Major amendments to Bermuda Companies Act 1981

John C.R. Collis, Anthony D. Whaley, Barbara A. Padega • Posted 23/12/2011 • Under Press Releases

On December 18, 2011, the Companies Amendment (No. 2) Act 2011 (the “Act”) 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.

Key Amendments

• 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.

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. This cooperative approach demonstrates the willingness and ability of Bermuda to adapt to the changing product needs of clients and corporations around the world.

Please contact your usual Conyers Dill & Pearman representative for additional information and advice.