The Companies Act, 1992 (the “Act”) was amended in the second quarter of 2019. If you are a director or shareholder of a company incorporated or registered under the Act, you may be interested in knowing what the changes are and how they affect you or your company. This Article discusses the more significant changes that affect companies incorporated or registered under the Act.
If shares in a company are held by a subscriber to the memorandum of association or a shareholder in a nominee capacity, this has to be stated on the memorandum of association and the register of members. Additionally, a nominee is required to sign a declaration of trust naming the beneficiaries for whom he holds the shares and a copy of this declaration is to be kept at the registered office.
A nominee who fails to comply with this requirement is liable to a penalty of $20 for each day or part thereof during which the breach continues.
Subsidiary company prohibited from holding shares in its parent
Effective the date of the amendments , a subsidiary company of a company incorporated or registered under the Act may not hold shares in the parent company. However, a subsidiary company is not prohibited from holding shares in its parent as personal representative or trustee provided the provisions of section 44A (5) are satisfied.
A subsidiary company is defined as “a company at least fifty per cent of whose outstanding voting shares of each class or series of shares are owned by another company”.
Time frame for payment of dividend and notification
When a company declares a dividend, any such dividend must be paid to shareholders within 120 days of the passing of the resolution to declare the dividend.
A copy of the resolution declaring the dividend must be sent to all shareholders entitled to the dividend and if the company is a public company, notice must be published in a local newspaper within 21 days of the passing of the resolution.
Notice period for meeting of shareholders
Directors are required to provide shareholders with at least 21 days’ notice of a meeting of shareholders to include the time and place of the meeting. This requirement may be waived if 90% (or such lesser majority as may be specified in the memorandum or articles of association or any unanimous shareholders agreement of the Company) of the total number of shares entitled to vote at the meeting agree to waive the notice requirement.
Upon receiving notice of the meeting, a shareholder owning 5% or more of the voting shares of the company may require the directors to include specific items on the meeting agenda, however, any such request has to be sent to the directors at least 7 days before the scheduled date of the meeting.
ENHANCEMENT TO EXISTING PROVISIONS
Striking off the Register and Restoration
The Act has been amended to enhance the provisions respecting the striking off of a company from the Register. Additionally, the Act now includes specific provisions respecting the restoration of a company to the Register.
If a company is in default of a provision of the Act meaning that the filing of a return, annual statement, notice or document has not been made or a fee has not been paid, the Registrar is to send the company a notice of the default and if the default is not remedied within 21 days of receipt of the notice, the company will be struck off.
If a company has been struck off for 20 years or less, it can be restored by payment of the outstanding fees or filing of the required document but if the company has been struck off for more than 20 years, it can only be restored by way of a court application.
Moreover, assets or other property of a company (owned by the company at the time the company was struck off) that has been struck off for 20 years or less, is held on trust by the Treasurer of the Government and if for more than 20 years shall be deemed to have no owner and belong outright to the Treasurer for the benefit of The Bahamas. Subject to the provisions of the Act, property vested in the Treasurer can only be disposed of (that is, transferred or given back to the company) with the prior approval of a resolution of both Houses of Parliament.
You are encouraged to review your company documents in light of the provisions outlined above and contact us to assist if need be with any amendments or outstanding filings. Also, if your company’s annual filings or fees are not current you are encouraged to bring those current to ensure that your company is not struck off the Register.