4), to


be bound by or entitled to the benefits of the contract.


(4) Except as provided in subsection (5), whether or not a written


contract made before the incorporation of the company is adopted by the company, a party


to the contract may apply to the court for an order under which obligations under the contract


may be fixed or being joint or joint and several for apportioning liability between the


company and a person who purported to act in the name of the company or on its behalf; and


the court may, make any order it thinks fit.


(5) If it is expressly so provided in a written contract, a person who


purported to act for or on behalf of a company before it was incorporated is not in any event


bound by the contract or entitled to the benefits of the contract.


-12-


Service of


23. Any writ, notice, order or other document required to be served


documents on


upon a company may be served by leaving the same, or sending it through the post in


company.


a prepaid letter, addressed to the company at its registered office.


Capacity and Powers


Capacity and


24. (1) Subject to this Act, a company incorporated under this Act has the


powers.


capacity and all the rights, powers and privileges of an individual of full capacity.


(2) A company incorporated under this Act has the capacity to carry


on its business, conduct its affairs and exercise its powers in any jurisdiction outside of The


Bahamas to the extent that the laws of The Bahamas and of that jurisdiction so permit.


(3) Any limitations in the memorandum or articles on the objects or


powers of the company or any limitations whether in the memorandum or articles or resulting


from a decision of the company in general meeting on the authority of the board of directors


or officers of the company, shall not affect a third party, unless that party actually knows of


such limitations or the lack of such authority relating to the relevant transaction.


(4) This section shall not authorize a company to carry on any


business or activity in breach of -


(a) any Act prohibiting or restricting the carrying on of the


business or activity; or


(b) any provision requiring permission or licence for the carrying


on of the business or activity.


Contracts.


25. (1) A contract made according to this section on behalf of a


company -


(a) if not otherwise invalid, shall be valid; and


(b) may be varied or discharged in the like manner that it is


authorized by this section to be made.


(2) A contract that, if made between individuals, would, by law, be


required to be in writing under seal may be made on behalf of a company in writing under


seal.


(3) A contract that, if made between individuals would, by law, be


required to be in writing or to be evidenced in writing by the parties to be bound thereby may


be made or evidenced in writing signed in the name of or on behalf of the company.


(4) A contract that, if made between individuals would, by law, be


valid although made by parol only and not reduced to writing may be made by parol on


behalf of the company.


Company seals.


26. (1) Every company shall have a common seal with its name engraved


thereon in legible characters.


(2) If authorized by its articles, a company may have for use in any


country, other than The Bahamas, or for use in any district or place not situated in The


-13-


Bahamas, an official seal, which shall be a facsimile of the common seal of the company


with the addition on its face of the name of every country, district or place where it is to be


used.


(3) Every document to which an official seal of the company is duly


affixed shall bind the company as if it has been sealed with the common seal of the company.


(4) A company may, by instrument in writing under its common seal,


authorize any person appointed for that purpose to affix the company’s official seal to any


document to which the company is a party in the country, district or place where its official


seal can be used.


(5) Any person dealing with an agent appointed pursuant to subsection


(4) in reliance on the instrument conferring the authority may assume that the authority of


the agent continues during the period, if any, mentioned in the instrument or, if no period is


so mentioned, until that person has actual notice of the revocation or determination of the


authority.


Bills and notes.


27. (1) A bill of exchange or promissory note shall be deemed to have


28 of 1994.


been made, accepted or endorsed, on behalf of a company, if made, accepted or endorsed in


the name of the company by a person acting under the authority of the company, or if


expressed to be made, accepted or endorsed on behalf or on account of the company by a


person acting under the authority of the company.


28 of 1994.


(2) If any director, manager or officer of a company or any person on


its behalf signs or authorizes to be signed on behalf of the company any bill of exchange,


promissory note, endorsement, cheque, order for money or goods, or issues or authorizes to


be issued any bills of parcels, invoice, receipt or letter of credit of the company wherein its


name is not mentioned, he is guilty of an offence and shall be liable on summary conviction


to a fine of five hundred dollars and shall further be personally liable to the holder of any


such bill of exchange, promissory note, cheque or order for money or goods for the amount


thereof, unless the same is duly paid by the company.


Power of


28. (1) A company may, in writing under seal, empower any person,


attorney.


either generally or in respect of any specified matter, as its attorney to execute deeds or any


other document, agreement or instrument on its behalf in any place within or outside The


Bahamas.


(2) A deed or any other document, agreement or instrument executed


by a person empowered as provided in subsection (1) shall bind the company and has the


same effect as if it were under the company’s seal.


Alteration of


29. (1) Subject to this Act, a company may by resolution of the members


memorandum


alter the contents of its memorandum.


and articles.


(2) Subject to this Act and to any conditions contained in its


memorandum, a company may by resolution of its members alter or add to its articles.


28 of 1994.


(3) A company that alters its memorandum under subsection (1) or


-14-


alters or adds to its articles under subsection (2) shall submit to the Registrar a copy of the


resolution of members altering its memorandum or altering or adding to its articles, as the


case may be, signed by a director, the secretary or an authorized officer of the company, as


a true copy of such resolution and the Registrar shall retain and register such copy of the


resolution.


Permitted loans.


30. Subject to section 31, a company may give financial assistance to


any person by means of a loan, guarantee or otherwise -


(a) in the ordinary course of business, if the lending of money by


such a company is not prohibited by any Act in force in The


Bahamas;


(b) on account of expenditures incurred or to be incurred on


behalf of the company;


(c) to a parent company, if the company that intends to make the


loan or give a guarantee is a subsidiary company of the parent


company;


(d) to a subsidiary company of the parent company; and


(e) to employees of the company or any of its affiliates for any


purpose including -


(i) to enable or assist them to purchase or erect living


accommodation for their own occupation,


(ii) in accordance with a plan for the purchase of shares of


the company or any of its affiliates to be held by a


trustee, or


(iii) to enable or assist them to improve their education or


skills or to meet reasonable medical expenses.


Prohibited loans.


31. (1) When circumstances prejudicial to the company exist, the company


or any company to which it is affiliated shall not, except as permitted by section 30, directly


or indirectly give financial assistance, by means of a loan, guarantee or otherwise -


(a) to a member, director, officer, or employee of the company or


affiliated company, or to an associate of any such person for


any purpose; or


(b) to any person for the purpose of, or in connection with, a


purchase of a share issued or to be issued by the company or


a company with which it is affiliated.


(2) Circumstances prejudicial to the company exist in respect of


financial assistance referred to in subsection (1) when there are reasonable grounds for


believing that -


(a) the company is unable or would, after giving the financial


assistance, be unable to pay its liabilities as they become due;


-15-


or


(b) the realisable value of the company’s assets, excluding the


amount of any financial assistance in the form of loan and in


the form of assets pledged or encumbered to secure a


guarantee, would, after giving the financial assistance, be less


than the aggregate of the company’s liabilities and issued


share capital of all classes.


Enforcement of


32. A contract made by a company contrary to section 31 may be


prohibited loans.


enforced by the company or by a borrower for value in good faith without notice of the


contravention.


Power to refer


33. A company may, from time to time, in writing under its common


matters to


seal, agree to refer and may refer to arbitration any existing or future difference,


arbitration.


question of other matter in dispute between itself and any other company or person; and the


parties to the arbitration may delegate to the person to whom the reference is made power to


settle any terms or to determine any matter capable of being lawfully settled or determined


by the companies themselves or by the directors of other officers of such companies.


Authentication


34. Any summons, notice, order, document or proceedings requiring


of summons,


authentication by a company may be signed by any director, secretary or other authorized


notice or


officer of the company, and need not be under the common seal of the company, and the


proceeding.


same may be in writing or in print, or partly in writing and partly in print.


PART III


SHARE CAPITAL, SHAREHOLDERS


AND RELATED MATTERS


Share Capital


Nature of


35. (1) The shares or other interest of a shareholder in a company


shares and


incorporated under this Act are personal property capable of being transferred in the


of certain


manner prescribed by the articles, and are not of the nature of real property, and each


transfers.


share, unless the articles otherwise provide, shall, in the case of a company having its


share capital divided into shares, be distinguishable by its given number.


(2) Any transfer of a share or other interest of a deceased shareholder


of a company under this Act made by his personal representative shall, notwithstanding such


personal representative may not himself be a shareholder, be of the same validity as if he had


been a shareholder at the time of the execution of the instrument of transfer.


(3) Shares may have a nominal or par value or may be of no par


value.


28 of 1994.


(4) Subject to any limitations in its memorandum or articles, a


company may issue fractions of a share and unless and to the extent otherwise provided in


the memorandum or articles, a fractional share has the corresponding fractional liabilities,


-16-


limitations, preferences, privileges, qualifications, restrictions, rights and other attributes of


a share of the same class or series of shares.


-17-


Classes of


36. (1) The articles may provide for the issue of more than one class of


shares and


shares; and if they so provide, the rights, privileges, restrictions and conditions attaching


issue thereof.


to each share shall be set out in such articles.


(2) Where there is no such provision in the articles, a company may


by resolution of shareholders resolve that all of its shares or, if its capital be divided into


shares of different classes, that all of its shares of a particular class rank

pari passu

for all


purposes, and in either case either already issued and being fully paid up or thereafter to be


issued as fully paid up, need not thereafter have a distinguishing number.


(3) If the articles of a company so provide, no shares of a class of


shares may be issued unless the shares have first been offered to the shareholders of the


company holding shares of that class; and those shareholders have a pre-emptive right to


acquire the offered shares in proportion to their holdings of the shares of that class, at such


price and on such terms as those shares are to be offered to others.


(4) Notwithstanding that the articles provide for the pre-emptive rights


referred to in subsection (3), the shareholders of the company have no pre-emptive right in


respect of shares to be issued by the company -


(a) for a consideration other than money;


(b) as a share dividend; or


(c) pursuant to the exercise of conversion privileges, options or


rights previously granted by the company.


Variation of


37. (1) If, in the case of a company, the share capital of which is divided


shareholders’


into different classes of shares, provision is made by the memorandum or articles for


rights.


authorizing the variation of the rights attached to any class of shares in the company, subject to the


consent of any specified proportion of the holders of the issued shares of that class or the sanction


of a resolution passed at a separate meeting of the holders of those shares, and in pursuance of such


provision the rights attached to any such class of shares are at any time varied, the holders of not less


in the aggregate than fifteen per cent of the issued shares of that class, being persons who did not


consent to or vote in favour of the resolution for the variation, may apply to the court to have the


variation cancelled, and where any such application is made, the variation shall not have effect unless


and until it is confirmed by the court.


(2) An application under this section shall be made within twenty-one


days after the date on which the consent was given or the resolution was passed, as the case


may be, and may be made on behalf of the shareholders entitled to make the application by


one or more of their number as they may appoint in writing for the purpose.


(3) On any such application, the court, after hearing the applicant and


any other persons who apply to the court to be heard and appear to the court to be interested


in the application, may, if it is satisfied, having regard to all the circumstances of the case,


that the variation would unfairly prejudice the shareholders of the class represented by the


applicant, disallow and shall, if not so satisfied, confirm the variation.


-18-


(4) The decision of the court on any such application shall be final.


(5) The company shall within fifteen days after the making of an order


by the court on any such application forward a copy of the order to the Registrar, and, if


default is made in complying with this provision, the company and every officer of the


company who is in default shall be liable to a civil penalty of ten dollars for each day during


which the default continues.


(6) In this section, “variation” includes abrogation and “varied” shall


be construed accordingly.


Share issue.


38. Subject to the articles, shares may be issued at such times and to


such persons and for such consideration as the directors may determine.


Consideration.


39. (1) A share may not be issued until it is fully or partly paid -


(a) in money; or


(b) in property or for past service that is the fair equivalent of the


money that the company would have received if the share had


been issued for money.


(2) In determining whether property or past service is the fair


equivalent of a money consideration the directors may take into account reasonable charges


and expenses of organisation and re-organisation and payments for property and past services


expected to benefit the company.


(3) For the purposes of this section “property” does not include a


promissory note or a promise to pay.


Restrictions as


40. (1) No allotment shall be made of any share capital of a company


to allotment.


offered to the public for subscription unless the following conditions have been complied


with, namely -


(a) the amount, if any, fixed by the memorandum or articles and


named in the prospectus as the minimum subscription upon


which the directors may proceed to allotment; or


(b) if no amount is so fixed and named, then the whole amount of


the share capital so offered for subscription,


has been subscribed and the sum payable on application for the amount so fixed and named,


or for the whole amount offered for subscription has been paid to and received by the


company.


(2) The amount so fixed and named and the whole amount


referred to in subsection (1) shall be reckoned exclusive of any amount payable otherwise


than in cash and in this Act referred to as the minimum subscription.


(3) The amount payable on application on each share shall not


be less than five per cent of the nominal value of the share.


(4) Where the conditions specified in subsection (1) have not


been complied with on the expiration of forty days after the first issue of the prospectus, all


-19-


money received from applicants for shares shall be immediately repaid to them without


interest and, if any such money is not repaid within forty-eight days after the issue of the


prospectus, the directors of the company are jointly and severally liable to repay that money


with interest at the current prime rate of interest from the expiration of the forty-eight days;


but a director shall not be liable if he proves that the loss of the money was not due to any


misconduct or negligence on his part.


(5) Any condition requiring or binding any applicant for shares


to waive compliance with any requirement of this section is void.


(6) This section, except subsection (3), shall not apply to any


allotment of shares subsequent to the first allotment of shares offered to the public for


subscription.


(7) In the case of the first allotment of share capital payable


in cash of a company having a share capital which does not issue a prospectus on or with


reference to its formation, or which has issued such a prospectus but has not proceeded to


allot any shares offered to the public for subscription, no allotment may be made unless the


minimum subscription, that is to say -


(a) the amount, if any, fixed by the memorandum or articles and


named in the statement in lieu of prospectus as the minimum


subscription upon which the directors may proceed to


allotment; or


(b) if no amount is so fixed and named, then the whole amount of


the share capital other than that issued or agreed to be issued


as fully or partly paid up otherwise than in cash,


has been subscribed and an amount, not less than five per cent of the nominal amount of each


share payable in cash, has been paid to and received by the company.


(8) This section shall not apply to a private company.


Effect of


41. (1) An allotment made by a company to an applicant contrary to


irregular


section 40 is voidable at the instance of the applicant within thirty days of the holding


allotment.


of the statutory meeting of the company and is so voidable notwithstanding that the company


is in the course of being wound up.


(2) A director of a company who knowingly contravenes or permits or


authorizes the contravention of any requirement of section 40 with respect to an allotment


shall be liable to compensate the company and the allotee respectively for any loss, damages


or costs which the company or the allotee may have sustained or incurred as a result of such


contravention.


(3) Proceedings for the recovery of any such loss, damages or costs


may not be commenced after the expiration of two years from the date of the allotment.


(4) For the purposes of this section “statutory meeting of the


company” means a meeting held in accordance with section 70(2).


-20-


Restriction on


42. (1) A company shall not commence business or exercise any


commencement


borrowing powers unless -


of business.


(a) shares held subject to the payment of the whole amount


thereof in cash have been allotted to an amount not less in the


whole than the minimum subscription;


(b) every director of the company has paid to the company on


each of the shares taken or contracted to be taken by him, and


for which he is liable to pay in cash, a proportion equal to the


proportion payable on application and allotment on the shares


offered for public subscription or, in the case of a company


which does not issue a prospectus inviting the public to


subscribe for its shares, a proportion equal to the proportion


payable on application and allotment on the shares payable in


cash;


(c) there has been filed with the Registrar a statutory declaration


by the secretary or one of the directors in the approved form


that the conditions specified in section 40 have been complied


with; and


(d) in the case of a company which does not issue a prospectus


inviting the public to subscribe for its shares, there has been


delivered to the Registrar a statement in lieu of prospectus.


(2) The Registrar shall, on filing of the statutory declaration, certify


that the company is entitled to commence business, and the certificate shall be conclusive


evidence that the company is so entitled; but in the case of a company which does not issue


a prospectus inviting the public to subscribe for its shares, the Registrar may not issue such


a certificate unless a statement in lieu of prospectus has been filed with him.


(3) A contract made by a company before the date at which it is


entitled to commence business is provisional only and shall not be binding on the company


until that date on which date it shall become binding.


(4) Nothing in this section precludes the simultaneous offer for


subscription or allotment of any shares and debentures on the receipt of any money payable


on application for debentures.


(5) This section shall not apply to a private company.


Returns as to


43. (1) Where a public company limited by shares or a company limited


allotment.


by guarantee and having a share capital makes any allotment of its shares, the company shall


within three months thereafter deliver to the Registrar -


(a) a return of the allotments, stating the number and nominal


amount of the shares comprised in the allotment, the names,


addresses and description of the allottees and the amount, if


-21-


any, paid or due and payable on each share; and


(b) in the case of shares allotted as fully or partly paid up


otherwise than in cash, a written contract constituting the title


of the allottee to the allotment together with any contract of


sale for services or other consideration in respect of which


that allotment was made and a return stating the number and


nominal amount of shares so allotted, the extent to which they


are to be treated as paid up and the consideration for which


they have been allotted.


(2) Where such a contract as is referred to in subsection (1) is not in


writing, the company shall within three months after the allotment file with the Registrar the


prescribed particulars of the contract.


(3) In case of a default in delivering to the Registrar within three


months after the allotment any document required to be filed by this section, the company,


or any person liable for the default, may apply to the court for relief and the court, if satisfied


that the omission to file the document was accidental due to inadvertence or that it is just and


equitable to grant relief, may make an order extending the time for the filing of the document


for such time as it considers proper.


Acquisition of


44. (1) Subject to this section and to its memorandum, a company may


holding of own


purchase or otherwise acquire shares issued by it.


shares.


(2) A company may not make any payment to purchase or otherwise


acquire shares issued by it, if there are reasonable grounds for believing that -


(a) the company is unable, or would after that payment, be unable


to pay its liabilities as they become due, or


(b) the realisable value of the company’s assets would, after that


payment, be less than the aggregate of its liabilities and issued


share capital of all classes.


(3) A purchase or acquisition of shares under this section shall not be


a reduction of share capital within the meaning of this Act.


Cancellation


45. Shares or fraction of shares issued by a company and purchased,


of shares.


redeemed or otherwise acquired by the company shall be cancelled, or, if the articles limit


the number of authorized shares, the shares or fractions may be restored to the status of


authorized, but unissued, shares.


Effect of


46. (1) A contract with a company providing for the purchase of shares of


purchase


a company is specifically enforceable against the company except to the extent that the


contract.


company cannot perform the contract without thereby being in breach of section 44.


(2) In any action brought on a contract referred to in subsection (1),


the company shall have the burden of proving that the performance of the contract is


prevented by section 44.


-22-


(3) Until the company has fully performed a contract referred to in


subsection (1), the other party retains the status of a claimant who is entitled -


(a) to be paid as soon as the company is lawfully able to do so, or


(b) to be ranked in a liquidation subordinate to the rights of


creditors but in priority to the shareholders.


Commission


47. (1) The directors of a company acting honestly and in good faith with


for share


a view to the best interests of the company may authorize the company to pay a


purchase.


commission to any person in consideration of his purchasing or agreeing to purchase shares


of the company from the company or from any other person, or procuring or agreeing to


procure the purchasers for any such shares.


(2) A commission authorized under subsection (1) shall not exceed ten


per cent of the amount paid or to be paid for the shares.


Matters


48. (1) Subject to the Exchange Control Regulations Act, a company


respecting


limited by shares, if so authorized by its articles, may, with respect to fully paid up


issue of


shares or to stock, issue under its common seal a warrant stating that the bearer is


share warrants.


entitled to the shares or stock therein specified and may provide, by coupons or


Ch.330.


otherwise, for the payment of future dividends on the shares or stock included in the warrant,


in this Act referred to as a share warrant.


(2) A share warrant entitles the bearer thereof to shares or stock


therein specified, and the shares or stock may be transferred by delivery, of the warrant.


(3) The bearer of a share warrant is, subject to the articles, entitled,


on surrendering it for cancellation, to have his name entered as a member in the register of


members, and the company is responsible for any loss incurred by any person by reason of


the company entering in its register the name of the bearer of a share warrant in respect of


the shares or stock therein specified without the warrant being surrendered and cancelled.


(4) The bearer of a share warrant may, if the articles so provide, be


deemed to be a member of the company within the meaning of this Act, either to the full


extent or for any purposes defined in the articles, except that he is not qualified in respect of


shares or stock specified in the warrant for being a director or manager of the company, in


cases where such a qualification is required by the articles.


(5) On the issue of a share warrant, the company shall strike out of its


register of members the name of the member then entered therein as holding the shares or


stock specified in the warrant as if he had ceased to be a member and shall enter in the


register the following particulars -


(a) the fact of the issue of the warrant;


(b) a statement of the shares or stock included in the warrant,


distinguishing each share by its number;


(c) the date of the issue of the warrant.


(6) Until the warrant is surrendered, the particulars specified in


-23-


subsection (5) shall be deemed to be the particulars required by this Act to be entered in the


register of members and on the surrender the date of the surrender shall be entered as if it


were the date at which a person ceased to be a member.


Alteration


49. (1) A company having a share capital may, if so authorized by its


of share


articles, by a resolution of shareholders -


capital.


(a) increase its share capital by the creation of new shares of such


amount as it considers expedient;


(b) consolidate and divide all or any of its share capital into


shares of larger amount than its existing shares;


(c) convert all or any of its paid-up shares into stock and reconvert


that stock into paid-up shares of any denomination;


(d) subdivide its shares or any of them into shares of a smaller


amount than is fixed by the memorandum so that in the


subdivision the proportion between the amount paid and the


amount, if any, unpaid on each reduced share shall be the


same as it was in the case of the share from which the reduced


share is derived;


(e) cancel shares which at the date of the passing of the resolution


in that behalf have not been taken or agreed to be taken by


any person or which have been forfeited and diminish the


amount of its share capital by the amount of the shares so


cancelled.


(2) A cancellation of shares under this section shall not be a reduction


of share capital within the meaning of this Act.


Reduction


50. A company limited by shares and a company limited by guarantee


of share


and having a share capital, may, if so authorized by its articles, by a resolution of


capital.


shareholders reduce its share capital in any way, and in particular without prejudice to the


generality of the foregoing power, may -


(a) extinguish or reduce the liability on any of its shares in


respect of share capital not paid-up;


(b) either with or without extinguishing or reducing liability on


any of its shares, cancel any paid-up share capital which is


lost or unrepresented by available assets; or


(c) either with or without extinguishing or reducing liability on


any of its shares, pay off any paid-up share capital which is in


excess of the wants of the company,


and may, if and so far as is necessary, alter its memorandum by reducing the amount of its


share capital and of its shares accordingly.


Application


51. (1) Where a company has passed a resolution reducing its share


-24-


to court for


capital, it shall apply to the court for an order confirming the reduction.


confirming order,


(2) Subject to subsection (3), where the proposed reduction of share


objections by


capital involves either diminution of liability in respect of unpaid share capital or the


creditors and


payment to any shareholder of any paid-up share capital, and in any other case if the


settlement of


court so directs -


objecting


(a) every creditor of the company who at the date fixed by the


creditors.


court shall be entitled to any debt or claim which, if that


28 of 1994.


date were the commencement of the winding up of the


company, would be admissible in proof against the company


shall be entitled to object to the reduction;


(b) the court, unless satisfied on affidavit that there are no such


creditors, shall settle a list of creditors so entitled to object,


and for that purpose shall ascertain, as far as possible without


requiring an application from any creditor, the names of those


creditors and the nature and amount of their debts or claims,


and may publish notices fixing a day within which creditors


not entered on the list are to be excluded from the right of


objecting to the reduction;


(c) Where a creditor entered on the list whose debt or claim is not


discharged or has not determined does not consent to the


reduction, the court may, if it thinks fit, dispense with the


consent of that creditor, on the company securing payment of


his debt or claim by appropriating, as the court may direct, the


following amount -


(i) if the company admits the full amount of the debt or


claim, or, though not admitting it, is willing to provide


for it then the full amount of the debt or claim,


(ii) if the company does not admit and is not willing to


provide for the full amount of the debt or claim, or if


the amount is contingent or not ascertained, then an


amount fixed by the court after the like inquiry and


adjudication as if the company were being wound up


by the court.


(3) The court may, having regard to any special circumstances of the


case, direct that subsection (2) shall not apply as regards any class or any classes of creditors.


Order confirming


52. (1) The court, if satisfied with respect to every creditor of the


reduction and


company who under section 51 is entitled to object to the reduction that either his consent


powers of court


to the reduction has been obtained or his debt or claim has been discharged or has


on making such


determined, or has been secured may make any order confirming the reduction on such


-25-


order.


terms and conditions as it thinks fit.


(2) Where the court makes any such order, it may -


(a) if for any special reason it thinks proper so to do, make an


order directing that the company shall, during such period,


commencing on or at any time after the date of the order, as


is specified in the order, add to its name as the last words


thereof the words “and reduced”; and


(b) make an order requiring the company to publish as the court


directs the reasons for reduction or such other information in


regard thereto as the court may think expedient with a view to


giving proper information to the public, and, if the court


thinks fit, the causes which led to the reduction.


(3) Where a company is ordered to add to its name the words “and


reduced” those words shall, until the expiration of the period, if any, specified in the order,


be deemed to be part of the name of the company.


Registration


53. (1) The Registrar, on production to him of an order of the court


of confirming


confirming the reduction of the share capital of a company, and the delivery to him of


order and


a copy of the order and a minute approved by the court showing, with respect to the


minute of


share capital of the company as altered by the order, the amount of the share capital, the


reduction.


number of shares into which it is to be divided, and the amount of each share, and the


amount, if any, at the date of registration deemed to be paid-up on each share, shall register


the order and minute.


(2) On the registration of the order and minute, and not before, the


resolution for reducing share capital as confirmed by the order so registered shall take effect.


(3) Notice of the registration shall be published in such manner as the


court directs.


(4) The Registrar shall certify under his hand the registration of the


order and minute, and his certificate shall constitute conclusive evidence that all the


requirements of this Act with respect to reduction of share capital have been complied with,


and that the share capital of the company is such as is stated in the minute.


(5) The minute when registered shall be deemed to be substituted for


the corresponding part of the memorandum, and shall be valid and alterable as if it had been


originally contained therein.


(6) The substitution of any such minute for part of the memorandum


of the company shall be deemed to be an alteration of the memorandum within the meaning


of section 29 of this Act.


Liability of


54. (1) Subject to subsection (2), in the case of a reduction of share


shareholders


capital, a shareholder of the company, past or present, shall not be liable in respect of


in respect


any share to any call or contribution exceeding in amount the difference, if any, between


-26-


of reduced


the amount of the share as fixed by the minute and the amount paid, or the reduced


shares.


amount if any, which is to be deemed to have been paid, on the share, as the case may be.


(2) If any creditor, entitled in respect of any debt or claim to object to


the reduction of share capital, is, by reason of his ignorance of the proceedings for reduction,


or of their nature and effect with respect to his claim, not entered on the list of creditors, and


immediately after the reduction, the company is unable, within the meaning of the provisions


of this Act with respect to winding up by the court, to pay the amount of his debt or claim,


then -


(a) every person who was a shareholder of the company at the


date of the registration of the order for reduction and the


minute, shall be liable to contribute for the payment of that


debt or claim an amount not exceeding the amount, if any,


which he would have been liable to contribute if the company


had commenced to be wound up on the day before the said


date; and


(b) if the company is wound up, the court, on the application of


any such creditor and proof of his ignorance, may if it thinks


fit, settle accordingly a list of persons so liable to contribute,


and make and enforce calls and orders, on the contributories


settled on the list, as if they were ordinary contributories in a


winding up.


(3) Nothing in this section shall affect the rights of the contributories


among themselves.


Notice to


55. Where a company having a share capital has -


Registrar


(a) consolidated and divided its share capital into shares of


concerning


larger amounts than its existing shares;


changes in


(b) converted shares into stock;


share capital.


(c) re-converted its shares or any of them;


(d) subdivided its shares or any of them;


(e) purchased or otherwise acquired any of its own shares; or


(f) cancelled any shares, otherwise than in connection with a


reduction of share capital under section 50,


the company shall within thirty days after so doing give notice thereof to the Registrar


specifying, as the case may be, the shares consolidated, divided, converted, subdivided,


purchased or otherwise acquired or cancelled or the stock re-converted, and the Registrar


shall register any such particulars.


Members


Register of


56. (1) Subject to this section, a company incorporated under this Act


-27-


members.


shall cause to be kept in writing at its registered office on one or more sheets whether bound


or unbound a register of its shareholders, and there shall be entered therein the following


particulars -


(a) the names and addresses and occupations, if any, of the


members of the company, with the addition in the case of a


company having a capital divided into shares, of a statement


of the shares held by each member, distinguishing each share


by its number; and of the amount paid, or agreed to be


considered as paid, on the shares of each shareholder;


(b) the date at which the name of any person was entered on the


register as a member; and


(c) the date on which any person ceased to be a member.


(2) The register of members, subject to such restrictions as may be


imposed by the directors, may be inspected by members of the company and any member of


the general public upon payment of such fee as may be determined by the directors.


(3) A member of a company may receive a copy of the register, or


any part thereof, or of the summary referred to in subsection (1) upon payment to the


company of such fee as the directors determine.


(4) The register of members constitutes prima facie evidence of any


matters which by this Act are directed or authorized to be inserted therein.


(5) The register of members may be in such form as the directors


approve but if it is in magnetic, electronic or other data storage form, the company must be


able to produce legible evidence of its contents.


Rectification


57. (1) If the name of any person is, without sufficient cause, entered in


of register of


or omitted from the register of members of any company incorporated under this Act,


members.


or if default is made or unnecessary delay takes place in entering on the register the fact that


a person has ceased to be a member of the company, the person, the member aggrieved, any


other member of the company or the company itself, may by way of motion apply to the court


for an order that the register be rectified and the court may in either case grant or refuse the


application with or without costs, to be paid by the applicant.


(2) Where the court is satisfied as to the justice of an application


pursuant to this section, it may make an order for the rectification of the register, and may


direct the company to pay all costs of such motion, application or petition and any damages


the party aggrieved may have sustained.


(3) The court may in proceedings under this section decide on any


question relating to the title of any person who is a party to such proceedings to have his


name entered in or omitted from the register, whether such question arises between two or


more members or alleged members, or between any members or alleged members and the


company, and generally the court may in any such proceedings decide any question that it


-28-


may be necessary or expedient to decide for the rectification of the register.


(4) Without prejudice to anything contained in subsection (3), the


court may direct an issue to be tried in which any question of law may arise or be raised.


(5) Where an order for rectification of the register is made, the court


may order that a copy be forwarded to the Registrar.


Annual list of


58. (1) Every company incorporated under this Act and having its capital


members and


divided into shares, shall cause to be made once at least in every year, a list of all


return of


persons who, on the fourteenth day succeeding the day on which the ordinary general


capital,


meeting, or if there is more than one ordinary general meeting in each year, the first


shares, call,


such ordinary general meeting is held, are members of the company; and such list


etc.


shall state the names and addresses and occupations of all the members therein mentioned


and the number of shares held by each of them, and shall contain a summary specifying the


following particulars -


(a) the amount of capital of the company, and the number of


shares into which it is divided;


(b) the number of shares taken from the commencement or the


company up to the date of the summary;


(c) the amount of calls made on each share;


(d) the total number of calls received;


(e) the total number of calls unpaid;


(f) the total number of shares forfeited;


(g) the names, addresses and occupations of the persons who


have ceased to be members since the last list was made, and


the number of shares held by each of them; and


(h) the registered number of the company.


(2) The list and summary referred to in subsection (1) shall be


contained in a separate part of the register, and shall be completed within seven days after


such fourteenth day, and a copy shall be forwarded to the Registrar to be kept by him in his


office with the original memorandum.


Returns in


59. (1) Every company incorporated under this Act, shall, before 1st


respect of


January in each year after the year in which the company first commenced business,


beneficial


submit to the Registrar a return declaring whether or not sixty per cent of its shares are


ownership


beneficially owned by Bahamians.


of shares.


(2) A return under subsection (1) shall be signed by two directors or


one director and the secretary.


(3) The Registrar may in any particular case grant an extension of


time in order to permit compliance with subsection (1) if he is satisfied that the noncompliance


is not wilful, due to circumstances beyond the control of the directors of the


company.


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Dividends


Payment of


60. (1) A company may pay a dividend by issuing fully paid up shares of


dividends.


the company and, subject to section 61, a company may pay a dividend in money or property.


(2) Subject to any limitations in its memorandum or articles a


company may by a resolution of directors, include in the computation of surplus for the


payment of a dividend, the net unrealized appreciation of assets of the company, and, in the


absence of fraud, the decision as to the value of the assets is conclusive unless a question of


law is involved.


(3) Where shares are issued as payment of a dividend, the value of the


dividend stated as an amount in money shall be added to the capital account maintained or


to be maintained for the shares of the class issued as payment of the dividend.


Prohibited


61. A company may not declare or pay a dividend if there are


dividend.


reasonable grounds for believing that -


(a) the company is unable or would after the payment of the


dividend, be unable to meet its liabilities as they become due;


or


(b) the realisable value of the assets of the company will be less


than the sum of its total liabilities, other than deferred taxes,


as shown in the books of account, and its issued and


outstanding share capital.


Immunity of


62. Unless otherwise provided in this Act, the shareholders of a


shareholders.


company shall not, as shareholders, be liable for any act or default of the company.


Lien on shares.


63. Subject to this Act, the articles may provide that the company has


a lien on a share registered in the name of the shareholder or his legal representative for a


debt of that shareholder to the company.


Liability of


64. (1) Subject to subsection (2), where a company incorporated under this


present and


Act is being wound up, the present and past members of that company shall be liable to


past members.


contribute to the assets of the company to an amount sufficient for the payment of debts and


liabilities of the company, and the costs, charges and expenses of the winding up and for the


payment of such sums as may be required for the adjustment of the rights of the


contributories amongst themselves, subject to the following qualifications -


(a) no past member shall be liable to contribute to the assets of


the company if he has ceased to be a member for a period of


one year or upwards prior to the commencement of the


winding up;


(b) no past member shall be liable to contribute in respect of any


debt or liability of the company contracted after the time at


which he ceased to be a member;


(c) no past member shall be liable to contribute to the assets of


-30-


the company unless it appears to the court that the existing


members are unable to satisfy the contributions required to be


made by them under this Act;


(d) in the case of a company limited by shares, no contribution


shall be required from any shareholder exceeding the amount,


if any, unpaid on the shares in respect of which he shall be


liable as a present or past shareholder;


(e) in the case of a company limited by guarantee, no contribution


shall be required from any member exceeding the amount of


the undertaking entered into on his behalf by the


memorandum;


(f) nothing contained in this Act shall invalidate any provision in


a policy of insurance or other contract whereby the liability of


individual members upon such policy or contract is restricted


or whereby the funds of the company are alone made liable in


respect of such policy or contract; and


(g) no sum due to any member, in his capacity as a member, by


way of dividends, profits or otherwise, may be deemed to be


a debt of the company, payable to such member in a case of


competition between himself and any other creditor not being


a member of the company; but any such sum may be taken


unto account, for the purposes of the final adjustment of the


rights of the contributories amongst themselves.


(2) Where a company is limited both by shares and by guarantee, any


person who is a contributory by reason of a holding of shares in the company and of an


undertaking entered into on his behalf by the memorandum shall be liable to contribute to


the assets of the company notwithstanding subsection (1)(d) and (e) and such contributions


shall be calculated in the aggregate.


Public Companies: Prospectus


Filing of


65. (1) Every prospectus issued by or on behalf of a company or in


prospectus.


relation to any intended company shall be dated, and the date shall, unless the contrary is


proved, be taken as the date of publication of the prospectus.


(2) A copy of every such prospectus, signed by every person who is


named therein as a director or proposed director of the company, or by his agent authorized


in writing, shall be filed for registration with the Registrar on or before the date of its


publication, and no such prospectus shall be issued until a copy thereof has been so filed for


registration.


(3) The Registrar may not register any prospectus unless it is dated


-31-


and the copy thereof signed in the manner required by this section.


(4) Every prospectus shall state ex facie that a copy has been filed for


registration as required by this section.


Particulars


66. (1) Every prospectus issued by or on behalf of a company, or by or


of prospectus.


on behalf of any person who is or has been engaged or interested in the formation of the


company shall state -


(a) the contents of the memorandum, with the names,


descriptions and addresses of the signatories, and the number


of shares or debentures subscribed for by them respectively


and the number of founders or management or deferred


shares, if any, and the nature and extent of the interest of the


holders in the property and profits of the company;


(b) the number of shares, if any, fixed by the articles as the


qualification of a director and any provision in the articles as


to the remuneration of the directors;


(c) the names, descriptions and addresses of the directors or


proposed directors;


(d) the minimum subscription on which the directors may


proceed to allotment, and the amount payable on application


and allotment on each share, and in the case of a second or


subsequent offer of shares, the amount offered for


subscription on each previous allotment made within the two


preceding years, and the amount actually allotted and the


amount, if any, paid on the shares so allotted;


(e) the number and amount of shares and debentures which


within the last two preceding years have been issued, or


agreed to be issued, as fully or partly paid-up otherwise than


in cash and in the latter case the extent to which they are so


paid-up in either case the consideration for which those shares


or debentures have been issued or are proposed or intended to


be issued;


(f) the names and addresses of the vendors of any property


purchased or acquired by the company or proposed to be so


purchased or acquired which is to be paid for wholly or partly


out of the proceeds of the issue offered for subscription by the


prospectus or the purchase or acquisition of which has not


been completed at the date of issue of the prospectus, and the


amount payable in cash, shares, or debentures to the vendor


and where there is more than one separate vendor, or the


-32-


company is a sub-purchaser, the amount payable to each


vendor; but where the vendors or any of them are a firm the


members of the firm shall not be treated as separate vendors;


(g) the amount, if any, paid or payable as purchase money in


cash, shares or debentures, for any such property specifying


the amount, if any, payable for goodwill;


(h) the amount, if any, paid within the two preceding years or


payable as commission for subscribing or agreeing to


subscribe, or procuring or agreeing to procure subscriptions


for any shares in, or debentures of, the company, or the rate of


any such commission; but it is not necessary to state the


commission payable to sub-underwriters;


(i) the amount or estimated amount of preliminary expenses;


(j) the amount paid within the two preceding years or intended to


be paid to any promoter and the consideration for any such


payment;


(k) the dates of and parties to every material contract and a


reasonable time and place at which any material contract or a


copy thereof may be inspected; but this requirement shall not


apply to a contract entered into in the ordinary course of the


business carried on or intended to be carried on by the


company or to any contract entered into more than two years


before the date of issue of the prospectus;


(l) the names and addresses of the auditors, if any, of the


company;


(m) full particulars of the nature and extent of the interest, if any,


of every director in the promotion of, or in the property


proposed to be acquired by, the company or, where the


interest of such a director consists in being a partner in a firm,


the nature and extent of the interest of the firm, with a


statement of all sums paid, or agreed to be paid by him or to


the firm in cash or shares or otherwise by any person either to


induce him to become, or to qualify him as, a director or


otherwise for services rendered by him or by a firm in


connection with the promotion or foundation of the company;


(n) where the company is a company having shares of more than


one class, the right of voting at meetings of the company,


conferred by the several classes of the shares respectively; and


(o) the facts as to the company’s financial situation prepared by


-33-


an accountant licensed to practice as such under the Public


8 of 1991.


Accountants Act.


(2) For the purposes of this section, every person shall be deemed to


be a vendor who has entered into any contract, absolute or conditional, for the sale or


purchase, or for any option to purchase property to be acquired by the company in any case


where -


(a) the purchase money is not fully paid at the date of issue of the


prospectus;


(b) the purchase money is to be paid or satisfied wholly or in part


out of the proceeds of the issue offered for subscription by the


prospectus; or


(c) the contract depends for its validity or fulfilment on the result


of that issue.


(3) Where any of the property to be acquired by the company is to be


taken on lease, this section shall apply as if the expression “vendor” included the lessor, and


the expression “purchase money” included the consideration for the lease and the expression


“sub-purchaser” included a sub-lessee.


(4) Any condition requiring or binding an applicant for shares or


debentures to waive compliance with any requirement of this section; or purporting to affect


him with notice of any contract, document or matter not specifically referred to in the


prospectus shall be void.


(5) Where any such prospectus as is mentioned in this section is


published as a newspaper advertisement, it shall not be necessary in the advertisement to


specify the contents of the memorandum or the signatories thereto or the number of shares


subscribed for by them.


(6) In the event of non-compliance with any of the requirements of


this section, a director or other person responsible for the prospectus shall not incur any


liability by reason of non-compliance, if he proves that -


(a) as regards any matter not disclosed, he was not cognisant


thereof; or


(b) the non-compliance arose from an honest mistake of fact on


his part; but in the event of non-compliance with the


requirement of subsection (1)(m) no director or other person


shall incur any liability in respect of the non-compliance


unless it is proved that he had knowledge of the matters not


disclosed.


(7) This section shall not apply to a circular or notice inviting existing


members or debenture holders of the company to purchase shares or debentures of the


company, whether with or without the right to renounce in favour of other persons, but this


-34-


section shall apply to any prospectus whether issued on or with reference to the formation


of the company, or subsequently.


(8) The requirements of this section as to the memorandum and the


qualification, remuneration and interest of directors, the names, descriptions and addresses


of directors or proposed directors and the amount or estimated amount of preliminary


expenses shall not apply in case of a prospectus issued more than one year after the date at


which the company is entitled to commence business.


(9) Nothing in this section limits or diminishes any liability which any


person may incur under the general law or this Act apart from this section.


Obligation of


67. A company which does not issue a prospectus on or with reference


company where


to its formation may not allot any of its shares or debentures unless before the first


no prospectus


allotment of either shares or debentures there has been filed with Registrar a statement


issued.


in lieu of prospectus signed by every person who is named therein as a director or a


28 of 1994.


proposed director of the company or by his agent authorised in writing in an approved form.


Restriction in


68. A company may not, prior to the first general meeting, vary the


respect of


contract referred to in the prospectus or statement in lieu of prospectus, except with the


alteration of


approval of the general meeting.


prospectus.


28 of 1994.


Liability for


69. (1) Where a prospectus invites persons to subscribe for shares in or


statements


debentures of a company -


in prospectus.


(a) every person who is a director of the company at the time of


the issue of the prospectus;


(b) every person who has authorised the naming of him and is


named in the prospectus as a director or as having agreed to


become a director either immediately or after an interval of


time;


(c) every promoter of the company; and


(d) every person who has authorised the issue of the prospectus,


shall be liable to pay compensation to all person who subscribe for any shares or debentures


on the faith of the prospectus for the loss or damage they may have sustained by reason of


any untrue statement therein or in any report or memorandum appearing on the face thereof


or by reference incorporated therein or issued therewith, unless it is proved -


(i) with respect to every untrue statement not purporting


to be made on the authority of an expert or of a public


official document or statement, that he had reasonable


cause to believe, and did up to the time of the


allotment of the shares or debentures, as the case may


be, believe, that the statement was true,


-35-


(ii) with respect to every untrue statement purporting to


be a statement by or contained in what purports to be


a copy or valuation of an expert, that it fairly


represented the statement or was a correct and fair


copy of or extract from the report or valuation, but the


director, person named as director, promoter or person


who authorized the issue of the prospectus shall be


liable to pay such compensation if it is proved that he


had no reasonable cause to believe that the person


making the statement, report or valuation was


competent to make it, and


(iii) with respect to every untrue statement purporting to


be a statement by an official person of contained in


what purports to be a copy of or extract from a public


official document; that it was a correct and fair


representation of the statement or copy of or extract


from the document;


or unless it is proved -


(iv) that having consented to become a director of the


company he withdrew his consent before the issue of


the prospectus and that it was issued without his


consent or authority,


(v) that the prospectus was issued without his knowledge


or consent and that on becoming aware of its issue he


immediately gave reasonable public notice that it was


issued without his consent, or


(vi) that after the issue of the prospectus and before


allotment thereunder, he, on becoming aware of any


untrue statement therein, withdraw his consent thereto


and gave reasonable public notice of the withdrawal


and of the reason therefor.


(2) Where the prospectus contains the name of a person as a director


of the company or as having agreed to become a director thereof and he has not consented


to become a director or has withdrawn his consent before the issue of the prospectus and has


not authorized or consented to the issue thereof, the directors of the company, except any


without whose knowledge or consent the prospectus was issued, and any other person who


authorized the issue thereof, shall be liable to indemnify the person so named against all


damages, costs, and expenses to which he may be made liable by reason of his name having


been inserted in the prospectus or in defending himself against any action or legal


-36-


proceedings brought against him in respect thereof.


(3) Every person who, by reason of his being a director or named as


a director or as having agreed to become a director or of his having authorized the issue of


the prospectus, shall become liable to make any payment under this section may recover


contribution, as in cases of contract, from any other person who if sued separately would


have been liable to make the same payment unless the person who has become so liable was,


and that other person was not, guilty of fraudulent misrepresentation.


(4) For the purposes of this section, the expression -


“promoter” means a person who was a party to the preparation of the prospectus


or of the portion thereof containing the untrue statement, but does not include


any person by reason of his acting in a professional capacity for persons


engaged in procuring the formation of the company;


“expert” includes engineer, valuer, accountant and any other person whose


profession gives authority to a statement made by him.


Application of


69A. Sections 65 to 69 shall not apply to private companies.


sections 65


to 69.


28 of 1994.


Meetings and Proceedings


General meetings.


70. (1) Subject to subsection (2), a general meeting of every company


incorporated under this Act shall be held once at the least in every year.


28 of 1994.


(2) Every company limited by shares and every company limited by


guarantee and having a share capital shall, within three months from the date of


incorporation, hold a general meeting of the members of the company which shall be called


“the statutory meeting”.


(3) Any such meeting shall be called by the directors of the company.


Extraordinary


71. (1) Notwithstanding anything contained in the articles, the directors


general meeting.


of a company shall, on the requisition of members of the company holding at the date of the


deposit of the requisition not less than one-tenth of the paid-up capital of the company which


as at the date of the deposit carries the right of voting at general meetings of the company,


or, in the case of a company not having a share capital, members of the company representing


not less than one-tenth of the total voting rights of all the members having at the date of the


deposit of the requisition a right to vote at general meetings of the company, immediately


proceed duly to convene an extraordinary general meeting of the company.


(2) The requisition shall state the objects of the meeting and shall be


signed by the requisitionists and deposited at the registered office of the company and may


consist of several documents in like form each signed by one or more requisitionists.


(3) Where the directors do not proceed to cause a meeting to be held


within twenty-one days from the date of the requisition being so deposited, the requisitionists


-37-


or a majority of them in value, may themselves or by the secretary of the company convene


the meeting, but the meeting so convened may not be held after three months from the date


of the deposit.


(4) Any meeting convened under this section by the requisitionists


shall be convened in the same manner, as nearly as possible, as that in which meetings are


to be convened by directors.


Meetings


72. (1) Upon the application to the court by a director of a company or a


called by


member of a company who is entitled to vote at a meeting of the company, or by the


the court.


Registrar, the court may -


(a) when for any reason it is impracticable -


(i) to call a meeting of members in the manner in which


meetings of members can be called, or


(ii) to conduct the meeting in the manner prescribed by


the articles and this Act, or


(b) for any other reason the court considers fit,


order a meeting of members to be called, held and conducted in such a manner as the court


may direct.


(2) Without restricting the generality of subsection (1), the court may


order that the quorum required by the articles or this Act be varied or dispensed with at a


meeting called, held and conducted pursuant to this section.


(3) A meeting of the members of a company called, held and


conducted pursuant to this section is for all purposes a meeting of members of the company


duly called, held and conducted.


Place of


73. (1) Meetings of members of a company shall be held at such place as


meetings.


is provided by the articles, or, in the absence of any such provision, at a location within The


Bahamas as the directors determine.


(2) A member who attends a meeting of members held outside The


Bahamas agrees to its being so held unless he attends the meeting for the express purpose of


objecting to the transaction of any business on the ground that the meting is not lawfully


held.


Meetings outside


74. Notwithstanding section 73, if the articles so provide, meetings of


The Bahamas.


members of a company may be held outside The Bahamas.


Quorum at


75. (1) Unless the articles otherwise provide, a quorum of members shall


meetings.


be present at a meeting of members if the holders of a majority of the shareholders entitled


to vote at the meeting are present in person or represented by proxy.


(2) If a quorum is present at the opening of a meeting of members,


those so present may, unless the articles otherwise provide, proceed with the business of the


meeting, notwithstanding that a quorum is not present throughout the meeting.


(3) If a quorum is not present within thirty minutes of the time


-38-


appointed for the meeting of members, the meeting stands adjourned to the same day two


weeks thereafter, at the same time, and place; and, if at the adjourned meeting, a quorum is


not present within thirty minutes of the appointed time, the members present constitute a


quorum.


Voting at


76. (1) Unless the articles otherwise provide, voting at a meeting of


meetings and


members shall be by a show of hands, except when a poll is demanded by a member


evidence of


or an appointed proxy holder entitled to vote at the meeting.


meetings.


(2) A shareholder or proxy-holder may demand a poll either before or


after any vote by show of hands.


(3) A company incorporated under this Act shall cause minutes of all


resolutions and proceedings of general or extraordinary meetings of the company and of


directors or managers to be kept in writing, and any such meetings, if purported to be signed


by the chairman of the meeting at which such resolutions were passed or proceedings had,


or by the chairman of the next meeting may be received as evidence in all legal proceedings.


(4) Until the contrary is proved, every general meeting of the


company, or meeting of the directors or managers in respect of the proceedings of which


minutes have been so made, shall be deemed to have been duly held and convened and all


resolutions passed of proceedings had, to have been duly passed and had and -


(a) all appointments of directors, managers, or liquidators; and


(b) all acts done by directors, managers or liquidators,


shall be valid, notwithstanding any defect that may afterwards be discovered in their


appointment or qualification.


Representative


77. (1) When a body corporate or association is a shareholder of a


of another


company, the company shall recognise any individual authorized by resolution of


body and


directors or other governing body of the body corporate or association to represent it at


joint


meetings of shareholders of the company.


shareholders.


(2) An individual who is authorized in the manner specified in


subsection (1) may exercise, on behalf of the body corporate or association that he represents,


all the powers it could exercise if it were an individual shareholder.


(3) Unless the articles otherwise provide, where two or more persons


hold shares jointly, one of those holders present at the meeting of shareholders may, in the


absence of the other, vote the shares; but if two or more persons who are present, in person


or by proxy, vote, they shall vote as one on the share held jointly by them.


Unanimous


78. (1) All the shareholders of a company among themselves or all the


shareholder


shareholders of a company and a person who is not a shareholder of a company, may by


agreement.


a written agreement restrict in whole or in part, the powers of the directors of the company


to manage the business and affairs of the company, and such agreement if not otherwise


invalid, shall be valid.


(2) A shareholder who is a party to any unanimous shareholder


-39-


agreement has all the rights, powers and duties, and incurs all the liabilities of a director of


the company to which the agreement relates, to the extent that the agreement restricts the


discretion or powers of the directors to manage the business and affairs of the company; and


the directors are thereby relieved of their duties and liabilities to the same extent.


(3) If a person who is the beneficial owner of all the issued shares of


a company makes a written declaration that restricts in whole or in part the powers of the


directors to manage the business and affairs of the company, the declaration shall constitute


a unanimous shareholder agreement.


(4) Where any unanimous shareholder agreement is executed or


terminated, written notice of that fact, together with the date of the execution or termination


thereof, shall be filed with the Registrar within fifteen days after the execution or


termination.


(5) In this section “shareholder” includes members.


Proxies.


79. (1) Subject to subsection (2), any member of a company entitled to


attend and vote at a meeting of the company shall be entitled to appoint another person,


whether a member or not, as his proxy to attend and vote in his stead and a proxy appointed


to attend and vote instead of a member shall also have the same right as the member to speak


at the meeting.


(2) Unless the articles otherwise provide -


(a) subsection (1) shall not apply in the case of a company not


having a share capital;


(b) a member of a company shall not be entitled to appoint more


than one proxy to attend on the same occasion; and


(c) a proxy shall not be entitled to vote except on a poll.


Special


80. In every notice calling a meeting of a public company having a


requirement


share capital there shall appear with reasonable prominence a statement that a member


regarding


entitled to attend and vote is entitled to appoint a proxy or, where that is allowed, one


notice of


or more proxies to attend and vote instead of him, and that a proxy need not also be a


meeting.


member; and if default is made in complying with this section as respects the meeting, every


officer of the company who is in default shall be liable to a civil penalty of ten dollars for


each day during which the default continues.


Provision


81. Any provision contained in the articles shall be void in so far as


relating to


it would have the effect of requiring the instrument appointing a proxy, or any other


validity of


document necessary to show the validity of or otherwise relating to the appointment of


proxy


a proxy, to be received by the company or any other person more than forty-eight hours


appointment.


before a meeting or adjourned meeting in order that the appointment may be effective thereat.


Revocation


82. A shareholder of a company may revoke a proxy -


of proxy.


(a) by depositing an instrument in writing executed by him or his


attorney authorized in writing -


-40-


(i) at the registered office of the company at any time, up


to and including the last business day preceding the


day of the meeting, or any adjournment of that


meeting, at which the proxy is to be used, or


(ii) with the chairman of the meeting on the day of the


meeting or any adjournment of that meeting; or


(b) in any other manner permitted by law.


Application


83. Sections 79 to 82 shall apply to meetings of any class of members


of Sections


of a company as it applies to general meetings of the company.


79 to 82.


PART IV


MANAGEMENT OF COMPANIES AND PROTECTION


OF CREDITORS AND INVESTORS


The Directors


Duty to manage


84. Subject to any unanimous shareholder agreement the directors of


company.


a company shall -


(a) exercise the powers of the company directly or indirectly


through the employees and agents of the company; and


(b) direct the management of the business and affairs of the


company.


Number of


85. (1) A company shall have at least two directors, but a public company


directors and


shall have no fewer than three directors, at least two of whom are not officers or


remuneration


employees of the company or any of its affiliates.


thereof.


(2) Unless the articles otherwise provide, a director need not hold


shares issued by the company.


(3) Subject to the articles, the directors of a company may fix the


remuneration of the directors, officers and employees of the company.


28 of 1994.


(4) Every company shall keep at its registered office a register of


directors and managers containing their names, addresses and occupations and shall send a


list of such names, addresses and occupations to the Registrar and any amendments thereto.


Duty of care.


86. (1) Every director and officer of a company in exercising his powers


and discharging his duties shall -


(a) act honestly and in good faith with a view to the best interests


of the company; and


(b) exercise the care, diligence and skill that a reasonably prudent


person would exercise in comparable circumstances.


(2) The duty imposed by subsection (1) on the directors of a company


is owed by them to the company alone; and the duty shall be enforceable in the same way as


-41-


any other fiduciary duty owed to a company by its directors.


(3) Every director and officer of a company shall comply with this Act


and with the articles of the company.


(4) The burden of proving that a director or an officer of the company


did not act in accordance with any provision of this section shall lie on the person making


the allegation.


Disqualified


87. (1) An individual who is prohibited by section 3(2) from forming or


directors.


joining in the formation of a company may not be a director of any company.


(2) When a person is disqualified under section 88 from being a


director of a company, that person may not, during that period of disqualification, be a


director of any company.


Directors


88. (1) When, on the application of the Registrar, it is made to appear to


disqualified


the court that a person is unfit to be concerned in the management of a public company,


by court.


the court may order that, without prior leave of the court, he may not be a director of the


company, or, in any way, directly or indirectly, be concerned with the management of the


company for such period -


(a) beginning -


(i) with the date of the order,


(ii) if the person is undergoing, or is to undergo a term of


imprisonment and the court so directs with the date on


which he completes that term of imprisonment or is


otherwise released from prison, or


(iii) if the person has been adjudged a bankrupt and the


court so directs, with the date of his discharge as a


bankrupt; and


(b) not exceeding five years,


as may be specified in the order.


(2) In determining whether or not to make an order under subsection


(1), the court shall have regard to all the circumstances that it considers relevant, including


any previous convictions of the person in The Bahamas or elsewhere for an offence involving


fraud or dishonesty or in connection with the promotion, formation or management of any


body corporate.


(3) Before making an application under this section in relation to any


person, the Registrar shall give that person not less than ten day’s notice of the Registrar’s


intention to make the application.


(4) On the hearing of an application made by the Registrar under this


section or an application for leave under this section to be concerned with the management


of a public company, the Registrar and any person concerned with the application may appear


and call attention to any matters that are relevant, and may give evidence, call witnesses and


-42-


be represented by a counsel and attorney.


Notice of


89. (1) At the time of sending articles of incorporation of a public


directors.


company to the Registrar, the incorporators shall send him, in the approved form, a notice


of the names of the persons who have consented to become directors of the company; and


the Registrar shall file the notice.


(2) Each director named in the notice referred to in subsection (1)


holds office as director of the company from the issue of the certificate of incorporation of


the company until the first meeting of the members of the company.


(3) The members of a company shall by a resolution at the first


meeting of the company and at each following annual meeting at which an election of


directors shall be required, elect directors to hold office for a term expiring not later than the


close of the third annual meeting of the members of the company following the election.


(4) It is not necessary that all the directors of a company elected at a


meeting of the company hold office for the same term.


(5) A director who is not elected for an expressly stated term shall


cease to hold office at the close of the first annual meeting of the company following his


election.


(6) Notwithstanding subsections (2), (3) and (5), if directors are not


elected at a meeting of the company, the incumbent directors shall continue in office until


their successors are elected.


(7) If a meeting of the company fails, by reason of the


disqualification, incapacity or death of any candidates, to elect the number or the minimum


number of directors required by the articles of the company, the directors elected at that


meeting may exercise all the powers of the directors as if the number of directors so elected


constituted a quorum.


Termination of


90. A director of a company shall cease to hold office when -


office.


(a) he dies or resigns;


(b) he is removed in accordance with section 92; or


(c) he becomes disqualified under section 87 or 88.


Resignation


91. The resignation of a director of a company shall become effective


of director.


at the time his written resignation is sent to the company or at the time specified in the


resignation, whichever is later.


Removal of


92. (1) The members of a company may, by a resolution at an


director.


extraordinary general meeting, remove any directors from office.


(2) Where the holders of any class or series of shares of a company


have an exclusive right to elect one or more directors, a director so elected may only be


removed by an ordinary resolution at a meeting of the shareholders of that class or series of


shares.


(3) Subject to subsection 103(b), a vacancy created by the removal of


-43-


a director may be filled at the meeting of the members at which the director is removed, or


if the vacancy is not so filled, it may be filled pursuant to section 94.


Right to notice.


93. (1) A director of a company is entitled to receive notice of, and to


attend and be heard at, every meeting of members.


(2) A director -


(a) who resigns;


(b) who receives a notice or otherwise learns of a meeting of


members called for the purpose of removing him from office;


or


(c) who receives a notice or otherwise learns of a meeting of


directors or members at which another person is to be


appointed or elected to fill the office of director, whether


because of his resignation or removal, or because his term of


office has expired or is about to expire,


may submit to the company a written statement giving the reasons for his resignation or the


reasons why he opposes any proposed action or resolution.


(3) The company shall forthwith send a copy of the statement referred


to in subsection (2) to the Registrar and to every member entitled to receive notice of any


meeting referred to in subsection (1).


(4) No company or person acting on its behalf shall incur any liability


by reason only of circulating a director’s statement in compliance with subsection (3).


Filling vacancy.


94. (1) Subject to subsections (3) and (4), a quorum of directors of a


company may fill a vacancy among the directors of the company, except a vacancy resulting


from an increase in the number or minimum number of directors or from a failure to elect


the number or minimum number of directors required by the articles of the company.


(2) If there is no quorum of directors, or if there has been a failure


to elect the number or minimum number of directors required by the articles, the directors


then in office shall forthwith call a special meeting of the company to fill the vacancy; and,


if they fail to call a meeting, or if there are no directors then in office, the meeting may be


called by any member.


(3) Where the holders of any class or series of shares of a company


have an exclusive right to elect one or more directors and a vacancy occurs among those


directors -


(a) then, subject to subsection (4), the remaining directors then


elected by that class or series may fill the vacancy except a


vacancy resulting from an increase in the number of directors


for that class or series; or


(b) if there are no such remaining directors, any holder of shares


of that class or series may call a meeting of the holders


-44-


thereof for the purpose of filling the vacancy.


(4) The articles may provide that a vacancy among the directors be


filled only -


(a) by a vote of the members; or


(b) by a vote of the holders of any class or series of shares having


an exclusive right to elect one or more directors, if the


vacancy occurs among the directors elected by that class or


series.


(5) A director appointed or elected to fill a vacancy shall hold office


for the unexpired term of his predecessor.


Change in


95. Subject to section 84, the members of a company may amend the


number of


articles of the company to increase, or, subject to section 100 to decrease, the number


directors.


of directors, or the minimum or maximum number of directors; but no decrease shortens the


term of an incumbent director.


Notice


96. (1) Within fifteen days after a change is made among its directors,


of change.


a company shall send to the registrar a notice in the approved form setting out the change;


and the Registrar shall file the notice.


(2) Any interested person, or the Registrar, may apply to the court for


an order to require a company to comply with subsection (1); and the court may so order and


make any further order it thinks fit.


Directors’


97. (1) Unless the articles otherwise provide, meetings of directors of a


meetings.


company may be held within or outside The Bahamas, and upon such notice as the


28 of 1994.


directors may determine.


(2) Subject to the articles, a majority of the number of directors or


minimum number of directors required by the articles shall constitute a quorum at any


meeting of directors; and, notwithstanding any vacancy among the directors, a quorum of


directors may exercise all the powers of the directors.


Notice of


98. (1) A notice of a meeting of the directors of a company shall specify


waiver.


any matter relevant to subsection (2) of section 93 that is to be dealt with at the meeting; but


unless the articles of the company otherwise provide the notice need not otherwise specify


the purpose of or the business to be transacted at the meeting.


(2) A director may, in any manner, waive a notice of a meeting of


directors; and attendance of a director at a meeting of directors shall be a waiver of notice


of the meeting by the director except when he attends the meeting for the express purpose


of objecting to the transaction of any business on the grounds that the meeting is not lawfully


called.


Adjourned


99. Notice of an adjourned meeting of directors need not be given if


meeting.


the time and place of the adjourned meeting is announced at the original meeting.


Two director


100. Where a private company has only two directors those directors


-45-


board.


may constitute a meeting.


Telephone


101. (1) Subject to the articles, a director may, if all the directors of the


participation.


company consent, participate in a meeting of directors of the company or of a committee of


the directors by means of a telephone or such other communication facilities that permit all


persons participating in the meeting to hear each other and recognise each other’s voice.


(2) A director who participates in a meeting of directors by such


means as are described in subsection (1), shall be for the purposes of this Act, present at the


meeting.


Delegation.


102. Directors of a company may appoint from their number a


managing director of a committee of directors and delegate to the managing director or


committee any of the powers of the directors:


Provided that such delegation shall not affect the liability of the


delegating directors.


Limitation of


103. Notwithstanding section 102, no managing director and no


delegated


committee of directors of a company may -


powers.


(a) submit to the members any question or matter requiring the


approval of the members;


(b) fill a vacancy among the directors by the office of auditor;


(c) issue shares except in the manner and on the terms authorized


by the directors;


(d) declare dividends;


(e) purchase, redeem or otherwise acquire shares issued by the


company;


(f) pay a commission referred to in section 47;


(g) approve any financial statements referred to in section 123; or


(h) adopt, amend or repeal the articles.


Validity of acts.


104. An act of a director or officer shall be valid notwithstanding any


irregularity in his election of appointment, or any defect in his qualification.


Directors’


105. (1) When a resolution in writing is signed by all the directors entitled


resolution in


to vote on that resolution at a meeting of directors or committee of directors -


writing.


(a) the resolution shall be valid as if it has been passed at a


meeting of directors or a committee of directors; and


(b) the resolution shall satisfy all the requirements of this Act


relating to meetings of directors or committees of directors.


(2) A copy of every resolution referred to in subsection (1) shall be


kept with the minutes of the proceedings of the directors or committee of directors.


Liabilities of Directors


Liability for


106. Directors of a company who vote for or consent to a resolution


-46-


share issue.


authorizing the issue of a share under section 39 for a consideration other than money are


jointly and severally liable to the company to make good any amount by which the


consideration received is less than fair equivalent of the money that the company would have


received if the share had been issued for money on the date of the resolution.


Liability for


107. Directors of a company who vote for, or consent to, a resolution


other acts.


authorizing -


(a) a loan prohibited by section 31;


(b) a purchase, redemption or other acquisition of shares contrary


to section 44(2);


(c) a commission contrary to section 47; or


(d) a payment of a dividend contrary to section 61 or 63,


shall jointly and severally be liable to restore to the company any amount so distributed or


paid and not otherwise recovered by the company.


Contribution


108. A director who has satisfied a judgement founded on a liability


for judgement.


under section 106 or 107 shall be entitled to contribution from the other directors who voted


for or consented to the unlawful act upon which the judgement was found.


Recovery by


109. (1) A director who is liable under section 107 may apply to the court


action.


for an order compelling a member or other recipient to pay or deliver to the director any


money or property that was paid or distributed to the member or other recipient contrary to


section 31, 44, 47, 61 or 63.


(2) In connection with an application under subsection (1), the court


may, if it is satisfied that it is equitable to do so -


(a) order a member or other recipient to pay or deliver to a


director any money or property that was paid or distributed to


the member or other recipient contrary to any of the


provisions of section 31, 44, 47, 61, or 63;


(b) order a company to return or issue shares to a person from


whom the company has purchased, redeemed or otherwise


acquired shares; or


(c) make any further order it thinks fit.


Defence to


110. A director of a company shall not be liable under section 106 if he


liability.


did not know and could not reasonably have known that the share was issued for


consideration less than the fair equivalent of the money that the company would have


received if the share had been issued for money.


Time limit on


111. An action to enforce a liability imposed under section 106 or 107


liability.


may not be commenced after two years from the date of the resolution authorizing the action


complained of.


Contractual Interest


-47-


Interests in


112. (1) A director or officer of a company -


contracts and


(a) who is a party to a material contract or proposed material


declaration


contract with the company; or


thereof.


(b) who is a director or an officer of any body, or has material


interest in any body, that is a party to a material contract or


proposed material contract with the company,


shall disclose in writing to the company or request to have entered in the minutes of meetings


of directors the nature and extent of his interest.


(2) The disclosure required by subsection (1) shall be made, in the


case of a director of a company -


(a) at the meeting at which a proposed contract is first


considered;


(b) if the director was not then interested in a proposed contract,


at the first meeting after he becomes so interested;


(c) if the director becomes interested after a contract is made, at


the first meeting after he becomes interested; or


(d) if a person who is interested in a contract later becomes a


director of the company, at the first meeting after he becomes


a director.


(3) The disclosure required by subsection (1) shall be made, in the


case of an officer of a company who is not a director -


(a) immediately after he becomes aware that the contract or


proposed contract is to be considered, or has been considered


at a meeting of directors of the company;


(b) if the officer becomes interested after a contract is made,


immediately after he becomes so interested; or


(c) if a person who is interested in a contract later becomes an


officer of the company, immediately after he becomes an


officer.


(4) If a material contract or a proposed material contract is one that,


in the ordinary course of the company’s business, would not require approval by the directors


or members of the company, a director or officer of the company shall disclose in writing to


the company or request to have entered in the minutes of meetings of directors, the nature


and extent of his interest immediately after the director or officer becomes aware of the


contract or proposed contract.


(5) A director of a company who is referred to in subsection (1) may


vote on any resolution to approve a contract that he has an interest in, if the contract -


(a) is an arrangement by way of security for money loaned to, or


obligations undertaken by him, for the benefit of the company


-48-


or an affiliate of the company;


(b) is a contract that relates primarily to his remuneration as a


director, officer, employee or agent of the company or


affiliate of the company;


(c) is a contract for indemnity or insurance under sections 118 to


122;


(d) is a contract with an affiliate of the company; or


(e) is a contract other than one referred to in paragraphs (a) to (d),


but, in the case of a contract described in paragraph (e), no resolution shall be valid unless


it is approved by not less than two-thirds of the votes of the members of the company to


whom notice of the nature and extent of the director’s interest in the contract is declared and


disclosed in reasonable detail.


(6) For the purpose of this section, a general notice to the directors of


a company by a director or an officer of the company declaring that he is a director or officer


of, or has a material interest in, another body, and is to be regarded as interested in any


contract with that body shall be a sufficient declaration of interest in relation to any such


contract.


Validity of


113. A material contract between a company and one or more of its


certain


directors or officers, or between a company and another body of which a director or


contracts.


office of the company is a director or officer, or in which he has a material interest, is neither


void nor voidable -


(a) by reason only of that relationship; or


(b) by reason that a director with an interest in the contract is


present at, or is counted to determine the presence of a


quorum at, a meeting of directors or a committee of directors


that authorized the contract,


if the director or officer disclosed his interest in accordance with subsection 112 (2), (3), (4)


or (6) as the case may be, and the contract was approved by the directors or the members and


was reasonable and fair to the company at the time it was approved.


Setting aside


114. When a director or officer of a company fails to disclose, in


contract.


accordance with section 112 his interest in a material contract made by the company, the


court may, upon the application of the company or member of the company, set aside the


contract on such terms as the court thinks fit.


Officers of the Company


Designation of


115. Subject to the articles or any unanimous shareholder agreement -


officer etc.


(a) the directors of the company may designate the offices of the


company, appoint as officers persons of full capacity, specify


their duties and delegate to them powers to manage the


-49-


business and affairs of the company, except powers to do


anything referred to in section 103;


(b) a director of a private company may be appointed to any


office of the company;


(c) and subject to section 85(1), a director of a public company


may be appointed to any office of the company; and


(d) two or more offices of the company may be held by the same


person.


Borrowing Powers of Directors


Borrowing


116. (1) Unless the articles or any unanimous shareholder agreement


powers.


relating to the company otherwise provide, the articles are presumed to provide that the


directors of the company may, on behalf of the company, without authorization of the


members -


(a) borrow money upon the credit of the company;


(b) issue, re-issue, sell or pledge debentures of the company;


(c) give a guarantee to secure performance of an obligation of any


person; and


(d) mortgage, charge, pledge, or otherwise create to secure any


obligation of the company a security interest in all or any


property of the company that is owned or subsequently


acquired by the company.


28 of 1994.


(2) Unless the articles, or any unanimous shareholder agreement


relating to a company otherwise provide, the directors of the company may by resolution


delegate the powers mentioned in subsection (1) to a director, a committee of directors or an


officer of the company.


(3) For the purposes of this Act “security interest” means any actual


or contingent interest in or charge upon any property of a company, by way of mortgage,


bond, lien, pledge, or other means, that is created or taken to secure the payment of an


obligation of the company.


Procedural Matters and Indemnities


Dissenting to


117. (1) A director who is present at a meeting of the directors or of a


resolutions.


committee of directors consents to any resolution passed or action taken at that meeting,


unless -


(a) he requests that his dissent be or his dissent is entered in the


minutes of the meeting;


(b) he sends his written dissent to the secretary of the meeting


before the meeting is adjourned; or


-50-


(c) he sends his dissent by registered post or delivers it to the


registered office of the company immediately after the


meeting is adjourned.


(2) A director who votes for, or consents to a resolution may not


dissent under subsection (1).


(3) A director who was not present at a meeting at which a resolution


was passed or action taken shall be presumed to have consented thereto unless, within seven


days after he becomes aware of the resolution, he -


(a) causes his dissent to be placed with the minutes of the


meetings; or


(b) sends his dissent by registered post or delivers it to the


registered office of the company.


(4) A director shall not be liable under section 106 or 108 if he relies


in good faith upon -


(a) financial statements of the company represented to him by an


officer of the company; or


(b) a report of a counsel and attorney, accountant, engineer,


appraiser or other person whose profession lends credibility


to a statement made by him.


Indemnifying


118. (1) Except in respect of an action by or on behalf of a company or


directors.


body corporate to obtain a judgement in its favour, a company may indemnify -


(a) a director or officer of the company;


(b) a former director or officer of the company; or


(c) a person who acts or acted at the company’s request as a


director or officer of a body corporate of which the company


is or was a member or creditor,


and his legal representatives, against all costs, charges and expenses (including an amount


paid to settle an action or satify a judgement) reasonably incurred by him in respect of any


civil, criminal or administrative action or proceeding to which he is made a party by reason


of being, or having been, a director or officer of that company or body corporate.


(2) Subsection (1) shall not apply unless the director or officer to be


so indemnified -


(a) acted honestly and in good faith with a view to the best


interest of the company; and


(b) in the case of a criminal or administrative action or


proceeding that is enforced by a monetary penalty, had


reasonable grounds for believing that his conduct was lawful.


Indemnifying


119. A company may with the approval of the court indemnify a person


other persons.


referred to in section 118 in respect of an action -


-51-


(a) by or on behalf of the company or body corporate to obtain a


judgement in its favour; and


(b) to which he is made a party by reason of being or having been


a director or an officer of the company or body corporate,


against all costs, charges and expenses reasonably incurred by him in connection with the


action, if he fulfils the conditions set out in subsection 118(2).


Right to


120. Notwithstanding anything in section 118 or 119, a person


indemnify.


described in section 118 shall be entitled to indemnity from the company in respect of all


costs, charges and expenses reasonably incurred by him in connection with the defence of


any civil, criminal or administrative action or proceeding to which he is made a party by


reason of being, or having been, a director or officer of the company or body corporate, if the


person seeking indemnity -


(a) was substantially successful on the merits in his defence of


the action or proceeding;


(b) qualified in accordance with the standards set out in section


118 or 119; and


(c) is fairly and reasonably entitled to indemnity.


Indemnity


121. (1) A company or person referred to in section 118 may apply to the


approved by


court for an order approving an indemnity under section 119, and the court may so order


court.


and make any further order it thinks fit.


(2) An applicant under subsection (1) shall give the Registrar notice of


the application; and the Registrar may appear and be heard in person or by a counsel and


attorney.


(3) Upon an application under subsection (1), the court may order


notice to be given to any interested person; and that person may appear and be heard in


person or by a counsel and attorney.


Insurance of


122. A company may purchase and maintain insurance for the benefit


directors, etc.


of any person referred to in section 118 against any liability incurred by him in his capacity


as a director or officer of the company.


Financial Disclosure


Annual


123. (1) Subject to this section, the directors of a company shall place


financial


before the members at every annual general meeting of the members of the company -


returns.


(a) comparative financial statements in the approved form


relating separately to -


(i) the period that began on the date the company came


into existence and ended not more than twelve months


after that date, or the period that began immediately


after the end of the last period for which the financial


-52-


statements were prepared and ended not more than


twelve months after the beginning of that period, and


(ii) the immediately preceding financial year;


(b) the report of the auditor; and


(c) any further information respecting the financial position of the


company and the results of its operations required by the


articles or any unanimous shareholder agreement.


(2) The financial statement required by subsection (1)(a)(ii) may be


omitted if the reason for the omission is set out in the financial statement, or in a note


thereto, to be placed before the members at an annual meeting.


(3) The Registrar may in any particular case adjust the period relating


to which comparable financial statements are to be placed before the members at any annual


general meeting.


Exemption of


124. Upon the application of a company for authorization to omit from


certain matters.


its financial statements any prescribed item, or to dispense with the publication of any


particular prescribed financial statement, the Registrar may, if he reasonably believes that


disclosure of the information therein contained would be detrimental to the company, permit


the omission on such reasonable conditions as he thinks fit.


Approval of


125. The directors of a company shall approve the financial statements


financial


referred to in section 123, and the approval shall be evidenced by the signature of one


statements.


or more directors.


Auditors’ report


126. Copies of the financial statements of a company may not be


to be appended


published or circulated without the auditors’ report on the company’s accounts being


to financial


appended thereto.


statements.


Members’ copies.


127. Not less than twenty-one days before each annual meeting of


members of a company, the company shall send a copy of the document referred to in section


123 to each member, except to a member who has informed the company in writing that he


does not want a copy of those documents.


Registrar’s


128. (1) The Registrar may, at any time, in writing, request from a


copies.


company a copy of the annual financial statement referred to in section 123 or a copy of the


consolidated financial statement referred to in section 125.


(2) A request by the Registrar pursuant to subsection (1) shall be


complied with within two days after the receipt of the written request.


(3) A request under subsection (1) shall be in the approved form.


Application of


129. Sections 123 to 128 shall not apply to private companies.


sections 123


to 128.


-53-


Auditors


Appointment


130. (1) Subject to section 131, the members of a company shall, in each


of auditor.


year, by a resolution of members, appoint an auditor to hold office for that year.


(2) Notwithstanding subsection (1), if an auditor is not appointed by


28 of 1994.


the members, the incumbent auditor may continue in office until his successor is appointed.


(3) Where a company does not have an auditor, the court may upon


application of a member or the Registrar, appoint and fix remuneration of an auditor, and


such as auditor holds office until an auditor shall be appointed under subsection (1).


(4) Subsection (3) shall not apply if the members have resolved under


section 131 to dispense with auditors.


(5) The remuneration of the auditor shall be fixed by the directors.


Dispensing with


131. (1) At least ninety percent of the registered shareholders of a private


auditors.


company may resolve not to appoint an auditor.


28 of 1994.


(2) A resolution passed under subsection (1) shall be valid until a


contrary resolution is passed by at least ninety percent of the registered shareholders of the


company.


Disqualified


132. (1) An individual shall not be qualified to be an auditor of a company


auditors.


if he is not independent of the company, its affiliated companies, and of the directors and


officers of the company and its affiliated companies.


(2) For the purposes of this section, whether or not an individual is


independent is a question of fact to be determined having regard to all the circumstances.


(3) An individual shall be presumed not to be independent of a


company if he or his business partner -


(a) is a business partner, a director, an officer or an employee of


the company or any of its affiliates, or a business partner of


any director, officer or employee of any such company or its


affiliates;


(b) beneficially owns or controls, directly or indirectly, a material


interest in the shares or debentures of the company or its


affiliates; or


(c) has been a receiver, receiver-manager, liquidator or trustee in


bankruptcy of the company or any of its affiliates within two


years of his proposed appointment as auditor of the company.


(4) The provision of corporate secretarial services by or on behalf of


an individual or his business partner does not by itself deprive an individual or his partner


of his independence for the purposes of this section.


(5) An auditor who becomes disqualified under this section shall


subject to subsection (6), resign immediately after he becomes aware of his disqualification.


(6) An interested person may apply to the court for a declaration that


-54-


an auditor is disqualified under this section and that the office of auditor is vacant.


Auditor’s


133. (1) Subject to section 130, an individual who satisfies the


qualifications.


requirements of subsection (2) shall be qualified for appointment as an auditor.


(2) An individual shall be qualified for appointment as an auditor,


if -


(a) he is a professionally qualified auditor; or


8 of 1991.


(b) he is an accountant licensed to practice as such under the


Public Accounts Act.


(3) The Minister may, after consultation with a recognised


professional body of chartered accountants in The Bahamas, by instrument in writing,


authorize any person to be appointed as an auditor of companies, if that person is in the


opinion of the Minister suitably qualified for such an appointment by reason of his


knowledge and experience.


Powers and


134. (1) Every auditor of a company has a right of access at all times to the


duties of


books and accounts and vouchers of the company and shall be entitled to require from


auditors.


the directors and officers of the company such information and explanation as may be


necessary for the performance of the duties of the auditors.


(2) The auditors are required to make a report to the members on the


accounts examined by them and on every balance sheet laid before the company in general


meeting during their tenure of office and to state whether, in their opinion, the balance sheet


is drawn up in accordance with the national accounting standards approved by a recognised


professional body of chartered accountants in The Bahamas so as to give a fair representation


of the company’s affairs.


Removal of


135. The directors of a company may remove the auditors other than an


auditor.


auditor appointed by the court under section 130(3).


Filling


136. (1) Subject to subsection (3), the directors shall immediately fill a


auditor’s


vacancy in the office of auditor.


vacancy.


(2) If there is not a quorum of directors, the directors then in office


shall within twenty-one days after the vacancy in the office occurs, call a special meeting of


the company to fill the vacancy, and if they fail to call such a meeting, or if there are no


directors the meeting may be called by any member.


(3) An auditor appointed to fill a vacancy shall hold office for the


unexpired term of his predecessor.


Occurence of


137. A vacancy in the office of auditor shall occur when an auditor -


vacancy.


(a) dies or resigns; or


(b) is removed in accordance with section 135.


Auditor’s right


138. An auditor of a company shall be entitled to receive notice of


to notice.


every meeting of the company and, at the expense of the company, to attend and be heard at


the meting on matters relating to his duties as an auditor.


-55-


Auditor’s


139. (1) If any member of a company, whether or not he is entitled to vote


compulsory


at a meeting, or a director of a company gives written notice to the auditor of the


attendance at


company, not less than ten days before a meeting of the company, to attend the meeting,


meeting.


the auditor shall attend the meeting at the expense of the company and answer questions


relating to his duties as auditor or former auditor of the company.


(2) A member or director who sends a notice referred to in subsection


(1) shall concurrently send a copy of the notice to the company.


(3) Subsection (1) shall apply, mutatis mutandis to any former auditor


of the company.


Statement by


140. (1) An auditor who -


auditor.


(a) resigns;


(b) receives notice or otherwise learns of a meeting of directors


called for the purpose of removing him from office;


(c) receives a notice or otherwise learns of a meeting of directors


or members at which another person is to be appointed to fill


the office of auditor, whether because of the resignation or


removal of the incumbent auditor or because his term has


expired or is about to expire; or


(d) receives a notice or otherwise learns of a meeting of the


company at which a resolution referred to in section 131 is to


be proposed,


may submit to the company a written statement giving the reasons for his resignation or the


reasons why he opposes any proposed action or resolution.


(2) When it receives a statement referred to in subsection (1), the


company shall immediately send a copy of the statement to every member entitled to receive


notice of any meeting referred to in section 138 and to the Registrar.


(3) No individual may accept appointment, consent to be appointed or


be appointed auditor of a company if he is replacing an auditor who has resigned, been


removed or whose term on office has expired or is about to expire, until the individual has


requested and received from the former auditor within a period of sixty days a written


statement of the circumstances and the reasons why, in that auditor’s opinion, he is to be


replaced.


(4) Notwithstanding subsection (3), an individual otherwise qualified


may accept appointment or consent to be appointed as auditor of a company if, within fifteen


days after making the request referred to in that subsection, he does not receive an interim


reply to it.


Notification of


141. (1) A director or officer of a company shall immediately notify the


error to


company’s auditor of any error or mis-statement of which the director or officer becomes


auditor.


aware in a financial statement that the auditor or former auditor of the company has reported


-56-


upon.


(2) When the auditor or former auditor of a company is notified or


becomes aware of an error or mis-statement in a financial statement upon which he has


reported to the company and, in his opinion, the error or mis-statement is material, he shall


inform each director of the company accordingly.


(3) Where under subsection (2) the auditor or a former auditor of a


company informs the directors of an error or mis-statement in a financial statement of the


company, the directors shall -


(a) prepare and issue revised financial statements; or


(b) otherwise inform the members of the error or mis-statement,


and, if the company is a public company, inform the Registrar


of the error or mis-statement in the same manner as the


directors inform the members of the error or mis-statement.


Non-liability


142. An auditor shall not be liable to any person in an action for


for


defamation based on any act done or not done, or any statement made by him in good


defamation.


faith in connection with any matter he is authorized or required to do under this Act.


Provision as


143. (1) Subject to this section, any provision, whether contained in the


to liability


articles of a company or in any contract with a company or otherwise, for exempting any


of officers


officer of the company or any person, whether an officer of the company or not,


and auditors.


employed by the company as auditor from or indemnifying him against any liability which by virtue


of any rule of law would otherwise attach to him in respect of any negligence, default, breach of duty


or breach of trust of which he may be guilty in relation to the company shall be void.


(2) Nothing in this section shall operate to deprive any person of any


exemption or right to be indemnified in respect of anything done or omitted to be done by


him while any such provision was in force.


(3) Notwithstanding anything contained in this section, a company


may, in pursuance of any such provision referred to in subsection (1), indemnify and such


officer or auditor against any liability incurred by him in defending any proceedings, whether


civil or criminal in which judgement is given in his favour or in which he is acquitted.


28 of 1994.


(4) This section shall not apply to private companies.


Receivers


Appointment


144. (1) Where any person -


and registration


(a) obtains an order for the appointment of a receiver of any


of receiver.


of the property of a company;


(b) who as a debenture holder becomes entitled to realise his


security interest and appoints a receiver of any assets of a


-57-


company pursuant to the instrument creating the debenture; or


(c) appoints a receiver, pursuant to any Act, instrument or rule of


law, of any of the property of a company or enters possession


of any property of a company under the powers contained in


any charge,


he shall give, within ten days from the date of the order, appointment or entry into


possession, notice thereof to the Registrar, who shall cause the same to be filed in the


company’s file at the Registry.


(2) When -


(a) a person who has been appointed a receiver of property of a


company ceases to act as receiver; or


(b) a person who has entered into possession of any property of


a company goes out of possession of that property,


he shall, within ten days of his having done so, give notice of his doing so in the approved


form to the Registrar, who shall enter the notice in the company’s file at the Registry.


Notice of


145. Where a receiver or a receiver-manager of any assets of a


receivership.


company has been appointed for the benefit of debenture holders, every invoice, order of


goods or business letter issued by or on behalf of the company or the receiver, being a


document on or in which the name of the company appears, shall contain a notice that a


receiver or a receiver-manager has been appointed.


Disqualified


146. (1) A person may not be appointed a receiver or receiver-manager of


receivers.


any assets of a company, and may not act as such a receiver or receiver-manager, if the


person -


(a) is a body corporate;


(b) is an undischarged bankrupt; or


(c) is disqualified from being a trustee under a trust deed


executed by the company or would be so disqualified if a trust


deed had been executed by the company.


(2) If a person who was appointed to be a receiver or receiver


-manager becomes disqualified under subsection (1) or under any provision contained in a


debenture or trust deed, another person may be appointed in his place by the persons who are


entitled to make the appointment or by the court; but a receivership is not terminated or


interrupted by the occurrence of the disqualification.


(3) This section applies to a person appointed a receiver or receiver


manager whether so appointed before or after the commencement of this Act.


Functions of


147. A receiver of any property of a company may, subject to the rights


receiver.


of secured creditors, receive the income from the property, pay the liabilities connected with


the property, and realise the security interest of those on behalf of whom he is appointed; but


except to the extent permitted by the court, he may not carry on the business of the company.


-58-


Functions of


148. A receiver of a company may, if he is also appointed manager of


receiver-manager.


the company, carry on any business of the company to protect the security interest of those


on behalf of whom he is appointed.


Court appointed


149. A receiver of receiver-manager of a company appointed by the


receiver.


court shall act in accordance with the directions of the court.


Receiver under


150. A receiver or receiver-manager of a company appointed under an


instrument.


instrument shall act in accordance with that instrument and any directions of the court given


under section 153.


Duty of care.


151. (1) A receiver of receiver-manager of a company appointed under an


instrument shall -


(a) act honestly and in good faith; and


(b) deal with any property of the company in his possession or


control in a commercially feasible manner.


(2) The burden of proving that a receiver or receiver-manager of the


company did not act in accordance with any provision of this section shall lie on the person


making the allegation.


Duties of


152. A receiver or receiver-manger of a company shall -


receiver.


(a) immediately give notice of his appointment to the Registrar


and of his discharge;


(b) take into his custody and control the property in accordance


with the court order or instrument under which he is


appointed;


(c) open and maintain a bank account in his name as receiver or


receiver-manager of the company for the moneys of the


company coming under his control;


(d) keep detailed accounts of all transactions carried out by him


as receiver or receiver-manager;


(e) keep accounts of his administration, which shall be available


during usual business hours for inspection by the directors of


the company;


(f) prepare financial statements of his administration at such


intervals as the court may direct or as his instrument of


appointment may require;


(g) upon completion of his duties, render a final account of his


administration, in the form approved for the purposes of


paragraph (f); and


(h) file with the Registrar a copy of any financial statement


mentioned in paragraph (f) and any final account mentioned


in paragraph (g) within fifteen days of the preparation of the


-59-


financial statement or rendering of the final account, as the


circumstances require.


Directions by


153. Upon an application by a receiver or receiver-manager of a


court.


company, whether appointed by the court or under an instrument, or upon an application by


an interested person, the court may make any order it thinks fit, including -


(a) an order appointing, replacing or discharging a receiver or


receiver-manager and approving his accounts;


(b) an order determining the notice to be given to any person, or


dispensing with notice to any person;


(c) an order declaring the rights of persons before the court or


otherwise, or directing any person to do or abstain from doing


anything;


(d) an order fixing the remuneration of a receiver or receivermanager;


(e) an order requiring the receiver or receiver-manager or a


person by or on behalf of whom he is appointed -


(i) to make good any default in connection with the


receiver or receiver-manager’s custody or management


of the property and business of the company,


(ii) to relieve any such person from any default on such


terms as the court thinks fit, and


(iii) to confirm any act of the receiver or receiver-manager;


and


(f) an order giving direction on any matter relating to the duties


of the receiver or receiver-manager.


Liability of


154. (1) A receiver of assets of a company appointed under section 144 -


receivers etc.


(a) shall be personally liable on any contract entered into by him in the


performance of his functions, except to the extent that the contract


otherwise provides; and


(b) shall be entitled in respect of that liability to an indemnity out


of the assets of which he was appointed to be receiver,


but nothing in this section shall limit any right to an indemnity that he would have, apart


from this section, or shall limit his liability on a contract entered into without authority, or


shall confer any right to indemnity in respect of that liability.


(2) Where the purported appointment of a receiver out of court is


invalid because the charge under which the appointment purported to be made is invalid or


because, in the circumstances of the case, the power of appointment under the charge was


not exercisable or not wholly exercisable, the court may on application made to


it -


-60-


(a) wholly or to such extent as it thinks fit, exempt the receiver


from personal liability in respect of anything done or omitted


to be done by him, that, if the appointment had been valid,


would have been properly done or omitted to be done;


(b) order that the person by whom the purported appointment was


made, be personally liable to the extent to which that relief


has been granted.


(3) Subsection (1) shall apply to a receiver appointed before or after


the commencement of this Act.


Preparation of


155. (1) Where a receiver of the whole or substantially the whole, of the


statement for


assets of a company is appointed under section 144 -


receiver.


(a) the receiver shall immediately send notice to the company of


his appointment;


(b) within fourteen days after the receipt of the notice by the


company or such longer period as may be allowed by the


receiver, there shall be prepared by the company and


submitted to the receiver a statement in accordance with


section 156 as to the affairs of the company; and


(c) the receiver shall, within two months after the statement, send


-


(i) to the Registrar and, if the receiver was appointed by


the court, to the court, a copy of the statement and of


any comments he sees fit to make thereon, and, in the


case of the Registrar, also a summary of the statement


and of his comments, if any, thereon,


(ii) to the company, a copy of those comments, or, if the


receiver does not see fit to make any comments, a


notice to that effect,


(iii) to the trustee of the trust deed, a copy of the statement


and those comments, if any, and


(iv) to the holders of all debentures belonging to the same


class as the debentures in respect of which he was


appointed, a copy of that summary.


(2) The receiver shall -


(a) within two months or such longer period as the court may


allow, after the expiration of the period of twelve months


from the date of his appointment and after every subsequent


period of twelve months; and


(b) within two months, or such longer period as the court may


-61-


allow, after he ceases to act as receiver of the assets of the


company,


send to the Registrar, and to the holders of debentures belonging to the same class as the


debentures in respect of which the receiver was appointed, an abstract in a form approved


by the Registrar.


(3) The abstract shall show -


(a) the receiver’s receipts and payments during the period of


twelve months or, if the receiver ceases to act, during the


period to which the last preceding abstract related up to the


date of his ceasing to act; and


(b) the aggregate amounts of his receipts and his payments during


all preceding periods since his appointment.


(4) Subsection (1) shall not apply in relation to the appointment of a


receiver to act with an existing receiver, or in place of a receiver who dies or ceases to act,


except that, where that subsection applies to a receiver who dies or ceases to act before the


subsection has been fully complied with, the references in paragraphs (b) and (c) of that


subsection to the receivers include references to his successor and to any continuing receiver.


(5) If the company is being liquidated, this section and section 156


shall apply notwithstanding that the receiver and the liquidator are the same person, but with


the necessary modifications.


(6) Nothing in subsection (2) affects the duty of a receiver to render


proper accounts of his receipts and payments to the persons to whom, and at the times that,


he is required to do so apart from that subsection.


Content of


156. (1) The statement as to the affairs of a company required by section


statement.


155 to be submitted to the receiver or successor shall show, as at the date of the receiver’s


appointment -


(a) the particulars of the company’s assets, debts and liabilities;


(b) the names, addresses and occupations of the company’s


creditors;


(c) the security interests held by the company’s creditors


respectively;


(d) the dates when the security interests were respectively


created; and


(e) such further information as may required by the receiver.


(2) The statement of the affairs of the company shall be submitted by,


and be verified by, the signed declaration of at least one person who is, at the date of the


receiver’s appointment, a director, and by the secretary of the company at that date, or by


such of the persons, hereafter in this subsection mentioned, as the receiver or his successor,


subject to the directions of the Registrar, may require to submit and verify the statement


-62-


namely, persons who -


(a) are or have officers of the company;


(b) have taken part in the formation of the company at any time


within one year before the date of the receiver’s appointment;


(c) are in the employment of the company, or have been in the


employment of the company within that year and, in the


opinion of the receiver, are capable of giving the information


required; or


(d) are or have been within that year officers of or in the


employment of an affiliated company.


(3) Any person making or verifying the statement of affairs of a


company or any part of it shall be allowed and paid by the receiver or his successor out of


the receiver’s receipts, such costs and expenses incurred in and about the making or verifying


of the statement as the receiver or his successor considers reasonable, subject to an appeal


to the court.


Public Companies – Insider Trading


Definitions.


157. (1) For the purposes of sections 158 and 159 “insider” means in


respect of a company -


(a) a director or officer of the company and a person connected


with a director or an officer;


(b) an associated company or enterprise of the company;


(c) an affiliated company or enterprise of the company;


(d) a person who beneficially owns more than ten per cent of the


shares of the company or who exercises control or direction


over more than ten per cent of the votes attached to the shares


of the company whether such control or direction is exercised


by virtue of direct or indirect ownership or by virtue of statute


or agreement and a person connected with such a person;


(e) a person, whether or not he is employed by the company, who


-


(i) receives specific confidential information from a


person described in this section including a person


described in this paragraph, and


(ii) who has knowledge that the person giving the


information is a person described in this section,


including a person described in this paragraph; or


(f) any agent, auditor, contractor or consultant to the company


who receives or comes into confidential information.


-63-


(2) In this section -


(i) “associated company” includes a company (not being a


subsidiary of the investing group or company) in which either


-


(a) the investing group or company’s interest is effectively


that of a partner in a joint venture or consortium and


the investing group or company is in a position to


exercise significant influence over the investee


company; or


(b) the investing group or company’s interest is for the


long term and substantial and, having regard to the


disposition of the other share-holdings of the


investing group or company, is in a position to


participate in the investee company’s operating and


financial policies (including dividend policy), but not


necessarily exercise control over these policies.


Where the investing group or company’s interest


amounts to twenty per cent or more of the equity


voting rights of a company, it shall be presumed,


subject to clear rebuttal otherwise, that the investing


group or company has the ability to exercise


significant influence over that company (through the


participation in the operating and financial policy


decisions of that company);


(ii) “connected person” includes, in relation to a director or


officer unless that person is also a director or an officer of the


same company -


(a) the spouse of the director or officer and any child or


step-child over eighteen;


(b) a body corporate in which the director or the officer or


those natural persons connected with the director or


the officer have direct or indirect interests in twenty


per cent or more or the equity share capital of that


body corporate or are able to control twenty per cent


or more of the voting power at any of its general


meetings;


(c) a trustee or trust, the beneficiaries of which include


the director or the officer himself or a person


connected with the director or the officer;


-64-


(d) a partner of either the director or officer or a


connected person;


(iii) “enterprise” includes an unicorporated association.


Presumed


158. (1) For the purposes of this section and sections 159 and 160 -


insider.


(a) a director or officer of a body corporate that is a parent


company is an insider of its subsidiary company;


(b) a director or officer of a body corporate that is a subsidiary is


an insider of its parent company;


(c) a director or officer of a body corporate that is an affiliated


company is an insider of its affiliates.


(2) For the purposes of this section and sections 159 and 160 -


(a) if a body corporate becomes an insider of a company or enters


into a business combination with a company, a director or


officer of the body corporate shall be presumed to have been


an insider of the company for the previous six months or for


such shorter period as he was a director or an officer of the


body corporate; and


(b) if a company becomes an insider of a body corporate, or


enters into a business combination with a body corporate, a


director or officer of the body corporate shall be presumed to


have been an insider of the company for the previous six


months or for such shorter period as he was a director or


officer of the body corporate.


(3) In subsection (2), business combination means an acquisition of all


or substantially all the property of one body corporate by another or a merger of two or more


bodies corporate.


Liability of


159. An insider who, in connection with a transaction in a share of the


insider.


company or any of its affiliates, makes use of any specific confidential information for his


own benefit or advantage that, if generally known, might reasonably be expected to affect


materially the value of the share -


(a) shall be liable to compensate any person for any direct loss


incurred by that person as a result of the transaction, unless


the information was known or in the exercise of reasonable


diligence should have been known to that person at the time


of the transaction; and


(b) shall be accountable to the company for any direct benefit or


advantage received or receivable by the insider as a result of


the transaction.


Limitation and


160. (1) An action to enforce a right created by section 159 may not be


-65-


application.


commenced except within two years after the discovery of the facts that gave rise to the cause


of action.


(2) Sections 157 to 159 inclusive are applicable to public companies


only.


PART V


MERGER, CONSOLIDATION AND


CONSEQUENTIAL MATTERS


Definitions for


161. In this Part -


purposes of


“consolidated company” means the new company that results from the


Part V.


consolidation of two or more constituent companies;


“consolidation” means the uniting of two or more constituent companies into a


new company;


“constituent company” means an existing company that is participating in a


merger or consolidation with one or more existing companies;


“merger” means the merging of two or more constituent companies into one of


the constituent companies;


“surviving company” means the constituent company into which one or more


other constituent companies are merged.


Merger and


162. (1) Two or more solvent companies may merge or consolidate in


consolidation.


accordance with subsections (3) to (5).


(2) One or more companies may merge or consolidate with one or


more companies incorporated under this Act in accordance with subsections (3) to (5) if the


surviving company or the consolidated company shall satisfy the requirements of this Act.


(3) The directors of each constituent company that proposes to


participate in a merger or consolidation shall approve a written plan of merger or


consolidation containing, as the case requires -


(a) the name of each constituent company and the name of the


surviving company or the consolidated company;


(b) in respect of each constituent company -


(i) the designation and number of outstanding shares of


each class or series of shares specifying each such


class or series entitled to vote on the merger or


consolidation, and


(ii) a specification of each such class or series, if any,


entitled to vote as a class or series;


(c) the terms and conditions of the proposed merger or


consolidation, including the manner and basis of converting


shares in each constituent company into shares, debt


-66-


obligations or other securities in the surviving company or


consolidated company, or money or other property, or a


combination thereof;


(d) in respect of a merger, a statement of any amendment to the


memorandum or articles of the surviving company to be


brought about by the merger; and


(e) in respect of a consolidation, everything required to be


included in the memorandum and articles for a company


except statements as to facts not available at the time the plan


of consolidation is approved by the directors.


(4) Some or all of the shares of the same class or series of shares in


each constituent company may be converted into a particular or mixed kind of property and


other shares of the class or series, or all the shares of other classes or series of shares, may


be converted into other property.


(5) The following apply in respect of a merger or consolidation under


this section -


(a) the plan of merger or consolidation shall be authorized by a


resolution of members and the outstanding shares of a class


or series of shares shall be entitled to vote on the merger or


consolidation as a class or series if the memorandum or


articles so provide or if the plan of merger or consolidation


contains any provisions that, if contained in a proposed


amendment to the memorandum or articles, would entitle the


class or series to vote on the proposed amendment as a class


or series;


(b) if a meeting of members is to be held, notice of the meeting,


accompanied by a copy of the plan of merger or


consolidation, shall be given to each member, whether or not


entitled to vote on the merger or consolidation;


(c) if it is proposed to obtain the written consent of members, a


copy of the plan of merger or consolidation shall be given to


each member, whether or not entitled to consent to the plan of


merger or consolidation;


(d) after approval of the plan of merger or consolidation by the


directors and members of each constituent company, articles


of merger or consolidation shall be executed by each company


and shall contain -


(i) the plan of merger or consolidation and, in the case of


consolidation, any statement required to be included


-67-


in the memorandum and articles of a company


incorporated under this Act,


(ii) the date on which the memorandum and articles of


each constituent company were registered by the


Registrar,


(iii) the manner in which the merger or consolidation was


authorized with respect to each constituent company;


(e) the articles of merger or consolidation shall be submitted to


the Registrar who shall retain and register them in the register


of companies;


(f) upon the registration of the articles of merger or


consolidation, the Registrar shall issue a certificate under his


hand and seal certifying that the articles of merger or


consolidation have been registered.


(6) A certificate of merger or consolidation issued by the Registrar


shall be prima facie evidence of compliance with all requirements of this Act in respect of


the merger or consolidation.


Merger with


163. (1) A parent company may merge with one or more subsidiary


subsidiary.


companies without the authorization of the members of any company, in accordance with


subsections (2) to (6), if the surviving company is a company incorporated under and shall


satisfy the requirements of this Act.


(2) The parent company shall approve a written plan of merger


containing -


(a) the name of each constituent company and the name of the


surviving company;


(b) in respect of each constituent company -


(i) the designation and number of outstanding shares of


each class and series of shares, and


(ii) the number of shares of each class and series of shares


in each subsidiary company owned by the parent


company; and


(c) the terms and conditions of the proposed merger, including


the manner and basis of converting shares in each company to


be merged into shares, debt obligations or other securities in


the surviving company, or money or other property, or a


combination thereof.


(3) Some or all of the shares of the same class or series of shares in


each company to be merged may be converted into property of a particular or mixed kind and


other shares of the class or all shares of other classes or series of shares, may be converted


-68-


into other property; but, if the parent company is not the surviving company, shares of each


class and series of shares in the parent company may only be converted into similar shares


of the surviving company.


(4) A copy of the plan of merger or an outline thereof shall be given


to every member of each subsidiary company to be merged unless the giving of that copy or


outline has been waived by that member.


(5) Articles of merger shall be executed by the parent company and


shall contain -


(a) the plan of merger;


(b) the date on which the memorandum and articles of each


constituent company were registered by the Registrar; and


(c) if the parent company does not own all the shares in each


subsidiary company to be merged, the date on which a copy


of the plan of merger or an outline thereof was made available


to the members of each subsidiary company.


(6) The articles of merger shall be submitted to the Registrar who


shall retain and register them in the register of companies.


(7) Upon the registration of the articles of merger, the Registrar shall


issue a certificate under his hand and seal certifying that the articles of merger have been


registered.


(8) A certificate of merger issued by the Registrar shall be prima facie


evidence of compliance with all the requirements of this Act in respect of the merger.


Effect of


164. (1) A merger or consolidation shall be effective on the date the articles


merger or


of merger or consolidation are registered by the Registrar or such date subsequent


consolidation.


thereto, not exceeding thirty days, as is stated in the articles of merger or consolidation.


(2) As soon as a merger or consolidation becomes effective -


(a) the surviving company or the consolidation company insofar


as is consistent with its memorandum and articles, as


amended or established by the articles of merger or


consolidation, has all rights, privileges, immunities, powers,


objects and purposes of each of the constituent companies;


(b) in the case of a merger, the memorandum and articles of the


surviving company are automatically amended to the extent,


if any, that changes in its memorandum and articles are


contained in the articles of merger;


(c) in the case of a consolidation, the statements contained in the


articles of consolidation that are required or authorized to be


contained in the memorandum and articles of a company


incorporated under this Act, are the memorandum and articles


-69-


of the consolidated company;


(d) property of every description, including choses in action and


the business of each of the constituent companies, shall


immediately vest in the surviving company or the


consolidation company; and


(e) the surviving company or the consolidated company shall be


liable for all claims, debts, liabilities and obligations of each


of the constituent companies.


(3) Where a merger or consolidation occurs -


(a) no conviction, judgement, ruling, order, claim, debt, liability


or obligation due or to become due, and no cause existing,


against a constituent company or against any member,


director, officer or agent thereof, shall be released or impaired


by the merger or consolidation; and


(b) no proceedings, whether civil or criminal pending at the time


of a merger or consolidation by or against a constituent


company, or against any member, director, officer or agent


thereof, are abated or discontinued by the merger or


consolidation, but -


(i) the proceedings may be enforced, prosecuted, settled


or compromised by or against the surviving company


or the consolidated company or against the member,


director, officer or agent, as the case may be, or


(ii) the surviving company or the consolidated company


may be substituted in the proceedings for a constituent


company.


(4) The Registrar shall strike off the register of companies -


(a) a constituent company that is not the surviving company in a


merger; and


(b) a constituent company that participates in a consolidation.


Disposition of


165. Any sale, transfer, lease, exchange or other disposition of more


assets.


than fifty per cent in value of the assets of a company, if not made in the usual manner


28 of 1994.


or regular course of the business carried on by the company, shall be made as


follows -


(a) the proposed sale, transfer, lease, exchange or other


disposition shall be approved by the directors;


(b) upon approval of the proposed sale, transfer, lease, exchange


or other disposition, the directors shall submit the proposal to


the members for it to be authorized by a resolution of


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members;


(c) if a meeting of members is to be held, notice of the meeting,


accompanied by an outline of the proposal, shall be given to


each member, whether or not he is entitled to vote on the sale,


transfer, lease, exchange or other disposition; and


(d) if it is proposed to obtain the written consent of members, an


outline of the proposal shall be given to each member,


whether or not he is entitled to consent to the sale, transfer,


lease, exchange or other disposition.


Redemption of


166. (1) Subject to any limitations in the memorandum or articles -


minority shares.


(a) shareholders holding ninety per cent of the votes of the


outstanding shares entitled to vote; and


(b) shareholders holding ninety per cent of the votes of the


outstanding shares of each class and series of shares entitled


to vote as a class or series,


on merger or consolidation under section 162 may give a written instruction to the company


directing the company to redeem the shares held by the remaining shareholders.


(2) Upon receipt of the written instruction referred to in subsection


(1), the company shall redeem the shares specified in the written instruction irrespective of


whether or not the shares are by their terms redeemable.


(3) The company shall give written notice to each shareholder whose


shares are to be redeemed stating the redemption price and the manner in which the


redemption is to be effected.


Arrangements.


167. (1) In this section “arrangement” means -


28 of 1994.


(a) a reorganization or reconstruction of a company;


(b) a separation of two or more businesses carried on by a


company;


(c) any combination of any of the circumstances specified in


paragraphs (a) and (b).


28 of 1994.


(2) If the directions of a company determine that it is in the best


interests of the company or the creditors or members thereof, the directors of the company


may by a resolution of directors, approve a plan of arrangement that contains the details of


the proposed arrangement.


(3) Upon approval of the plan of arrangement by the members, the


company shall make application to the court for approval of the proposed arrangement.


(4) The court may, upon an application made to it under subsection


(3), make an interim or final order that is not subject to an appeal unless a question of law


is involved, in which case notice of appeal shall be given within twenty days immediately


following the date of the order and in making the order the court may -


-71-


(a) determine what notice, if any, of the proposed arrangement is


to be given to any person;


(b) determine whether approval of the proposed arrangement by


any person should be obtained and the manner of obtaining


the approval;


(c) determine whether any holder of shares, debt obligations or


other securities in the company may dissent from the


proposed arrangement and receive payment of the fair value


of his shares, debt obligations or other securities under section


168;


(d) conduct a hearing and permit any interested persons to appear;


and


(e) approve or reject the plan of arrangement as proposed or with


such amendments as it may direct.


(5) Where the court makes an order approving a plan of arrangement,


the directors of the company, if they are still desirous of executing the plan, shall confirm the


plan of arrangement as approved by the court whether or not the court has directed any


amendments to be made thereto.


(6) The directors of the company, upon confirming the plan of


arrangement, shall -


(a) give notice to the persons to whom the order of the court


requires notice to be given; and


(b) submit the plan of arrangement to those persons for such


approval, if any, as the order of the court requires.


(7) After the plan of arrangement has been approved by those persons


by whom the order of the court may require approval, articles of arrangement shall be


executed by the company and shall contain -


(a) the plan of arrangement;


(b) the order of the court approving the plan of arrangement; and


(c) the manner in which the plan of arrangement was approved,


if approval was required by the order of the court.


(8) The articles of arrangement shall be submitted to the Registrar who


shall retain and register them in the register of companies.


(9) Upon registration of the articles of arrangement, the Registrar shall


issue a certificate under his hand and seal certifying that the articles of arrangement have


been registered.


(10) A certificate of arrangement issued by the Registrar shall be prima


facie evidence of compliance with all requirements of this Act in respect of the arrangement.


(11) An arrangement shall be effective on the date the articles of


-72-


arrangement are registered by the Registrar or on such date subsequent thereto not exceeding


thirty days, as is stated in the articles of arrangement.


Rights of


168. (1) A member of a company shall be entitled to payment of the fair


dissenters.


value of his shares upon dissenting from -


(a) a merger, if the company is a constituent company, unless the


company is the surviving company and the member continues


to hold the same or similar shares;


(b) a consolidation if the company is a constituent company;


(c) any sale, transfer, lease, exchange or other disposition of more


than fifty per cent of the assets or business of the company, if


not made in the usual or regular course of the business carried


on by the company, but not including -


(i) a disposition pursuant to an order of the court having


jurisdiction in the matter,


(ii) a disposition for money on terms requiring all or


substantially all net proceeds to be distributed to the


members in accordance with their respective interests


within one year after the date of disposition, or


(iii) a transfer pursuant to the power described in section


36;


(d) a redemption of his shares by the company pursuant to section


166; and


(e) an arrangement, if permitted by the court.


(2) A member who desires to exercise his entitlement under subsection


(1) shall give to the company, before the meeting of members at which the action is


submitted to a vote, or at the meeting before the vote, written objection to the action; but an


objection shall not be required from a member to whom the company did not give notice of


the meeting in accordance with this Act or where the proposed action is authorized by written


consent of members without a meeting.


(3) An objection under subsection (2) shall include a statement that the


member proposes to demand payment for his shares if the action is taken.


(4) Within twenty days immediately following the date on which the


vote of members authorizing the action is taken, or the date on which written consent of


members without a meeting is obtained, the company shall give written notice of the


authorization or consent to each member who gave written objection or from whom written


objection was not required, except those members who voted for, or consented to in writing,


the proposed action.


(5) A member to whom the company was required to give notice and


who elects to dissent shall, within twenty days immediately following the date on which the


-73-


notice referred to in subsection (4) is given, give to the company a written notice of his


decision to elect to dissent, stating -


(a) his name and address;


(b) the number and classes or series of shares in respect of which


he dissents; and


(c) a demand for payment of the fair value of his shares,


and a member who elects to dissent from a merger under section 163 shall give to the


company a written notice of his decision to elect to dissent within twenty days immediately


following the date on which the copy of the plan of merger or an outline thereof is given to


him in accordance with section 162.


(6) A member who dissents shall do so in respect of all shares that he


holds in the company.


(7) Upon the giving of a notice of election to dissent, the member to


whom the notice relates shall cease to have any of the rights of a member except the right to


be paid the fair value of his shares.


(8) Within seven days immediately following the date of the


expiration of the period within which members may give their notices of election to dissent,


or within seven days immediately following the date on which the proposed action is put into


effect, whichever is later, the company or, in the case of a merger or consolidation, the


surviving company or the consolidated company, shall make a written offer to each


dissenting member to purchase his shares at a specified price that the company determines


to be their fair value; and if, within thirty days immediately following the date on which the


offer is made, the company making the offer and the dissenting member agree upon the price


to be paid for his shares, the company shall pay to the member the amount in money upon


the surrender of the certificates representing his shares.


(9) If the company and a dissenting member fail, within the period of


thirty days referred to in subsection (8), to agree on the price to be paid for the shares owned


by the member, within twenty days immediately following the date on which the period of


thirty days expire, the following shall apply -


(a) the company and the dissenting member shall each designate


an appraiser;


(b) the two designated appraiser together shall designate a third


appraiser;


(c) the three appraisers shall fix the fair value of the shares


owned by the dissenting member as of the close of business


on the day prior to the date on which the vote of members


authorizing the action was taken or the date on which written


consent of members without a meeting was obtained,


excluding any appreciation or depreciation directly or


-74-


indirectly induced by the action or its proposal, and that value


is binding on the company and the dissenting member for all


purposes; and


(d) the company shall pay to the member the amount in money


upon the surrender by him of the certificates representing his


shares.


(10) Shares acquired by the company pursuant to subsection (8) or (9)


shall be cancelled, but if the shares are shares of a surviving company, they shall be available


for reissue.


(11) The enforcement by a member of his entitlement under this section


shall exclude the enforcement by the member of a right to which he might otherwise be


entitled by virtue of his holding shares, except that this section shall not exclude the right of


the member to institute proceedings to obtain relief on the ground that the action is illegal.


PART VI


INCORPORATION AND REGISTRATION OF


OTHER COMPANIES


Incorporation of Companies without Share Capital


Application of sec-


169. Sections 170 to 178 shall apply to non-profit companies only.


tions 170 to 178.


28 of 1994.


Form of


170. The memorandum of a non-profit company shall state -


memorandum.


(a) the restrictions on the undertaking that the company is to


carry on;


(b) that the company has no authorized share capital and is to be


carried on without pecuniary gain to its members and that any


profits or other accretions to the company are to be used in


furthering its undertaking;


(c) if the undertaking of the company is of a social nature, the


address in full of the club house or similar building


maintained by the company; and


(d) that each first director becomes a member of the company


upon its incorporation.


By-laws.


171. The directors of a non-profit company may make by-laws to


Second Schedule.


provide for the matters specified in the Second Schedule.


Directors.


172. A non-profit company shall have no fewer than three directors and


its articles may provide for individuals becoming directors by virtue of their holding some


office outside the company.


Unlimited


173. Unless the articles otherwise provide, there shall be no limit to the


-75-


membership.


membership of a non-profit company.


Classes of


174. The articles of a non-profit company may provide for more than


membership.


one class of membership; in which case, the designation of and the terms and conditions


attaching to each class of shares shall be specified.


Admission to


175. Subject to the articles of a non-profit company persons may be


membership.


admitted to membership in the company by a resolution of directors; but the articles may


provide -


(a) that the resolution shall be ineffective until confirmed by the


members in general meeting; and


(b) that members can be admitted by virtue of holding some


office outside the company.


Voting.


176. (1) Subject to subsection (2), each member of each class of members


of a non-profit company shall have one vote.


(2) The articles of a non-profit company may provide that each


member of a specified class shall have more than one vote or shall have no vote.


Transfer of


177. (1) Unless the articles of a non-profit company otherwise provide, the


members’


interest of a member in such a company shall not be transferable, and shall lapse and


interests.


cease to exist upon his death or when he shall cease to be a member by resignation or


otherwise in accordance with the articles of the company.


(2) Where the articles of a non-profit company provide that the


interest of a member shall be transferable, any restriction on such interest shall be void.


Dissolution and


178. (1) The articles of a non-profit company may provide that, upon


distribution.


dissolution, the remaining property of the company shall be distributed among the members


or among the members of a class or classes of members or to one designated organisation or


more, or to any combination thereof.


(2) Where the articles of a non-profit company do not provide for a


distribution of its remaining property in accordance with subsection (1), the company shall,


by a resolution of directors, after payment of all debts and liabilities, distribute or dispose of


the remaining property to any organization in The Bahamas the undertaking of which is


charitable or beneficial to the community at large.


(3) Where the articles do not contain a provision for the distribution


of remaining property to the members, the articles may not be amended so to provide.


Registration of Foreign Companies


Interpretation.


179. In this Part -


“foreign company” means any incorporated or unincorporated body formed under


the laws of a country other than The Bahamas;


“undertaking” means, in relation to a foreign company, any business or


undertaking carried on by a foreign company.


-76-


Carrying on


180. (1) A foreign company carries on an undertaking in The Bahamas


business in The


if -


Bahamas.


(a) it maintains a warehouse or place of business in The


Bahamas;


(b) it is licensed or registered or required to be licensed or


registered under the laws of The Bahamas whereby it is


entitled to do business or to sell shares or debentures of its


own issue; or


(c) in any other manner, it carries on any undertaking in The


Bahamas.


(2) For the purposes of subsection (1), where a foreign company is


listed with a telephone number in The Bahamas under the name of the foreign company in


a telephone directory published for use in The Bahamas, the foreign company is presumed,


in the absence of evidence to the contrary, to be carrying on an undertaking in The Bahamas.


Registration of


181. (1) Subject to subsection (2), no foreign company may begin to carry


foreign


on any undertaking in The Bahamas until it is registered under this Act.


companies.


(2) Subject to section 182, a foreign company, upon payment of the


prescribed fee, shall be entitled to be registered under this Act for any lawful undertaking.


(3) This section shall not apply to a foreign company that carried on


an undertaking in The Bahamas prior to the commencement of this Act.


Requirements


182. (1) In order to register under this Act, a foreign company shall file


for registration


with the Registrar a statement in the approved form setting out -


of foreign


(a) the name of the company;


company.


(b) the jurisdiction in which the company was incorporated;


(c) the date of its incorporation;


(d) the manner in which it was incorporated;


(e) the particulars of its corporate instruments;


(f) the period, if any, fixed by its corporate instruments for the


duration of the company;


(g) the extent, if any, to which the liability of the shareholders or


members of the company is limited;


(h) the undertaking that the company will carry on in The


Bahamas;


(i) the date on which the company intends to commence any of


its undertakings in The Bahamas;


(j) the authorized, subscribed and paid up or stated capital of the


company and the shares that the company is authorized to


issue and their nominal or par value, if any;


(k) the full address of the principal office of the company outside


-77-


The Bahamas;


(l) the full address of the principal office of the company in The


Bahamas; and


(m) the full names, addresses and occupations of the directors of


the company.


(2) The statement for the purposes of subsection (1) shall be


accompanied by -


(a) a statutory declaration by at least one director of the company


that verifies on behalf of the company the particulars set out


in the statement;


(b) a certified copy of the corporate instruments of the company;


(c) a statutory declaration by a counsel and attorney that this


section has been complied with;


28 of 1994.


(d) the prescribed fees.


(3) Where the statement required by this section is not in the English


language, a notarially certified translation of that document shall be provided unless the


Registrar otherwise directs.


Certificate of


183. (1) When the Registrar has, in respect of a foreign company, received


registration.


all the required documents and the prescribed fees, the Registrar shall -


(a) issue a certificate showing that the company has been


registered as a foreign company under this Act; and


(b) publish in the Gazette a notice of the registration of the


company as a foreign company.


(2) A certificate of registration issued under this Act to a foreign


company shall be conclusive proof of the registration of the company on the date shown on


the certificate and any other facts that the certificate purports to certify.


Effect of


184. Subject to this Part and any other law of The Bahamas, a foreign


registration.


company that is registered under this Act may carry on its undertaking in The Bahamas in


accordance with its certificate of registration and may exercise its corporate powers within


The Bahamas.


Capacity of


185. A foreign company that is registered under this Act has the same


foreign company.


capacity as a company incorporated under this Act and the provisions of this Act, except


28 of 1994.


those relating to incorporation, shall apply, mutatis mutandis, to foreign companies.


Suspension of


186. (1) Subject to any regulations made by the Minister respecting foreign


registration.


companies, the Minister may suspend or revoke the registration of a foreign company for


failure to comply with any requirements of this Part or for any other prescribed cause; and


the Minister may subject to those regulations, remove a suspension or cancel a revocation.


(2) The rights of the creditors of a foreign company shall not be


affected by the suspension or revocation of its registration under this Act.


-78-


(3) The Registrar shall immediately publish in the Gazette a notice of


any suspension or revocation of a foreign company under this Act.


Cancellation of


187. (1) When a foreign company ceases to carry on its undertaking in The


registration.


Bahamas, the company shall file a notice to that effect with the Registrar, who shall


thereupon cancel the registration of the company under this Act.


(2) If a foreign company ceases to exist and the Registrar is made


aware of that circumstance by evidence satisfactory to him, the Registrar may cancel the


Registration of the company under this Act.


Revival of


188. (1) Subject to subsection (3), where the registration of a foreign


registration.


company has been cancelled under section 187, the Registrar may revive the registration of


a foreign company under this Act if the company files with him such documents as he may


require and pays the prescribed fee.


(2) The registration of a foreign company is revived when the


Registrar issues a new certificate of registration to the company.


28 of 1994.


(3) The Registrar may not revive the registration of a foreign company


the registration of which was suspended or revoked by the Minister under section 186.


Name display.


189. (1) A foreign company registered under this Act and carrying on an


undertaking in The Bahamas shall paint or affix its name and place of business, in a


conspicuous place in easily legible letters, and keep that information so painted and affixed,


on the outside of its registered office in The Bahamas and every office or place in The


Bahamas in which it carries on its undertaking.


(2) A foreign company carrying on any undertaking in The Bahamas,


in the transaction of its undertaking in The Bahamas, shall have its name mentioned in


legible characters in -


(a) all notices, advertisements and other official publications;


(b) all bills of exchange, promissory notes, endorsements,


cheques and orders for money or goods purporting to be


signed by or on behalf of the company; and


(c) all bills of parcels, invoices, receipts and letters of credit of


the company.


Registered


190. A foreign company that is registered under this Act shall maintain


office.


a registered office in The Bahamas and the address of that office shall be notified to the Registrar.


Returns.


191. (1) The Registrar may, at any time, make a written demand for


information concerning a foreign company and such information shall be furnished within


twenty-one days of the demand signed by at least one director of the company.


(2) The Registrar may cancel the registration of a foreign company for


failure to comply with a demand under subsection (1) where he is satisfied that his demand


has been received and there has been wilful default in complying therewith.


-79-


PART VII


WINDING UP OF COMPANIES


Preliminary


Definition of


192. For the purposes of this Part “contributory” means every person


“Contributory”.


liable to contribute to the assets of a company under this Act in the event of that company


being wound up and includes any person alleged to be a contributor in proceedings for


determining the persons who are to be deemed contributories and in all proceedings prior to


the final determination of such persons.


Nature of


193. (1) The liability of any person to contribute to the assets of a company


liability of


under this Act, in the event of such company being wound up, shall be deemed to create


contributory.


a debt of the nature of a specialty accruing due from such person at the time when his liability


commenced, but payable at the time or respective times when calls are made for enforcing such


liability.


(2) Without affecting subsection (1), where a contributory is bankrupt,


the estimated value of his liability to future calls, as well as calls already made, may be


proved against his estate.


Contributories


194. Where any contributory dies either before or after he has been


in case of


placed on the list of contributories, his personal representatives, heirs, and devisees shall


death.


be liable in the due course of administration to contribute to the assets of the company in discharge


of the liability of such deceased contributory and such personal representatives, heirs, and devisees


shall be deemed to be contributories accordingly.


Contributories


195. Where any contributory becomes bankrupt, either before or after


in case of


he has been placed on the list of contributories, his assignees shall be deemed to


bankruptcy.


represent such bankrupt for all the purposes of the winding up, and shall be deemed to be


contributories, accordingly, and may be called upon to admit to proof against the estate of


such bankrupt, or otherwise to allow to be paid out of his assets in due course of law, any


monies due from such bankrupt in respect of his liability to contribute to the assets of the


company being wound up.


28 of 1994.


196. REPEALED.


Winding up by court


Circumstances


197. A company under this Act may be wound up by the court in the


giving rise to


following circumstances -


winding up by


(a) when the company has passed a resolution requiring the


court.


company to be wound up by the court;


(b) when the company does not commence its business within a


year from its incorporation, or suspends its business for a


period of one year;


(c) when the members are reduced in number to less than two;


-80-


(d) when the company is unable to pay its debts;


(e) if the court is of the opinion that it is just and equitable that


the company should be wound up; or


(f) if the Central Bank petitions for the winding up of a bank


whose licence has been suspended.


Company when


198. A company under this Act shall be deemed to be unable to pay its


deemed unable


debts where -


to pay its


(a) a creditor, by assignment or otherwise, to whom the


debts.


company is indebted, in a sum exceeding one thousand


dollars then due, has served on the company, at its registered


office, a demand under his hand requiring the company to pay


the sum due, and the company has for three weeks thereafter


neglected to pay such sum, or to secure or compound for the


same to the reasonable satisfaction of the creditor;


(b) execution or other process issued on a judgement, decree, or


order obtained in any court in favour of any creditor in any


proceeding instituted by such creditor against the company, is


returned unsatisfied in whole or in part;


(c) it is proved to the satisfaction of the court that the company is


unable to pay its debts; or


(d) it is proved to the satisfaction of the court that the value of the


company’s assets is less than the amount of its liabilities,


having regard to its contingent and prospective creditors.


Application for


199. Any application to the court for the winding up of a company


winding up to


under this Act shall be by petition; and such petition may be presented by the company,


be made by


a director, or by any one or more creditors, a contributory of the company, or by all or


petition.


any of the above parties, together or separately; and every order which may be made on any


such petition shall operate in favour of all the creditors and all the contributories of the


company in the same manner as if it had been made upon the joint petition of a creditor and


a contributory.


Power of court.


200. Any judge of the court may do in chambers any act which the


court is authorized to do in a winding up by the court.


Commencement


201. A winding up of a company by the court shall be deemed to


of winding up.


commence at the time of the presentation of the petition for the winding up.


Court may grant


202. The court may, at any time after the presentation of a petition for


injunction.


winding up a company under this Act, and before making an order for winding up the


company, upon the application of the company, or of any creditor or contributory of the


company, restrain further proceedings in any action, suit or proceeding against the company,


upon such terms as the court thinks fit; the court may also at any time after the presentation


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of such petition, and before the first appointment of liquidators, appoint provisionally an


official liquidator of the estate and effects of the company.


Course to be


203. Upon hearing the petition the court may dismiss the same with or


pursued by


without costs, may adjourn the hearing conditionally or unconditionally, and may make


court.


any interim order, or any other order that it deems just.


Actions and


204. When an order has been made for winding up a company under


suits to be


this Act, or a provisional liquidator has been appointed, no suit, action, or other


stayed.


proceedings shall be proceeded with or commenced against the company except with the


leave of the court, and subject to such terms as the court may impose.


Copy of order


205. When an order has been made for winding up a company under


to be forwarded


this Act, a copy of such order shall be forwarded by the company to the Registrar who


to Registrar.


shall make a minute thereof in the register of companies.


Power of court


206. The court may at any time after an order has been made for


to stay


winding up a company, upon the application by motion of any creditor or contributory


proceedings.


of the company, and upon proof to the satisfaction of the court that all proceedings in relation


to such winding up ought to be stayed, make an order staying the same, either altogether or


for a limited time, on such terms and subject to such conditions as it deems fit.


Effect of order


207. When an order has been made for winding up a company limited


on share capital


by guarantee and having a capital divided into shares, any share capital that may not


of company


have been called up shall be deemed to be assets of the company, and to be a debt of the


limited by


nature of a specialty due to the company from each member to the extent of any sums


guarantee.


that may be unpaid on any shares held by him, and payable at such time as may be appointed


by the court.


Court may have


208. (1) Subject to subsection (2), the court may, as to all matters relating


regard to wishes


to the winding up, have regard to the wishes of the creditors or contributories, as proved


of creditors


to it by any sufficient evidence, and may, if it thinks it expedient, direct meetings of the


or contributors.


creditors or contributories to be summoned, held, and conducted in such manner as the court


directs, for the purpose of ascertaining their wishes, and may appoint a person to act as


chairman of such meeting, and to report the result of such meeting to the court.


(2) Without affecting subsection (1), in the case of creditors, regard


is to be had to the value of the debts due to each creditor, and in the case of contributories


to the number of votes conferred on each contributory by the regulation of the company.


Official Liquidators


Appointment of


209. (1) For the purpose of conducting the proceedings in winding up a


official


company, and assisting the court therein, there may be appointed a person to be called


liquidator.


an official liquidator; and the court having jurisdiction may appoint such person, either


provisionally or otherwise, as it thinks fit, to the office of official liquidator; but in either


case, if more persons than one are appointed to the office of official liquidator, the court may


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declare whether any act hereby required or authorized to be done by the official liquidator


is to be done by all or any one or more of such persons, and the court may also determine


whether any and what security is to be given by any official liquidator on his appointment.


(2) If no official liquidator is appointed or during any vacancy in such


appointment, all the property shall be deemed to be in the custody of the court.


Registrations,


210. (1) Any official liquidator may resign or be removed by the court on


removals etc.


due cause shown; and any vacancy in the office of official liquidator appointed by the court shall be


filled by the court.


(2) There shall be paid to the official liquidator such salary or


remuneration, by way of percentages or otherwise, as the court may direct; and if more


liquidators than one are appointed such remuneration shall be distributed amongst them in


such proportions as the court shall direct.


Style and


211. The official liquidator shall be described by the style of the official


duties of


liquidator of the particular company in respect of which he is appointed, and not by his


official


individual name; and he shall take into his custody, or under his control, all the property,


liquidator.


effects, and things in action to which the company is or appears to be entitled, and shall


perform such duties in reference to the winding up of the company as may be imposed by the


court.


Powers of


212. The official liquidator may, with the approval of court, do any or


official


all of the following -


liquidator.


(a) bring or defend any action, suit, or prosecution, or other legal


proceedings, civil or criminal, in the name and on behalf of


the company;


(b) carry on the business of the company, so far as may be


necessary for the beneficial winding up of the same;


(c) sell the real and personal property, effects, and things in


action of the company by public auction or private contract,


with power to transfer the whole thereof to any person or


company, or to sell the same in parcels;


(d) do all acts and execute, in the name and on behalf of the


company, all deeds, receipts, and other documents, and for


that purpose use, when necessary, the company’s seal;


(e) prove, rank, claim, and draw a dividend, in the matter of the


bankruptcy or insolvency of any contributory, for any balance


against the estate of such contributory, and take and receive


dividends in respect of such balance, in the matter of


bankruptcy or insolvency as a separate debt due from such


bankrupt or insolvent, and rateably with the other separate


creditors;


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(f) draw, accept, make and endorse any bill of exchange or


promissory note in the name and on behalf of the company,


also to raise upon the security of the assets of the company


from time to time any requisite sum or sums of money; and


drawings, accepting, making or endorsing of every such bill


of exchange or promissory note on behalf of the company


shall have the same effect with respect to the liability of such


company as if such bill or note had been drawn, accepted,


made, or endorsed by or on behalf of such company in the


course of carrying on the business thereof;


(g) take out, if necessary, in his official name, letters or


administration to any deceased contributory, and do in his


official name any other act that may be necessary for


obtaining payment of any monies due from a contributory or


from his estate, and which act cannot be conveniently done in


the name of the company; and in all cases where he takes out


letters of administration, or otherwise uses his official name


for obtaining payment of any monies due from a contributory,


such monies shall for the purposes of enabling him to take out


such letters or recover such monies, be deemed to be due to


the official liquidator himself; and


(h) do and execute all such other things as may be necessary for


winding up the affairs of the company and distributing its


assets.


Discretion of


213. The court may provide by any order that the official liquidator


official


may exercise any of the above powers without the approval or intervention of the court,


liquidator.


and where an official liquidator is provisionally appointed may limit and restrict his powers


by the order appointing him.


Vesting of


214. (1) Where a company is being wound up by the court the court may


property in


on the application of the liquidator, by order, direct that all or any part of the property


liquidator.


belonging to the company or held by trustees on its behalf shall vest in the liquidator by his


official name, whereupon the property to which the order relates shall vest accordingly.


(2) The liquidator may, after giving such indemnity, if any, as the


court may direct, bring or defend in his official name any action or other legal pro-ceeding


which relates to that property or which is necessary to bring or defend for the purpose of


effectually winding up the company and recovering its property.


Assistance for


215. The official liquidator may, with the approval of the court, appoint


liquidator.


a counsel and attorney to assist him in the performance of his duties.


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Ordinary Powers of Court


Collection and


216. As soon as may be after making an order for winding up the


application


company, the court shall settle a list of contributories, with power to rectify the register


of assets.


of members in all cases where such rectification is required in pursuance of this Act, and


shall cause the assets of the company to be collected, and applied in discharge of its


liabilities.


Provisions


217. In settling the list of contributories the court shall distinguish


as to


between persons who are contributories in their own right and persons who are


representative


contributories as being representatives of or being liable for the debts of others; and it


contributories.


shall not be necessary, where the personal representative of any deceased contributory is


placed on the list, to add the heirs or devisees of such contributory, but such heirs or devisees


may be added as and when the court thinks fit.


Power of court


218. The court may, at any time after making an order for winding up


to require


a company, require any contributory for the time being settled on the list of


delivery of


contributories, trustee, receiver, banker, or agent, or officer of the company to pay,


property.


deliver, convey, surrender, or transfer forthwith, or within such time as the court directs, to


or into the hands of the official liquidator, any sum or balance, books, papers, estate, or


effects which happen to be in his hands for the time being, and to which the company is


prima facie


entitled.


Power of court


219. (1) Subject to subsections (2) and (3), the court may, at any time after


to order


making an order for winding up the company, make an order on any contributory for the


payment of


time being settled on the list of contributories, directing payment to be made, in respect


debts by


of any monies due from him or from the estate of the person whom he represents to the


contributory.


company exclusive of any monies which he or the estate of the person whom he represents may be


liable to contribute by virtue of any call made or to be made by the court pursuant to this Part.


(2) The court may, in making such order when the company is not


limited, allow to such contributory by way by way of set-off any monies due to him or the


estate which he represents from the company on any independent dealing or contract with


the company, but not any monies due to him as a member of the company in respect of any


dividend or profit.


(3) When all the creditors of any company whether limited or


unlimited are paid in full, any monies due on account whatever to any contributory from the


company may be allowed to him by way of set-off against any subsequent call.


Power of


220. The court may, at any time after making an order for winding up


court to


a company, and either before or after it has ascertained the sufficiency of the assets of


make calls.


the company, make calls on and order payment thereof by all or any of the contributories for


the time being settled on the list of contributories, to the extent of their liability, for payment


of all or any sums it deems necessary to satisfy the debts and liabilities of the company, and


the costs, charges, and expenses of winding it up, and for the adjustment of the rights of the


-85-


contributories amongst themselves, and it may, in making a call, take into consideration the


probability that some of the contributories upon whom the same is made may partly or


wholly fail to pay their respective portions of the same.


Power of court


221. The court may order any contributory, purchaser, or other person


to order


from whom money is due to the company to pay the same into a bank to the account of


payment into


the official liquidator, instead of to the official liquidator and such order may be enforced


bank.


in the same manner as if it had directed payment to the official liquidator.


Regulation of


222. All monies, bills, notes, and other securities paid and


account


delivered into a bank in the event of a company being wound up by the court shall be


with court.


subject to such order and regulations for the keeping of the account of such monies and other


effects, and for the payment and delivery in, or investment and payment and delivery out of,


the same as the court may direct.


Representative


223. If any person made a contributory as personal representative of a


contributory


deceased contributory makes default in paying any sum ordered to be paid by him,


not paying


proceedings may be taken for administering the personal and real estates of such


monies ordered.


deceased contributory, or either of such estates, and of compelling payment of the monies


due.


Order conclusive


224. Any order made by the court pursuant to this Act upon any


evidence.


contributory shall, subject to the provisions for appealing against such order, be conclusive


evidence that the monies, if any, thereby appearing to be due or ordered to be paid are due,


and all other pertinent matters stated in such order are to be taken to be truly stated as against


all persons, and in all proceedings, with the exception of proceedings taken against the real


estate of any deceased contributory, in which case such order shall only be prima facie


evidence for the purpose of charging his real estate, unless his heirs or devisees were on the


list of contributories at the time of the order being made.


Court may


225. The court may fix a day on or within which creditors of the


exclude creditors


company are to prove their debts or claims, or to be excluded from the benefit of any


not proving in


distribution made before such debts are proved.


certain time.


Court to adjust


226. The court shall adjust the rights of the contributories amongst


rights of


themselves, and distribute any surplus that may remain amongst the parties entitled


contributories.


thereto.


Court to order


227. The court may, in the event of the assets being insufficient to


costs.


satisfy the liabilities, make an order as to the payment out of the estate of the company of the


costs, charges, and expenses incurred in winding up any company in such order of priority


as the court thinks just.


Dissolution of


228. When the affairs of the company have been completely wound up,


company.


the court may make an order that the company be dissolved from the date of such order, and


the company shall be dissolved accordingly.


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Registrar to


229. Any order so made shall be reported by the official liquidator to


make minute of


the Registrar who shall make a minute in the register of companies of the dissolution of


dissolution.


such company.


Extraordinary Powers of Court


Power of


230. The court may, after it has made an order for winding up the


court to


company, summon before it any officer of the company or person known or suspected


summon persons.


to have in his possession any of the estate or effects of the company, or supposed to be


indebted to the company, or any person whom the court may deem capable of giving


information concerning the trade, dealings, estate, or effects of the company; and the court


may require any such officer or person to produce any books, papers, deeds, writings, or


other documents in his custody or power relating to the company; and if any person so


summoned, after being tendered a reasonable sum for his expenses, refuses to come before


the court at the time appointed, having no lawful impediment (made known to the court at


the time of its sitting, and allowed by it), the court may cause such person to be apprehended,


and brought before the court for examination; but, in cases where any person claims any lien


on papers, deeds, or writings or documents produced by him, such production shall be


without prejudice to such lien, and the court shall have jurisdiction in the winding up to


determine all questions relating to such lien.


Examination of


231. The court may examine upon oath, either orally or upon written


parties by


interrogatories, any person appearing or brought before it concerning the affairs,


court.


dealings, estate, or effects of the company, and may reduce into writing the answers of every


such person, and require him to subscribe the same.


Power of arrest.


232. The court may, at any time before or after it has made an order


for winding up a company, upon proof being given that there is probable cause for believing


that any contributory to such company is about to leave The Bahamas or otherwise abscond,


or to remove or conceal any of his goods or chattels, for the purpose of evading payment of


calls, or for avoiding examination in respect of the affairs of the company, cause such


contributory to be arrested, and his books, papers, monies securities for monies, goods, and


chattels to be seized, and him and them to be safely kept until such time as the court may


order.


Powers of court


233. Any powers conferred on the court by this Act shall be deemed to


cumulative.


be in addition to and not in restriction of any other powers subsisting of instituting


proceedings against any contributory, or the estate of any contributory, or against any debtor


of the company for the recovery of any call or other sums due from such contributory, or


debtor, or his estate, and such proceedings may be instituted accordingly.


Power to


234. All orders made by the court under this Act may be enforced in


enforce orders.


the same manner in which orders of such court made in any suit pending therein may be


enforced.


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Voluntary Winding Up of Company


Circumstances


235. A company incorporated under this Act may be wound up


under which


voluntarily where -


company may be


(a) the period, if any, fixed for the duration of the company by


wound up


the articles shall expire, or whenever the event, if any,


voluntarily.


shall occur, upon the occurrence of which it is provided by the


articles that the company is to be dissolved, and the members


of the company have passed a resolution requiring the


company to be wound up voluntarily;


28 of 1994.


(b) a resolution requiring the company to be wound up


voluntarily has been passed by a majority of not less than


three-fourths of such members of the company for the time


being entitled according to the articles to vote as may be


present in person or by proxy at any general meeting of which


notice specifying the intention to propose such resolution had


been duly given; or


(c) the members of the company have passed a resolution to the


effect that it has been proved to their satisfaction that the


company cannot by reason of its liabilities continue its


business, and that it is advisable to wind up the same.


Commencement


236. A voluntary winding up shall be deemed to commence at the time


of voluntary


of the passing of the resolution authorizing such winding up.


winding up.


Effect of


237. Whenever a company is wound up voluntarily the company shall,


voluntary


from the date of the commencement of such winding up, cease to carry on its business,


winding up.


except in so far as may be required for the beneficial winding up thereof, and all transfers of


shares except transfers made to or with the sanction of the liquidators, or alteration in the


status of the members of the company taking place, after the commencement of such winding


up are void, but its corporate state and all its corporate powers shall, notwithstanding it is


otherwise provided by its regulations, continue until the affairs of the company are wound


up.


Notice of


238. Notice of any resolution passed for winding up a company


resolution to


voluntarily shall be published in the Gazette.


wind up.


Consequences of


239. The following consequences ensue upon the voluntary winding up


voluntary


of a company -


winding up.


(a) the property of the company shall be applied in satisfaction of


its liabilities

pari passu

and, subject thereto, shall, unless it be


otherwise provided by the articles, be distributed amongst the


-88-


members according to their rights and interests in the


company;


(b) a liquidator shall be appointed for the purpose of winding up


the affairs of the company and distributing the property;


(c) the company in general meeting shall appoint such person as


it thinks fit to be the liquidator, and may fix the remuneration


to be paid to them;


(d) upon the appointment of a liquidator, all the powers of the


directors shall cease, except in so far as the company in


general meeting may approve the continuance of such powers;


(e) if several liquidators are appointed, every power hereby given


may be exercised by such one or more of them as may be


determined at the time of their appointment, or in default of


such determination by any number not less than two;


(f) a liquidator may, without the approval of the court, exercise


all powers by this Act given to the official liquidator;


(g) a liquidator may exercise the powers given to the court of


settling the list of contributories of the company, and any list


so settled shall be prima facie evidence of the liability of the


persons named therein to be contributories.


Special powers


240. (1) A liquidator may at any time after the passing of the resolution for


and duties


winding up the company, and before they have ascertained the sufficiency of the assets


of liquidator.


of the company, call on all or any of the contributories for the time being settled on the list of


contributories to the extent of their liability to pay all or any sums they deem necessary to satisfy the


debts and liabilities of the company, and the costs, charges, and expenses of winding it up, and for


the adjustment of the rights of the contributories amongst themselves; and the liquidators may in


making a call take into consideration the probability that some of the contributories upon whom the


same is made may partly or wholly fail to pay their respective portions of the same.


(2) A liquidator shall pay the debts of the company, and adjust the


rights of the contributories amongst themselves.


(3) Until the affairs of the company are completely wound up, a


liquidator shall keep both the members of the company and the Registrar informed of the


state of affairs of the company by filing with the Registrar periodic statements of receipts and


disbursements and such statements shall be made available to the members.


Effect of


241. Where a company limited by guarantee, and having a capital


winding up on


divided into shares, is being wound up voluntarily, any share capital that may not have


share capital


been called up shall be deemed to be assets of the company, and to be a specialty debt


of company


due from each member to the company to the extent of any sums that may be unpaid on


limited by


any shares held by him, and payable at such time as may be appointed by the liquidator.


-89-


guarantee.


Power of


242. A company about to be wound up voluntarily, or in the course of


company to


being wound up voluntarily, may by resolution, delegate to its creditors, or to any


delegate


committee of its creditors the power of appointing liquidators, or any of them, and


authority to


supplying any vacancies in the appointment of liquidators or may by a like resolution


appoint


enter into any arrangement with respect to the powers to be exercised by the liquidators,


liquidator.


and the manner in which they are to be exercised; and any act done by the creditors pursuant


to such delegated power, has the same effect as if it had been done by the company.


Arrangement


243. Any arrangement entered into between a company about to be


when binding


wound up voluntarily and its creditors is binding on the company if approved by


on creditors.


a resolution of its members, and on the creditors if acceded to by three-fourths in number and


value of the creditors if acceded to by such right of appeal in accordance with section 244.


Power of


244. Any creditor or contributory of a company that has entered into


creditor or


any arrangement with its creditors may, within three weeks from the date of the


contributory


completion of such arrangement, appeal to the court against such arrangement, and the


to appeal.


court may thereupon, as it thinks just, amend, vary, or confirm any such arrangement.


Power of


245. Where a company is being wound up voluntarily the liquidators or


liquidators or


any contributory of the company may apply to the court to determine any question arising


contributories


in the matter of such winding up, or to exercise, as respects the enforcing of calls, or in


in voluntary


respect of any other matter, all or any of the powers which the court might exercise if


winding up to


the company were being wound up by the court; and the court if satisfied that the


apply to


determination of such question, or the required exercise of power will be just and


court.


beneficial, may accede, wholly, or partially, to such application, on such terms and subject


to such conditions as the court thinks fit, or it may make such other order, interlocutor, or


decree on such application as the court thinks just.


Power of


246. Where a company is being wound up voluntarily, the liquidator


liquidator


may from time to time during the continuance of such winding up summon general


to call


meetings of the company for the purpose of obtaining the approval of the company by


general


resolution or for any other purposes they think fit; and in the event of the winding up


meeting.


continuing for more than one year the liquidator shall summon a general meeting of the


company at the end of the first year of each succeeding year from the commencement of the


winding up or as soon thereafter as may be convenient and shall lay before such meeting an


account showing their acts and dealings and the manner in which the winding up has been


conducted during the preceding year.


Power to


247. If any vacancy occurs in the office of liquidator appointed by the


fill vacancy


company by death, resignation, or otherwise, the company in general meeting may,


of liquidator.


subject to any arrangement they may have entered into with their creditors fill such vacancy, and a


general meeting for the purpose of filling such vacancy may be convened by the continuing


liquidators, if any, or by any contributory of the company, and shall be deemed to have been duly


-90-


held if held in manner prescribed by the articles of the company, or in such other manner as may, on


application by the continuing liquidator, if any, or by any contributory of the company, be


determined by the court.


Power of


248. If there is no liquidator acting in the case of a voluntary winding


court to


up, the court may, on the application of a contributory, appoint a liquidator; and the


appoint


court may, on due cause shown, remove any liquidator, and appoint another liquidator


liquidators.


to act in the matter of a voluntary winding up.


Liquidators on


249. (1) As soon as the affairs of the company are fully wound up, the


conclusion of


liquidator shall make up an account showing the manner in which such winding up has


winding up


been conducted, and the property of the company disposed of; and they shall call a


to make up


general meeting of the company for the purpose of having the account laid before them


an account.


and hearing any explanation that may be given by the liquidator.


(2) The meeting shall be called by advertisement, specifying the time,


place and object of such meeting; and such advertisement shall be published one month, at


least, prior to the meeting.


Liquidator to


250. (1) The liquidator shall make a return to the Registrar of such meeting


report


having been held, and of the date at which the same was held, and on the expiration of


meeting to


three months from the date of the registration of such return the company shall be


Registrar.


deemed to be dissolved.


(2) Notification of a dissolution shall be notified in the Gazette and in


any local newspaper as the Registrar shall determine.


Costs of


251. All costs, charges, and expenses properly incurred in the voluntary


voluntary


winding up of a company, including the remuneration of the liquidators, shall be payable


liquidation.


out of the assets of the company in priority to all other claims.


Saving of


252. The voluntary winding up of a company does not constitute a bar


rights of


to the right of any creditor or contributory of such company to have the same wound up


creditors.


by the court, if the court is of the opinion that the rights of such creditor or contributory will


be prejudiced by a voluntary winding up.


Power of court


253. Where a company is in the course of being wound up voluntarily,


to adopt


and proceedings are taken for the purpose of having the same wound up by the court, the


proceedings of


court may, if it thinks fit, notwithstanding that it makes an order directing the company


voluntary


to be wound up by the court, provide in such order or in any other order for the adoption


winding up.


of all of any of the proceedings taken in the course of the voluntary winding up.


Winding up subject to the Supervision


of the Court


Power of court


254. When a resolution has been passed by a company to wind up


on application


voluntarily, the court may make an order directing that the voluntary winding up should


to direct


continue, but subject to such supervision of the court, and with such liberty for creditors,


-91-


winding up


contributories, or others, to apply to the court, and generally upon such terms and subject


subject to


to such conditions as the court thinks just.


supervision.


Petition for


255. A petition, praying wholly or in part that a voluntary winding up


winding up


should continue, but subject to the supervision of the court, and which winding up is


subject to


hereinafter referred to as a winding up subject to the supervision of the court, shall,


supervision.


for the purpose of giving jurisdiction to the court over suits and actions, be deemed to be a


petition for winding up the company by the court.


Court may


256. (1) Subject to subsection (2), the court may, in determining whether


have regard


a company is to be wound up altogether by the court or subject to the supervision of the


to wishes


court, in the appointment of liquidators, and in all other matters relating to the winding


of creditors.


up subject to supervision, have regard to the wishes of the creditors or contributories as


proved to it by any sufficient evidence, and may direct meetings of the creditors or


contributories to be summoned, held, and regulated in such manner as the court directs for


the purpose of ascertaining their wishes, and may appoint a person to act as chairman of any


such meeting, and to report the result of such meeting to the court.


(2) The court may, in the case of creditors, have regard to the value


of the debts due to each creditor and in the case of contributories to the number of votes


conferred on each contributory by the regulations of the company.


Powers of court


257. (1) Subject to subsection (2), where any order is made by the court for


to appoint


a winding up subject to the supervision of the court, the court may, in such order or in


additional


any subsequent order, appoint any additional liquidators, and any liquidator so appointed


liquidators in


by the court shall have the same powers, be subject to the same obligations, and in all


winding up


respects stand in the same position as if they had been appointed by the company.


subject to


(2) The court may from time to time remove any liquidator so


supervision.


or appointed by the court and fill any vacancy occasioned by such removal or by death or


resignation.


Effect of order


258. (1) Where an order is made for a winding up subject to the


of court for


supervision of the court, the liquidators appointed to conduct such winding up may,


winding up


subject to any restrictions imposed by the court, exercise all their powers, without the


subject to


approval or intervention of the court, in the same manner as if the company were being


supervision.


wound up altogether voluntarily; but, any order made by the court for a winding-up, subject


to the supervision of the court, shall for all purposes, including the staying of actions, suits


and other proceedings, be deemed to be an order of the court, for winding up the company


by the court, and shall confer full authority on the court to make calls, or to enforce calls


made by the liquidators, and to exercise all other powers which it might have exercised if an


order had been made for winding up the company altogether by the court.


(2) For the purposes of the construction of the provisions whereby the


court is empowered to direct any act or thing to be done to or in favour of the official


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liquidators, the expression official liquidators shall be deemed to include the liquidators


conducting the winding up, subject to the supervision of the court.


Appointment of


259. Where any order has been made for the winding up of a company


voluntary


subject to the supervision of the court, and such order is afterwards superseded by an


liquidators to


order directing the company to be wound up compulsorily, the court may in such order,


office of


or in any subsequent order, appoint the voluntary liquidators, either provisionally or


official


permanently, and either with or without the addition of any other persons, to be official


liquidators.


liquidators.


Supplemental Provisions


Dispositions


260. Where any company is being wound up by the court or subject to


after the


the supervision of the court all dispositions of the property, effects, and things in action


commencement


of the company and every transfer of shares, or alteration in the status of the members


of winding up


of the company made between the commencement of the winding up and the order for


to be rendered


winding up are, unless the court otherwise orders, void.


void.


Books of the


261. Where any company is being wound up, all books, accounts and


company to be


documents of the company and of the liquidators shall, as between the contributories of


evidence.

the company, be prima facie

evidence of the truth of all matters purporting to be therein


recorded.


Disposal of


262. Where any company has been wound up under this Act and is


books, accounts


about to be dissolved, the books, accounts and documents of the company and of the


and documents


liquidators may be disposed of as follows -


of the company.


(a) where the company has been wound up by or subject to the


supervision of the court, in such way as the court directs; and


(b) where the company has been wound up voluntarily, in such


way as the company by resolution directs; but after the lapse


of five years from the date of such dissolution, no


responsibility shall rest on the company, or the liquidators, or


anyone to whom the custody of such books, accounts and


documents have been committed, by reason that the same, or


any of them, cannot be made available to any party claiming


to be interested therein.


Inspection


263. Where an order has been made for winding up a company by the


of books.


court, or subject to the supervision of the court, the court may make such order for the


inspection by the creditors and contributories of the company of its books and papers as the


court thinks just, and any books and papers in the possession of the company may be


inspected by creditors or contributories, in conformity with the order of the court.


Power of


264. Any person to whom anything in action belonging to the company


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assignee


is assigned, in pursuance of this Act, may bring or defend any action or suit relating to


to sue.


such thing in action in his own name.


Debts to be


265. In the event of any company being wound up under this Act, all


proved.


debts payable on a contingency, and all claims against the company, present or future, certain


or contingent, ascertained or sounding only in damages, shall be admissible as proof against


the company, a just estimate being made, so far as is possible, of the value of all such debts


or claims as may be subject to any contingency or sound only in damages, or for some other


reason do not bear a certain value.


Rules to be


266. In the winding up of an insolvent company the same rules shall


observed.


prevail and be observed with regard to the respective rights of secured and unsecured


creditors and to debts provable and to the valuation of annuities and future and contingent


liabilities as are in force for the time being and all persons who in any case would be entitled


to prove for and receive dividends out of the assets of the company may come in under the


winding up and make such claims against the company as they are entitled to by virtue of this


section.


Preferential


267. (1) Notwithstanding anything contained in this Act, in a winding up


payments.


there shall be paid in priority to all other debts -


(a) all rates, taxes, assessments or impositions imposed or made


under the provisions of any Act, and having become due and


payable within twelve months next before the relevant date;


(b) all wages or salary of any clerk or servant in respect of


services rendered to the company during four months before


the relevant date;


(c) all wages of any workman or labourer in respect of services


rendered to the company during two months before the


relevant date;


(d) unless the company is being wound up voluntarily merely for


the purpose of reconstruction or of amalgamation with


another company or unless the company has at the


commencement of the winding up under a contract with


insurers with rights capable of being transferred to and vested


in the workmen, all amounts due in respect of personal injury


to workmen accured before the relevant date.


(2) The debts referred to in subsection (1) -


(a) rank equally among themselves and shall be paid in full,


unless the assets are insufficient to meet them, in which case


they shall abate in equal proportions; and


(b) so far as the assets of the company available for payment of


general creditors are insufficient to meet them, have priority


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over the claims of holders of debentures under any floating


charge created by the company, and be paid accordingly out


of any property comprised in or subject to that charge.


(3) Subject to the retention of such sums as may be necessary for the


costs and expenses of the winding up, the debts referred to in subsection (1) shall be


discharged so far as the assets are sufficient to meet them.


(4) Where any payment on account of wages or salary has been made


to any clerk, servant, workman, or labourer in the employment of a company out of money


advanced by some person for that purpose, that person shall in a winding up have a right of


priority in respect of the money so advanced and paid up to the amount by which the sum in


respect of which that clerk, servant, workman or labourer would have been entitled to priority


in the winding up has been diminished by reason of the payment having been made.


(5) In the event of a landlord or other person distraining or having


distrained on any goods or effects of the company within three months next before the date


of a winding order, the debts to which priority is given by this section shall be a first charge


on the goods or effects so distrained on, or the proceeds of the sale thereof; but in respect of


any money paid under any such charge, the landlord or other person shall have the same


rights of priority as the person to whom the payment is made.


(6) In any case in which it appears that there are numerous claims for


wages by workmen and others employed by the company, it shall be sufficient if one proof


for all such claims is made by some person on behalf of all such creditors; and such proof


shall have annexed thereto, as forming part thereof, a schedule specifying the names of the


workmen and others, and the amounts severally due to them.


(7) Any proof made in compliance with subsection (6) has the same


effect as if separate proofs had been made by each workman and others.


(8) In this section the expression “relevant date” means -


(a) in the case of a company ordered to be wound up


compulsorily which had not previously commenced to be


wound up voluntarily, the date of the winding up order; and


(b) in any other case, the date of the commencement of the


winding up.


Liquidation


268. (1) The liquidators may, with the approval of the court, where the


scheme may


company is being wound up by the court or subject to the supervision of the court, and


be approved.


by resolution of the company where the company is being wound up voluntarily, pay any classes of


creditors in full, or make such compromise or other arrangement as the liquidators may deem


expedient with creditors or persons claiming to be creditors, or persons having or alleging


themselves to have any claim, present or future, certain or contingent, ascertained or sounding only


in damages against the company, or whereby the company may be rendered liable.


(2) Where a company is being wound up in circumstances


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contemplated by subsection (1) the liquidators may, with the approval of the court,


compromise -


(a) all calls and liabilities to calls, debts, and liabilities capable of


resulting in debts;


(b) all claims, whether present or future, certain or contingent,


ascertained or sounding only in damages, subsisting or


supposed to subsist between the company and any contributory


or alleged contributory, or other debtor or person


apprehending liability to the company; and


(c) all questions in any way relating to or affecting the assets of


the company or the winding up of the company, upon the


receipt of such sums, payable at such times, and upon such


terms as may be agreed upon, with power for the liquidators


to take any security for the discharge of such debts or


liabilities, and to give complete discharges in respect of all or


any such calls, debts or liabilities.


Acceptance of


269. (1) Subject to subsection (2), where any company is proposed to be or


shares etc. as


is in the course of being wound up voluntarily, and the whole or a portion of its business


consideration


or property is proposed to be transferred or sold to another company, the liquidators of


for sale of


the first company may, with the approval of a resolution of the company by whom they


property of


were appointed, conferring either a general authority on the liquidators, or an authority


company.


in respect of any particular arrangement -


(a) receive in compensation or part compensation for such


transfer or sale shares, policies or other like interests in such


other company, for the purpose of distribution amongst


members of the company being wound up; or


(b) enter into any other arrangement whereby the members of the


company being wound up may, in lieu of receiving cash,


receive shares, policies, or other like interests, or in addition


thereto, participate in the profits of or receive any other


benefit from the purchasing company,


and any sale made or arrangement entered into by the liquidators pursuant to this section


shall be binding on the members of the company being wound up.


(2) If any member of a company being wound up who has not voted


in favour of the resolution passed by the company of which he is a member at the meeting


held for passing the resolution expresses his dissent from any such resolution in writing


addressed to the liquidators or one of them, and left at the registered office of the company


not later than seven days after the date of the meeting at which such resolution was passed,


such dissentient member may require the liquidators to do one of the following -


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(a) abstain from carrying such resolution into effect; or


(b) purchase the interest held by such dissentient member at a


price to be determined.


(3) For the purpose of subsection (2)(b) the purchase money shall be


paid before the company is dissolved, and shall be raised by the liquidators in such manner


as may be determined by resolution of members.


(4) No resolution shall be deemed invalid for the purposes of this


section by reason that it is passed antecedently to or concurrently with any resolution for


winding up the company, or for appointing liquidators; but if an order be made within a year


for winding up the company by or subject to the supervision of the court, such resolution


shall not be of any validity unless it is approved by the court.


Mode of


270. The price to be paid or the purchase of the interest of any


determining


dissentient member may be determined by agreement, but if the parties dispute about the


price.


same, such dispute shall be settled by arbitration, and for the purposes of such arbitration


Ch.168.


the provisions of The Arbitration Act shall be incorporated within this Act.


Certain


271. Where any company is being wound up by the court or subject to


attachments and


the supervision of the court, any attachment, distress, or execution put in force against


executions to


the estate or effects of the company after the commencement of the winding up is void.


be void.


Fraudulent


272. (1) Any conveyance, mortgage, delivery of goods, payment,


preference.


execution, or other act relating to property as would, if made or done by or against any


individual trader, be deemed in the event of his bankruptcy to have been made or done by


way of undue or fraudulent preference of the creditors of such traders, shall, if made or done


by or against any company, be deemed, in the event of such company being wound up under


this Act, to have been made or done by way of undue or fraudulent preference of the creditors


of such company, and is invalid accordingly.


(2) For the purposes of this section -


(a) the presentation of a petition for winding up a company in the


case of a company being wound up by the court or subject to


the supervision of the court;


(b) a resolution for winding up the company, in the case of a


voluntary winding up,


shall be deemed to correspond with the act of bankruptcy in the case of an individual trader;


and any conveyance or assignment made by any company formed under this Act of all or any


part of its estate and effects to trustees for the benefit of all or any part of its creditors is void.


Assessment of


273. Where, in the course of the winding up of any company under this


damages against


Act, it appears that any past or present director, manager, official or other liquidator, or


delinquent


any officer of such company -


directors and


(a) has misapplied or retained in his own hands or become


-97-


officers.


liable or accountable for any monies of the company; or


(b) is guilty of any misfeasance or breach of trust in relation to


the company,


the court may, on the application of any liquidator, or of any creditor or contributory of the


company, notwithstanding that the offence is one for which the offender is criminally


responsible, examine the conduct of such director, manager, or other officer and may compel


him to repay any monies so misapplied or retained, or for which he has become liable or


accountable, together with interest at such rate as the court thinks just, or to contribute such


sums of money to the assets of the company by way of compensation in respect of such


misapplication, retainer, misfeasance, or breach of trust, as the court thinks just.


Prosecution of


274. Where any order is made for winding up a company by the court


delinquent


or subject to the supervision of the court, and it appears in the course of such winding


directors in


up that any past or present director, manager, officer, or member of such company has


winding up


been guilty of any offence in relation to the company for which he is criminally


by court.


responsible, the court may, on the application of any person interested in such winding up,


or of its own motion, direct the official liquidators to refer the matter to the Attorney-General


who may institute and conduct a prosecution or prosecutions of such offence.


Prosecution of


275. Where a company is being wound up voluntarily, and it appears to


delinquent


the liquidators conducting such winding up that any past or present director, manager,


directors in


officer, or member of such company has been guilty of any offence in relation to the


voluntary


company for which he is criminally responsible, the liquidators may, refer the matter to


winding up.


the Attorney-General who may institute and conduct a prosecution or prosecutions of such


offence.


PART VIII


ADMINISTRATIVE MATTERS


Responsibility


276. (1) The Registrar has, subject to the general supervision of the


of Registrar.


Minister, the responsibility for the administration of this Act.


(2) The responsibility of the Registrar shall include -


(a) the preparation of the approved forms; and


(b) the creation and maintenance of the various registers,


that are required for the purposes of this Act.


Application for


277. The Registrar may apply to the court for directions in respect of


directions.


any matter concerning his duties under this Act.


Registrar’s seal.


278. The Minister may approve a seal for use by the Registrar in the


performance of his duties.


Delegation.


279. (1) Subject to subsection (2), the Registrar may delegate to any public


officer within his Department any of his functions under this Act.


(2) The power to delegate under subsection (1) shall not include the


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power of the Registrar to investigate any company incorporated or registered under this Act.


(3) Any delegation by the Registrar under subsection (1) shall not


prevent such functions being exercised by the Registrar and the public officer to whom the


delegation was made.


Power to


280. (1) If the Registrar has reasonable cause to suspect that the affairs of


investigate.


a company are being conducted in a fraudulent manner he may, after consultation with the


Minister, make a preliminary investigation into the company and submit his findings to the


court with a view to the company being wound up.


(2) Upon receipt of the Registrar’s findings, the court may proceed to


deal with the company in accordance with Part VII.


(3) In the exercise of his power under subsection (1), the Registrar


may, in writing, request any document from a company under investigation or from an


affiliated company, and the company shall give effect to any such request.


Removal of


281. (1) The Registrar may remove from the register of companies -


companies from


(a) a company that fails to submit any return, notice, document


Register.


or prescribed fee to the Registrar as required by this Act;


(b) a company that is dissolved;


(c) a company that has amalgamated or merged, with one or more


companies;


(d) a company that refuses to comply with any request or


direction given by the Registrar pursuant to this Act;


(e) a company whose registration is revoked or cancelled in


accordance with this Act;


(f) a company that has ceased to carry on business.


(2) Where the Registrar is of the opinion that a company is in default


with respect to any requirement as to a return, notice, document or prescribed fee, he shall


send a notice to that company advising it as to the default and stating that, unless the default


is remedied within twenty-one days after the receipt of the notice, the company shall be


removed from the register of companies.


(3) After the expiration of the time specified in the notice, the


Registrar may remove the company from the register and publish a notice of that fact in the


Gazette.


(4) Where a company is removed from the register of companies, the


Registrar may, upon receipt of an application, before the expiration of twenty years from the


publication in the Gazette of the notice aforesaid, in the approved form and upon payment


of the prescribed fee, restore the company to the register and issue a certificate in the


approved form.


Continuation of


282. Where a company is removed from the register of companies


liability.


pursuant to section 281, the liability of the company and of every director, officer or member


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of the company shall continue and may be enforced as if the company had not been removed


from the register.


Property to be


282A. Where a company is removed from the register of companies


vested in


pursuant to section 281 the company shall thereupon be dissolved and any property


Treasurer.


vested in or belonging to any such company shall thereupon vest in the Treasurer for the


24 of 1993.


benefit of The Bahamas and shall not be disposed of without the prior approval of both


Houses of Parliament signified by resolution thereof.


Re-vesting


282B. Notwithstanding anything to the contrary in section 282A, where


of company’s


a company is restored to the register of companies pursuant to an application made under


property.


section 281(4) the Minister of Finance may in his discretion on application made to him


30 of 1995.


by or on behalf of the company direct, subject to such terms and conditions as the Minister


of Finance sees fit, that any property of the company that had vested in the Treasurer upon


its removal from the Register and which has not been disposed of be re-vested in the


company and such restoration and re-vesting of property shall be as if the company was never


removed from the register.


Indemnity.


283. The Registrar and any public officer authorized by him to perform


any function under this Act shall not be liable for any act or omission performed in good


faith under this Act.


Returns to


284. Any return, notice, list of other document or information that is


Register.


required by this Act to be submitted or supplied to the Registrar shall be authenticated


by the signature of the secretary or manager or one of the directors of the company and shall


bear the seal of the company.


Certificate


284A. (1) The Registrar shall, upon request by any person, issue a certificate


of good


of good standing under his hand and seal certifying that a company incorporated or


standing.


registered under this Act is of good standing if the Registrar is satisfied that -


28 of 1994.


(a) the name of the company is on the Register;


(b) the company has paid all fees and penalties due and payable;


and


(c) the company has filed with the Registrar all documents


required to be filed under this Act, unless there are good


reasons for not doing so.


(2) The certificate of good standing issued under subsection (1) shall


contain a statement as to whether -


(a) the company has submitted to the Registrar articles of merger


or consolidation that have not yet become effective;


(b) the company has submitted to the Registrar articles of any


arrangement that have not yet become effective;


(c) the company is in the process of being wound up; or


(d) any notice has been served on the company by the Registrar


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to remove the company from the register of companies.


PART IX


CIVIL REMEDIES, CIVIL PENALTIES AND OFFENCES


Civil Remedies


Definitions.


285. In this Part -


“action” means an action under this Act;


“complainant” means -


(a) a shareholder or debenture holder or a former holder of a


share or debenture of a company;


(b) a director or an officer or former director or officer of a


company or its affiliates;


(c) any other person, who in the opinion of the court is a proper


person to institute an action under this Part.


Derivative


286. (1) Subject to subsection (2), a complainant may for the purpose of


action.


prosecuting, defending or discontinuing an action on behalf of a company apply to the court


for leave to bring an action in the name and on behalf of the company or any of its


subsidiaries or intervene in any action to which any such company or any of its subsidiaries


is a party.


(2) No action may be brought, and no intervention in an action may


be made, under subsection (1) unless the court is satisfied that -


(a) the complainant has given reasonable notice to the directors


of the company or its subsidiary of his intention to apply to


the court under subsection (1) if the directors of the company


or its subsidiary do not bring, diligently prosecute or defend,


or discontinue, the action;


(b) the complainant is acting in good faith; and


(c) it appears to be in the interests of the company or its


subsidiary that the action should be brought, prosecuted,


defended or discontinued.


(3) In respect of an action under subsection (1), the court may at any


time make any order it deems fit having regard to all the circumstances, including -


(a) an order authorizing the complainant or any other person to


control the conduct of the action;


(b) an order giving directions for the conduct of the action;


(c) an order directing that any amount adjudged payable by a


defendant in the action be paid in whole or in part, directly to


former and present shareholders or debenture holders of the


company or its subsidiary, instead of to the company or its


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subsidiary; or


(d) an order requiring the company or its subsidiary to pay


reasonable legal fees incurred by the complainant in


connection with the action.


Restraining


287. (1) A complainant may apply to the court for any order against a


oppressive


company or a director or officer of that company to restrain oppressive action.


action.


(2) If, upon an application under subsection (1), the court is satisfied


that in respect of a company or any of its affiliates -


(a) any act or omission of the company or any of its affiliates


effects a result;


(b) the business or affairs of the company or any of its affiliates


are or have been carried on or conducted in a manner; or


(c) the powers of the directors of the company or any of its


affiliates are or have been exercised in a manner,


that is oppressive or unfairly oppressive to, or that unfairly disregards the interest of, any


shareholder or debenture holder, creditor, director or officer of the company, the court may


make an order to rectify the matter complained of.


(3) In connection with an application under this section, the court


may make any interim or final order it thinks fit, including -


(a) an order restraining the conduct complained of;


(b) an order appointing a receiver or a receiver-manager;


(c) an order to regulate a company’s affairs amending its articles


or creating or amending a unanimous shareholder agreement;


(d) an order directing an issue or exchange of shares or


debentures;


(e) an order appointing directors in place of, or in addition to, all


or any of the directors then in office;


(f) an order directing a company, subject to subsection (4), or any


other person, to purchase shares or debentures of a holder


thereof;


(g) an order directing a company, subject to subsection (4), or any


other person, to pay a shareholder or debenture holder any


part of the monies paid by him for his shares or debentures;


(h) an order varying or setting aside a transaction or contract to


which a company is a party, and compensating the company


or any other party to the transaction or contract;


(i) an order requiring a company, within the time specified by the


court, to produce to the court or an interested person financial


statements in the form required by section 123 or in such


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other form as the court determines;


(j) an order compensating an aggrieved person;


(k) an order directing rectification of the registers or other records


of the company;


(l) an order liquidating and dissolving the company;


(m) an order directing the Registrar to make a preliminary


investigation into a company; or


(n) an order requiring the trial of any issue.


(4) A company may not make a payment to a shareholder under


subsection (3)(f) or (g) if there are reasonable grounds for believing that -


(a) the company is unable or would be unable to pay its liabilities


as they become due; or


(b) the realisable value of the company’s assets would thereby be


less than the aggregate of its liabilities.


(5) Nothing in this section affects an application, by petition, for the


winding up of a company under Part VII.


Limitation of


288. (1) An action brought or intervened in under this Part may not be


staying of


stayed or dismissed by reason only that it is shown that the alleged breach of duty owed


action.


to the company or its subsidiary has been or might be approved by the shareholders of the


company or its subsidiary; but evidence of approval by the shareholders may be taken into


account by the court in making an order under section 286 or 287.


(2) An action brought or intervened in under this Part may not be


stayed, discontinued, settled or dismissed for want of prosection without the approval of the


court given upon such terms as the court thinks fit; and if the court determines that the


interests of the complainant could be substantially affected by the stay, discontinuance,


settlement or dismissal, the court may order any party to the action to give notice to the


complainants.


Interim costs.


289. In an action brought or intervened in under section 286 or 287 the


court may at any time order the company or its subsidiary to pay to the complainant interim


costs, including legal fees and disbursements; but the complainant may be held account-able


for those interim costs upon the final disposition of the action.


Restraining


290. If a company or any director, officer, employee, agent, auditor,


order.


trustee, receiver, receiver-manager, or liquidator of a company does not comply with this Act, the


articles or any unanimous shareholder agreement of the company, a complainant or creditor may,


without prejudice to any other remedy under this Act, apply to the court for an order directing any


such person to comply with, or restraining any other person from acting in breach of, any provision


of this Act, the articles or unanimous shareholder agreement, as the case may be.


Appeal from


291. (1) A person aggrieved by a decision of the Registrar -


Registrar’s


(a) to refuse to file in the form submitted to him any articles


-103-


decisions.


or any other document that is required to be filed under this


Act;


(b) to register, change, reserve or revoke a name of a company;


(c) to grant any exemption that is authorized to grant under this


Act; or


(d) to refuse to do anything that he is required to do in order to


give effect to this Act,


may apply to the court for relief, and the court may, subject to subsection (2), grant such


relief as it considers appropriate having regard to all the circumstances.


(2) The court may refuse relief under this section if it is of the opinion


that the application is frivolous and vexatious.


Security


292. Where a limited liability company is plaintiff in any action, suit or


for costs.


other legal proceedings, a judge having jurisdiction in the matter may, if it appears by any


credible testimony that there is reason to believe that if the defendant is successful in his


defence the assets of the company may be insufficient to pay his costs, require sufficient


security to be given for such costs, and may stay all proceedings until such security is given.


Civil Penalties


Civil penalties.


293. (1) A company or an officer thereof that -


(a) willfully contravenes sections 12, 13, 18, 20, 21, 40(7), 42(1),


44(2), 47(2), 55, 56, 58, 60, 61, 65, 66, 112, 123, 128(2),


140(2), 141(1), 144, 152, 155(1), 155(2), 166(2) or 166(3);


(b) knowingly refuses or neglects to do anything that is required


to be done by a company under this Act; or


(c) fails to pay any fee that is due and payable under this Act,


shall be liable to a civil penalty of twenty dollars for each day or part thereof during which


the contravention, refusal or neglect continues.


(2) A director or officer of a company who knowingly permits the


contravention, refusal or neglect shall be liable to a civil penalty of twenty dollars for each


day or part thereof during which the contravention, refusal or neglect continues.


Recovery of


294. All penalties under this Act may be recovered in a court of


civil penalties.


summary jurisdiction and all such penalties when recovered shall be paid into the


Consolidated Fund.


Offences


Criminal


295. (1) When an offence is committed under this Act by a company,


liability and


whether it is incorporated or registered under this Act, and a director or officer of the


proceedings.


company knowingly authorized, permitted or acquiesced in the commission of the offence,


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the director or officer is also guilty of that offence and shall be liable to the same criminal


penalty specified for that offence.


(2) Every offence under this Act and every default, refusal or


contravention for which a penalty is provided by this Act, being an offence, default, refusal


or contravention for which no other mode of proceedings is provided shall be enforced by


summary proceedings.


Name offence.


296. A person who contravenes any requirement of this Act regarding


the name of a company is guilty of an offence and shall be liable on summary conviction to


a fine of five hundred dollars.


Establishing


297. A person who establishes, carries on or is a member of, an


prohibited


association that is prohibited by this or any other Act is guilty of an offence and


association.


shall be liable on summary conviction to a fine of five hundred dollars.


Offence


298. If any officer of a company -


regarding


(a) wilfully conceals the name of any creditor entitled to object


reduction


to a reduction of capital;


of capital.


(b) wilfully misrepresents the nature or amount of the debt or


claim of any creditor; or


(c) aids, abets or is privy to any such concealment or


misrepresentation,


he is guilty of an offence and shall be liable on conviction on information to fine of fifty


thousand dollars or to imprisonment for two years.


False return


299. A person who knowingly and wilfully makes a return for the


regarding


purpose of section 59 which is false in any material particular is guilty of an offence and


beneficial


shall be liable on summary conviction to a fine of ten thousand dollars or to


ownership of


imprisonment for two years.


shares.


False Reports


300. (1) A person who makes or assists in making a report, return, notice


and False


or other document for submission to the Registrar that -


statements.


(a) contains any untrue statement of a material fact; or


(b) omits to state a material fact required in such report, return,


notice or other document,


is guilty of an offence and shall be liable on summary conviction to a fine of ten thousand


dollars or to imprisonment for two years.


(2) A person is not guilty of an offence under subsection (1) if the


making of the untrue statement or the omission of the material fact was unknown to him and


with the exercise of reasonable diligence could not have been known to him.


(3) Where a prospectus issued after the commencement of this Act


includes any untrue statement, any person who authorized the issue of the prospectus is guilty


of an offence and shall be liable on conviction on information to a fine of fifty thousand


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dollars or to imprisonment for two years or to both such fine and imprisonment.


(4) It shall be a defence to a charge under this section for the accused


person to prove either that the statement was immaterial or that he had reasonable grounds


to believe and did, up to the time of the issue of the prospectus, believe that the statement


was true.


(5) A person shall not be deemed for the purposes of this section to


have authorized the issue of a prospectus by reason only of his having given his consent to


the inclusion therein of a statement purporting to be made by an expert.


Unsigned


301. Where any copy of a balance sheet which has not been signed as


balance


required by section 134(2) is issued, circulated or published or any copy of a balance


sheet.


sheet is issued, circulated or published without either having a copy of the auditor’s report


attached thereto or does not contain a reference to that report as is required by this section,


the company and every director, manager, secretary or other officer of the company who is


knowingly a party to the default, shall, on summary conviction, be liable to a fine of five


hundred dollars.


Insider trading.


302. (1) A person, being an insider who, within the meaning of section


157, in connection with any transaction in a share of a company or any of its affiliates, makes


use of any material confidential information for his own benefit or advantage is guilty of an


offence and shall be liable on conviction on information to a fine of fifty thousand dollars


or to imprisonment for two years or to both such fine and imprisonment.


(2) No information may be brought against a person if the transaction


took place more than two years after he has ceased to be associated with the company.


Falsification of


303. Any director, officer or contributory of a company wound up


company books


under this Act who -


etc.


(a) destroys, mutilates, alters or falsifies any books, papers,


writings or securities; or


(b) makes or is privy to the making of any false or fraudulent


entry in any register, book of account or other document


belonging to the company,


with intent to defraud or deceive any person is guilty of an offence and shall be liable on


conviction on information to imprisonment for two years.


Offences in the


304. (1) In the course of the winding up of a company under this Act any


course of


person, being a past or present officer, director, manager, official or other liquidator of


winding up.


such company commits an offence if -


(a) he does not to the best of his knowledge and belief fully and


truly discover to the liquidator all the company’s property, and


how and to whom and for what consideration and when the


company disposed of any part of that property, except such


part as has been disposed of in the ordinary way of the


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company’ business;


(b) he does not deliver up to the liquidator, or as he directs, all


such part of the company’s property as is in his custody or


under his control, and which he is required by law to deliver


up;


(c) he does not deliver up to the liquidator, or as he directs, all


books and papers in his custody or under his control


belonging to the company and which he is required by law to


deliver up;


(d) he knows or has reason to believe that a false debt has been


proved by any person in the winding up, and fails to inform


the liquidator within a reasonable time thereafter; or


(e) after the commencement of the winding up, he prevents the


production of any book or paper affecting or relating to the


company’s property or affairs.


(2) A person, being a past or present officer, director, manager,


official or other liquidator of a company commits an offence if -


(a) in the course of winding up of that company he attempts to


account for any part of the company’s property by fictitious


losses or expenses; and


(b) is deemed to have committed an offence if within twelve


months immediately preceding the commencement of the


winding up he attempted to account for any part of the


company’s property by fictitious losses or expenses.


(3) A person who is guilty of an offence under this section shall be


liable on conviction on information to a fine of fifty thousand dollars or to imprisonment for


two years or to both such fine and imprisonment.


(4) It shall be a defence -


(a) for a person charged under paragraph (a), (b) or (c) of


subsection (1) to prove that he had no intent to defraud; and


(b) for a person charged under paragraph (e) of subsection (1) to


prove that he had no intent to conceal the state of affairs of


the company or to defeat the law.


Miscellaneous


305. A person who without reasonable cause contravenes any section of


offences.


this Act for which no other penalty is provided is guilty of an offence and shall be liable on


summary conviction to a fine of ten thousand dollars or to imprisonment for two years.


Penalty of


306. Where a person -


perjury.


(a) upon an examination, oath or affirmation authorized under


this Act;


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(b) in any affidavit, deposition, or solemn affirmation in or about


the winding up of any company under this Act; or


(c) otherwise in or about any matter arising under this Act,


wilfully and corruptly gives false evidence, he is guilty of an offence and shall be liable on


conviction to the penalties for wilful perjury.


PART X


MISCELLANEOUS


Exemptions.


307. The Minister may, by order, exempt a non-profit company or a


foreign company from any requirement of this Act, if he is satisfied that such exemption


would not materially affect the objectives of the Act.


Fees.


308. (1) Subject to this section, there shall be paid to the Registrar in


Third Schedule.


respect of the several matters mentioned in the Third Schedule the several fees specified


therein.


(2) All fees paid under this section shall be placed into the


Consolidated Fund.


(3) For the purpose of assessing the fees payable under this section by


a company, no share shall be deemed to be beneficially owned by a Bahamian if -


(a) that Bahamian is in any way under an obligation to or


otherwise may exercise any right attaching to that share at the


instance of, any person who is not a Bahamian; or


(b) that share is held jointly or severally with any person who is


not a Bahamian.


(4) Notwithstanding subsection (3), a share shall be deemed to be


beneficially owned by a Bahamian if -


(a) it is owned by a Bahamian as trustee and every person having


a beneficial interest in the trust is a Bahamian;


(b) it is owned by a Bahamian as nominee for another who is a


Bahamian and no one is in any way under any obligation to or


otherwise may exercise any right attaching to the share at the


instance of, or for the benefit of, any person who is not a


Bahamian.


(5) In respect of the payment of fees -


(a) not more than thirty days’ grace, to be calculated from the 1st


of January in each year, may be allowed by the Registrar for


payment of the fee payable in any year under this Act; and


(b) no fee is payable in any year -


(i) where the memorandum was filed in respect of a


company on or after 1st July in the preceding year, or


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(ii) in respect of a non-profit company that is granted a


licence by the Minister under section 14 of this Act.


Amendment of


309. (1) The Minister may, by order, amend the Third Schedule for the


Third Schedule.


purpose of increasing or decreasing the fees specified therein and any such order which


Ch.2.


increases the fees shall be exempt from the provisions of section 31 of the Interpretation


and General Clauses Act but shall be subject to affirmative resolution of the House of


Assembly.


(2) In subsection (1) “affirmative resolution of the House of


Assembly” in relation to subsidiary legislation, means that such legislation does not come


into operation unless and until affirmed by a resolution of that House.


Rules and


310. The Minister may make rules and regulations generally in order to


regulations.


give effect to this Act.


Repeals and


311. (1) The Acts specified in the Fourth Schedule are hereby repealed.


savings.


(2) Any subordinate legislation made under any of the Acts specified


Fourth Schedule.


in the Forth Schedule shall continue in force, mutatis mutandis, until such time as


subordinate legislation for similar purposes is made under this Act.


(3) Nothing in this section shall affect -


(a) the continuation of any civil or criminal proceedings


commenced under any of the Acts specified in the Fourth


Schedule; and


(b) any liability to pay any fees or penalties under any of the Acts


specified in the Fourth Schedule.


Existing


312. (1) Subject to subjection (2), all companies existing prior to the


companies.


commencement of this Act shall not be affected by anything contained in section 311, and


shall continue to exist as private companies as if incorporated or registered, as the case may


be, under this Act but shall be liable to pay the fees specified in the Third Schedule.


(2) Where a company existing prior to the commencement of this Act


wishes to continue as a public company, it may do so but shall satisfy the requirements of


this Act regarding public companies within such time as the Minister determines.


(3) Where a company is unable to comply with the requirements of


this Act within the time determined by this Act, it may apply for an extension to the Minister,


who may grant such extension.


28 of 1994.


(4) References to “special resolution” in the articles of companies


existing prior to the commencement of this Act shall be construed as references to


“resolution of members” within the meaning of this Act.


FIRST SCHEDULE (Section 10(2))


ARTICLES OF ASSOCIATION OF


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A COMPANY LIMITED BY SHARES


PRELIMINARY


1. For the purposes of these regulations, expressions defined in the


Companies Act at the date at which these regulations become binding on the company, shall


have the meanings so defined; and words importing the singular shall include the plural, and


vice versa, and words importing the masculine gender shall include females, and words


importing persons, shall include bodies corporate.


BUSINESS


2. The directors shall have regard to the restrictions on the


commencement of business imposed by section 42 of the Companies Act if, and so far as,


those restrictions are relevant to the company.


SHARES


3. Subject to the provisions, if any, in that behalf of the


memorandum of the company and without prejudice to any special rights previously


conferred on the holders of existing shares in the company, any share in the company may


be issued with such preferred, deferred or other special rights or such restrictions, whether


in regard to dividend, voting, return of share capital or otherwise as the company may from


time to time by resolution determine.


4. Where at any time the share capital is divided into different classes


of shares, the rights attached to any class (unless otherwise provided by the terms of issue


of the shares of that class) may be varied by a resolution of directors.


5. No share shall be offered to the public for subscription except


upon the terms that the amount payable on application shall be at least five per cent of the


nominal amount of the share, and the directors shall, as regards any allotment of shares, duly


comply with such of the provisions of sections 40 and 42 of the Companies Act as may be


applicable thereto.


6. Every person whose name is entered as a member in the register


of members shall, without payment, be entitled to a certificate under the common seal of the


company specifying the share or shares held by him and the amount paid up thereon,


provided that in respect of a share or shares held jointly by several persons the company shall


not be bound to issue more than one certificate, and delivery of a certificate for a share to one


of several joint holders shall be sufficient delivery to all.


7. A share certificate defaced, lost or destroyed may be renewed on


payment of such fee, if any, as may be prescribed, and on such terms, if any, as to evidence


and indemnity as the directors think fit.


8. No part of the funds of the company shall be employed in the


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purchase of, or in loans upon the security of, the company’s shares.


LIEN


9. The company shall have a lien on every share (not being a fully


paid-up share) for all moneys (whether presently payable or not) called or payable at a fixed


time in respect of that share, and the company shall also have a lien on all shares (other than


fully paid-up shares) standing registered in the name of a single person, for all moneys


presently payable by him or his estate to the company, but the directors may at any time


declare any share to be wholly or in part exempt from the provisions of this clause. The


company’s lien, if any, on a share shall extend to all dividends payable thereon.


10. The company may sell, in such manner as the directors think fit,


any shares on which the company has a lien, but no sale shall be made unless some sum in


respect of which the lien exists is presently payable, nor until the expiration of fourteen days


after a notice in writing, stating and demanding payment of such part of the amount in


respect of which the lien exists as is presently payable, has been given to the registered


holder for the time being of the share or the person entitled by reason of his death or


bankruptcy to the share.


11. The proceeds of the sale shall be applied in payment of such part


of the amount in respect of which the lien exists as is presently payable, and the residue shall


(subject to a like lien for sums not presently payable as existed upon the shares prior to the


sale) be paid to the person entitled to the shares at the date of the sale. The purchaser shall


be registered as the holder of the shares and he shall not be bound to see to the application


of the purchase money, nor shall his title to the shares be affected by any irregularity or


invalidity in the proceedings in reference to the sale.


12. The joint holders of a share shall be jointly and severally liable to


pay all calls in respect thereof.


13. Where a sum called in respect of a share is not paid before or on


the day appointed for payment thereof, the person from whom the sum is due shall pay


interest upon the sum at the current prime rate of interest from the day appointed for the


payment thereof to the time of the actual payment, but the directors may waive payment of


that interest wholly or in part.


14. The provisions of these regulations as to payment of interest shall


apply in the case of non-payment of any sum which, by the terms of issue of a share,


becomes payable at a fixed time, whether on account of the amount of the share or by way


of premium, as if the same had become payable by virtue of a call duly made and notified.


15. The directors may make arrangements on the issue of shares for


a difference between the holders in the amount of calls to be paid and in the times of


payment.


16. The directors may, if they think fit, receive from any member


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willing to advance the same all or any part of the moneys uncalled and unpaid upon any


shares held by him; and upon all or any of the moneys so advanced may (until the same


would but for such advance become presently payable) pay interest at such rate (not


exceeding, without the sanction of the company in general meeting, six per cent) as may be


agreed upon between the member paying the sum in advance and the directors.


TRANSFER AND TRANSMISSION OF SHARES


17. The instrument of transfer of any share in the company shall be


executed both by the transferor and transferee, and the transferor shall be deemed to remain


a holder of the share until the name of the transferee is entered in the register of members in


respect thereof.


18. Shares in the company shall be transferred in the following form,


or in any usual or common form which the directors shall approve:


I,A.B. of in consideration of the sum of $ paid to me by C.D.


of (hereinafter called “the said transferee”) do hereby transfer to


the said transferee, the share (or shares) numbered in the undertaking


called the Company Limited, to hold unto the said transferee,


his executors, administrators and assigns, subject to the several conditions on


which I held the same at the time of the execu-tion thereof: and I, the said


transferee, do hereby agree to take the said share (or shares) subject to the


conditions aforesaid. As witness our hands the day of


Witness to the signatures of etc.


19. The directors may decline to register any transfer of shares, not


being fully paid-up shares, to a person of whom they do not approve and may also decline


to register any transfer of shares on which the company has a lien. The directors may also


suspend the registration of transfers during the fourteen days immediately preceding the


ordinary general meeting in each year. The directors may decline to recognise any instrument


of transfer unless -


(a) any prescribed fee is paid to the company in respect thereof;


and


(b) the instrument of transfer is accompanied by the certificate of


the shares to which it relates, and such other evidence as the


directors may reasonably require to show the right of the


transferor to make the transfer.


20. The executors or administrators of a deceased sole holder of a


share shall be the only persons recognised by the company as having any title to the share.


In the case of a share registered in the names of two or more holders, the survivors or the


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executors or administrators of the deceased survivor shall be the only persons recognised by


the company as having any title to the share.


21. Any person becoming entitled to a share in consequence of the


death or bankruptcy of a member shall, upon such evidence being produced as may from


time to time be required by the directors, having the right, either to be registered as a member


in respect of the share or, instead of being registered himself, to make such transfer of the


share as the deceased or bankrupt person could have made; but the directors shall, in either


case, have the same right to decline or suspend registration as they would have had in the


case of a transfer of the share by the deceased or bankrupt person before the death or


bankruptcy.


22. A person becoming entitled to a share by reason of the death or


bankruptcy of the holder shall be entitled to the same dividends and other advantages to


which he would be entitled if he were the registered holder of the share, except that he shall


not, before registered as a member in respect of the share, be entitled in respect of it to


exercise any right conferred by membership in relation to meetings of the company.


FORFEITURE OF SHARES


23. Where a member fails to pay any call or instalment of a call on the


day appointed for payment thereof, the directors may, at any time thereafter during such time


as any part of such call or instalment remains unpaid, serve a notice on him requiring


payment of so much of the call or instalment as is unpaid, together with any interest which


may have accured.


24. The notice shall name a further day not earlier than the expiration


of fourteen days from the date of the notice on or before which the payment required by the


notice is to be made and shall state that in the event of non-payment at or before the time


appointed the shares in respect of which the call was made will be liable to be forfeited.


25. Where the requirements of any such notice are not complied with,


any share in respect of which the notice has been given may at any time thereafter, before


the payment required by the notice has been made, be forfeited by a resolution of the


directors to that effect.


26. A forfeited share may be sold or otherwise disposed of on any


such terms and in such manner as the directors thinks fit,and at any time before a sale or


disposition the forfeiture may be cancelled on such terms as the directors think fit.


27. A person whose shares have been forfeited shall cease to be a


member in respect of the forfeited shares but shall, notwithstanding, remain liable to pay to


the company all moneys which, at the date of forfeiture, were presently payable by him to the


company in respect of the shares, but his liability shall cease if and when the company


receives payment in full of the nominal amount of the shares.


28. A statutory declaration in writing that the declarant is a director of


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the company and that a share in the company has been duly forfeited on a date stated in the


declaration shall be conclusive evidence of the facts therein stated, as against all persons


claiming to be entitled to the share, and that declaration, and the receipt of the company for


the consideration, if any, given for the share on the sale or disposition thereof, shall


constitute a good title to the share and the person to whom the share is sold or disposed of


shall be registered as the holder of the share and shall not be bound to see to the application


of the purchase money, if any, nor shall his title to the share be affected by any irregularity


or invalidity in the proceedings in reference to the forfeiture, sale, or disposal of the share.


29. The provisions of these regulations as to forfeiture shall apply in


the case of non-payment of any sum which by the terms of issue of a share becomes pay-able


at a fixed time, whether on account of the amount of the share or by way of pre-mium, as if


the same had been payable by virtue of a call duly made and notified.


CONVERSION OF SHARES INTO STOCK


30. The directors may, with the approval of the company previously


given in general meeting, convert any paid-up shares into stock and may with the like


approval re-convert any stock into paid-up shares of any denomination.


31. The holders of stock may transfer the same or any part thereof in


the same manner and subject to the same regulations as and subject to which the shares from


which the stock arose might previously to conversion have been transferred or as near thereto


as circumstances admit; but the directors may from time to time fix the minimum amount of


stock transferable and restrict or forbid the transfer of fractions of that minimum, but the


minimum shall not exceed the nominal amount of the shares from which the stock arose.


32. The holders of stock shall, according to the amount of the stock


held by them, have the same rights, privileges and advantages as regards dividends, voting


at meetings of the company and other matters, as if they held the shares from which the stock


arose, but no such privilege or advantage (except participation in the dividends and profits


of the company) shall be conferred by any such aliquot part of stock as would not if existing


in shares, have conferred that privilege or advantage.


33. Such of the regulations of the company (other than those relating


to share warrants) as are applicable to paid-up shares shall apply to stock, and the words


“share” and “shareholder” therein include “stock” and “stockholder”.


SHARE WARRANTS


34. The company may issue share warrants, and accordingly the


directors may in their discretion, with respect to any share which is fully paid-up, on


application in writing signed by the person registered as holder of the share and authenticated


by such evidence, if any, as the directors may from time to time require as to the identity of


the person signing the request, and on receiving the certificate, if any, of the share and such


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fee as the directors may from time to time require, issue under the company’s seal a warrant,


stating that the bearer of the warrant is entitled to the shares therein specified and may


provide by coupons, or otherwise, for the payment of dividends or other moneys on the


shares included in the warrant.


35. A share warrant shall entitle the bearer to the shares included in it,


and the shares shall be transferred by the delivery of the share warrant, and the provisions of


the regulations of the company with respect to transfer and transmission of shares shall not


apply thereto.


36. The bearer of a share warrant shall, on surrender of the warrant


to the company for cancellation and on payment of such sum as the directors may from time


to time prescribe, be entitled to have his name entered as a member in the register of


members in respect of the shares included in the warrant.


37. The bearer of a share warrant may at any time deposit the warrant


at the office of the company, and so long as the warrant remains so deposited the depositor


shall have the same right of signing a requisition for calling a meeting of the company, and


of attending and voting and exercising the other privileges of a member at any meeting held


after the expiration of two clear days from the time of deposit, as if his name were inserted


in the register of members as the holder of the shares included in the deposited warrant. Not


more than one person shall be recognised as depositor of the share warrant. The company


shall, on two days’ written notice, return the deposited share warrant to the depositor.


38. Subject as herein otherwise expressly provided, no person shall, as


bearer of a share warrant, sign a requisition for calling a meeting of the company, or attend


or vote or exercise any other privilege of a member at a meeting of the company or be


entitled to receive any notices from the company; but the bearer of a share warrant shall be


entitled in all other respects to the same privileges and advantages as if he were named in the


register of members as the holder of the shares included in the warrant, and he shall be a


member of the company.


39. The directors may from time to time make rules as to the terms on


which (if they shall think fit) a new share warrant or coupon may be issued by way of


renewal in case of defacement, loss, or destruction.


ALTERATION OF CAPITAL


40. The company may, by a resolution of shareholders, increase the


share capital by such sum to be divided into shares of such amount as the resolution shall


prescribe.


41. (1) All new shares shall, before issue, be offered to such persons as


at the date of the offer are entitled to receive notices from the company of general meetings


in proportion, as nearly as the circumstances admit, to the amount of the existing shares to


which they are entitled.


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(2) The offer shall be made by notice specifying the number of shares


offered and limiting a time within which the offer, if not accepted, will be deemed to be


declined, and after the expiration of that time or on the receipt of an intimation from the


person to whom the offer is made that he declines to accept the shares offered, the directors


may dispose of the same in such manner as they think most beneficial to the company.


(3) The directors may likewise so dispose of any new shares which


(by reason of the ratio which the new shares bear to shares held by persons entitled to an


offer of new shares) cannot, in the opinion of the directors, be conveniently offered under


this article.


42. The new shares shall be subject to the same provisions with


reference to the payment of calls, lien, transfer, transmission, forfeiture and otherwise, as the


shares in the original share capital.


43. The company may, by resolution of directors -


(a) consolidate and divide its share capital into shares of larger


amount than its existing shares;


(b) subdivide its existing shares, or any of them or divide the


whole or any part of its share capital into shares of smaller


amount than is fixed by the memorandum;


(c) cancel any shares which, at the date of the passing of the


resolution, have not been taken or agreed to be taken by any


person;


(d) reduce its share capital in any manner and with and subject to


any incident authorised and consent required by law.


GENERAL MEETINGS


44. The statutory general meeting of the company shall be held within


the period required by section 70 of the Companies Act.


45. (1) A general meeting shall be held once in every year at such time


(not being more than fifteen months after the holding of the last preceding general meeting)


and place as may be prescribed by the company in general meeting, or, in default, at such


time in the month following that in which the anniversary of the company’s incorporation


occurs, and at such place, as the directors shall appoint.


(2) In default of a general meeting being so held, a general meeting


shall be held in the month next following and may be convened by any two members in the


same manner as nearly as possible as that in which meetings are to be convened by the


directors.


46. The above-mentioned general meetings shall be called ordinary


meetings; all other general meetings shall be called extraordinary.


47. (1) The directors may, whenever they think fit, convene an


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extraordinary general meeting, and extraordinary general meetings shall also be convened


on such requisition, or, in default, may be convened by such requisitionists, as provided by


section 71 of the Companies Act.


(2) Where at any time there are not in The Bahamas sufficient


directors capable of acting to form a quorum, any director or any two members of the


company may convene any extraordinary general meeting in the same manner as nearly as


possible as that in which meetings may be convened by the directors.


PROCEEDINGS AT GENERAL MEETINGS


48. Seven days’ notice at the least (exclusive of the day on which the


notice is served or deemed to be served, but inclusive of the day for which notice is given)


specifying the place, the day and the hour of meeting and, in case of special business, the


general nature of that business, shall be given in the manner hereinafter mentioned, or in such


other manner, if any, as may be prescribed by the company in general meeting, to such


persons as are under the regulations of the company entitled to receive such notices from the


company; but the non-receipt of the notice by any member shall not invalidate the


proceedings at any general meeting.


49. All business shall be deemed special that is transacted at an


extraordinary meeting, and all that is transacted at an ordinary meeting with the exception


of sanctioning a dividend, the consideration of the accounts, balance-sheets and the ordinary


report of the directors and auditors, election of directors and other officers in the place of


those retiring by rotation and the fixing of the remuneration of the auditors.


50. No business shall be transacted at any general meeting unless a


quorum of members is present at the time when the meeting proceeds to business; save as


herein otherwise provided, three members personally present shall be a quorum.


51. Where within half an hour from the time appointed for the meeting


a quorum is not present, the meeting, if convened upon the requisition of members, shall be


dissolved; in any other case it shall stand adjourned to the same day in the next week, at the


same time and place, and, where at the adjourned meeting a quorum is not present within half


an hour from the time appointed for the meeting, the members present shall be a quorum.


52. The chairman, if any, of the board of directors shall preside as


chairman at every general meeting of the company.


53. Where there is no such chairman or at any meeting he is not


present within fifteen minutes after the time appointed for holding the meeting or is


unwilling to act as chairman, the members present shall choose some one of their number to


be chairman.


54. (1) The chairman may, with the consent of any meeting at which a


quorum is present (and shall if so directed by the meeting), adjourn the meeting from time


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to time and from place to place, but no business shall be transacted at any adjourned meeting


other than the business left unfinished at the meeting from which the adjournment took place.


(2) When a meeting is adjourned for ten days or more, notice of the


adjourned meeting shall be given as in the case of an original meeting.


(3) Save as aforesaid, it shall not be necessary to give any notice of


an adjournment or of the business to be transacted at an adjourned meeting.


55. At any general meeting a resolution put to the vote of the meeting


shall be decided on a show of hands, unless a poll is (before or on the declaration of the


result of the show of hands) demanded by at least three members and unless a poll is so


demanded, a declaration by the chairman that a resolution has, on a show of hands, been


carried or carried unanimously or by a particular majority or lost, and an entry to that effect


in the book of the proceedings of the company, shall be conclusive evidence of the fact,


without proof of the number or proportion of the votes recorded in favour of or against that


resolution.


56. If a poll is duly demanded it shall be taken in such manner as the


chairman directs, and the result of the poll shall be deemed to be the resolution of the


meeting at which the poll was demanded.


57. In the case of an equality of votes, whether on a show of hands or


on a poll, the chairman of the meeting at which the show of hands takes place or at which the


poll is demanded shall be entitled to a second or casting vote.


58. A poll demanded on the election of a chairman, or on a question


of adjournment, shall be taken forthwith; a poll demanded on any other question shall be


taken at such time as the chairman of the meeting directs.


VOTES OF MEMBERS


59. On a show of hands every member present in person shall have


one vote. On a poll every member shall have one vote for each share of which he is the


holder.


60. In the case of joint holders the vote of the senior who tenders a


vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the


other joint holders; and for this purpose seniority shall be determined by the order in which


the names stand in the register of members.


61. A member of unsound mind, or in respect of whom an order has


been made by any court having jurisdiction with respect to persons of unsound mind, may


vote, whether on a show of hands or on a poll, by his committee or other person in the nature


of a committee appointed by that court, and any such committee or other person may, on a


poll, vote by proxy.


62. No member shall be entitled to vote at any general meeting unless


all calls or other sums presently payable by him in respect of shares in the company have


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been paid.


63. On a poll votes may be given either personally or by proxy.


64. (1) The instrument appointing a proxy shall be in writing under the


hand of the appointer or his attorney duly authorised in writing or, if the appointer is a


corporation, either under the common seal or under the hand of an officer or attorney so


authorised.


(2) No person shall act as proxy unless either he is entitled on his own


behalf to be present and vote at the meeting at which he acts as proxy or he has been


appointed to act at the meeting as proxy for a corporation.


65. The instrument appointing a proxy and the power of attorney or


other authority, if any, under which it is signed or a certified copy of that power or authority


shall be deposited at the registered office of the company not less than forty-eight hours


before the holding of the meeting at which the person named in the instrument proposes to


vote, and in default the instrument of proxy shall not be treated as valid.


66. An instrument appointing a proxy may be in the following form or


in any other form which the directors may approve:


Company Limited.


“I of being a member of the Company Limited, hereby


appoint of as my proxy to vote for me and on my behalf


at the (ordinary or extraordinary, as the case may be) general meeting of the company


to be held on the day of and at any adjournment thereof.”


Signed this day of


DIRECTORS


67. The number of the directors and the names of the first directors


shall be determined in writing by the subscribers of the memorandum.


POWERS AND DUTIES OF DIRECTORS


68. The business of the company shall be managed by the directors,


who may pay all expenses incurred in getting up and registering the company, and may


exercise all such powers of the company as are not by the Companies Act or by these articles,


required to be exercised by the company in general meeting, subject nevertheless to any


regulation of these articles, to the Companies Act and to such regulations, being not


inconsistent with the aforesaid regulations or provisions, as may be prescribed by the


company in general meeting, but no regulation made by the company in general meeting shall


invalidate any prior act of the directors which would have been valid if that regulation had


not been made.


69. The directors may from time to time appoint one or more of their


body to the office of managing director or manager for such term and at such remuneration


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(whether by way of salary or commission or participation in profits, or partly in one way and


partly in another) as they may think fit, and a director so appointed shall not, while holding


that office, be subject to retirement by rotation or taken into account in determining the


rotation of retirement of directors; but his appointment shall be subject to determination


ipso


facto


if he ceases from any cause to be director of the company in general meeting resolve


that his tenure of the office of managing director or manager be determined.


70. The amount for the time being remaining undischarged of moneys


borrowed or raised by the directors for the purposes of the company (otherwise than by the


issue of share capital) shall not at any time exceed the issued share capital of the company


without the sanction of the company in general meeting.


71. The directors shall duly comply with the Companies Act and in


particular with the provisions in regard to the registration of the particulars of mortgages and


charges affecting the property of the company or created by it and to keeping a register of the


directors, and to sending to the Registrar an annual list of members and a summary of


particulars relating thereto and notice of any consolidation or increase of share capital or


conversion of shares into stock and copies of special resolutions and a copy of the register


of directors and notifications of any changes therein.


72. The directors shall cause minutes to be made in books provided for


the purpose -


(a) of all appointments of officers made by the directors;


(b) of the names of the directors present at each meeting of the


directors and of any committee of the directors; and


(c) of all resolution and proceedings at all meetings of the


company and of the directors and of committees of directors,


and every director present at any meeting of directors or committee of directors shall sign his


name in a book to be kept for that purpose.


THE SEAL


73. The seal of the company shall not be affixed to any instrument


except by the authority of a resolution of the directors, and in the presence of at least two


directors and of the secretary of such other person as the directors may appoint for the


purpose; and those two directors and secretary or other person as aforesaid shall sign every


instrument to which the seal of the company is so affixed in their presence.


ROTATION OF DIRECTORS


74. At the first ordinary meeting of the company all directors shall


retire from office, and at the ordinary meeting every subsequent year, one-third of the


directors for the time being or, if their number is not three or a multiple of three, then the


number nearest to the one-third, shall retire from office.


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75. The directors to retire in every year shall be those who have been


longest in office since their last election, but as between persons who become directors on


the same day, those to retire shall (unless they otherwise agree among themselves) be


determined by lot.


76. A retiring director shall be eligible for re-election.


77. The company at the general meeting at which a director retires


in the manner aforesaid may fill the vacated office by electing a person thereto.


78. Where at any meeting at which an election of directors ought to


take place the places of the vacating directors are not filled, the meeting shall stand adjourned


till the same day in the next week at the same time and place, and if at the adjourned meeting


the places of the vacating directors are not filled, the vacating directors, or such of them as


have not had their places filled, shall be deemed to have been re-elected at the adjourned


meeting.


79. The company may from time to time in general meeting increase


or reduce the number of directors and may also determine in what rotation the increased or


reduced number is to go out of office.


80. Any casual vacancy occurring in the board of directors may be


filled by the directors, but the person so chosen shall be subject to retirement at the same


time as if he had become a director on the day on which the director in whose place he is


appointed was last elected a director.


81. The directors shall have power at any time and from time to time


to appoint a person as an additional director who shall retire from office at the next following


ordinary general meeting but shall be eligible for election by the company at that meeting as


an additional director.


82. The company may by resolution -


(a) remove any director before the expiration of his period of


office; and


(b) appoint another person in place of the director removed in


accordance with paragraph (a),


but the person so appointed shall be subject to retirement at the same time as if he had


become a director on the day on which the director in whose place he is appointed was last


elected a director.


PROCEEDINGS OF DIRECTORS


83. (1) The directors may meet together for the dispatch of business,


adjourn and otherwise regulate their meetings, as they think fit.


(2) Questions arising at any meeting shall be decided by a majority of


votes. In case of an equality of votes the chairman shall have a second or casting vote.


(3) A director may, and the secretary on the requisition of a director


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shall, at any time summon a meeting of the directors.


84. The quorum necessary for the transaction of the business of the


directors may be fixed by the directors and unless so fixed shall (when the number of


directors exceeds three) be three.


85. The continuing directors may act notwithstanding any vacancy in


their body, but, if and so long as their number is reduced below the number fixed by or


pursuant to the regulations of the company as the necessary quorum of directors, the


continuing directors may act for the purpose of increasing the number of directors to that


number or of summoning a general meeting of the company, but for no other purpose.


86. The directors may elect a chairman of their meetings and


determine the period for which he is to hold office; but if no such chairman is elected or if


at any meeting the chairman is not present within five minutes after the time appointed for


holding the same, the directors present may choose one of their number to be chairman of


the meeting.


87. The directors may delegate any of their powers to committees


consisting of such members or members of their body as they think fit; any committee so


formed shall in the exercise of the powers so delegated conform to any regulations that may


be imposed on them by the directors.


88. A committee may elect a chairman of their meetings; if no such


chairman is elected or if at any meeting the chairman is not present within five minutes after


the time appointed for holding the same, the members present may choose one of their


number to be chairman of the meeting.


89. (1) A committee may meet and adjourn as they think proper.


(2) Questions arising at any meeting shall be determined by a majority


of votes of the members present, and in case of an equality of votes the chairman shall have


a second or casting vote.


90. All acts done by any meeting of the directors or of a committee of


directors, or by any person acting as a director, shall, notwithstanding that it be afterwards


discovered that there was some defect in the appointment of any such directors or persons


so acting or that they or any of them were disqualified, be as valid as if every such person had


been duly appointed and was qualified to be a director.


DIVIDENDS AND RESERVE


91. Subject to the Companies Act the company in general meeting may


declare dividends, but no dividend shall exceed the amount recommended by the directors.


92. The directors may from time to time pay to the members such


interim dividends as appear to the directors to be justified by the profits of the company.


93. No dividend shall be paid otherwise than out of profits.


94. Subject to the rights of persons, if any, entitled to shares with


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special rights as to dividends, all dividends shall be declared and paid according to the


amounts paid-up on the shares, but if and so long as nothing is paid-up on any of the shares


in the company dividends may be declared and paid according to the amounts of the shares.


No amount paid-up on a share in advance of calls shall, while carrying interest, be treated for


the purposes of this article as paid-up on the shares.


95. The directors may, before recommending any dividend, set aside


out of the profits of the company such sums as they think proper as a reserve or reserves


which shall, at the discretion of the directors, be applicable for meeting contingencies or for


equalising dividends or for any other purpose to which the profits of the company may be


properly applied, and pending such application may, at the like discretion, either be employed


in the business of the company or be invested in such investments (other than shares of the


company), as the directors may from time to time think fit.


96. Where several persons are registered as joint holders of any share


any one of them may give effectual receipts for any dividend payable on the share.


97. Notice of any dividend that may have been declared shall be given


in the manner hereinafter mentioned to the persons entitled to share therein.


98. No dividend shall bear interest against the company.


ACCOUNTS


99. The directors shall cause true accounts to be kept -


(a) of the sums of money received and expended by the company


and the matter in respect of which such receipt and


expenditure takes place; and


(b) of the assets and liabilities of the company.


100. The books of account shall be kept at the registered office of the


company or at such other place or places as the directors think fit and shall always be open


to the inspection of the directors.


101. The directors shall from time to time determine whether and to


what extent and at what times and places and under what conditions or regulations the


accounts and books of the company or any of them shall be open to the inspection of


members not being directors, and no member (not being a director) shall have any right of


inspecting any account or book or document of the company except as conferred by statute


or authorised by the directors or by the company in general meeting.


102. Once at least in every year the directors shall lay before the


company in general meeting a profit and loss account for the period since the preceding


account or (in the case of the first account) since the incorporation of the company, made up


to a date not more than six months before such meeting.


103. (1) A balance-sheet shall be made out in every year and laid before


the company in general meeting made up to a date not more than six months before such


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meeting.


(2) The balance-sheet shall be accompanied by a report of the


directors as to the state of the company’s affairs and the amount which they recommend to


be paid by way of dividend and the amount, if any, which they propose to carry to a reserve


fund.


104. A copy of the balance-sheet and report shall, seven days previous


to the meeting, be sent to the persons entitled to receive notices of general meetings in the


manner in which notices are to be given hereunder.


NOTICES


105. (1) A notice may be given by the company to any member either


personally or by sending it by post to him to his registered address, or if he has no registered


address in The Bahamas to the address, if any, within The Bahamas supplied by him to the


company for the giving of notices to him.


(2) Where a notice is sent by post, service of the notice shall be


deemed to be effected by properly addressing, pre-paying and posting a letter containing the


notice and, unless the contrary is proved, to have been effected at the time at which the letter


would be delivered in the ordinary course of post.


106. Where a member has no registered address in The Bahamas and


has not supplied to the company an address within The Bahamas for the giving of notices to


him, a notice addressed to him and advertised in a newspaper circulating in the


neighbourhood of the registered office of the company shall be deemed to be duly given to


him on the day on which the advertisement appears.


107. A notice may be given by the company to the joint holders of a


share by giving the notice to the joint holder named first in the register in respect of the


share.


108. A notice may be given by the company to the persons entitled to


a share in consequence of the death or bankruptcy of a member by sending it through the post


in a pre-paid letter addressed to them by name or by the title of representatives of the


deceased, or trustees of the bankrupt, or by any like description, at the address, if any, in The


Bahamas supplied for the purpose by the persons claiming to be so entitled, or (until such an


address has been so supplied) by giving the notice in any manner in which the same might


have been given if the death or bankruptcy had not occurred.


109. Notice of every general meeting shall be given in some manner


hereinbefore authorised to every member of the company (including bearers of share


warrants), except those members who (having no registered address within The Bahamas)


have not supplied to the company an address within The Bahamas for the giving of notices


to them, and also to every person entitled to a share in consequence of the death or


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bankruptcy of a member, who, but for his death or bankruptcy, would be entitled to receive


notice of the meeting. No other persons shall be entitled to receive notices of general


meetings.


SECOND SCHEDULE (Section 171)


(1) By-laws should provide for -


(a) the admission of persons and unincorporated associations as


members and as

ex officio

members, and the qualifications of


and the conditions of membership;


(b) the fees and dues of members;


(c) the issue of membership cards and certificates;


(d) the suspension and termination of membership by the


company and by a member;


(e) where the articles provide that the interest of a member is


transferable, the method of transferring membership;


(f) the qualifications of, and the remuneration of, the directors


and ex officio directors, if any;


(g) the time for and manner of electing directors;


(h) the appointment, remuneration, functions, duties and removal


of agents; officers and employees of the company, and the


security, if any, to be given by them to the company;


(i) the time and place, and the notice to be given, for the holding


of meetings of the members and of the board of directors, the


quorum at meetings, the requirement as to proxies, and the


procedure in all things at meetings of the board of directors;


and


(j) the conduct in all other particulars of the affairs of the


company.


(2) The directors of a non-profit company may make by-laws


respecting -


(a) the division of its members into groups, either territorially or


on the basis of common interest;


(b) the election of some or all of the directors -


(i) by the groups on the basis of the member in each


group,


(ii) for the groups in a defined geographical area, by the


delegates of the groups meeting together, or


(iii) by the groups on the basis of common interest;


(c) the election of delegates and alternate delegates to represent


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each group on the basis of the number of members in each


group;


(d) the number and qualification of delegates and the method of


their election;


(e) the holding of meetings of members or delegates;


(f) the powers and authority of delegates at meetings; and


(g) the holding of meetings of members or delegates territorially


or on the basis of common interest.


(3) A by-law made under subsection (2)(b) may provide that a meeting


of delegates for all purposes is a meeting of the members with all powers of such a meeting.


(4) A by-law made under subsection (2) is not effective until it is


confirmed by at least two-thirds of the votes cast at a general meeting of the members duly


called for that purpose.


(5) A delegate has only one vote and may not vote by proxy.


(6) A by-law made under subsection (2) may not prohibit members


from attending meetings of delegates and participating in the discussion at the meetings.


THIRD SCHEDULE (Section 308(1))


Fees to be Paid to the Registrar


Matter in respect of which fee is payable Amount of fee


1. Upon filing memorandum $ 300.00


2. Upon filing articles $ 30.00


3. In respect of a company registered under this Act on


1st January in each year, and being a company in


which -


(a) not less than 60 per cent of its shares are


beneficially owned by Bahamians $ 350.00


(b) less than 60 per cent of the shares are


beneficially owned by Bahamians $ 1,000.00


FOURTH SCHEDULE (Section 311(1))


1. Companies Act, Ch.279.


2. Foreign Companies Act, Ch.280.


ARRANGEMENT OF SECTIONS


PART I


PRELIMINARY


1. Short title and commencement.


2. Interpretation.


PART II


CONSTITUTION AND INCORPORATION


OF COMPANIES


3. Method of incorporation.


4. Mode of limiting liability of members.


5. Memorandum of company with limited liability.


6. Memorandum of company with unlimited liability.


7. Memorandum of company limited by guarantee.


8. Company limited both by shares and by guarantee.


9. Signature etc. of memorandum.


10. Articles of association.


11. Signature and effect of articles.


12. Restriction on name of company.


13. Requirements as to name.


14. Exclusion of “Limited” from name of companies.


15. Reserving name.


16. Certificate of incorporation and consequences thereof.


17. Registered office.


18. Company records.


19. Register of companies.


20. Copies of memorandum and articles to be given to members.


21. Publication of name.


22. Pre-incorporation contracts.


23. Service of documents on company.


24. Capacity and powers.


25. Contracts.


26. Company seals.


27. Bills and notes.


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28. Power of attorney.


29. Alteration of memorandum and articles.


30. Permitted loans.


31. Prohibited loans.


32. Enforcement of prohibited loans.


33. Power to refer matters to arbitration.


34. Authentication of summons, notice or proceedings.


PART III


SHARE CAPITAL, SHAREHOLDERS AND


RELATED MATTERS


35. Nature of shares and of certain transfers.


36. Classes of shares and issue thereof.


37. Variation of shareholders’ rights.


38. Share issue.


39. Consideration.


40. Restrictions as to allotment.


41. Effect of irregular allotment.


42. Restriction on commencement of business.


43. Returns as to allotment.


44. Acquisition of holding of own shares.


45. Cancellation of shares.


46. Effect of purchase contract.


47. Commission for share purchase.


48. Matters affecting issue of share warrants.


49. Alteration of share capital.


50. Reduction of share capital.


51. Application to court for confirming order, objection by creditors


and settlement of objecting creditors.


52. Order confirming reduction and powers of court on making such order.


53. Registration of confirming order and minute of reduction.


54. Liability of shareholders in respect of reduced shares.


55. Notice to Registrar concerning changes in share capital.


56. Register of members.


57. Rectification of register of members.


58. Annual list of members and return of capital, shares, call etc.


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59. Returns in respect of beneficial ownership of shares.


60. Payment of dividends.


61. Prohibited dividend.


62. Immunity of shareholders.


63. Lien on shares.


64. Liability of present and past members.


65. Filing of prospectus.


66. Particulars of prospectus.


67. Obligation of company where no prospectus issued.


68. Restriction in respect of alteration of prospectus.


69. Liability for statements in prospectus.


69A. Application of sections 65 to 69.


70. General meeting.


71. Extraordinary general meeting.


72. Meeting called by the court.


73. Place of meetings.


74. Meetings outside The Bahamas.


75. Quorum at meetings.


76. Voting at meetings and evidence of meetings.


77. Representative of another body and joint shareholders.


78. Unanimous shareholder agreement.


79. Proxies.


80. Special requirement regarding notice of meeting.


81. Provision relating to validity of proxy appointment.


82. Revocation of proxy.


83. Application of sections 79 to 82.


PART IV


MANAGEMENT OF COMPANIES AND PROTECTION


OF CREDITORS AND INVESTORS


84. Duty to manage company.


85. Number of directors and remuneration thereof.


86. Duty of care.


87. Disqualified directors.


88. Directors disqualified by court.


89. Notice of directors.


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90. Termination of office.


91. Resignation of director.


92. Removal of director.


93. Right to notice.


94. Filling vacancy.


95. Change in number of directors.


96. Notice of change.


97. Directors meetings.


98. Notice and wavier.


99. Adjourned meeting.


100. Two director board.


101. Telephone participation.


102. Delegation.


103. Limitation of delegated powers.


104. Validity of acts.


105. Directors’ resolution in writing.


106. Liability for share issue.


107. Liability for other acts.


108. Contribution for judgement.


109. Recovery by action.


110. Defence to liability.


111. Time limit on liability.


112. Interests in contracts and declaration thereof.


113. Validity of certain contracts.


114. Setting aside contract.


115. Designation of offices etc.


116. Borrowing powers.


117. Dissenting to resolutions.


118. Indemnifying directors.


119. Indemnifying other persons.


120. Right to indemnify.


121. Indemnity approved by court.


122. Insurance of directors etc.


123. Annual financial returns.


124. Exemption of certain matters.


125. Approval of financial statements.


126. Auditors’ report to be appended to financial statements.


127. Members’ copies.


128. Registrar’s copies.


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129. Application of sections 123 to 128.


130. Appointment of auditor.


131. Dispensing with auditors.


132. Disqualified auditors.


133. Auditor’s qualifications.


134. Powers and duties of auditors.


135. Removal of auditor.


136. Filling auditor’s vacancy.


137. Occurence of vacancy.


138. Auditor’s right to notice.


139. Auditor’s compulsory attendance at meeting.


140. Statement by auditor.


141. Notification of error to auditor.


142. Non-liability for defamation.


143. Provision as to liability of officers and auditors.


144. Appointment and registration of receiver.


145. Notice of receivership.


146. Disqualified receivers.


147. Functions of receiver.


148. Functions of receiver-manager.


149. Court appointed receiver.


150. Receiver under instrument.


151. Duty of care.


152. Duties of receiver.


153. Directions by court.


154. Liability of receivers etc.


155. Preparation of statement for receiver.


156. Content of statement.


157. Definitions.


158. Presumed insider.


159. Liability of insider.


160. Limitation and application.


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PART V


MERGER, CONSOLIDATION AND CONSEQUENTIAL


MATTERS


161. Definitions for purposes of Part V.


162. Merger and consolidation.


163. Merger with subsidiary.


164. Effect of merger or consolidation.


165. Disposition of assets.


166. Redemption of minority shares.


167. Arrangements.


168. Rights of dissenters.


PART VI


INCORPORATION AND REGISTRATION OF OTHER


COMPANIES


169. Application of sections 170 to 178.


170. Form of memorandum.


171. By-laws.


172. Directors.


173. Unlimited membership.


174. Classes of membership.


175. Admission to membership.


176. Voting.


177. Transfer of members’ interests.


178. Dissolution and distribution.


179. Interpretation.


180. Carrying on business in The Bahamas.


181. Registration of foreign companies.


182. Requirements for registration of foreign company.


183. Certificate of registration.


184. Effect of registration.


185. Capacity of foreign company.


186. Suspension of registration.


187. Cancellation of registration.


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188. Revival of registration.


189. Name display.


190. Registered office.


191. Returns.


PART VII


WINDING UP OF COMPANIES


192. Definition of contributory.


193. Nature of liability of contributory.


194. Contributories in case of death.


195. Contributories in case of bankruptcy.


196. REPEALED.


197. Circumstances giving rise to winding up by court.


198. Company when deemed unable to pay its debts.


199. Application for winding up to be made by petition.


200. Power of court.


201. Commencement of winding up.


202. Court may grant injunction.


203. Course to be pursued by court.


204. Actions and suits to be stayed.


205. Copy of order to be forwarded to Registrar.


206. Power of court to stay proceedings.


207. Effect of order on share capital of company limited


by guarantee.


208. Court may have regard to wishes of creditors or


contributories.


209. Appointment of official liquidator.


210. Resignations, removals etc.


211. Style and duties of official liquidator.


212. Powers of official liquidator.


213. Discretion of official liquidator.


214. Vesting of property in liquidator.


215. Assistance for liquidator.


216. Collection and application of assets.


217. Provisions as to representative contributories.


218. Power of court to require delivery of property.


-cxxxiii-


219. Power of court to order payment of debts by contributory.


220. Power of court to make calls.


221. Power or court to order payment into bank.


222. Regulation of account with court.


223. Representative contributory not paying monies ordered.


224. Order conclusive evidence.


225. Court may exclude creditors not proving in certain time.


226. Court to adjust rights of contributories.


227. Court to order costs.


228. Dissolution of company.


229. Registrar to make minute of dissolution.


230. Power of court to summon persons.


231. Examination of parties by court.


232. Power of arrest.


233. Powers of court cumulative.


234. Power to enforce orders.


235. Circumstances under which company may be wound up


voluntarily.


236. Commencement of voluntary winding up.


237. Effect of voluntary winding up.


238. Notice of resolution to wind up.


239. Consequences of voluntary winding up.


240. Special powers and duties of liquidator.


241. Effect of winding up on share capital of company limited


by guarantee.


242. Power of company to delegate authority to appoint liquidator.


243. Arrangement when binding on creditors.


244. Power of creditor or contributory to appeal.


245. Power of liquidators or contributories in voluntary winding up


to apply to court.


246. Power of liquidator to call general meeting.


247. Power to fill vacancy of liquidator.


248. Power of court to appoint liquidators.


249. Liquidators on conclusion of winding up to make up an account.


250. Liquidator to report meeting to Registrar.


251. Costs of voluntary liquidation.


252. Saving of rights of creditors.


253. Power of court to adopt proceedings of voluntary winding up.


-cxxxiv-


254. Power of court on application to direct winding up subject to supervision.


255. Petition for winding up subject to supervision.


256. Court may have regard to wishes of creditors.


257. Powers of court to appoint additional liquidators in winding up subject to supervision.


258. Effect of order of court for winding up subject to supervision.


259. Appointment of voluntary liquidators to office of official liquidators.


260. Dispositions after the commencement of winding up to be rendered void.


261. Books of the company to be evidence.


262. Disposal of books, accounts and documents of the company.


263. Inspection of books.


264. Power of assignee to sue.


265. Debts to be proved.


266. Rules to be observed.


267. Preferential payments.


268. Liquidation scheme may be approved.


269. Acceptance of shares etc. as consideration for sale of property of company.


270. Mode of determining price.


271. Certain attachments and executions to be void.


272. Fraudulent preference.


273. Assessment of damages against delinquent directors and officers.


274. Prosecution of delinquent directors in winding up by court.


275. Prosecution of delinquent directors in voluntary winding up.


PART VIII


ADMINISTRATIVE MATTERS


276. Responsibility of Registrar.


277. Application for directions.


278. Registrar’s seal.


279. Delegation.


280. Power to investigate.


281. Removal of companies from Register.


282. Continuation of liability.


282A. Property to be vested in Treasurer.


282B. Re-vesting of company’s property.


283. Indemnity.


284. Returns to Registrar.


-cxxxv-


PART IX


CIVIL REMEDIES, CIVIL PENALTIES AND OFFENCES


285. Definitions.


286. Derivative action.


287. Restraining oppressive action.


288. Limitation of staying of action.


289. Interim costs.


290. Restraining order.


291. Appeal from Registrar’s decisions.


292. Security for costs.


293. Civil penalties.


294. Recovery of civil penalties.


295. Criminal liability and proceedings.


296. Name offence.


297. Establishing prohibited association.


298. Offence regarding reduction of capital.


299. False return regarding beneficial ownership of shares.


300. False reports and false statements.


301. Unsigned balance sheets.


302. Insider trading.


303. Falsification of company books etc.


304. Offences in the course of winding up.


305. Miscellaneous offences.


306. Penalty of perjury.


PART X


MISCELLANEOUS


307. Exemptions.


308. Fees.


309. Amendment of Third Schedule.


310. Rules and regulations.


311. Repeals and savings.


312. Existing companies.


FIRST SCHEDULE.


SECOND SCHEDULE.


THIRD SCHEDULE.


FOURTH SCHEDULE.

 

 

No. 16 of 2004

Short title

 

AN ACT TO AMEND THE PERPETUITIES ACT

[Date of Assent – 16 August, 2004]

Enacted by the Parliament of the Bahamas

1.(1) This Act may be cited as the Perpetuities (Amendment)

and

Act, 2004.

commencement.

(2) This Act shall come into operation on such day as the Minister may, by notice published in the Gazette, appoint.

Amendment of

2. The Perpetuities Act is amended by the deletion of the

Ch. 114.

therefor of the words “one hundred and fifty”.

word “eighty” wherever it appears therein and the substitution

OBJECTS AND REASONS

This Bill seeks to amend the Perpetuities Act , Chapter 114 by increasing the perpetuity period from eighty years to one hundred and fifty years.

 

Copyright The Government of the Commonwealth of The Bahamas

CHAPTER 114

PERPETUITIES

ARRANGEMENT OF SECTIONS

SECTION

1. Short title.

2. Interpretation.

3. Validity dependent upon actual events.

4. When the perpetuity period begins to run.

5. Powers of appointment.

6. The perpetuity period.

7. The measuring lives.

8. Reduction of age.

9. Gift to a class.

10. Condition relating to death of surviving spouse.

11. Ulterior and dependent limitations.

12. Presumption and evidence to the age of procreation.

13. Cy-près at conclusion of perpetuity period.

14. Administrative powers of trustees.

15. Options relating to land.

16. Avoidance of contractual and other rights in cases of remoteness.

17. Possibilities of reverter, conditions, subsequent, exceptions and reservations.

18. Non-charitable purpose trusts.

19. Application to the court for directions.

20. Application of Act.

CHAPTER 114

PERPETUITIES

3 of 1995

An Act to modify the law relating to the avoidance of future interests in property

on grounds of remoteness.

[Commencement 14th February, 1995]

Short title.

1.

This Act may be cited as the Perpetuities Act, 1995.

Interpretation.

2.

“court” means the Supreme Court;

“disposition” includes the conferring of a power of appointment and any other

disposition of an interest in or right over property, and references to the interest disposed

of shall be construed accordingly;

“power of appointment” includes any discretionary power to transfer a beneficial

interest in property without the furnishing of valuable consideration;

“will” includes a codicil.

In this Act-

Validity dependent upon actual events.

3.

property becomes void if the interest disposed of fails to vest within the perpetuity period

as defined by section 6.

(2) Every disposition of a non-vested interest in property shall be treated, until

such time (if any) as it becomes established that the vesting will not take place within the

perpetuity period, as if such disposition were not subject to the rule against perpetuities;

and its becoming so established shall not affect the validity of anything previously done

(1) Subject to subsections (2) and (3), a disposition of a non-vested interest in

Copyright The Government of the Commonwealth of The Bahamas

in relation to the interest disposed of by way of advancement; application of intermediate

income or otherwise.

(3) Subsection (1) shall not apply-

(a) to charitable trusts;

(b) to the trusts of any fund registered under the Superannuation and Other Trust

Funds (Validation) Act.

When the perpetuity period begins to run.

4.

(a) in the case of an instrument

those created by an instrument described in paragraph (b), at the effective date

of the instrument;

(b) in the case of an instrument

revocable or amendable in the sole discretion of the grantor, at the time at

which such right of revocation or amendment terminates;

(c) in the case of interests in property created by will, at the date of the death of the

testator;

(d) in the case of an interest created in exercise of a general power of appointment,

at the same date as would be applicable if the instrument exercising the general

power were an instrument creating interests in property in accordance with

paragraphs (a) and (b);

(e) in the case of an interest created in the exercise of a special power of

appointment, at the date on which the period began to run in respect of the

instrument creating such special power.

The perpetuity period begins to run-inter vivos creating interests in property, other thaninter vivos creating interests in property which are

Powers of appointment.

5.

shall be treated as a special power unless-

(a) in the instrument creating the power it is expressed to be exercisable by one

person only; and

(b) it could, at all times during its currency when that person is of full age and

capacity, be exercised by him so as immediately to transfer to himself the whole

of the interest governed by the power without the consent of any other person

or compliance with any other condition, not being a formal condition relating

only to the mode of the exercise of the power:

Provided that for the purpose of determining whether a disposition made under a

power of appointment exercisable by will only is void for remoteness, the power shall be

treated as a general power where it could have fallen to be so treated if exercisable by

deed.

(2) Where a disposition consists of the creation of-

(a) a general power of appointment, such power becomes void if it does not

become exercisable within the perpetuity period;

(b) a special power of appointment, such power becomes void in so far as it is not

fully exercised within the perpetuity period.

(3) Every disposition consisting of the creation of-

(a) a general power of appointment shall be treated, until such time (if any) as it

becomes established that the power will not become exercisable within the

perpetuity period, as if the disposition were not subject to the rule against

perpetuities;

(b) a special power of appointment shall be treated, until such time (if any) as it

becomes established that the power has not been fully exercised within the

period, as if the disposition were not subject to the rule against perpetuities.

(4) Where an appointment is made in the exercise of a general or a special

(1) For the purposes of the rule against perpetuities, a power of appointment

Copyright The Government of the Commonwealth of The Bahamas

power of appointment, such appointment shall be treated, until such time, (if any) as it

becomes established that the vesting of the interest created by such appointment will not

take place or has not taken place within the perpetuity period, as if such appointment

were not subject to the rule against perpetuities, and its becoming so established shall

not affect the validity of anything previously done in relation to the interest created by the

appointment by way of advancement, application of intermediate income or otherwise.

The perpetuity period.

6.

perpetuity period shall be a period measured by the lives of persons alive at the time

when the perpetuity period begins to run in respect of any instrument creating interests

in property (hereinafter called the “measuring lives”) plus twenty-one years.

(2) Where an instrument by which any disposition is made so provides, the

perpetuity period applicable to the disposition, instead of being any other period, shall be

a period equal to such number of years, not exceeding eighty, as is specified in the

instrument:

Provided that this subsection shall not apply where the disposition is made in

exercise of a special power of appointment, but where a period is specified under this

subsection in the instrument creating such special power, that period shall apply in

relation to any appointment which is made in exercise of the power.

(3) For the purposes of subsection (1) and of sections 3, 5(2) and 7 a person

ventre sa mère

at the relevant time.

(4) Where no lives are applicable under subsection (1) and no period of years is

specified under subsection (2), the perpetuity period shall be a period of eighty years.

(1) Subject to subsections (2) and (4), and to sections 7, 15(3) and 18, theenbut subsequently born alive shall be treated as a person who was alive

The measuring lives.

7.

disposition is that laid down in section 6(1), the measuring lives shall be such of the

following persons as are alive and identifiable at the time when the perpetuity period

relevant to the disposition begins to run-

(a) such persons as may be expressly selected in the instrument making the

disposition as being the measuring lives for the purposes of the disposition;

(b) the person or persons by whom the disposition was made;

(c) any person to whom or in whose favour the disposition was made, that is to

say-

(i) in the case of a disposition to a class of persons, any member or potential

member of the class,

(ii) in the case of an individual disposition to a person taking only on certain

conditions being satisfied, any person as to whom some of the conditions

are satisfied and the remainder may in time be satisfied,

(iii) in the case of a disposition made in exercise of a special power of

appointment-

(A) the donee of the power;

(B) where such power is exercisable in favour of members or a class,

any member or potential member of the class; and

(C) where such power is exercisable in favour of one person only, that

person, or, where the object of the power is ascertainable only on

certain conditions being satisfied, any person as to whom some of

the conditions are satisfied and the others may in time be satisfied;

(d) a person having a child or grandchild within paragraph (c) or any of whose

children or grandchildren, if subsequently born, would, by virtue of his or her

descent, fall within that paragraph;

(1) Subject to subsection (3), where the perpetuity period applicable to a

Copyright The Government of the Commonwealth of The Bahamas

(e) any person during whose life or upon whose death, whether as an individual or

as the survivor of a group of persons, or on the failure or determination of where

prior interest the disposition is expressly limited to take effect, and any parent or

grandparent of such person:

Provided that only those lives as are within paragraph (a) shall be the measuring

lives for the purposes of a disposition if the settlor or testator so manifests his intention.

(2) Where the question relates to the validity of a general or special power of

appointment or of an option the measuring lives are the person or persons by whom the

disposition was made and the person or persons upon whom such power or option is

conferred.

(3) Where the ascertainment of the date of death of the survivor of the measuring

lives, whether because the number is large or for any other reason is not reasonably

practicable, viewed from the date on which the perpetuity period begins to run in respect

of the disposition, the measuring lives applicable to any disposition shall be reduced,

category by category, within subsection (1) by the exclusion of all the lives in that

category which makes such ascertainment impracticable.

(4) Where an application is made to the court under section 19 for a

determination of the measuring lives applicable to a disposition, the onus of establishing

that the lives in any particular category are ascertainable shall be upon the party so

asserting.

Reduction of age.

8.

postponed until the attainment by such person or persons of an age in excess of twentyone

years and it becomes apparent at any time that-

(a) the disposition, in respect of any one or more of such persons would, apart from

this section, vest outside the perpetuity period; but

(b) it would not so vest if the specified age had been twenty-one years,

the disposition shall be treated for all purposes as if, instead of being limited by

reference to the age in fact specified it had been limited, in respect of the separate

interest or share of each such person or persons, by reference to the age nearest that

age which would, if specified instead, have allowed the disposition to such person to

vest within the period.

(2) Subsection (1) shall be construed so as to allow the age to be reduced only in

respect of any person whose interest would otherwise vest outside the perpetuity period;

and any such reduction in respect of a disposition in favour of one such person shall not,

by reason only of such reduction, effect the reduction of the age of vesting in respect of

any other such person.

(3) Where in the case of any disposition different ages exceeding twenty-one

years are specified in relation to different persons-

(a) the reference in paragraph (b) of subsection (1) to the specified age shall be

construed as a reference to all the specified ages; and

(b) that subsection shall operate to reduce each such age so far as is necessary,

but not below the age of twenty-one years, to allow the disposition to vest within

the period.

(1) Where the vesting of a disposition in favour of any person or persons is

Gift to a class.

9.

or more members of the class vests duringthe perpetuity period, but either-

(a) it becomes established that the interests or another or other members will not

vest within the perpetuity period; or

(b) the interests of such other member or members do not vest within such period,

the person or persons described in paragraphs (a) and (b) shall be deemed for all the

Where, subject to section 8, in the case of a gift to a class, the interest of one

Copyright The Government of the Commonwealth of The Bahamas

purposes of the disposition to be excluded from the class.

Condition relating to death of surviving spouse.

10.

of a person in being at the commencement of the perpetuity period and any spouse of

that person, and that time has not arrived at the end of the perpetuity period, the

disposition shall be treated for all purposes as if it had instead been limited by reference

to the time immediately before the end of that period.

Where a disposition is limited by reference to the time of death of the survivor

Ulterior and dependent limitations.

11.

reason only of the fact that it is ulterior to and dependent upon a prior interest which is

void for perpetuity is hereby abolished.

(2) The vesting of such ulterior interest shall not be prevented from being

accelerated on the failure of the prior interest by reason only that the prior interest fails to

vest within the perpetuity period.

(1) Any rule of the common law to the effect that an interest is invalid by

Presumption and evidence to the age of procreation.

12.

(a) respecting the rule against perpetuities;

(b) in relation to the closing of a class;

(c) as to the time at which payments may be made from a trust;

(d) in relation to the termination of a trust or a period of accumulation; or

(e) for any other like reason,

as to the ability of a person to have a child at some future time, then subject to

subsection (2), it shall conclusively be presumed that a male is capable of procreating a

child at the age of fourteen years or over, but not under that age, not after death, and

that a female can conceive, and subsequently bear a child at the age of twelve years but

not under that age or over the age of fifty-five years.

(2) In the case of a living person evidence may be given to show that such

person, although within the ages laid down in subsection (1) is incapable of procreating

or conceiving a child at the time in question.

(3) Where any such question is decided by treating a person as unable to

reproduce at a particular time and he or she does so, the court may make such order as

it thinks fit for placing the persons interested in the property which is the subject of such

decision, so far as may be just, in the position such persons would have held if the

question had not been so decided.

(4) The foregoing provisions of this section (except subsection (2) shall apply in

relation to the possibility that a person will become the parent of a child by adoption,

legitimation or other means as they apply to his or her ability at that time to procreate or

conceive a child.

(1) Where any question arises-

Cy-près at conclusion of perpetuity period.

13.

section, any disposition would be void solely on the ground that it infringes the rule

against perpetuities, and where the general intention originally governing the disposition

can be ascertained in accordance with the normal principles of interpretation of

instruments and the rules of evidence, the disposition may, on application to the court by

an interested person, be varied so as to give effect as far as possible to the general

intention of the settlor or testator within the limits of the rule against perpetuities.

(2) Subsection (1) shall not apply where the disposition of the property has been

the subject of a valid compromise.

(1) Where it has become apparent that, apart from the provisions of this

Administrative powers of trustees.

14.

on trustees or other persons to sell, lease, exchange or otherwise dispose of any

The rule against perpetuities shall not operate to invalidate a power conferred

Copyright The Government of the Commonwealth of The Bahamas

property for full consideration, or to do any other act in the administration (as opposed to

the distribution) of any property, and shall not prevent the payment to trustees or other

persons of reasonable remuneration for their services.

Options relating to land.

15.

the conferring of an option to acquire for valuable consideration an interest reversionary

(whether directly or indirectly) on the term of a lease if-

(a) the option is exercisable only by the lessee or his successors in title; and

(b) it causes to be exercisable at or before the expiration of one year following the

determination of the lease.

(2) Subsection (1) shall apply in relation to an agreement for a lease as it applies

in relation to a lease, and “lessee” shall be construed accordingly.

(3) Subject to subsection (4), in the case of a disposition consisting of the

conferring of an option to acquire for valuable consideration any interest in land, the

perpetuity period under the rule against perpetuities shall be twenty-one years, and

section 6 of this Act shall not apply.

(4) Subsection (3) shall not apply to a right of pre-emption conferred on a public

body in respect of land used or to be used for religious purposes where the right

becomes exercisable only if the land ceases to be used for such purposes.

(1) The rule against perpetuities shall not apply to a disposition consisting of

Avoidance of contractual and other rights in cases of remoteness.

16.

if the rights and duties thereunder were capable of transmission to persons other than

the original parties and had been so transmitted, it shall be treated as void as between

the person by whom it was made and the person to whom or in whose favour it was

made or any successor of his, and no remedy shall lie in contract or otherwise for giving

effect to it on making restitution for its lack of effect.

Where a disposition inter vivos would fall to be treated as void for remoteness

Possibilities of reverter, conditions, subsequent, exceptions and reservations.

17.

(a) a possibility of reverter on the determination of a determinable fee simple; or

(b) a possibility of a resulting trust on the determination of any other determinable

interest in property,

the rule against perpetuities shall apply in relation to the provision causing the interest to

be determinable as it would apply if that provision were expressed in the form of a

condition subsequent giving rise, on breach thereof, to a right of re-entry or an

equivalent right in the case of property other than land, and where the provision falls to

be treated as void for remoteness the determinable interest shall become an absolute

interest.

(2) Where a disposition is subject to any such provision, or to any such condition

subsequent, or to any exception or reservation, the disposition shall be treated for the

purposes of this Act as including a separate disposition of any rights arising by virtue of

the provision, condition subsequent, exception or reservation.

(1) In the case of-

Non-charitable purpose trusts.

18.

void, for reasons other than failure to comply with the rule against perpetuities, certain

dispositions under which property is to be applied for purposes which are not charitable

or for the benefit of corporations which are not charities.

(2) Any such trust, if valid under the general law apart from the rule against

perpetuities, shall be valid for a period of eighty years only.

(3) Any such trust which is in existence at the date of the commencement of this

Act shall continue for either the period for which it would continue if this Act had not been

passed, or for a period of eighty years from the date of the commencement of this Act,

(1) Nothing in this Act shall affect the operation of any rule of law rendering

Copyright The Government of the Commonwealth of The Bahamas

whichever period is the shorter.

Application to the court for directions.

19.

in the validity or invalidity of an interest in that property may apply to the court for the

opinion, advice or direction of the court with respect to the following matters-

(a) the construction of the will or trust instrument;

(b) a determination of the persons who are measuring lives for the purposes of the

disposition;

(c) whether a person who is a measuring life shall be presumed dead;

(d) whether, prior to the determination of the perpetuity period governing the

disposition, any interest shall be treated as incapable of vesting during that

period;

(e) at the conclusion of the perpetuity period, for the variation of the terms of the

will or trust instrument in accordance with section 13;

(f) any other matter on which such application could properly be made to the court

according to current practice as if this Act had not been passed.

An executor or a trustee of any property or any person interested therein, or

Application of Act.

20.

to instruments in respect of which, in accordance with section 4, the perpetuity period

begins to run after the commencement of this Act, and in the case of an instrument

made in the exercise of a special power of appointment shall apply, in accordance with

section 4(e), only where the instrument creating the power takes effect after such

commencement.

(2)(a) Section 5(1) shall apply to instruments coming into effect both before and after

the commencement of this Act to determine, for the purpose of the application

of the rule against perpetuities, the distinction between general and special

powers of appointment;

(b) section 14 shall apply for the purpose of enabling a power to be exercised at

any time after the commencement of this Act notwithstanding that the power is

conferred by an instrument which took effect before that commencement;

(c) section 12(1)(b), (c), (d) and (e) shall apply to instruments coming into effect

both before and after the commencement of this Act, but shall not apply so as

to affect any questions which have been determined, by litigation or

compromise or otherwise, before the commencement of this Act;

(d) section 18 shall apply so as to terminate, after a period of eighty years, noncharitable

purpose trusts, whether created before or after the commencement

of this Act.

(3) This Act shall apply in relation to a disposition made otherwise than by an

instrument as if the disposition had been contained in an instrument taking effect when

the disposition was made.

(4) This Act binds the Crown.

(1) Subject to subsection (2), the provisions of this Act shall apply in relation

 

Copyright The Government of the Commonwealth of The Bahamas

CHAPTER 78

FRAUDULENT DISPOSITIONS

ARRANGEMENT OF SECTIONS

SECTION

1. Short title.

2. Interpretation.

3. Application.

4. Avoidance of fraudulent dispositions.

5. Saving of certain rights.

6. Extent of avoidance of relevant dispositions.

7. Act not to validate certain dispositions.

8. Relationship with Trusts (Choice of Governing Law) Act.

CHAPTER 78

FRAUDULENT DISPOSITIONS

1 of 1991

An Act to amend the law relating to dispositions made with an intent to defraud.

[Assent 5th March, 1991]

[Commencement 5th April, 1991]

Short title.

1.

This Act may be cited as the Fraudulent Dispositions Act, 1991.

Interpretation.

2.

“creditor” means a person to whom an obligation is owed;

“disposition” means any disposition or series thereof, however effected, and

(without prejudice to the generality thereof) includes any transaction, gift, grant or

transfer of property of any nature whatsoever;

“intent to defraud” means an intention of a transferor wilfully to defeat an

obligation owed to a creditor;

“obligation” means an obligation or liability (which shall include a contingent

liability) which existed on or prior to the date of a relevant disposition and of which the

transferor had actual notice;

“relevant disposition” means a disposition to which section 4(1) applies;

“transferor” means the person who as owner or as the holder of a power in that

behalf directly or indirectly makes a relevant disposition or causes it to be made;

“transferee” means the person to whom a relevant disposition is made and shall

include any successor in title;

“undervalue”, in relation to a disposition of property, means-

(a) the provision of no consideration for the disposition; or

(b) a consideration for the disposition the value of which in money or money’s

worth is significantly less than the value of the property the subject of the

disposition.

“appointed date” means the date on which this Act comes into operation;

Application.

3.

in effect prior to the appointed date to every disposition of property made after the

appointed date by any person and whether or not the property, the subject of the

disposition, is situate in The Bahamas or elsewhere; save that in any action or

proceedings commenced prior to the appointed date or within six months of the

appointed date but in respect of a disposition made prior to the appointed date this Act

shall have no application and the law to be applied shall be that in effect prior to the

(1) With effect from the appointed date this Act shall apply in place of the law

Copyright The Government of the Commonwealth of The Bahamas

appointed date.

(2) In this section, “the law in effect” means the law relating to fraudulent

dispositions of property.

Avoidance of fraudulent dispositions.

4.

with an intent to defraud and at an undervalue shall be voidable at the instance of a

creditor thereby prejudiced.

(2) The burden of establishing an intent to defraud for the purposes of this Act

shall be upon the creditor seeking to set aside the disposition.

(3) No action or proceedings shall be commenced pursuant to this Act unless

commenced within two years of the date of the relevant disposition.

(1) Subject to the provisions of this Act, every disposition of property made

Saving of certain rights.

5.

then-

(a) unless the court is satisfied that the transferee has acted in bad faith-

(i) the transferee shall have a first and paramount charge over the property,

the subject of the disposition, of an amount equal to the entire costs

properly incurred by the transferee in the defence of the action or

proceedings to set aside (and not merely such costs as might otherwise be

allowed by the court; and

(ii) the relevant disposition shall be set aside subject to the proper fees, costs,

pre-existing rights, claims and interests of the transferee, (and of any

predecessor transferee which has not acted in bad faith); and

(b) unless the court is satisfied that a beneficiary of a trust has acted in bad faith

the disposition shall only be set aside subject to the right of such beneficiary to

retain any distribution made consequent upon the prior exercise of a trust,

power or discretion vested in the trustee of such trust or any other person, and

otherwise properly exercised.

(2) The burden of proving that a transferee or beneficiary has acted in bad faith

shall be upon the person making the allegation.

(1) In the event that any disposition shall be set aside pursuant to this Act,

Extent of avoidance of relevant dispositions.

6.

necessary to satisfy the obligation to a creditor at whose instance the disposition had

been set aside together with such costs as the court may allow.

A disposition shall be set aside pursuant to this Act only to the extent

Act not to validate certain dispositions.

7.

(a) shall validate any disposition of property which is neither owned by the

transferor nor the subject of a power in that behalf vested in the transferor;

(b) shall affect the recognition of a foreign law in determining whether the transferor

is the owner of such property or the holder of such power.

Nothing in this Act-

Relationship with Trusts (Choice of Governing Law) Act.

8.

of a creditor or person which right, claim or interest would be avoided or defeated by the

Trusts (Choice of Governing Law) Act.

Nothing in this Act shall create or enable any right, claim or interest on behalf