Bermuda: Incorporation Of A Bermuda Exempted Company

Last Updated: 21 April 2017
Article by Jonathan Betts and Ariane West

Introduction

An exempted company limited by shares (a "Company") is the most commonly used type of Bermuda legal entity for international transactions. This note describes the incorporation process in Bermuda. It is intended to be a summary only, and is not exhaustive.

Legislation

Formation of a Company is subject to the requirements of the Companies Act 1981 of Bermuda (the "Act"). Under the Act the appropriate permissions and registrations must be made with the Bermuda Monetary Authority (the "BMA") and the Registrar of Companies (the "Registrar").

Regulatory Approvals

Walkers Corporate (Bermuda) Limited will be required to gather information on the proposed shareholders of the Company, including standard KYC documentation, and request consent from the BMA to incorporate.

Licensing or authorisation may be required from the BMA where it is proposed that the Company engage in regulated activities in the local market or from a physical location in Bermuda, for example insurance, investment business, trust business, asset management, corporate services and deposit taking and money services. Applications to the BMA are typically pursued following incorporation of the Company.

Application to the Registrar of Companies

An application to incorporate will be submitted by filing the following documents at the Registrar:

  1. the Memorandum of Association;
  2. name reservation request;
  3. annual declaration;
  4. Form 13 (notice of registered address); and
  5. the appropriate filing fees.

A Company shall be deemed to be registered as of the date of filing and the Registrar shall issue a Certificate of Incorporation.

The Certificate of Incorporation will generally be issued within five working days.

Constitution

The constitution of a Company consists of a memorandum of association (the "Memorandum") and the bye-laws (the "Bye-laws").

Pursuant to the Act, any one or more persons associated for any lawful purpose may, by subscribing their names to the Memorandum, and otherwise complying with the Act in respect of registration, form an incorporated company.

The most common form of Company is a company limited by shares, with a share capital divided into shares having a par value. A company may also be incorporated by way of unlimited liability or by guarantee.

The Memorandum must be filed at the Registrar and will be open to inspection by members of the public. The bye-laws do not need to be filed and may remain private.

The objects of a Company will be set forth in the Memorandum. In a majority of cases, the objects clause will be worded very broadly using a formulation such as, "the objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by any law".

Bermuda Residency Requirements

A Company must have a registered office situated in Bermuda to which all notices and communications may be addressed.

There are no residency or qualification requirements for shareholders of a Company nor is a Company required to hold board meetings or shareholder meetings in Bermuda (or elsewhere) unless so required under its bye-laws.

A company secretary is required and at least one of the following of a Bermuda company must be ordinarily resident in Bermuda:

  1. a director;
  2. secretary; or
  3. resident representative.

A Company may have a sole director and can be a natural person or corporate entity.

Taylors, through its professional services provider Walkers Corporate (Bermuda) Limited, can provide registered office, corporate secretarial and resident representative services.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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