Bermuda amends company and partnership legislation
The Bermuda government has passed a series of legislative amendments to improve the efficiency of international business in Bermuda. We expect that the amendments will come into force in the next few weeks.
The Companies Amendment Act 2009 amends the Companies Act 1981 to improve the process of delivering documents to shareholders via the internet. Previously, if a Bermuda exempted company wished to deliver documents to shareholders by posting them on a webpage, the shareholder was required to consent actively to receiving documents in this manner.
With the amendments, an electronic record of a document will be deemed to have been delivered to a person if it is published on a website and the person to whom it is to be delivered has been advised of the address of the website, the place on the website where the document may be found, and how the document may be accessed. If the person wishes to receive the document in a physical form, he can notify the company of that wish and the company will be obliged to provide it to him. This procedure more closely parallels the "opt out" electronic delivery method used by the US Securities & Exchange Commission and will improve efficiency for Bermuda companies listed on US exchanges.
Residency requirements for Bermuda exempted companies have been adjusted for greater flexibility. A Bermuda exempted company will now only require one director who is ordinarily resident in Bermuda, or a Bermuda resident secretary, or a Bermuda resident representative. The secretary and the resident representative may be individuals or companies.
The Partnership Act 1902, the Exempted Partnerships Act 1992, the Limited Partnership Act 1883 and the Overseas Partnership Act 1995 have also been amended to improve efficiency in the formation and administration of Bermuda partnerships.
Partnerships can now be formed in a manner similar to the process followed for the incorporation of companies. The particulars required to be set out in the certificates of exempted and limited partnership have been reduced and it will no longer be necessary to file the articles of partnership upon formation.
When the partnership is formed, any changes to the particulars in the certificates of exempted and limited partnership are not effective until the filing of the amended certificates. Any changes in the general partners must be approved by the Bermuda Monetary Authority in advance.
Limited partnerships are no longer required to state on the register of limited partners the value of the money and other property contributed by each limited partner as capital. This will significantly reduce the administrative burden on large limited partnerships and will be particularly welcomed by our investment fund clients.
Amendments to the Overseas Partnership Act similarly streamline the application procedure and reduce the content of the certificate of overseas partnership. A partnership fund is now exempt from the requirement to obtain a permit to carry on business in Bermuda if it engages a person in Bermuda to attend to any principal fund activities, such as accounting or administration. Fund partnerships will be permitted to advertise, offer partnership interests for subscription, accept subscriptions in Bermuda. This is consistent the existing situation for funds that are overseas companies.
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