Companies Amendment Act 1994
The Laws of Bermuda
Annual Volume of Public Acts 1994 : 22
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BERMUDA
1994 : 22
COMPANIES AMENDMENT ACT 1994
[Date of Assent 13 July 1994]
[Operative Date 13 July 1994]
WHEREAS it is expedient to amend the Companies Act 1981:
Be it enacted by The Queen's Most Excellent Majesty, by and
with the advice and consent of the Senate and the House of Assembly of
Bermuda, and by the authority of the same, as follows:
Short title
1 This Act which amends the Companies Act 1981 (hereinafter
referred to as "the principal Act") may be cited as the Companies
Amendment Act 1994.
Amends section 2(1) of principal Act
2 Section 2(1) of the principal Act is amended—
(a) by deleting the definition of the expression "income
equalization account"; and
(b) by deleting the full stop at the end of the subsection and
substituting a semi-colon, and by inserting next after the
definition of "subsidiary company" the following:
" "unlimited liability company" has the meaning
given in section 5(2)(c).".
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Amends section 5 of principal Act
3 Section 5 of the principal Act is amended—
(a) in subsection (1), by inserting next after the words
"company with" the words "or without"; and
(b) in subsection (2)—
(i) by deleting the word "either";
(ii) by deleting the word "or" at the end of paragraph
(a); and
(iii) by deleting the full stop at the end of paragraph
(b) and substituting a semi-colon and the word
"or"; and by inserting next after paragraph (b)
the following:
"(c)a company not having any limit on the
liability of its members, in this Act termed an
"unlimited liability company".".
Amends section 7(1) of principal Act
4 Section 7(1) of the principal Act is amended—
(a) by deleting paragraph (a) and substituting the
following—
"(a) the name of the company and, in the case of a
company limited by shares or a company limited
by guarantee, subject to section 9, the word
"Limited" as the last word of the name;
(aa) in the case of a company limited by shares or a
company limited by guarantee, that the liability of
its members is limited;"; and
(b) by deleting the full stop at the end of paragraph (g) and
substituting therefor a semi-colon and the word "and"
and by inserting next after paragraph (g) the following:
"(h) the period, if any, fixed for the duration of the
company, or the event, if any, on the occurrence
of which the company is to be dissolved.".
Amends section 8(2) of principal Act
5 Section 8(2) of the principal Act is amended by deleting
paragraph (f) and substituting the following:
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"(f) in the case of a company limited by shares or a company
limited by guarantee, subject to section 9, does not
contain the word "Limited"; or
(g) in the case of an unlimited liability company ends with
the word "Limited".".
Amends section 10 of principal Act
6 Section 10 of the principal Act is amended—
(a) by deleting subsection (1) and substituting the following:
"(1) Subject to section 8(1) and (2), a company may
by resolution change its name if—
(a) not more than three months prior to an
application for the approval of the
Registrar under paragraph (b), notice of
the intention to change the name and of
the proposed name has been published
in an appointed newspaper; and
(b) the Registrar has, on application,
approved, in writing, the proposed
name;";
(b) by deleting subsection (2); and
(c) by deleting subsection (3) and substituting the follow-
ing:
"(3) The Registrar shall, on receipt of a certified copy
of the resolution referred to in subsection (1)
together with such fee as may be prescribed—
(a) enter the new name on the register in
place of the former name;
(b) enter on the register the effective date of
the change of name which shall be the
date of entry of the new name on the
register; and
(c) issue a certificate of change of name.".
Inserts new section 14A in principal Act
7 (1) The principal Act is amended by inserting next after section
14 the following new section:
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"Re-registration of limited liability company as unlimited
liability company
14A (1) Subject to the provisions of this section, a company
which is registered as a company limited by shares may be re-
registered as an unlimited liability company in pursuance of an
application in that behalf complying with the requirements of
this section.
(2) No application to re-register a company limited by
shares as an unlimited liability company shall be lodged with the
Registrar unless such application has been agreed by all the
members of the company.
(3) For the purposes of subsection (2) all the members
of a company shall be deemed to have agreed at a general
meeting if either—
(a) all the members are present in person or by
proxy at the meeting and agree; or
(b) if some of the members are not present in
person or by proxy at the meeting, then, if the
members present in person or by proxy at the
meeting agree and there are produced at the
meeting statements in writing from the members
not present in person or by proxy stating that
they agree.
(4) An application referred to in subsection (1) shall be
in the prescribed form and shall be signed by a director or the
secretary of the company and shall be lodged with the Minister,
together with the documents specified in subsection (6).
(5) The application shall set out such alterations in the
company's memorandum as are requisite in order to conform
with the memorandum of a company to be formed as an
unlimited liability company.
(6) The documents referred to in subsection (4) are—
(a) a certified copy of the agreement referred to in
subsection (3)(a), or certified copies of the
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agreement and the written statements referred to in
subsection (3)(b); and
(b) a statutory declaration made by at least two
directors of the company that the persons who
have signified their agreement pursuant to sub
section (3) constitute the whole membership of the
company; and
(c) a printed copy of the memorandum
incorporating the alterations in it set out in the
application.
(7) Sections 12(2) and 6, and section 12(7A) shall,
mutatis mutandis, apply respectively—
(a) to an application for re-registration; and
(b) re-registration,
under this section, as they apply to an application for the
Minister's consent to register a company and the registration of a
company's memorandum which has been altered.
Amends section 16 of principal Act
8 Section 16 of the principal Act is amended by deleting
subsection (3).
Amends section 39A(3) of principal Act
9 Section 39A(3) of the principal Act is amended by deleting
paragraph (a) and substituting the following:
"(a) a distribution of a company's assets out of funds of the
company which would otherwise be available for
dividend or distribution,".
Amends section 39B(2) of principal Act
10 Section 39B(2) of the principal Act is amended by deleting the
words "profits available for distribution or contributed surplus" and
substituting the words "funds of the company which would otherwise be
available for dividend or distribution".
Amends section 42(1) of principal Act
11 Section 42(1) of the principal Act is amended by deleting
paragraphs (a) and (b) of the proviso thereto and substituting the
following:
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"(a)no such shares shall be redeemed except out of the
capital paid up thereon or out of the funds of the
company which would otherwise be available for
dividend or distribution or out of the proceeds of a fresh
issue of shares made for the purposes of the redemption;
and
(b) the premium, if any, payable on redemption, is provided
for out of funds of the company which would otherwise
be available for dividend or distribution or out of the
company's share premium account before the shares are
redeemed.".
Amends section 42A(1) of principal Act
12 Section 42A(1) of the principal Act is amended by inserting next
after the word "memorandum" the words "or bye-laws".
Amends section 77 of principal Act
13 Section 77 of the principal Act is amended—
(a) in subsection (1), by inserting next after the words
"Subject to", the words "the provisions of this section,";
and
(b) by inserting next after subsection (8) the following:
" (9) Nothing contained in this section shall be
construed as prohibiting a member who is the holder of
two or more shares from appointing more than one
proxy to represent him and vote on his behalf, whether
on a show of hands or on a poll, at a general meeting of
the company or at a class meeting.".
Amends section 91(3) of principal Act
14 Section 91(3) of the principal Act is amended by deleting the
words "until the next annual general meeting".
Inserts new section 104A
15 The principal Act is amended by inserting next after section 104
the following:
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"Amalgamation of exempted company and foreign
corporation
104A (1) An exempted company and a body incorporated
outside Bermuda (hereinafter in this section referred to as a
"foreign corporation") may apply to the Minister for consent to
amalgamate and continue as an exempted company registered in
Bermuda to which the provisions of this Act and any other
relevant laws of Bermuda shall apply.
(2) An application for consent under subsection (1)
shall be in such form, and be accompanied by an application fee
and such documents, as the Minister may determine, including
documentary proof, satisfactory to the Minister, that the foreign
corporation has obtained all necessary authorization required
under the laws of the country in which it was incorporated to
enable it to make the application.
(3) The exempted company and the foreign corporation
shall, not more than three months prior to an application for the
consent of the Minister under subsection (1), advertise in an
appointed newspaper their intention to amalgamate.
(4) The provisions of sections 105 to 109, mutatis
mutandis, apply to an amalgamation under this section in the
same way as they apply to an amalgamation under section 104.
(5) The Minister shall not grant consent under this
section to a foreign corporation carrying on banking business as
defined in the Banks Act 1969.".
Amends section 106 of principal Act
16 Section 106 of the principal Act is amended—
(a) in subsection (1), by deleting the words "or series";
(b) in subsection (2), by deleting paragraph (b) and
substituting the following:
"(b) subject to subsection (2A), state—
(i) the fair value of the shares as
determined by each amalgamating
company; and
(ii) that a dissenting shareholder is entitled
to be paid the fair value of his shares.
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(2A) Notwithstanding subsection (2)(b)(ii), fai-
lure to state the matter referred to in that subsection
does not invalidate an amalgamation.";
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(c) by deleting subsection (4) and substituting the following:
" (4) The holders of shares of a class of
shares of an amalgamating company are entitled to vote
separately as a class in respect of an amalgamation if
the amalgamation agreement contains a provision which
would constitute a variation of the rights attaching to
any such class of shares for the purposes of section 47.
(4A) The provisions of the bye-laws of the
company relating to the holding of general meetings
shall apply to general meetings and class meetings
required by this section provided that, unless the bye-
laws otherwise provide, the resolution of the share-
holders or class must be approved by a majority vote of
three-fourths of those voting at such meeting and the
quorum necessary for such meeting shall be two persons
at least holding or representing by proxy more than one-
third of the issued shares of the company or the class,
as the case may be, and that any holder of shares
present in person or by proxy may demand a poll.";
(d) by deleting subsection (6) and substituting the following:
" (6) Any shareholder who did not vote in
favour of the amalgamation and who is not satisfied that
he has been offered fair value for his shares may within
one month of the giving of the notice referred to in
subsection (2) apply to the Court to appraise the fair
value of his shares.
(6A) Subject to subsection (6B), within one
month of the Court appraising the fair value of any
shares under subsection (6) the company shall be
entitled either—
(a) to pay to the dissenting shareholder
an amount equal to the value of his
shares as appraised by the Court; or
(b) to terminate the amalgamation in
accordance with subsection (7).
(6B) Where the Court has appraised any
shares under subsection (6) and the amalgamation has
proceeded prior to the appraisal then, within one month
of the Court appraising the value of the shares, if the
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amount paid to the dissenting shareholder for his shares
is less than that appraised by the Court the
amalgamated company shall pay to such shareholder
the difference between the amount paid to him and the
value appraised by the Court.
(6C) No appeal shall lie from an appraisal by
the Court under this section.
(6D) The costs of any application to the Court
under this section shall be in the discretion of the
Court.".
Amends section 108(3) of principal Act
17 Section 108(3) of the principal Act is amended in paragraph (b)
by deleting the word "stated" and substituting the word "issued".
Amends section 129(2) of principal Act
18 Section 129(2) of the principal Act is amended by deleting the
words "or outside" and the words "or partly within and partly outside
those waters";.
Amends section 132G of principal Act
19 Section 132G of the principal Act is amended by deleting
subsection (2) and substituting the following:
" (2) The consent of the Minister shall be in
such form as the Minister may determine and shall be
for such duration, and may be subject to such terms
and conditions, as the Minister may specify therein.".
Amends section 132H of principal Act
20 Section 132H of the principal Act is amended by deleting
subsection (4).
Amends section 132I of principal Act
21 Section 132I of the principal Act is amended—
(a) in paragraph (a), by deleting the word "Act" and
substituting the word "Part";
(b) in paragraph (b)(iii), by deleting the words "to
prosecution";
(c) in paragraph (b)(iv), by deleting the word ", criminal";
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(d) by deleting paragraph (b)(v); and
(e) by inserting the following as paragraph (c):
"(c)the Minister is satisfied—
(i) that there is no existing liability to
prosecution in Bermuda in respect of
the company;
(ii) there is no criminal action or proceeding
pending in Bermuda against the
company; and
(iii) any conviction, or any ruling, order or
judgment, against the company in
Bermuda has been enforced against the
company.".
Repeals and replaces section 201 of principal Act
22 Section 201 of the principal Act is repealed and replaced by the
following:
"Circumstances in which a company must be wound up
201 A company shall be wound up voluntarily—
(a) when the period, if any, fixed for the duration of
the company by its incorporating Act or its
memorandum expires, or the event, if any,
occurs on the occurrence of which the incor-
porating Act or memorandum provides that the
company is to be dissolved; or
(b) the company resolves in general meeting that
the company be wound up voluntarily.".
Inserts new section 201A in principal Act
23 The principal Act is amended by inserting next after section 201
the following:
"Appointment of liquidator and dissolution of company of
fixed duration
201A (1) Subject to section 227, within ninety days—
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(a) of the expiration of the period, if any, fixed in the
incorporating Act or the memorandum for the
duration of a company; or
(b) from the date of the event, if any, on the
occurrence of which it is provided in the
incorporating Act or the memorandum that a
company is to be dissolved,
the shareholders of the company shall appoint a person to be
liquidator for the purpose of winding up the affairs, and
distributing the assets, of the company.
(2) Where the shareholders fail to appoint a
liquidator pursuant to subsection (1), any shareholder or any
creditor may apply to the Court to appoint a liquidator.".
Amends section 202 of principal Act
24 Section 202 of the principal Act is amended by deleting
subsection (1) and substituting the following:
" (1) Where a company is being wound up pursuant to
section 201, then within twenty-one days after—
(a) the expiration of the period fixed for the duration
of the company by its incorporating Act or
memorandum;
(b) the occurrence of the event, on the occurrence of
which the incorporating Act or memorandum
provides that the company is to be dissolved; or
(c) the passing of the resolution that the company
be wound up voluntarily,
the company shall give notice thereof by advertisement in an
appointed newspaper.".
Repeals and replaces section 203 of principal Act
25 Section 203 of the principal Act is repealed and replaced by the
following:
"Commencement of voluntary winding up
203 A voluntary winding up shall be deemed to commence—
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(a) on the expiration of the period, if any, fixed in the
incorporating Act or the memorandum for the
duration of a company;
(b) on the occurrence of the event, if any, on the
occurrence of which it is provided in the incor-
porating Act or the memorandum that a company is
to be dissolved; or
(c) at the time of the passing of the resolution for
voluntary winding up.".
Amends proviso to section 204 of principal Act
26 The proviso to section 204 of the principal Act is amended by
inserting next after the words "Provided that" the words "in the case of a
voluntary winding up under section 201(b),".
Amends section 206 of principal Act
27 Section 206 of the principal Act is amended—
(a) in subsection (1), by inserting next after the word
"voluntarily" the words "pursuant to section 201(b)"; and
(b) in subsection (2), by deleting paragraph (a) and
substituting the following—
"(a) it is made within five weeks immediately
preceding—
(i) the expiration of the period, if any, fixed
by the incorporating Act or the
memorandum for the duration of the
company;
(ii) the occurrence of the event, if any, on
the occurrence of which it is provided in
the incorporating Act or the memoran-
dum that the company is to be
dissolved; or
(iii) the date of the passing of the resolution
for voluntarily winding up,
and is delivered to the Registrar for registration
before that date;".
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Repeals and replaces section 260 of principal Act
28 Section 260 of the principal Act is repealed and replaced by the
following:
"Power of Court to declare dissolution of company void
260 (1) Where a company has been dissolved, the Court
may, at any time within ten years from the date of the
dissolution, on an application being made for the purpose by the
liquidator of the company or by any other person who appears
to the Court to be interested, make an order declaring the
dissolution to have been void and—
(a) upon such order being made; and
(b) upon such order being registered pursuant to
subsection (2),
the company shall be deemed to have continued in existence as
if it had not been dissolved.
(2) It shall be the duty of the person on whose
application the order was made, within seven days after the
making of the order, or such further time as the Court may
allow, to deliver to the Registrar for registration a copy of the
order, and if that person fails so to do he shall be liable to a
default fine.
(3) Where the Court makes an order under subsection
(1), the Court may make such consequential orders, or impose
such terms and conditions, as to the Court may seem
appropriate in the circumstances.".
Saving
29 The provisions of section 7(1)(aa) do not apply to a company
limited by shares, or a company limited by guarantee, which was formed
prior to the company coming into operation of this Act.
Minor amendments
30 The sections of the principal Act specified in the first column of
the Schedule are amended in the manner specified in the second column
of that Schedule.
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Schedule (section 26)
Sections Amendment
11(2); 13(1)(2) and (3)(xv), 19, 33, Insert next after the words
42(1), 42A(1), 43, 44, 45(1), 77(1), "limited by shares" the words
110(1), 126(a), 131(1)(a)(ii)(aa) and ", or other company having a
(a)(iii)(cc)A; 152(1); 158(d); First share capital,".
Schedule; Fifth Schedule, Part I,
wherever the words "limited by shares"
appear
39C(3)(b) Insert next after the words
"not limited by shares" the
words " or does not have
a share capital".
117(1) and (2) Insert next after the words
"limited by shares" the words
", or other company having a
share capital,".
156A Insert next after the words
"limited by shares" the words
", or other company having a
share capital".
246(4) and 247(3) Delete the words "subsection
(1) of section 3 of the Bank-
ruptcy Act 1876" and substi-
tute therefor the words
"section 3 of the
Bankruptcy Act 1989".
