The financial sector, with over 40 years of steady growth and experience in the offshore banking and trust industry, is the second leading contributor to the economy of The Bahamas, employing more than 10% of the country's labour force and comprisiong 12% of GDP ($340 million).
Bahamas Investment Authority
Procedures for The Bahamas
In an effort to meet the growing changes in the global community, the Government of The Bahamas has enacted a new Companies Act. This Act came into effect on August 1, 1992, and repeals the Companies Act of 1866 and the Foreign Companies Act of 1891. It also makes substantial changes in the incorporation and operation of companies. Those companies incorporated under the new Act may carry on in, or from within, The Bahamas the business of banking or trust companies, and insurance and reinsurance. An enterprise can conduct business in The Bahamas through incorporation or through branch operation.
The modified Companies Act provides investors with a number of advantages. The doctrine of 'ultra vires' has been abandoned and, consequently, gives companies virtually the same range of powers enjoyed by human persons without any further need to set out the extensive litany of 'objects' once required under previous company law. The minimum number of persons that may now incorporate a company has been reduced from five persons to two persons. The paper requirements of company formation have been further reduced with the inclusion of a standard form of Articles of Association, which can be adopted by mere reference. Company members' meetings may be held outside The Bahamas and participation in meetings may be effected by telephone and other electronic means. In an effort to better safeguard investments in public companies made by members of the public, shareholders in such companies are imposed with a substantially higher burden of accountability. If a company wishes to be restored after being "struck-off," it will no longer be required to apply to the Supreme Court of The Bahamas.
Company FormationIn order to incorporate a company in The Bahamas, a Memorandum of Association must be filed with the Registrar General. Articles of Association may be filed with the Memorandum of Association or within six months thereafter and must be signed and witnessed by one other person. Other provisions require:
MergerA company merging or consolidating with another company or companies must submit articles of merger or consolidation to the Registrar General. The Companies Act does allow a company to merge with a subsidiary. In this type of merger, the parent company is required to file Articles of Merger with the Registrar General. Under this Act, a company intending to reorganize or reconstruct itself must submit Articles of Arrangement with the Registrar General.
Private & Public CompaniesAll companies already registered as private companies in the register of the Registrar General's Office continue to exist as private companies, unless they wish to continue as public companies. A public company is considered a company whose shares or any class of whose shares are intended for distribution to the public. Following incorporation, the public company may start business or seek to secure credit after:
Foreign CompaniesAny incorporated or unincorporated body formed under the laws of a country outside The Bahamas is considered a foreign company under this Act. In order to be incorporated in The Bahamas, the foreign company must file a statement in the approved form, setting out the following:
Statements may be obtained from the Registrar General's office.
Non-Profit CompaniesA non-profit company is defined as one involved in activities that are religious, charitable, educational, scientific, historical, fraternal, literary, sporting, artistic and athletic. Non-profit companies are required to file a Memorandum stating the following:
General Requirements for All Companies
All companies are required to file names of officers, directors and managers; location of the registered officer; and an annual return stating whether or not 60% of the shares are beneficially owned by Bahamians. Banks must publish annual statements showing their true financial position. Every company having its capital divided by shares is required to file with the Registrar General an annual return with the following information:
Company ManagementA company must be managed by at least two directors and, in the case of the public company, three directors. Persons consenting to be directors may hold office until the first meeting of the members of the company at which time election of directors takes place. Directors' meetings may occur at any place and upon such notice as the directors determine, unless otherwise provided for by the Articles of Association. Meetings may be held by telephone or other communications which allow voice recognition of each of the directors. The directors are required to submit financial statements and the report of the auditor at the annual general meeting. Directors hold office until they are disqualified, removed by resolution at an extraordinary meeting or until their death or resignation.
Name ReservationIn order to reserve a name for the company, application may be made on the approved form, which can be obtained from the Registrar General's Office. The Registry provides a 24-hour company name reservation service. Under Bahamas Company Law, the word "Limited" (or ,as abbreviated, "Ltd.") must be the last word in the name of each company.
Business License & Fees
Every business must have a license to operate in The Bahamas. Each licensed business is also required to pay an annual fee, based on the gross profit as a percentage of turnover. Fees are based, in the case of most businesses, on the annual gross receipts, less the "cost incurred in producing that turnover." They range from nothing for a petty business to $500,000 for "a very large business with a very high profit" per year. The Business License Act defines business to include all types of manufacturing and commercial undertakings and covers professions such as law, accounting, and medicine.
Filing FeesDomestic Company:
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