BAHAMAS Trends and Developments Contributed by: Castino Sands, Lennox Paton
creditor, the person who holds title to the collateral or the nature of the secured obligation. The legislation proposes, for the first time in The Bahamas, the crea - tion of a collateral registry responsible for registering all security interests in movable assets created under Bahamian law. Moreover, the legislation provides that where a secu - rity interest in movable property is perfected, a secu - rity interest in the proceeds of the movable property is also perfected without any further act and will be continuously perfected, where the proceeds are in the form of money, accounts receivable, a negotiable instrument or a deposit account. If a security interest in movable property is perfected and the proceeds of the movable property are in a form other than money, accounts receivable, negotiable instruments or rights to payment of funds credited to a deposit account, the security interest in the proceeds must be perfected by one of the means available to the relevant type of proceeds. Furthermore, under the legislation, perfected security interests shall have priority over those that have not been perfected. Priority between perfected security interests shall be determined in the order prescribed by the legislation. The provisions of the Movable Property Security Inter - ests Act, 2025, should it be brought into force, will have significant implications for acquisition financing structures in which security interests over shares or other movable assets of Bahamian companies are given as collateral. International Business Companies (Amendment) (No 2) Act, 2023 The International Business Companies (Amendment) (No 2) Act, 2023 (the “IBC Amendment”), for the first time in The Bahamas, prescribes a statutory procedure whereby a corporate spin-off may be effected under local law. This is significant in the context of Bahamas M&A Transactions, particularly in a case where the intention is only to dispose of a part of the business, a particular asset or a combination of both. The spin-off process, described under the IBC Amendment as a demerger, prescribes a process whereby a company incorporated under the IBC Act may demerge into
two or more companies, one of which is the surviving company and the other, or others of which, are new companies or all of which are new companies. The statutory demerger process requires that a num - ber of documents in the prescribed form be filed with the Registrar of Companies. The IBC Amendment requires that these documents describe the terms and conditions of the demerger and the means by which the demerger is to occur. In particular, the plan of demerger must identify the undertaking, property, rights and liabilities of the demerging company and must state, in respect of each demerged company, which part of the undertaking, property, rights and liabilities of the demerging company is to become the undertaking, property, rights and liabilities of each demerged company. In order for a demerger to proceed, the directors of the demerging company shall pass a resolution that, in the opinion of the directors, the demerger is in the best interests of the demerging company. Furthermore, the directors shall be required to state that, having made a full inquiry into the affairs of the demerging company, they reasonably believe that • the demerging company is and will remain until the demerger is completed, able to discharge its liabili - ties as they fall due; and • the assets of the demerging company exceed its liabilities and will continue to do so until the demerger is completed. Once satisfied that all of the formalities prescribed by the IBC Amendment have been complied with, the Registrar of Companies shall issue a certificate of demerger evidencing compliance with the legislation and completion of the demerger in accordance with the terms and subject to the conditions contained in the plan of merger. In accordance with the IBC Amendment, once the demerger is completed: • all property and rights to which the demerging company was vested in or entitled to immediately before the demerger was completed become the property and rights of the demerged companies in
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