BERMUDA Law and Practice Contributed by: Ian Stone and Leo Shaw, Wakefield Quin Limited
• the voluntary winding-up of the company (Section 161). Unless the Listing Regulations apply, shareholders do not have a right of pre-emption under the Companies Act or common law. Under Section 24A, subject to its memorandum and bye-laws, a company may agree that certain powers reserved to its members may not be exercised. These are Sections 10 (change of name), 10A (secondary name), 12 and 13 (amendments to the memoran - dum and bye-laws), 45 (power of company limited by shares to alter its share capital), 46 (reduction of share capital), 93 (removal of directors), 106 (shareholder approval of amalgamation or merger), 161 (circum - stances in which a company may be wound up by the court) and 201 (circumstances in which a company may be wound up voluntarily). This gives the initial subscribers to the memorandum of association the ability to vest significant power in the board of direc - tors over the future direction of the company. Officers Officers exercise delegated authority from the board The Companies Act does not prescribe detailed pro - cedural requirements for board meetings, leaving these to the bye-laws. Customarily, bye-laws provide that the quorum is a majority of directors, that deci - sions are made by simple majority vote and that the chairman has a casting vote in the event of a tie. There is wide flexibility for the bye-laws to provide for voting at the board level – eg, for certain directors to hold higher voting rights and for decisions to be subject to shareholder approval. The bye-laws typically permit board meetings to be held by telephone or other elec - tronic means. Written resolutions signed by all direc - tors are also generally permitted under the bye-laws, consistent with Section 77A of the Companies Act. General Meetings The Companies Act prescribes detailed requirements for general meetings. An annual general meeting must be held at least once in each calendar year (Section within the scope of their appointment. 2.3 Decision-Making Processes Board Meetings
71), unless dispensed with by an election under Sec - tion 71A. A special general meeting can be called by the board at any time between annual general meet - ings. Notice requirements are set out in Section 75 (typically not less than five days’ notice, subject to the bye-laws specifying a longer period). A quorum is typically prescribed by the bye-laws (commonly two shareholders present in person or by proxy). Voting is by show of hands unless a poll is demanded. Shareholders may appoint proxies to attend and vote on their behalf (Section 77). Share - holders may also pass written resolutions in lieu of a meeting, provided the requisite majority signs the resolution (Section 77A). Bermuda operates a unitary board system. There is no requirement under the Companies Act for a two-tier or supervisory board structure. The board of directors is a single body that is collectively responsible for the overall governance and management of the company. The Companies Act requires a minimum of one direc - tor (Section 90), though regulated or listed compa - nies may be required to have more. The bye-laws may prescribe a maximum number. There is no statutory requirement for the separation of the roles of chair - man and chief executive officer, though this may be required by applicable listing rules. Corporate direc - tors are permitted. 3.2 Board Members The Companies Act does not prescribe distinct legal categories of directors. In practice, the following roles might be assigned. • Chairman: typically appointed by the board under the bye-laws, the chairman presides over meetings of the board and shareholders. • Executive directors: directors who are also officers or employees of the company, with responsibilities for day-to-day management. 3. Directors and Officers 3.1 Board Structure
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