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Bahamas IBC Act -309

Bahamas Formations India Companies Act 1956 previous companies act next companies act

PART V - DIRECTORS, OFFICERS, AGENTS AND LIQUIDATORS

40.Subject to any limitations in its Memorandum or Articles or in any unanimous shareholder agreement, the business and affairs of a company shall be managed by a board of directors that consists of two or more persons who may be individuals or companies.

Management by directors.

41.(1) All the shareholders of a company among themselves or all the shareholders of a company and a person who is not a shareholder of a company, may by a written agreement restrict in whole or in part, the powers of the directors of the company to manage the business and affairs of the company, and any such agreement if not otherwise invalid, shall be valid.

Unanimous shareholder agreement.

(2) A shareholder who is a party to any unanimous shareholder agreement has all the rights, powers and duties and incurs all the liabilities of a director of the company to which the agreement relates, to the extent that the agreement restricts the discretion or powers of the directors to manage the business and affairs of the company; and the directors are hereby relieved of their duties and liabilities to the same extent.

(3) If a person who is the beneficial owner of all the issued shares of a company makes a written declaration that restricts in whole or in part the powers of the directors to manage the business and affairs of the company, the declaration shall constitute a unanimous shareholder agreement.

(4) Where any unanimous shareholder agreement is executed or terminated, written notice of that fact, together with the date of the execution or termination thereof, shall be filed with the Registrar within 15 days after the execution or termination and no such agreement shall be legally effective until notice of its execution shall have been filed as aforesaid.

(5) In this section "shareholder" includes "member".

42.(1) The first directors of a company shall be elected by the subscribers to the Memorandum; and thereafter, the directors shall be elected by the members for such term as the members may determine and where permitted by the Memorandum or Articles of a company the directors may also elect directors for such term as the directors may determine.

Election, term and removal of directors.

(2) Each director holds office until his successor takes office or until his earlier death, resignation or removal or in the case of a company upon the making of an order for the winding up or dissolution of the company or upon the removal of a defunct company by the Registrar otherwise than pursuant to a winding-up order.

(3) Subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement-

(a) a director shall cease to hold the office of director if a majority requests his resignation in writing;

(b) a director may resign his office by giving written notice of his resignation to the company and the resignation has effect from the date the notice is received by the company or from such later date as may be specified in the notice.

(4) Subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, a vacancy in the board of directors may be filled by a resolution of members or of a majority of the remaining directors.

43.The number of directors shall be fixed by the Articles and, subject to any limitations in the Memorandum or Articles, the Articles may be amended to change the number of directors.

Number of directors.

44.(1) A company shall keep a register to be known as a register of directors and officers containing-

Register of directors and officers.

(a) the names and addresses of the persons who are directors and officers of the company;

(b) the date on which each person whose name is entered in the register was appointed as a director or officer of the company; and

(c) the date on which each person as a director or officer ceased to be a director or officer of the company.

(2) The register of directors and officers may be in such form as the directors approve, but if it is in magnetic, electronic or other data storage form, the company must be able to produce legible evidence of its contents.

(3) The register of directors and officers, commencing from the date of the registration of the company, shall be kept at the registered office of the company referred to in section 37.

(4) A copy of the register of directors and officers shall be filed with the Registrar and shall be open to inspection by members of the public during official hours.

(5) The register of directors and officers is prima facie evidence of any matters directed or authorised by this Act to be contained therein.

45.The directors shall have all the powers of the company that are not reserved to the members under this Act or in the Memorandum or Articles or in any unanimous shareholder agreement.

Powers of directors.

46.Subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, the directors may, by a resolution of directors fix the emoluments of directors in respect of services to be rendered in any capacity to the company.

Emoluments of directors.

47.(1) The directors may, by a resolution of directors designate one or more Committees, each consisting of one or more directors.

Committee of directors.

(2) Subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, each Committee has such powers and authority of the directors, including the power and authority to affix the common seal of the company, as are set forth in the resolution of directors establishing the Committee, except that no Committee has any power or authority with respect to the matters requiring a resolution of directors under section 42 or 54.

48.(1) Subject to any limitations in the Memorandum or Articles or in an unanimous shareholder agreement, the directors of a company incorporated under this Act may meet at such times and in such manner and places within or outside The Bahamas as the directors may determine to be necessary or desirable.

Meeting of directors.

(2) A director shall be deemed to be present at a meeting of directors if-

(a) he participates by telephone or other electronic means; and

(b) all directors participating in the meeting are able to hear each other and recognise each other's voice and for this purpose participation constitutes prima facie proof of recognition.

49.(1) Subject to a requirement in the Memorandum or Articles or in any unanimous shareholder agreement to give longer notice, a director shall be given not less than 2 days notice of meetings of directors.

Notice of meetings of directors.

(2) Notwithstanding subsection (1) but subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, a meeting of directors held in contravention of that subsection, is valid if all the directors, or such majority thereof as may be specified in the Memorandum or Articles or in any unanimous shareholder agreement, entitled to vote at the meeting, have waived the notice of the meeting; and for this purpose, the presence of a director at the meeting shall be deemed to constitute waiver on his part.

(3) The inadvertent failure to give notice of a meeting to a director, or the fact that a director has not received the notice, does not invalidate the meeting.

50.The quorum for a meeting of directors is that fixed by the Memorandum or Articles.

Quorum of directors.

51.Subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, an action that may be taken by the directors or a Committee of directors at a meeting may also be taken by a resolution of directors or a Committee of directors consented to in writing or by telex, telefax, telegram, cable or other written electronic communication, without the need for any notice.

Consents of directors.

52.(1) Subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, a director may by a written instrument appoint an alternate who need not be a director and the name of such alternate shall be disclosed and notified to the Registrar.

Alternates for directors.

(2) An alternate for a director appointed under subsection (1) shall be entitled to attend meetings in the absence of the director who appointed him and to vote or consent in the place of the director.

53.Where there is a single director or a single shareholder of a company, any requirement in this Act or in the Articles for a meeting of directors or shareholders for any purpose shall be satisfied where such single director or single shareholder passes a resolution in lieu of such meeting.

Meeting of single director or single shareholder.

54.(1) The directors may, by a resolution of directors appoint any person, including a person who is a director, to be an officer or agent of the company.

Officers and agents.

(2) Subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, each officer or agent has such powers and authority of the directors, including the power and authority to affix the common seal of the company, as are set forth in the Articles or in any unanimous shareholder agreement, or in the resolution of directors appointing the officer or agent, except that no officer or agent has any power or authority with respect to the matters requiring a resolution of directors under section 46 and this section.

(3) The directors may remove an officer or agent appointed under subsection (1) and may revoke or vary a power conferred on him under subsection (2) .

55.Every director, officer, agent and liquidator of a company, in performing his functions, shall act honestly and in good faith with a view to the best interest of the company and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

Standard of care.

56.Every director, officer, agent and liquidator of a company, in performing his functions, is entitled to rely upon the Share Register kept under section 29, the books of accounts and records and the minutes and copies of consents to resolutions kept under section 67 and any report made to the company by any other director, officer, agent or liquidator or by any person selected by the company to make the report.

Reliance on records and reports.

57.(1) Subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, ifthe requirements of subsection (2) are satisfied, no agreement or transaction between-

Conflict of interests.

(a) a company; and

(b) one or more of its directors or liquidators, or any person in which any director or liquidator has a financial interest or to whom any director or liquidator is related, including as a director or liquidator of that other person, is void or voidable for this reason only or by reason only that the director or liquidator is present at the meeting of directors or liquidators, or at the meeting of the Committee of directors or liquidators, that approves the agreement or transaction or that the vote or consent of the director or liquidator is counted for that purpose.

(2) An agreement or transaction referred to in subsection (1) is valid if-

(a) the material facts of the interest of each director or liquidator in the agreement or transaction and his interest in or relationship to any other party to the agreement or transaction are disclosed in good faith or are known by the members entitled to vote at a meeting of members; and

(b) the agreement or transaction is approved or ratified by a resolution of members.

(3) Subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, a director or liquidator who has an interest in any particular business to be considered at a meeting of directors, liquidators or members may be counted for purposes of determining whether the meeting is duly constituted in accordance with section 50 or otherwise.

58.(1) Subject to subsection (2) and any limitations in its Memorandum or Articles or in any unanimous shareholder agreement, a company may indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal or administrative proceedings any person who-

Indemnification.

(a) is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil or administrative by reason of the fact that the person is or was a director, an officer or a liquidator of the company; or

(b) is or was, at the request of the company, serving as a director, officer or liquidator, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise.

(2) Subsection (1) only applies to a person referred to in that subsection if the person acted honestly and in good faith with a view to the best interests of the company.

59.A company may purchase and maintain insurance in relation to any person who is or was a director, a registered agent, an officer or a liquidator of the company, or who at the request of the company is or was serving as a director, a registered agent, an officer or a liquidator of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not the company has or would have had the power to indemnify the person against the liability under subsection (1) of section 58.

Insurance.

PART VI - PROTECTION OF MEMBERS AND CREDITORS

60.(1) Subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, the directors of a company may convene meetings of the members of the company at such times and in such manner and places within or outside The Bahamas as the directors consider necessary or desirable.

Meetings of members.

(2) Subject to a provision in the Memorandum or Articles or in any unanimous shareholder agreement for a lesser percentage, upon the written request of members holding more than 50 per cent of the votes of the outstanding voting shares in the company, the directors shall convene a meeting of members.

(3) Subject to any limitations in the Memorandum or Articles, a member shall be deemed to be present at a meeting of members if-

(a) he participates by telephone or other electronic means; and

(b) all members participating in the meeting are able to hear each other and recognise each other's voice and for this purpose participation constitutes prima facie proof of recognition.

(4) A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.

(5) The following provisions apply in respect of joint ownership of shares-

(a) if 2 or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;

(b) if only one of them is present in person or by proxy, he may vote on behalf of all of them; and

(c) if 2 or more are present in person or by proxy, they shall vote as one.

61.(1) Subject to any requirement in the Memorandum or Articles or in any unanimous shareholder agreement to give longer notice, the directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date of the notice appear as members in the Share Register referred to in section 29 and are entitled to vote at the meeting.

Notice of meetings of members.

(2) Notwithstanding subsection (1) but subject to any limitations in the Memorandum or Articles or in any unanimous shareholder agreement, a meeting of members held in contravention of the requirement to give notice is valid if members holding 90 per cent majority, or such lesser majority as may be specified in the Memorandum or Articles or in any unanimous shareholder agreement, of-

(a) the total number of the shares of the members entitled to vote on all the matters to be considered at the meeting; or

(b) the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with an absolute majority of the remaining votes,

have waived notice of the meeting; and for this purpose the presence of a member at the meeting shall be deemed to constitute waiver on his part.

(3) The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received the notice, does not invalidate the meeting.

62.The quorum for a meeting of members for purposes of a resolution of members is that fixed by the Memorandum or Articles; but where no quorum is so fixed, a meeting of members is properly constituted for all purposes if at the commencement of the meeting there are present in person or by proxy shareholders representing more than one-half of the shares of each class or series thereof.

Quorum for meeting of members.

63.(1) Except as otherwise provided in the Memorandum or Articles, all shares vote as one class and each whole share has one vote.

Voting by members.

(2) The directors of a company incorporated under this Act may fix the date notice is given of a meeting as the record date for determining those shares that are entitled to vote at the meeting.

64.Subject to any limitations in the Memorandum or Articles, an action that may be taken by members at a meeting of members may also be taken by a resolution of all members consented to in writing or by telex, telegram, telefax, cable or other written electronic communication, without the need for any notice.

Consents of members.

65.Any notice, information or written statement required under this Act to be given to members by a company shall be served, in the case of members holding registered shares-

Service of notice on members.

(a) in the manner prescribed in the Memorandum or Articles, as the case may be; or

(b) in the absence of a provision in the Memorandum or Articles, by personal service or by mail addressed to each member at the address shown in the Share Register.

66.(1) Any summons, notice, order, document, process, information or written statement to be served on a company may be served by leaving it, or by sending it by registered mail addressed to the company at its registered office or by leaving it with, or by sending it by registered mail to the registered agent of the company.

Service of process, etc., on company.

(2) Service of any summons, notice, order, document, process, information or written statement to be served on a company may be proved by showing that the summons, notice, order, document, process, information or written statement-

(a) was mailed in such time as to admit to its being delivered in the normal course of delivery, within the period prescribed for service; and

(b) was correctly addressed and the postage was prepaid.

67.(1) A company shall keep such financial statements, accounts and records as the directors consider necessary or desirable in order to reflect the financial position of the company.

Books, records and common seal.

(2) A company shall keep at its registered office-

(a) a copy of the Memorandum and Articles and all amendments thereto;

(b) a register of all its directors and officers,

and such other records as the Minister may by order prescribe.

(3) A company shall have a common seal and an imprint thereof shall be kept at the registered office of the company.

68.(1) A member of a company may, in person or by attorney and in furtherance of a proper purpose, request in writing specifying the purposes, to inspect during normal business hours the Share Register of the company and the books, records, minutes and consents kept by the company and to make copies of extracts therefrom.

Inspection of books and records.

(2) For the purposes of subsection (1) , a proper purpose is a purpose reasonably related to the members interest as a member.

(3) If a request under subsection (1) is submitted by an attorney for a member, the request shall be accompanied by a power of attorney authorising the attorney to act for the member.

(4) If the company, by a resolution of directors, determines that it is not in the best interest of the company or of any other member of the company to comply with a request under subsection (1) , the company may refuse the request.

(5) Upon refusal by the company of a request under subsection (1) , the member may before the expiration of a period of 90 days of his receiving notice of the refusal, apply to the court for an order to allow the inspection.

69.(1) Contracts may be entered into on behalf of a company as follows-

Contracts generally.

(a) a contract that, if entered into between individuals, is required by law to be in writing and under seal, may be entered into by or on behalf of the company in writing under the common seal of the company, and may, in the same manner, be varied or discharged;

(b) a contract that, if entered into between individuals, is required by law to be in writing and signed by the parties, may be entered into by or on behalf of the company in writing and signed by a person acting under the express or implied authority of the company, and may, in the same manner, be varied or discharged; and

(c) a contract that, if entered into between individuals, is valid although entered into orally, and not reduced to writing, may be entered into orally by or on behalf of the company by a person acting under the express or implied authority of the company, and may in the same manner, be varied or discharged.

(2) A contract entered into in accordance with this section is valid and is binding on the company and its successors and all other parties to the contract.

(3) Without affecting paragraph (a) of subsection (1) , a contract, agreement or other instrument executed by or on behalf of a company by a director or an authorised officer or agent of the company is not invalid by reason only of the fact that the common seal of the company is not affixed to the contract, agreement or instrument.

70.(1) A person who enters into a written contract in the name of or on behalf of a company before the company comes into existence, shall be personally bound by the contract and is entitled to the benefits of the contract, except where-

Pre-incorporation contracts.

(a) the contract specifically provides otherwise; or

(b) subject to any provisions of the contract to the contrary, the company adopts the contract, under subsection (2) .

(2) Within a period of 90 days after a company comes into existence, the company may, by any action or conduct signifying its intention to be bound thereby, adopt a written contract entered into in its name or on its behalf before it came into existence.

(3) When a company adopts a contract under subsection (2) -

(a) the company shall be bound by, and entitled to the benefits of, the contract as if the company had been in existence at the date of the contract and had been a party to it; and

(b) subject to any provisions of the contract to the contrary, the person who acted in the name of or on behalf of the company ceases to be bound by or entitled to the benefits of the contract.

71.A promissory note or bill of exchange shall be deemed to have been made, accepted or endorsed by a company if it is made, accepted or endorsed in the name of the company-

Notes and bills of exchange.

(a) by or on behalf or on account of the company; or

(b) by a person acting under the express or implied authority of the company,

and if so endorsed, the person signing the endorsement shall not be liable thereon.

72.(1) A company may, by an instrument in writing, whether or not under its common seal, authorise a person, either generally or in respect of any specified matter, as its agent to act on behalf of the company and to execute contracts, agreements, deeds and other instruments on behalf of the company.

Power of Attorney.

(2) A contract, agreement, deed or other instrument executed on behalf of the company by an agent appointed under subsection (1) , whether or not under his seal, is binding on the company and has the same effect as if it were under the common seal of the company.

(3) A power of attorney under this section applies both within and outside The Bahamas.

73.(1) A document requiring authentication or attestation by a company may be signed by a director, a secretary or by an authorised officer or agent of the company, and need not be under its common seal.

Authentication or attestation.

(2) If the signature of any director, officer or agent authenticating or attesting any document is verified in writing by the registered agent of a company, the company is bound by the document.

74.If at any time there is no member of a company, any person doing business in the name of or on behalf of the company is personally liable for the payment of all debts of the company contracted during the time and the person may be sued therefor without joinder in the proceedings of any other person.

Company without a member.