BAHAMAS Law and Practice Contributed by: Judith Whitehead KC, Michaela Sumner-Budhi, Sean McWeeney Jr., Charisma Romer-Cartwright and Hubert Edwards, GrahamThompson
such that the use of nominee directors is prohibited. Note, however, that the authors have taken the view that this restriction does not apply to the provision of directorial services where such directors are acting independently of the instructions of others and in the best interest of the company. 3.4 Management Structures The directors of companies incorporated under the Companies Act and the International Business Com - panies Act are charged with the responsibility of man - aging the company. Generally, this rule is subject to any limitation as provided for in any unanimous share - holder agreement and the constitutional documents The typical management structure of a company is based on a single-tier system and consists of a board of directors responsible for appointing officers. How - ever, subject to any limitation in the company’s articles of association or a unanimous shareholder agreement, the directors may delegate their powers to a single director, a committee of directors, or officers, and specify their duties to manage the business and affairs of the company to them. of the company. Companies Act The officers are, however, restricted from issuing shares, declaring dividends, purchasing or redeeming shares, approving financial statements, or amending the company’s articles of association. The International Business Companies Act The usual management structure of an international business company is also based on a single-tier sys - tem and consists of a board of directors responsible for the appointment of officers. Subject to any limita - tions in the memorandum or articles of association or in a unanimous shareholder agreement, each officer or agent has similar powers and authority to the direc - tors, except the power to fix emoluments of directors with respect to services provided to the company. Directors of an international business company are also permitted to designate one or more committees, each consisting of one or more directors. The only limitations of such committees are the powers to fill
a vacancy in the board of directors and appoint and remove officers or agents of the company. 3.5 Directors’, Officers’ and Shareholders’ Liability The directors owe a fiduciary duty to their companies and should avoid situations where their duty conflicts with their personal interests. In accordance with the Companies Act and the International Business Com - panies Act, directors, officers and agents must act honestly and in good faith with a view to the best inter - est of the company and exercise the care, diligence, and skill that a reasonably prudent person would exer - cise in comparable circumstances in performing their functions. Where a current or former director or officer has act - ed in good faith with a view to the best interest of the company and, in certain cases, had reasonable grounds to believe that their conduct was lawful, the company may indemnify such person. Section 58 of the International Business Companies Act provides that subject to any limitations in its mem - orandum or articles of association or 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: • 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 direc - tor or an officer of a company; or • is or was, at the request of the company, serving as a director or officer, or in any other capacity is or was acting for another company or a partnership, joint venture, trust, or other enterprises, provided that such person acted honestly and in good faith with a view to the best interests of the company. Also, under the common law of The Bahamas, there is the concept of piercing the corporate veil based on English common law principles.
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