Companies Act Amendments Now In Force
Major changes to the way Bermuda’s off-shore sector conducts business on the island came into effect this week.
On December 18, 2011, the Companies Amendment [No. 2] Act 2011 received assent and became operative.
The act provides for significant amendments to the Companies Act 1981, the principal statute governing the formation and operation of Bermuda companies.
“The act is the result of the Bermuda Government’s open communication with the private sector which continues to encourage the promotion and maintenance of Bermuda as a leading international finance centre,” said a spokesman for Hamilton law firm Conyers Dill & Pearman in a briefing paper on the changes issued to its international clientele.
“This cooperative approach demonstrates the willingness and ability of Bermuda to adapt to the changing product needs of clients and corporations around the world.”
Key Amendments Include
- Directors: Sole directors and corporate directors of Bermuda companies are now permitted.
- Annual General Meetings: Companies have the option to waive annual general meetings.
- Financial Assistance: Prohibitions on providing financial assistance have been removed.
- Share Transfers: Paperless share transfers are possible for listed companies.
- Dividends and Distributions: Amendments have been made to the solvency test, allowing Bermuda companies to declare dividends or distributions when recording a profit, notwithstanding that the company may carry a negative retained earnings balance.
- Mergers: A new process for mergers has been added as an alternative to the existing amalgamations procedure. In a merger, companies combine their assets, liabilities and undertakings and a surviving company is created.
