CHAPTER 308
COMPANIES
LIST OF AUTHORISED PAGES
1 – 2 LRO 1/2010 3 – 4 LRO 1/2006 5 – 10 Original 11 – 12 LRO 1/2010 13 – 14 LRO 1/2006 15 – 40 Original 41 – 42 LRO 1/2006 43 – 90 Original 91 – 92 LRO 1/2006 93 – 96 Original 97 – 98 LRO 1/2010 99 – 153 Original
ARRANGEMENT OF SECTIONS
PART I PRELIMINARY
SECTION - Short title.
- Interpretation.
PART II CONSTITUTION AND INCORPORATION OF COMPANIES
Legal Formalities - Method of incorporation.
- Mode of limiting liability of members.
- Memorandum of company with limited liability.
- Memorandum of company with unlimited liability.
- Memorandum of company limited by guarantee.
- Company limited both by shares and by guarantee.
- Signature, etc., of memorandum.
- Articles of association.
- Signature and effect of articles.
- Restriction on name of company.
- Requirement as to name.
- Exclusion of “Limited” from name of companies.
- Reserving name.
Incorporation - Certificate of incorporation and consequences thereof.
- Registered office.
- Company records.
- Register of companies.
- Copies of memorandum and articles to be given to members.
- Publication of name.
- Pre-incorporation contracts.
- Service of documents on company.
Capacity and Powers - Capacity and powers.
- Contracts.
- Company seals.
- Bills and notes.
- Power of attorney.
- Alteration of memorandum and articles.
- Permitted loans.
- Prohibited loans.
- Enforcement of prohibited loans.
- Power to refer matters to arbitration.
- Authentication of summons, notice or proceeding.
PART III SHARE CAPITAL, SHAREHOLDERS AND RELATED MATTERS
Share Capital - Nature of shares and of certain transfers.
- Classes of shares and issue thereof.
- Variation of shareholders’ rights.
- Share issue.
- Consideration.
- Restrictions as to allotment.
- Effect of irregular allotment.
- Restriction on commencement of business.
- Returns as to allotment.
- Acquisition of holding of own shares.
- Cancellation of shares.
- Effect of purchase contract.
- Commission for share purchase.
- Matters respecting issue of share warrants.
- Alteration of share capital.
- Reduction of share capital.
- Application to court for confirming order, objections by creditors and settlement of objecting creditors.
- Order confirming reduction and power of court on making such order.
- Registration of confirming order and minute of reduction.
- Liability of shareholders in respect of reduced shares.
- Notice to Registrar concerning changes in share capital.
Members - Register of members.
- Rectification of register of members.
- Annual list of members and return of capital, shares, call, etc.
- Returns in respect of beneficial ownership of shares.
Dividends - Payment of dividends.
- Prohibited dividends.
- Immunity of shareholders.
- Lien on shares.
- Liability of present and past members.
Meetings and Proceedings - General meetings.
- Extraordinary general meeting.
- Meetings called by the court.
- Place of meetings.
- Meetings outside The Bahamas.
- Quorum at meetings.
- Voting at meetings and evidence of meetings.
- Representative of another body and joint shareholders.
- Unanimous shareholder agreement.
- Proxies.
- Special requirement regarding notice of meeting.
- Provision relating to validity of proxy appointment.
- Revocation of proxy.
- Application of Sections 74 to 77.
PART IV MANAGEMENT OF COMPANIES AND PROTECTION OF CREDITORS AND INVESTORS
The Directors - Duty to manage company.
- Number of directors and remuneration thereof.
- Duty of care.
- Disqualified directors.
- Directors disqualified by court.
- Notice of directors.
- Termination of office.
- Resignation of director.
- Removal of director.
- Right to notice.
- Filling vacancy.
- Change in number of directors.
- Notice of change.
- Directors’ meetings.
- Notice of waiver.
- Adjourned meeting.
- Two director board.
- Telephone participation.
- Delegation.
- Limitation of delegated powers.
- Validity of acts.
- Directors’ resolution in writing.
Liabilities of Directors - Liability for share issue.
- Liability for other acts.
- Contribution for judgment.
- Recovery by action.
- Defence to liability.
- Time limit on liability.
Contractual Interest - Interests in contracts and declaration thereof.
- Validity of certain contracts.
- Setting aside contract.
Officers of the Company
110. Designation of officer, etc.
Borrowing Powers of Directors
111. Borrowing powers.
Procedural Matters and Indemnities - Dissenting to resolutions.
- Indemnifying directors.
- Indemnifying other persons.
- Right to indemnify.
- Indemnity approved by court.
- Insurance of directors, etc.
Financial Disclosure - Annual financial returns.
- Excemption of certain matters.
- Approval of financial statements.
- Auditors’ report to be appended to financial statements.
- Members’ copies.
- Registrar’s copies.
- Application of sections 118 to 123.
Auditors - Appointment of auditor.
- Dispensing with auditors.
- Disqualified auditors.
- Auditor’s qualifications.
- Powers and duties of auditors.
- Removal of auditor.
- Filling auditor’s vacancy.
- Occurrence of vacancy.
- Auditor’s right to notice.
- Auditor’s compulsory attendance at meeting.
- Statement by auditor.
- Notification of error to auditor.
- Non-liability for defamation.
- Provision as to liability of officers and auditors.
Receivers - Appointment and registration of receiver.
- Notice of receivership.
- Disqualified receivers.
- Functions of receiver.
- Functions of receiver-manager.
- Court appointed receiver.
- Receiver under instrument.
- Duty of care.
- Duties of receiver.
- Directions by court.
- Liability of receivers, etc.
- Preparation of statement for receiver.
- Content of statement.
PART V MERGER, CONSOLIDATION AND CONSEQUENTIAL MATTERS
- Definitions for purposes of Part V.
- Merger and consolidation.
- Merger with subsidiary.
- Effect of merger or consolidation.
- Disposition of assets.
- Redemption of minority shares.
- Arrangements.
- Rights of dissenters.
PART VI INCORPORATION AND REGISTRATION OF OTHER COMPANIES
Incorporation of Companies without Share Capital - Application of sections 161 to 169
- Form of memorandum.
- By-laws.
- Directors.
- Unlimited membership.
- Classes of membership.
- Admission to membership.
- Voting.
- Transfer of members’ interests.
- Dissolution and distribution.
Registration of Foreign Companies - Interpretation.
- Carrying on business in The Bahamas.
- Registration of foreign companies.
- Requirements for registration of foreign company.
- Certificate of registration.
- Effect of registration.
- Capacity of foreign company.
- Suspension of registration.
- Cancellation of registration.
- Revival of registration.
- Name display.
- Registered office.
- Returns.
PART VII WINDING UP OF COMPANIES
Preliminary - Definition of “contributory”.
- Nature of liability of contributory.
- Contributories in case of death.
- Contributories in case of bankruptcy.
Winding-up by Court - Circumstances giving rise to winding-up by court.
- Company when deemed unable to pay its debts.
- Application for winding up to be made by petition.
- Power of court.
- Commencement of winding up.
- Court may grant injunction.
- Course to be pursued by court.
- Actions and suits to be stayed.
- Copy of order to be forwarded to Registrar.
- Power of court to stay proceedings.
- Effect of order on share capital of company limited by guarantee.
- Court may have regard to wishes of creditors or contributories.
Official Liquidators - Appointment of official liquidator.
- Registrations, removals, etc.
- Style and duties of official liquidator.
- Powers of official liquidator.
- Discretion of official liquidator.
- Vesting of property in liquidator.
- Assistance for liquidator.
Ordinary Powers of Court - Collection and application of assets.
- Provisions as to representative contributories.
- Power of court to require delivery of property.
- Power of court to order payment of debts by contributory.
- Power of court to make calls.
- Power of court to order payment into bank.
- Regulation of account with court.
- Representative contributory not paying monies ordered.
- Order conclusive evidence.
- Creditors not proving in time.
- Court to adjust rights.
- Court to order costs.
- Dissolution of company.
- Registrar to make minute of dissolution.
Extraordinary Powers of Court - Power of court to summon persons.
- Examination of parties by court.
- Power of arrest.
- Powers of court cumulative.
- Power to enforce orders.
Voluntary Winding Up of Company - Circumstances under which company may be wound up voluntarily.
- Commencement of voluntary winding up.
- Effect of voluntary winding up.
- Notice of resolution to wind up.
- Consequences of voluntary winding up.
- Special powers and duties of liquidator.
- Effect of winding up on share capital of company limited by guarantee.
- Power of company to delegate authority to appoint liquidator.
- Arrangement when binding on creditors.
- Power of creditor or contributory to appeal.
- Power of liquidators or contributories in voluntary winding up to apply to court.
- Power of liquidator to call general meeting.
- Power to fill vacancy of liquidator.
- Power of court to appoint liquidators.
- Liquidators on conclusion of winding-up to make up an account.
- Liquidator to report meeting to Registrar.
- Costs of voluntary liquidation.
- Saving of rights of creditors.
- Power of court to adopt proceedings of voluntary winding-up.
Winding up subject to the Supervision of the Court - Power of court on application to direct winding up subject to supervision.
- Petition for winding-up subject to supervision.
- Court may have regard to wishes of creditors.
- Powers of court to appoint additional liquidators in winding-up subject to supervision.
- Effect of order of court for winding up subject to supervision.
- Appointment of voluntary liquidators to office of official liquidators.
Supplemental Provisions - Dispositions after the commencement of winding up to be rendered void.
- Books of the company to be evidence.
- Disposal of books, accounts and documents of the company.
- Inspection of books.
- Power of assignee to sue.
- Debts to be proved.
- Rules to be observed.
- Preferential payments.
- Liquidation scheme may be approved.
- Acceptance of shares, etc., as consideration for sale of property of company.
- Mode of determining price.
- Certain attachments and executions to be void.
- Fraudulent preference.
- Assessment of damages against delinquent directors and officers.
- Prosecution of delinquent directors in winding-up by court.
- Prosecution of delinquent directors in voluntary winding up.
PART VIII ADMINISTRATIVE MATTERS - Responsibility of Registrar.
- Application for directions.
- Registrar’s seal.
- Delegation.
- Power to investigate.
- Removal of companies from Register.
- Continuation of liability.
- Property to be vested in Treasurer.
- Re-vesting of company’s property.
- Indemnity.
- Returns to Registrar.
- Certificate of good standing.
PART IX CIVIL REMEDIES, CIVIL PENALTIES AND OFFENCES
Civil Remedies - Definitions.
- Derivative action.
- Restraining oppressive action.
- Limitation of staying of action.
- Interim costs.
- Restraining order.
- Appeal from Registrar’s decisions.
- Security for costs.
Civil Penalties - Civil penalties
- Recovery of civil penalties.
Offences - Criminal liability and proceedings.
- Name offence.
- Establishing prohibited association.
- Offence regarding reduction of capital.
- False return regarding beneficial ownership of shares.
- False reports and false statements.
- Unsigned balance sheet.
- Falsification of company books, etc.
- Offences in the course of winding up.
- Miscellaneous offences.
- Penalty of perjury.
PART X MISCELLANEOUS - Exemptions.
- Fees.
- Amendment of Third Schedule.
- Rules and regulations.
- Repeals and savings.
- Existing companies.
FIRST SCHEDULE — Articles of Association of a Company Limited by Shares. SECOND SCHEDULE — By-laws. THIRD SCHEDULE — Fees to be paid to the Registrar. FOURTH SCHEDULE.
CHAPTER 308
COMPANIES
An Act to consolidate and revise the law respectingthe incorporation, management and control of companies.
[Assent 10th June, 1992][Commencement 1st August, 1992]
PART I PRELIMINARY
- This Act may be cited as the Companies Act.
- 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;
“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 berepresented 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 sixtyper cent of its shares are beneficially owned by Bahamians;
18 of 1992 24 of 1993 28 of 1994 30 of 1995 2 of 1998 1 of 1999 2 of 1999 23 of 1999
S.I. 36/2005 13 of 2009
Short title.
Interpretation.
28 of 1994, s. 2.
28 of 1994, s. 2.
28 of 1994, s. 2.
Ch. 309.
Statute Law of The Bahamas, Revised Edition 1987, Ch. 279.
“capital”, in relation to a company, means the sum of the aggregate par value of all the outstandingshares 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 incorporated or registered under this Act;
“court” means the Supreme Court; “debenture” includes debenture stock, bonds and anyother securities of a company whether consisting of a charge on the assets of the company or not; “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 Business Company Act; “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 161; “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);
“parent company” means a company that owns at least fifty per cent of the outstanding votingshares of each class or series of shares in another company:
Provided that for the purposes of section 154 it means a company that owns more than ninety percent of such shares as aforesaid;
“private company” has the meaning assigned to it by section 62 of the Securities Industry Act;
“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 constitutedmeeting of directors or a committee ofdirectors of a company by affirmative vote of a simple majority, or such largermajority 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 asmay 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;
28 of 1994, s. 2.
1 of 1999, s. 98 and Sch.
Ch. 363.
28 of 1994, s. 2.
28 of 1994, s. 2.
“resolution of members” or “resolution of the company” means — - (a)
- a resolution approved at a duly constituted meeting of a company by the affirmativevote of —
- (i)
- a simple majority, or such largermajority 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 largermajority 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 largermajority as may be specified in the articles, of the votes of the members, or
- (ii)
- a simple majority, or such largermajority 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 acquiredshares in a company incorporated under this Act that is limited by shares;
“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 154 it means a company more than ninety percent of whose shares as aforesaid are owned by another company;
“surplus” in relation to a company, means the excess, if any, at the time of the determination of total assets of the company over the sum of its total liabilities as shown in the books of account plus its issued and outstanding share capital.
PART II CONSTITUTION AND INCORPORATION OF COMPANIES
Legal Formalities
3. (1) Subject to subsection (2), two or more persons may incorporate a company with or without limitedliability by signing a memorandum and submitting it to 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 isaccompanied by a statutory declaration by a counsel and attorney that to the best of his knowledge and belief nosignatory 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. - The liability of the members of a company incorporated under this Act may, according to the memorandum, be limited either to the amount, if any, unpaid on the shares respectively held by them, or to such amount as the members may respectively undertake by the memorandum to contribute to the assets of the company in the event of its being wound up.
- Subject to section 13, where a company is incorporated on the principle of having the liability of itsmembers limited to the amount unpaid on their shares, hereinafter referred to as a company limited by shares, the memorandum shall state —
- the name of the proposed company with the addition of the word “Limited” or “Ltd.” as the last word in such name;
- the location in The Bahamas of the registered office;
Method of incorporation.
28 of 1994, s. 2A.
Mode of limiting liability of members.
Memorandum of company with limited liability.
Memorandum of company with unlimited liability.
Memorandum of company limited by guarantee. - (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 section35(3), its division into a stated number of sharesof 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
- (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 withwhich the company proposes to be registered.
6. Where a company is formed on the principle of having no limit placed on the liability of its members, hereinafter referred to as an unlimited liability company, the memorandum shall state — - (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 proposesto be registered.
7. Subject to section 13, where a company is formed on the principle of having the liability of its members limited to such amount as the members respectively undertake to contribute to the assets of thecompany in the event of a winding up, 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 withinone 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 upthe 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.
8. (1) Without affecting anything contained in this Act, a company may be limited both by shares and by guarantee and any reference in this Act to a company limited by shares or to a company limited by guarantee shall so far as appropriate include a company limited both by shares and by guarantee.
(2) The memorandum of a company limited both by shares and by guarantee shall state the number of shares and the value of each share with which the company proposes to be registered.
9. (1) The memorandum shall be signed by each subscriber in the presence of at least one witness who shall attest his signature. - (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 oramount as contained in the memorandum, notification of the increase shall be given to the Registrar within fourteen daysof the resolution authorizing the increase and the Registrarshall thereupon record the increase.
Company limited both by shares and by guarantee.
Signature, etc., of memorandum.
Articles of association.
First Schedule.
Signature and effect of articles.
Restriction on name of company.