THE BAHAMAS THE INTERNATIONAL BUSINESS COMPANIES ACT, 2000

PART II CONSTITUTION OF COMPANIES

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

4. No person other than a bank or trust company licensed under the Banks and Trust Companies Regulation Act, 2000 shall incorporate an International Business Company unless such person is licensed and approved under the Financial and Corporate Service Providers Act, 2000.

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

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

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

6. Where a company is incorporated under this Act for any criminal activity including drug trafficking or any relevant offense under the Proceeds of Crime Act, 2000 or for any prohibited purpose the company shall forthwith be struck off the Register by the Registrar publishing notice to that effect in the Gazette but section 164 (5) shall apply to such company for the purposes of liability: Provided that before being struck off, the Registrar shall give the company the opportunity of being heard within seven days before the striking off.

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

8. The liability of the members of a company incorporated under this Act may, according to the Memorandum––

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

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

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

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

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

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

(b) issue the following ––

(i) voting shares,

(ii) non–voting shares,

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

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

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

(vi) no par value shares,

(vii) unnumbered shares;

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

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

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

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

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

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

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

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

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

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

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

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

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

(c)    it appears fair and reasonable in the circumstances to set aside or prohibit the performance of the contract; and in so doing the court may, in applying this subsection, award to the company or to the other parties such compensation as may be reasonable except that in determining the amount of compensation the court shall not take into account anticipated profits to be derived from the performance of the contract.

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

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

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

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

(b)   contains the words "Assurance", "Bank", "Building Society", "Chamber of Commerce", "Chartered", "Cooperative", "Imperial", "Insurance", "Municipal", "Royal", "Trust", or a word conveying a similar meaning, or any other word that, in the opinion of the Registrar, suggests or is calculated to suggest the patronage of or any connection with Her Majesty or any member of the Royal Family or the Government of The Bahamas, a department thereof, a statutory corporation or board or a local or municipal authority;

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

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

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

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

(b)   so nearly resembles the name of another company in existence which was incorporated under this Act or registered under the Companies Act as to be calculated to deceive or confuse, the Registrar may, whether or not the consent of the company in existence has been obtained pursuant to subsection (3)(a), give notice to the last registered company to change its name and if it fails to do so within 60 days from the date of the notice the Registrar shall direct the company to change its name to such name as the Registrar deems appropriate, and the Registrar shall publish a notice of the change in the Gazette.

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

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

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

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

13.

(1) The Memorandum shall include the following particulars ––

(a)    the name of the company;

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

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

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

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

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

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

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

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

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

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

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

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

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

14.

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

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

15.

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

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

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

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

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

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

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

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

or

(b) the registered agent named in the memorandum of the company to be the registered agent, certifies in writing that the requirements of this Act in respect of registration have been complied with and the written certification delivered to the Registrar is sufficient evidence of compliance.

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

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

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

(2)   A company that amends its Memorandum or Articles shall submit to the Registrar within fourteen days after any amendment a copy of the resolution of members or directors amending the Memorandum or Articles, as the case may be, authenticated, in accordance with subsection (1) of section 72, as a true copy of the resolution amending the Memorandum or Articles and the Registrar shall retain and register such copy of the resolution.

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

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

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