Deadline for filing pursuant to the Commercial Entities (Substance Requirements) Act, 2018 for entities in existence under the applicable Acts in 2019 is 31 December 2020, filing is to take place 9 months following a company’s end of fiscal year.
All Bahamian entities incorporated under the Companies Act, International Business Companies Act, Exempted Limited Partnership Act, Partnership Act, Limited Liability Partnership Act and being in existence in 2019 is required to file a report with the Competent Authority by 31 December 2020
Anti-money laundering regulations “sweeps across” the non-profit regime in The Bahamas with the implementation of the 2019 Non Profit Organisation (NPO) statute. The Non-profit Act 2019 (“the Act”) and the amendments thereto makes it mandatory, pursuant to s7(1) for all Non-profits to be registered in order to carryout business. S7(1) provides as follows: “(1) A
Corporate Governance continues to expand globally, and indeed in The Bahamas, as organizations as well as the legislature recognizes the need for greater transparency in companies.
Legislation continues to be developed in order to ensure those with daily control of corporate entities are acting in the interest of all its stakeholders and not just for the sole benefit of any one constituent.
Minority shareholders should be in a position to receive information concerning those with greater beneficial interests in their companies and any dealings those individuals may have concerning material contracts with their companies. This is the direction taken by governance regime globally and The Bahamas is enhancing its laws to make such disclosures a requirement.
Updates to The Bahamas’ Securities Industry Rules were made by way of the Securities Industry (Corporate Governance) (Amendment) Rules, 2020 this April. The amendments requires additional disclosures be made by directors. Additionally, the Chairman and CFO must attest to the accuracy of the financial statements in writing.
In summary the new Rules provides as follows:
The insertion of a new paragraph 2A makes it mandatory that when directors vote on any material contract for which a fellow director or officer of the company has advised that he is an officer or director of the proposed contracting company, the vote must be by an expressed resolution and that director or officer must recuse himself and not take part in the voting.
7. The Chairman and CFO must satisfy the board that the financial statements present a true and fair view of the affairs of the company – this must be done in writing; and
8. finally, (as in the previous Rules a and b continues to apply as stated below – however, c is newly introduced) the annual report of the company must disclose:
a. directors’ interests in contracts with the company, its subsidiaries and holding company and the nature and details of the contracts and such interests of the director;
b. any service and material contracts with controlling shareholders.
c. details of any board membership, employment or compensated positions held by directors and any board committees and ownership interests in other companies, public issuers and regulated entities.
A part of a corporate secretary’s role is to assist companies in managing their corporate governance and board obligations.
It is a good idea for corporate secretaries to prepare proper board charters to aid directors and officers in complying with regulatory requirements. Corporate secretaries should work with the company’s executives in developing corporate governance policies that will ensure company wide adherence to regulations and general good governance as a whole.
The Securities Commission of The Bahamas has stated that the amendments made to the Rules are “based on a review of The Bahamas’ Ease of Doing Business rating, with a view to improving minority shareholder protections, strengthening disclosure requirements for directors, nominee directors and officers of public issuers, and addressing shareholder rights generally”.
The author of this article is a Corporate Governance Attorney specializing in assisting public issuers as well those companies whose shares are not publicly sold or listed. Capital Law Associates provides Corporate Secretary services and assists companies in preparing board charters and directors protocols. Additionally, we assist companies with regulatory filings and general counsel services. We can be contacted at email@example.com.
Consider thoughtfully all possible options for dealing with reduced staff hours and staff separations