BAHAMAS Law and Practice Contributed by: Michelle Neville-Clarke, Lethea Carey and Stan Burnside, Lennox Paton
5.3 Scope of Due Diligence In The Bahamas, due diligence for negotiated busi - ness combinations is comprehensive but tailored to the target and transaction type. Corporate and legal reviews cover constitutional documents, share reg - isters, subsidiaries, material contracts and statutory compliance, while financial due diligence examines accounts, taxes, liabilities and asset valuations. Reg - ulatory diligence assesses sector-specific licences, permits, approvals and exchange control compli - ance. A key feature is mandatory AML/KYC compli - ance under the Proceeds of Crime Act 2018, Financial Transactions Reporting Act 2018 and related regu - lations, including beneficial ownership verification, source of funds assessment and enhanced checks for higher-risk clients. For regulated financial institutions, diligence extends to underlying owners and control - lers and regulatory approvals often require detailed personal and financial disclosures. AML/KYC thus forms an essential, sometimes gating, part of trans - actional due diligence. 5.4 Standstills or Exclusivity In M&A transactions in The Bahamas, exclusivity is more commonly demanded to prevent the seller from engaging with other potential bidders during negotia - tions. This gives the buyer time to conduct due dili - gence and finalise the deal without competition. On the other hand, standstill agreements are less frequent but may be included in deals where the seller wants to avoid hostile takeovers or prevent a potential buyer from acquiring additional shares during the negotia - tion process. While exclusivity is more standard, either may be demanded depending on the nature of the transaction. 5.5 Definitive Agreements In The Bahamas, the documentation of tender offer terms is entirely a matter of contractual agreement. Where a tender offer is used, it is permissible and common practice to set out the terms and conditions in a definitive agreement or offer document.
ences are subject to ongoing disclosure requirements, including periodic financial reporting and the prompt disclosure of material changes to the Securities Com - mission of The Bahamas. By contrast, digital asset derivatives fall under the Digital Assets and Regis - tered Exchanges Act, 2024, which requires registered digital asset businesses to submit audited financial statements, maintain annual registration and report on AML/CFT compliance. The Bahamas does not have a comprehensive cross-sector antitrust regime with mandatory filing thresholds for derivatives transactions. Competition oversight is largely sector-specific and derivatives transactions generally do not trigger competition fil - ings unless they are structured to confer control of an entity or materially affect market competition. 4.6 Transparency Shareholders are generally not required by law to dis - close the purpose of their acquisition or their inten - tions regarding control of a company. For private com - panies and international business companies (IBCs), there is no statutory takeover regime or mandatory disclosure requirement that obliges shareholders to make such declarations. In The Bahamas, the timing of disclosure depends on whether the transaction falls within the scope of the Securities Industry Act, 2024 and the Digital Assets and Registered Exchanges Act, 2024, which apply to public issuers and reporting companies, including those listed on the Bahamas International Securi - ties Exchange (BISX). Private companies that are not reporting issuers are generally not subject to statu - tory continuous disclosure obligations and therefore have no mandatory requirement to publicly disclose negotiations prior to completion, subject to contrac - tual confidentiality arrangements. 5.2 Market Practice on Timing There is no legal requirement to disclose deal negotia - tions in The Bahamas. 5. Negotiation Phase 5.1 Requirement to Disclose a Deal
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