Formation of Bermuda Exempted Company

Bermuda Exempted Company

Formation of Bermuda Exempted Company

Company Name 
The proposed name of a company can be reserved with the Registrar of Companies, up to three months prior to incorporation. No company may be registered with a name which, in the opinion of the Registrar, is undesirable or which: is identical to or resembles the name by which another company is already registered or incorporated in Bermuda; contains the words “Chamber of Commerce” or suggests the patronage of Her majesty or any member of the Royal Family; contains the word “municipal” or “chartered”; contains the word “co-operative”; contains the words “building society”; contains the word “bank” (section 57 of The Banks and Deposit Companies Act 1999); does not contain the word “Limited” in the case of a company limited by shares; or ends with the word “Limited” where the company is formed with unlimited liability. If at any time after a company has been registered, it appears to the Registrar that a company’s name is undesirable the Registrar may notify and direct the company to change its name. 

Memorandum Of Association 
A company is incorporated in Bermuda by application made to the Registrar of Companies. Memorandum of Association must be lodged with the Registrar. Memorandum specifies the activities in which the company may engage, share capital of the company, liability of shareholders, the rules governing the internal management of the company. 

Formation Procedure 
The formation procedure of a Bermuda Company is complex. Initially an advertisement has to be placed in a local newspaper announcing the intention to incorporate. The name of the proposed company, together with the objects clauses, has to be disclosed in the advertisement, confirming also whether the company requires being exempt or domestic. An application for consent to incorporate is made to the Bermuda Monetary Authority; this application should contain the following information:

• The name of the company;
• The proposed registered office address;
• The names and addresses and nationalities of the proposed directors;
• The names and addresses and nationalities of the proposed shareholders and their interest in the proposed company;
• The Memorandum of Association detailing the share capital and classes of shares;
• Proposed bank account details;
• Bank character references relating to the proposed beneficial owners;
• The appropriate registry fees.

Shareholders 
A Bermuda exempted company must have at least one member (or shareholder), any nationality, individual or legal entity. Upon the issue of shares the names and addresses of the members must be entered on the share register. The share certificates may be denominated in any currency. 

Share Capital 
The minimum share capital of an exempted company is US$12,000; of an insurance company is US$120,000; or of a mutual fund is US$1 (or an equivalent amount in another currency). The authorized share capital may subsequently be increased by resolution of the company in general meeting. Shares of no par value and bearer shares are not permitted. 

Directors 
A company must have at least one individual director and need not be a resident of Bermuda. Corporate Directors are not permitted. 
A list of directors must be maintained at the registered office. The names of directors and officers are not made public; however, the Bahamas Registry may require the information in some circumstances, such as if an official certificate is required. Changes in directors or officers need not be registered or reported. 

Registered Office And Local Requirements 
A Bermuda exempted company must have a registered office in Bermuda. A Bermuda exempted company must appoint a President and a Vice President or a Chairman or Deputy Chairman. The foregoing positions must be filled by an individual who is a director of the company. The Directors must appoint a Secretary, which may be a company, provided that if the Secretary is a director it must be an individual. The Bermuda exempted company can be fulfilled by the appointment of any one of the following, who must be ordinarily resident in Bermuda:

• A resident Secretary;
• Director
• Resident Representative

Where a secretary is also either a director or resident representative in paragraphs a) and c) above the provisions of the Companies Act 1981 will not be satisfied. A Bermuda exempted company must keep at its registered office its corporate records and the register of officers and directors. 

Meetings 
Directors meetings may be held in or outside Bermuda. Notice of a meeting of the directors must be given to all directors. Shareholder meetings (AGM) must be held every calendar year and need not be held in Bermuda. 

Incorporation Time 
Usually 14 working days, but we require extra 7 working days for legalization of the documents and delivery by courier.

Taxation 
In Bermuda there is no income or corporation tax, no capital gains tax, no VAT or sales tax, and no withholding tax. Companies and partnerships pay annual fees to the Government depending on their nature and capitalization. An exempt company may apply to the Minister of Finance for a certificate exempting it from future profits taxation, should there be any, for a period ending not later than the 28th March, 2016. 

Audit And Financial Returns 
Although there is no statutory requirement to file accounts, there should be sufficient accounting records to enable the directors and shareholders to ascertain the financial position of the company. The accounting records should be kept at the registered office address. If they are kept outside Bermuda, copies of all accounting records should be available for inspection by the directors each quarter. All Bermuda companies should appoint an auditor, except where the directors and shareholders have unanimously agreed not to appoint one.