BAHAMAS Law and Practice Contributed by: Judith Whitehead KC, Graham Thompson
3.4 Management Structures The directors of companies incorporated under the Companies Act and the International Busi - ness Companies Act are charged with the responsibility of managing the company. Gen - erally, this rule is subject to any limitation as pro - vided for in any unanimous shareholder agree - ment and the constitutional documents of the company. Companies Act The typical management structure of a company is based on a single-tier system and consists of a board of directors responsible for appoint - ing officers. However, subject to any limitation in the company’s articles of association or a unani - mous shareholder agreement, the directors may delegate their powers to a single director, a com - mittee of directors, or officers, and specify their duties to manage the business and affairs of the company to them. The officers are, however, restricted from issu - ing shares, declaring dividends, purchasing or redeeming shares, approving financial state - ments, or amending the company’s articles of association. The International Business Companies Act The usual management structure of an interna - tional business company is also based on a sin - gle-tier system and consists of a board of direc - tors responsible for the appointment of officers. Subject to any limitations in the memorandum or articles of association or in a unanimous share - holder agreement, each officer or agent has sim - ilar powers and authority to the directors, 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 commit - tees 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 com - panies and should avoid situations where their duty conflicts with their personal interests. In accordance with the Companies Act and the International Business Companies Act, direc - tors, officers and agents must act honestly and in good faith with a view to the best interest of the company and exercise the care, diligence, and skill that a reasonably prudent person would exercise in comparable circumstances in per - forming their functions. Where a current or former director or officer has acted in good faith with a view to the best inter - est 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 Com - panies Act provides that subject to any limita - tions in its memorandum or articles of associa - tion 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 rea - sonably 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
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