Corporate Affairs 

As is the case with natural persons, a company's name is one of the important features which identifies the company within the business community. Its name also enables other business persons, government authorities and members of the public at large to identify with some degree of precision the specific legal entity which is carrying on business in or from Barbados. In short, a company's name gives the company a distinct and unique identity which is not to be confused with that of another company. With this in mind, the Companies Act, Cap. 308 (s.11) expressly forbids the incorporation of a company with a name which is prohibited or refused, or with a name which is reserved for another company or intended company. Additionally, where a company has been incorporated with a name to which objection has been taken, section 12(2) of the Act empowers the Registrar, upon being satisfied that the name should be changed, to direct that the company to amend its articles to change its name.

Under Barbados law (s.416), a company name must not be identical or similar to the name of business name of another person association or partnership or firm where the use of the name would be likely to confuse or mislead. Such names are prohibited from registration unless the written consent of the person, association, partnership or firm is obtained to the use of the name in whole or in part, and 

OR  (ii) the association, partnership or firm undertakes to cease to carry on its business or activities within six (6) months after the filing of the articles by which the name is acquired.

An 'external company' wishing to conduct an undertaking in Barbados and seeking registration under the Act is subject to the provisions of the Companies Act within respect to prohibited or refused names. (See s.324 - s.346)

Name Search and Name Reservation Procedure

It will therefore be appreciated that one of the most important preliminary matters to be addressed before incorporating a company or changing the name of an existing company is to obtain an approved name for the company from the Registrar of Companies. The Companies Act, Cap. 308 contains a mechanism or procedure whereby persons desirous of incorporating an intended company, or companies intending to amalgamate or change their names, may apply to the Registrar for the name to be approved and reserved. To save time, an application for Name Search and Name Reservation (Form 33) is usually submitted to the Registrar in advance of other applications such as for incorporation, registration, amalgamation or a name change amendment as the case may be.

How is a company name reserved?

The first step in the Name Search and Name Reservation procedure under the Companies Act, Cap. 308 is to obtain a Request for Name Search and Name Reservation Form (Form 33). [See DOWNLOAD FORMS]

This form (Form 33) is relatively simple to complete. However, you should read the statutory Instructions on the reverse side of the Form before attempting to complete the form as this can help you to avoid unnecessary mistakes and save time. The statutory Form-filling Instructions for each form are also provided on this website. [See DOWNLOAD FORMS]

After completion, the Request for Name Search and Name Reservation Form (Form 33) may be submitted to the Corporate Affairs & Intellectual Property Office (CAIPO) together with the prescribed fee of BDS $30.00. [See FEES]

For what period of time is a company name reserved?

Section 415 of the Companies Act, Cap. 308 provides that a name for an intended company or a company about to change its name may be reserved for ninety (90) days. During this period, no other company may be incorporated with or be allowed to have the reserved name.

Processing of your Name Search and Name Reservation Request

Once the request is submitted and the prescribed fee of $30.00 is paid, the request is processed. On average the Department takes approximately 2 to 3 working days to process an application for name search and name reservation. However, all urgent requests for approval of company names are expedited.

Are there any other important points to be kept in mind regarding the Name Search and Name Reservation procedure?

The following are some important points to be noted about the name search and name reservation procedure:-

What is a Company?

Under the Companies Act, a company means "a body corporate that is incorporated or continued under the Companies Act". It is a separate legal entity from its shareholders or, in the case of a non-profit company, from its members. Upon its incorporation, a company has the capacity, as well as the rights, powers and privileges of an individual. 

One of the important considerations behind a decision to incorporate a company as distinct from conducting business as a sole trader, or in partnership with others, is the fact that upon incorporation, the liability of the owners or shareholders of the company is limited to the amount invested in the company or any amount unpaid on their shares. Similarly, in the case of a non-profit company having no share capital, the members of the non-profit company incur no personal liability or individual responsibility for the debts or other liabilities of the company.

Who can form a Company?

A company may be incorporated by one or more competent persons (known as "incorporators"). Competent individuals, as well as bodies corporate may apply to incorporate a company by signing and filing articles of incorporation with the Registrar of Companies. The Companies Act, Cap. 308, expressly prohibits the following individuals from forming or joining in the formation of a company under the Act, namely any individual who is:-

(a) under 18 years of age;

(b) a bankrupt; or

(c) is of unsound mind and has been so found by a tribunal in Barbados or elsewhere.

An incorporator (whether an individual or a corporation) may form a corporation which has shareholders, officers and directors that are completely different persons from the incorporator. "One-man" companies are permissible under Barbados law in as much as a single incorporator may form a company and also be the sole director, officer holder and shareholder of that company. Incorporators are responsible for organizational matters such as filing of the articles of incorporation and designating the first directors of the company who will assume responsibility for the company upon its incorporation.

Section 4(3) of the Companies Act provides that if Articles of Incorporation submitted to the Registrar are accompanied by a statutory declaration by an Attorney-at-law that to the best of his knowledge and belief no signatory to the Articles is an individual described in subsections 4(2) then that declaration is conclusive on the facts declared therein.

What are the main reasons for incorporating?

There are many reasons for incorporating a company. Some of these may be:-

* To create a legal entity separate and distinct from its shareholders or members;

* To limit the personal liability of the shareholders or members as this will make investment attractive;

* To create a legal entity with the capacity, rights, powers and privileges of an individual;

* To create a legal entity with a perpetual existence and which can, in theory, outlive its shareholders and members;

* To qualify for incentives as an "approved small business" under the Small Business Development Act,1999.

What types of businesses can be incorporated under the Companies Act?

Broadly, there is no legal restriction or limit on the type of business activity which may be conducted through the medium of a company incorporated under the Companies Act. The Companies Act gives companies the same capacity, rights, powers and privileges as an individual has. Accordingly, in the absence of any express restriction on its activities which might be set out in its articles of incorporation, a company may carry on any business which an individual may carry on.

There are, however, some commercial activities such as banking, insurance business, and the businesses of trust and financial companies and merchant banks, which may more conveniently be carried on through a company incorporated under the Companies Act than by private individuals. In this regard, the Financial Institutions Act, 1996 (which regulates the operations of financial institutions in and from Barbados) expressly provides that no license may be issued to any person other than a body corporate.

In the offshore sector, the activities of Foreign Sales Corporations, International Business Companies, Off-shore Banks and other offshore entities are also regulated by special incentives legislation which envisages that such activities should be carried on by companies and not by individuals or partnerships.

How long does it take to incorporate a company?

Provided that the required documentation filed with the Registrar is in order, incorporation of a company may be achieved within five (5) business days or less. It should be noted that all urgent requests for incorporation are expedited provided that the prescribed fee is paid and the appropriate documentation is in order.

What documents must be filed to incorporate a company?

The following documents are required to be filed with the Registrar of Companies on application for incorporation of a company:

1. Approved Name Search and Name Reservation Form (Form 33) 
2. Notice of Address or Change of Address of Registered Office (Form 4) 
3. Notice of Directors or Notice of Change of Directors (Form 9) 
4. Articles of Incorporation (Form 1) 
5. Declaration of Attorney-at-Law (where applicable) 

Do I need an Attorney-at-Law to incorporate a company?

The Companies Act, Cap. 308 is a legal document which may need interpretation. Additionally, experience shows that if a company is properly and thoughtfully structured at the outset, this will usually make subsequent amendments to its articles of incorporation unnecessary. An Attorney-at-Law may provide valuable advice and it is strongly suggested that one be consulted to advise on the legal implications of company formation.

How much does it cost to incorporate a company?

Apart from the initial filing fee of BDS $30.00, which is required for the approval of the company name, a fee of BDS $750.00 is payable to the Registrar for the filing of articles of incorporation. Of course, if you obtain legal advice when completing your articles of incorporation professional fees are payable to the Attorney-at-Law in addition to the filing fees. The legal fees are regulated under the Legal Profession (Attorneys'-at-Law) (Remuneration for Non-contentious Business) Rules, 1983.

After incorporation do I need a company seal?

Yes. A company must have a "common seal" with its name engraven thereon in legible characters. Except when required by certain enactments to use its "common seal", the company may, for the purpose of sealing any document, use its "common seal" or any other form of seal. (Section 25(1))

A company may, if authorized by its by-laws, keep an "official seal" for use in a country other than Barbados. The "official seal must be a facsimile of its "common seal" and bear in addition on its face the name of every country other than Barbados where it is to be used. (Section 25(2))

It should be noted however that every document to which an "official seal" of the company is duly affixed binds that company as if it had been sealed with the "common seal" of the company. (Section 25(3))

What formalities are to be observed when filing Articles of Incorporation in respect of a proposed company?

The formalities to be observed can be found under Section 5(1) of the Act. The Articles of Incorporation must follow the prescribed form and set out, in respect of the proposed company, inter alia:-

* The proposed name of the company;

* If the right to transfer shares of the company is to be restricted, a statement that the right to transfer shares is restricted and the nature of those restrictions;

* The number of directors, or the minimum or maximum number of directors of the company;

* Any restrictions on the business that the company may carry on.

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The advent of the Internet has spawned new ways of doing business which have come into conflict with and are posing challenges to the traditional framework within which business is regulated in Barbados and around the world.

As commercial activity on the Internet has increased, domain names have become part of the standard communication apparatus used by businesses to identify themselves, their products, services and activities.

The relative ease with which someone desirous of establishing a presence on the Internet, can register a domain name (without regard for prior rights such as trade marks or established trade or corporate names or other traditional business identifiers) has already come into conflict with the well established territorially based intellectual property system around the world. For example, the problem of abusive, bad faith registration of domain names in deliberate violation of trade mark rights, became so widespread that in 1999 the World Intellectual Property Organization (WIPO) established, and now successfully operates, a dispute resolution mechanism for resolving Internet domain name disputes.

It has also become common place nowadays to speak of "dot.com" companies as if the mere establishment of an Internet web site has automatically created some legal corporate personality known to the law. It should, however, be pointed out that in the eyes of the law the establishment of an Internet web site does not have the same legal effect or significance as the incorporation of a company which still remains the internationally recognized manner in which a corporate entity with a separate legal personality is created.

During the year 2000, it became popular for the owners or operators of Internet web sites to seek to incorporate a legal company using the registered internet domain name as the company name. The domain name "dot.com" company phenomenon caused the Barbados Corporate Affairs and Intellectual Property Office (which also has responsibility for trade mark registrations) to revise its working policies and procedures and to make some adjustments in the way in which requests for company names for domain name "dot.com" companies are processed.

The following administrative policy is currently employed when the Department is processing applications under the Companies Act for incorporation of a domain name "dot.com" company in Barbados:

The applicant must file (along with the usual incorporation documents) a Statutory Declaration for the information of the Registrar of Corporate Affairs and Intellectual Property in Barbados declaring the following:-

Before the name is approved, a search is also made in the trade mark register and among pending trade mark applications filed with the Department to determine whether the proposed name conflicts with a registered or pending mark held in the Department.

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What is an 'external company'?

An 'external company' is defined in section 324(1)(a) of the Companies Act Cap.308 as "any incorporated or unincorporated body formed under the laws of a country other than Barbados".

Why must an 'external company' be registered in Barbados?

To formally establish a legal presence within the jurisdiction of Barbados, an external company must be registered in Barbados in order to carry on any business or undertaking in Barbados. This requirement for registration formally subjects the 'external company' to the provisions of the Companies Act, Cap. 308 and enables the Registrar of Companies to ensure that its entry into the commercial scene in Barbados will not result in confusion with the operations of existing businesses already on the register.

When is an external company carrying on "an undertaking" in Barbados?

The Companies Act, Cap. 308 provides that an 'external company' is carrying on an undertaking in Barbados if:

* it holds title to any land in Barbados or has an interest in any such land;

* it maintains an office, warehouse or place of business in Barbados;

* it is licensed or registered or required to be licensed or registered under any law of Barbados that entitles it to do business or to sell shares or debentures of its own issue;

* it is the holder of a certificate of registration issued under the Road Traffic Act Cap.295 respecting a public service vehicle.

As a matter of fact, an 'external company' is required to be registered under the Companies Act if in any other manner it carries on an undertaking in Barbados (e.g. being listed with a telephone number in Barbados under its name in a telephone directory published for local use). In this circumstance the external company is presumed in the absence of evidence to the contrary, to be carrying on an undertaking in Barbados.

It must be stressed that the 'external company' cannot carry on any undertaking in Barbados until it is registered under the Companies Act.

Can an external company be exempted from registration?

Yes, by virtue of section 325 of the Act, an external company carrying on an undertaking on a co-operative basis under the Co-operatives Societies Act, Cap, 378A or one which is exempted by an order, made by the Minister is exempt from registration under the Companies Act.

Can the powers or activities of an external company be restricted?

Yes, in prescribed circumstances, the Registrar may restrict the powers or activities that an 'external company' can exercise or carry on in Barbados. (See section 328(1)).

What are the consequences of failing to register an external company under the Companies Act Cap 308?

Under Section 344(1), an 'external company', which fails to register under the Companies Act, is placed under a statutory disability and cannot maintain any action, suit or other proceedings in any court in Barbados. This incapacity relates to any contract made in whole or in part within Barbados in the course of or in connection with the carrying on of any undertaking by the company in Barbados. However, the statutory incapacity is removed upon registration as an 'external company' under the Act, or upon the restoration of its registration, as the case may be. Thereupon, the company may then maintain an action suit or other proceedings in respect of its contract as though the company had never been disabled in the first place.

What documents must be filed with the Registrar?

In order to become registered as an 'external company' in Barbados, section 330(1) provides that a Statement in the prescribed form (Form 28) must be filed with the Registrar.

The Statement (Form 28) must also be accompanied by the following:-

* a Statutory Declaration by 2 directors of the company that verifies on behalf of the company the particulars (listed below) set out in the Statement;

* a certified copy of the corporate instruments of the company;

* a Statutory Declaration by an attorney-at-law that this section has been complied with;

* the prescribed fees, of BDS $3,000.00 and

* a Power of Attorney and a Consent to act as Attorney in the prescribed form (Form 30) empowering some person named in the power and resident in Barbados to act as attorney of the company for the purpose of receiving service of process in all suits and proceedings in Barbados and all lawful notices.

All of the above documents are filed in duplicate.

What particulars are to be given in the Statement (Form 28)?

Section 330(1) provides that the Statement (in the prescribed form) must contain the following particulars:

* the name of the company; (N.B. See topic Company Names)

* the jurisdiction within which the company was incorporated;

* the date of its incorporation;

* the manner in which it was incorporated;

* the period, if any, fixed by its corporate instruments for the duration of the company;

* the extent, if any, to which the liability of the shareholders or members of the company is limited;

* the undertaking that the company will carry on in Barbados;

* the date on which the company intends to commence any of its undertakings in Barbados;

* the authorized, subscribed and paid-up or stated capital of the company, any number of shares that the company is authorized to issue and their nominal or par value, if any;

* the full address of the registered or head office of the company outside of Barbados;

* the full address of the principal office of the company in Barbados (no P.O. Box address is allowed); and

* the full names, residential addresses and occupations of the directors of the company.

What happens to the application for registration of an external company after it has been filed with the Registrar of Companies?

On receipt of the application for registration of an 'external company' with the attached documents and the prescribed filing fee:-

a) An officer in the Registry conducts a 'form examination' of the filed documents to ensure that:-

i. all documents submitted are properly completed;

ii. relevant government stamp duty is paid (Power of attorney - under seal stamp duty is BDS $25.00; without seal stamp duty is BDS $10.00; counterpart BDS $5.00); and

iii. all necessary documents have been filed in accordance with the Companies Act.

b) The relevant data is then entered in the computer and a computer-generated number is assigned to the company and all documents are placed on the file;

c) The file is then passed to the Deputy Registrar who conducts a "substantive examination" of all filed documentation to ensure that the statutory and legal requirements of the Companies Act, Cap. 308 are complied with;

d) When the Certificate of Registration has been issued, one set of documents is returned to the applicant and one set remains at the Corporate Registry as part of the public records.

What are some of the common errors or frequent filing defects that can cause delays in the processing and registration of an 'external company' ?

a) documents not properly dated, signed or witnessed;

b) documents not certified as copies e.g. Corporate instruments;

c) in cases where the corporate instruments are in a foreign language, no notarially certified translation of the instruments has been submitted;

d) company seal not affixed where necessary;

e) full residential addresses of directors not included on the Statement (Form 28);

f) registered office of company listed as a P.O. Box;

g) documents submitted on paper other than A4 size;

h) No Name Search and Name Reservation form (Form 33) submitted;

i) authorized capital inserted on application instead of stated capital of company;

j) Insufficient or no stamp duty affixed to Power of Attorney;

k) Certified copy of the Certificate of Incorporation of the external company has not been submitted with the application for registration. This certificate must accompany the Corporate Instruments of the Company;

l) No notarized translation of the name of the Company has been submitted in the case where the name of the company is in a foreign language

How and where must the name of an 'external company' be displayed?

An external company carrying on any undertaking Barbados shall paint or affix its name and place of business in a conspicuous place in easily legible letters. This information must be kept painted and affixed on the outside of its head office in Barbados at all times. It must also be painted and affixed on every other office or place in Barbados in which it carries on its undertaking in Barbados.

Another extremely important corporate responsibility which a company assumes upon incorporation under the Companies Act, is the obligation to keep the Registrar of Companies notified of any change which occurs in the address of its registered office. Section 169(2) of the Act requires a company to notify the Registrar of any change of the address of its registered office within 15 days after the change is made. Since a company is required to have a registered office at all times and is under statutory obligations to keep certain registers and records at its registered office for inspection by the directors as well as the company's creditors, it is important for the public with whom the company does business to be informed of any change which has taken place in the location of the registered office. As is the case with directors' information, the statutory obligation to notify changes to the Registrar assists the Registrar to update the public records held at the Department and ensures that the public at large is notified of such changes as soon as possible after they are effected by the company. 

What categories of records is a company required to maintain at its registered office?

Section 168(1) of Companies Act states that "a company must at all-times have a registered office in Barbados." 

Companies are also required to prepare and maintain at their registered offices various categories of corporate records. The Companies Act also requires the following categories of records to be maintained at the registered office of the company, namely:- 

* The articles and by-laws and all amendments made thereto and a copy of any unanimous shareholder agreement and amendments thereto;[Section 170(1)(a)]
* All minutes of meetings and shareholders resolutions; ;[Section 170(1)(b)]
* Copies of all notices required to be filed effecting any changes in the directors of the company (Form 9) and any changes in he Registered Office (Form 4); [Section 170(1)(c)]
* A register of shareholders showing the name and last known address of each shareholder, the shares held by each shareholder, and the date on which each person was entered on the register and the date on which each person ceased to be a shareholder; [Section 170(2)]
* Where debentures are issued, a register of debentures; [Section 170(3)]
* Where conversion privileges, options, or rights to acquire shares are issued, a register of persons to whom such privileges, options or rights have been granted; [Section 170(3)]
* In addition to the above records, the company shall also keep adequate accounting records and records containing minutes of meetings and resolutions of the directors and any committees of the directors. [Section 172(1)]


Apart from knowing where the corporate records are located why would the public need to know where a company can be found?

Section 414 of the Companies Act provides that a notice or document may be served on the company by leaving it at or sending it to the registered office of the company. It is therefore important that changes in the location of a company's registered office be notified to the Registrar in a timely manner as required by law.

Where is the Notice of Change of Address of Registered Office (Form 4) filed?

When a company changes the location of its registered office a (Form 4) or Notice of Change of Registered Office must be submitted to the Corporate Registry in duplicate notifying the Registrar of the change in the location of the registered office.

What information must be included in the Notice (Form 4)?

The Notice of Change of Registered Office (Form 4) must set out the following particulars:

* The previous registered office address;
* The address of the new registered office; and
* The mailing address of the company

The registered office of the company must be a complete physical address, which would enable any person to readily locate the office. The use of a Post Office Box is not permitted. However, a Post Office Box address may be used as the mailing address of the company.

No change is effective until this Notice has been filed with the Corporate Registry and the prescribed fee paid.

When is the Notice of Change of Address of Registered Office (Form 4) filed?

Any change in the Registered Office of the Company must be filed by depositing the Notice (Form 4) together with the prescribed fee at the office of the Registrar. This Notice must be filed within 15 days after any change of address of the Registered Office of the company. 

Who can sign the Notice of Change of Address of Registered Office (Form 4) ?

A director or authorized officer of the company shall sign the Notice of Change of Address of Registered Office (Form 4). Upon Incorporation, an incorporator shall sign the Notice of Address of Registered Office (Form 4). 

What is the filing fee for the Notice of Change of Address of Registered Office (Form 4) ?
The fee for filing the Notice of Change of Address of Registered Office is BDS $25.00.

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What is a company charge?

As is the case with natural persons, a company may create a legal or equitable obligation to pay money or may create an obligation to repay a loan secured upon its land or other assets. The creation by a company of such an obligation or security interest is referred to as a company charge. Charges may be fixed (i.e. attaching to specific assets of the company) or floating (i.e. generally covering all unspecified assets present or future of the company.)

Who is required to register a company charge?

Part II Division A of the Companies Act, Cap. 308 sets out the specific rules governing the registration of charges created by companies incorporated or continued under the Act.

Charges created or acquired by "external companies" on property in Barbados are also subject to the provisions of Part II Division A of the Companies Act and with like consequences as if the "external company" were a company which is incorporated or continued under the Act.

Section 252(2) defines "external company" as a firm or other body of persons, whether incorporated or unincorporated, that is formed under the laws of a country other than Barbados.

Persons interested in the charge documents (e.g. a bank, mortgage company or other creditor) may require the documents to be lodged or themselves lodge the documents with the Registrar for registration.

What are the consequences of failing to register company charges with the Registrar of Companies as required by law?

Section 237(1) of the Companies Act, Cap. 308 provides that if documentation relating to or evidencing the creation of a charge is not lodged with the Registrar of Companies within 28 days after the creation of the charge, the charge is void so far as any security interest it purported to create.

What is the rationale for the legal requirement to register company charges with the Registrar of Companies?

Most modern companies acts usually require the registration of charges with the Registrar of Companies. The requirement is founded in a desire to protect creditors and to provide a mechanism for providing notice to the world of the state of affairs in respect of the security given by a charge on assets of the company.

What documents must be filed with the Registrar?

Section 237(1) of the Companies Act, Cap. 308 provides for the following documents relating to or evidencing the creation of a charge to be lodged with the Registrar for registration:

1) Statement of Charge containing the particulars prescribed in section 238 (See below);
2) The original instrument creating the charge or alternatively,
3) A copy of the instrument creating the charge;
4) Where (3) is filed instead of (2), a statutory declaration verifying the execution of the charge and verifying the copy as a true copy of the original instrument should accompany (3);
5) In practice, duplicate copies of the form of Certificate of Registration should be prepared and filed at the Companies Registry by the person lodging the above documents as this will save time and assist in expediting the issuance of the Certificate by the Registrar.

What particulars are to be given in the Statement of Charge?

Section 238 provides that the Statement of Charge must contain the following particulars:

(a) the date of creation of the charge;
(b) the nature of the charge;
(c) the amount secured by the charge, or the maximum deemed to be secured (being the maximum covered by the stamp duty paid thereon);
(d) short particulars of the property charged;
(e) the person(s) entitled to the charge;
(f) where the charge is a floating charge, the nature of any restriction on the company's power to create further charges ranking in priority to, or equally with, the charge.

What other requirements should be observed at the time of filing the charge documents?

Since the Registrar of Companies also functions as adjudicator of stamp duty under the Stamp Duty Act, Cap. 91, no charge documents will be processed unless Government stamp duty is paid thereon. Accordingly, all documentation evidencing the charge must be adjudicated and appropriately stamped with the required stamp duty by the time they are presented for registration at the Corporate Registry.

What happens to the charge documents after they are lodged for registration with the Registrar of Companies?

On receipt of the above documents together with the appropriate filing fee, an officer in the Registry conducts a "formality examination" of the filed documents to ensure that the documents are appropriately stamped and were filed within the statutory period and that all necessary documents have been filed in accordance with the Companies Act.

The particulars of the company charge are manually entered at the appropriate page and folio of the Register of Mortgages and Charges (viz. a series of volumes of large bound Register Books) The charge is also appropriately indexed in a separate Index for subsequent search purposes. The relevant page and folio numbers corresponding to the entry in the Register are also manually inserted in the Certificate of Registration.

All documents are then passed to the Registrar of Companies who conducts a "substantive examination" of all the charge documents to ensure that they meet the statutory and legal requirements. The Certificate of Registration and the duplicate thereof is then signed by the Registrar upon being satisfied that legal requirements have been met.

After issuance by the Registrar of the Certificate of Registration, one set of duplicate documents is returned to the person filing the documentation together with the signed Certificate of Registration, while the remaining signed certificate together with the other set of filed documents is placed on the relevant companies file where they are available to any member of the public desirous of ascertaining the state of affairs in respect of the security given by the charge on assets of the company.

Where documentation filed contains errors or other matters which in the opinion of the Registrar require corrections to be made, a note of the defects requiring correction is made and kept on a pending file where same can be checked by the company secretary, legal clerk, bank official or other person who filed the documents for registration.

What are some of the common errors or frequent filing defects which can cause delays in the process of registering company charges?

The following are a few of the most frequent filing defects/errors noted by the Corporate Registry in the process of registering company charges:

a) Documents not properly dated, signed or witnessed;
b) Company seal not affixed;
c) Company resolution not dated;
d) Obvious discrepancies between the way in which the charge is referred to on the actual instrument creating the charge and the way in which the charge is referred to in the Statement of Charge, or in the Statutory Declaration accompanying the Charge, or in the draft Certificate of Registration prepared for the Registrar's signature;
e) The Statement of Charge not properly or accurately completed, (e.g. all statutory particulars not filled-in);
f) Discrepancies between how the property secured by the charge is described in the Statement of Charge and the property actually secured in the instrument creating the charge;
g) Discrepancies between the amount secured by the charge as shown in the Statement of Charge and the amount mentioned in the instrument creating the charge or in the draft Certificate of Registration submitted for the Registrar's signature;
h) Where the instrument creating the charge is expressed to secure an unlimited amount or covers a fluctuating amount, the maximum sum covered by the stamp duty paid thereon is not stated in the Statement of Charge or on the Certificate of Registration submitted for the Registrar's signature.

The foregoing matters are all legal requirements which must be complied with and corrected before registration can be finalized and a Registration Certificate issued.

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What is an amalgamation?

Section 206 of the Barbados Companies Act, Cap. 308 while not defining the word "amalgamation" provides that two or more companies, including holding and subsidiary companies, may amalgamate and continue as one company.

The following judicial attempt at a definition was adopted by Lord Justice Romer in the English case of Re Walker's Settlement [1935] Ch. 567 @ 583. According to Lord Justice Romer, "the word "amalgamation" has no definite legal meaning. It contemplates a state of things under which two companies are so joined as to form a third entity, or one company is absorbed into or blended with another company."

What rules govern company amalgamations?

The statutory requirements and procedural rules governing the circumstances in which companies, including holding and subsidiary companies, may amalgamate and continue as one company are set out in sections 206 to 212 of the Barbados Companies Act, Cap. 308.

What are the different types of amalgamation procedures provided for under the Companies Act?

The Companies Act, Cap. 308 provides three (3) distinct procedures for effecting company amalgamations in Barbados. Briefly these may be classified as follows:

1) "Long-form amalgamation" procedure (i.e. requiring the adoption of an Amalgamation Agreement by special resolution of shareholders under sections 207 and 208);

2) "Vertical short-form amalgamation" procedure (i.e. amalgamation between a holding company and one or more of its subsidiaries under section 209); and

3) "Horizontal short-form amalgamation" procedure (i.e. amalgamation between two or more wholly-owned subsidiaries of the same holding company under section 210).

What are the statutory pre-conditions necessary for effecting a "long-form amalgamation" under Barbados law?

Sections 207 and 208 of the Companies Act govern the procedures to be followed to effect a "long-form amalgamation" in Barbados. Essentially, there are two (2) main statutory pre-conditions to be met before Articles of Amalgamation for a "long-form amalgamation" can be filed with the Registrar. The pre-conditions are as follows:-

(i) Each amalgamating company must enter into an Amalgamation Agreement setting out the terms and means of effecting the amalgamation, and, in particular, setting out the minimum statutory particulars identified in section 207(1) of the Act; and

(ii) The Amalgamation Agreement must be adopted by special resolution by a meeting of the shareholders of each of the amalgamating companies and by the holders of each class or series of shares of an amalgamating company who are entitled to vote on the amalgamation in accordance with section 208 of the Act.

What are the statutory pre-conditions necessary for effecting a "vertical short-form amalgamation" under Barbados law?

Section 209 of the Companies Act governs the procedures to be followed to effect a "vertical short-form amalgamation" in Barbados. Essentially, there are four (4) main statutory pre-conditions to be met before Articles of Amalgamation for a "vertical short-form amalgamation" can be filed with the Registrar. The pre-conditions are as follows:-

(i) The amalgamation must be approved by a resolution of the directors of each amalgamating company;

(ii) The resolutions must provide that the shares of each amalgamating subsidiary company will be cancelled without repayment of capital in respect of the cancellation;

(iii) The resolutions must provide that the articles of amalgamation will be the same as the articles of incorporation of the amalgamating holding company; and

(iv) The resolutions must provide that no shares or debentures will be issued by the amalgamated company in connection with the amalgamation.

What are the statutory pre-conditions necessary for effecting a "horizontal short-form amalgamation" under Barbados law?

Section 210 of the Companies Act governs the procedures to be followed to effect a "horizontal short-form amalgamation" in Barbados. Essentially, there are four (4) main statutory pre-conditions to be met before Articles of Amalgamation for a "horizontal short-form amalgamation" can be filed with the Registrar. The pre-conditions are as follows:-

(i) The amalgamation must be approved by a resolution of the directors of each amalgamating company;

(ii) The resolutions must provide that the shares of all but one of the amalgamating subsidiary companies will be cancelled without repayment of capital in respect of the cancellation;

(iii) The resolutions must provide that the articles of amalgamation will be the same as the articles of incorporation of the amalgamating subsidiary company whose shares are not cancelled; and

(iv) The resolutions must provide that the stated capital of the amalgamating subsidiary companies whose shares are cancelled will be added to the stated capital of the amalgamating subsidiary company whose shares are not cancelled.

When the statutory pre-conditions for an amalgamation are met, what documents must be filed with the Registrar of Companies?

Section 211 of the Companies Act, Cap. 308 provides in effect that following the adoption of an amalgamation under section 208 (long-form), or under section 209 (vertical short-form) or section 210 (horizontal short-form), the following completed documents must be sent to the Registrar in duplicate together with the prescribed fee:

1) Articles of Amalgamation in the prescribed form (Form 15) and completed in accordance with the statutory Instructions printed at the back of the form and issued therewith;

2) Request for Name Search and Reservation Form (Form 33). If a proposed name is not reserved under section 415 of the Act, the Articles of Amalgamation must be accompanied by a statement setting out the main types of business to be carried on by the amalgamated company;

3) Statutory Declaration by a director or officer of each amalgamating company establishing to the satisfaction of the Registrar the matters identified in section 211(2) of the Act;(See below)

4) Notice of Directors (Form 9);

5) Notice of Registered Office (Form 4);

6) If the amalgamation is a "long-form amalgamation" effected under section 208 of the Act, the Articles of Amalgamation must be accompanied by a copy of the Amalgamation Agreement and a copy of the required special resolution of shareholders of each amalgamating company;

7) If the amalgamation is a "vertical short-form amalgamation" or a "horizontal short-form amalgamation" effected under section 209 or 210, the Articles of Amalgamation must be accompanied by a copy of the required directors resolution of each amalgamating company.

What facts should be included in the Directors' Statutory Declaration in order to establish the matters identified in section 211(2) of the Act to "the satisfaction of the Registrar"?

Section 211(2) of the Companies Act, Cap. 308 requires that the statutory declaration to be attached to the Articles of Amalgamation should establish the following matters "to the satisfaction of the Registrar":-

1) that there are reasonable grounds for believing that each amalgamating company is, and the amalgamated company will be able to pay its liabilities as they become due; and

2) that there are reasonable grounds for believing that the realisable value of the amalgamated company's assets will not be less than the aggregate of its liabilities and the stated capital of all classes;and

3) that there are reasonable grounds for believing that no creditor will be prejudiced by the amalgamation; or

4) that there are reasonable grounds for believing that adequate notice has been given to all known creditors of the amalgamating companies, and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious.

In effect, section 211(1) of the Act prescribes what amounts to a "solvency test" which is fulfilled by the director/officer of each of the amalgamating companies laying out in his Statutory Declaration the factual basis of his belief that the amalgamating companies and the amalgamated company are solvent and will be able to pay its liabilities, and that the realisable value of the assets of the amalgamated company will not be less than the aggregate of its liabilities and the stated capital of all classes.

In practice, the "solvency test" is fulfilled by the director expressly asserting in the Statutory Declaration that he has reviewed the financial affairs of the company and has satisfied himself as to the company's solvency. The director will also annex to the Statutory Declaration, inter alia, certified copies of the balance sheet of each amalgamating company as well as the pro forma balance sheet of the amalgamated company. (N.B. The specimen Statutory Declaration usually accepted in amalgamation matters may be obtained from the Registry on request.)

What legal consequences flow from the issuance of the Registrar's Certificate of Amalgamation?

Section 212(2) of the Companies Act, Cap. 308 provides that on the date shown in a certificate of amalgamation issued by the Registrar:

a) the amalgamation of the amalgamating companies and their continuance as one company becomes effective;

b) the property of each amalgamating company becomes the property of the amalgamated company;

c) the amalgamated company becomes liable for the obligations of each amalgamating company;

d) any existing cause of action, claim or liability to prosecution is unaffected;

e) a civil, criminal or administrative action or proceeding pending by or against an amalgamating company may be continued by or against the amalgamated company;

f) a conviction against, or ruling, order or judgment in favour of or against, an amalgamating company may be enforced by or against the amalgamated company; and

g) the articles of amalgamation are the articles of incorporation of the amalgamated company.

What are some of the common errors or frequent filing defects which can cause delays in the processing of a company amalgamation?

The following are a few of the most frequent filing defects/errors noted by the Corporate Registry when processing company amalgamations:-

a) Articles of Amalgamation (Form 15) incompletely filled-in;

b) Where the amalgamation is effected under section 208 ("long-form amalgamation"), the Articles are not accompanied by a copy of the Amalgamation Agreement or a copy of the special resolution;

c) The Amalgamation Agreement required in connection with a "long-form amalgamation" does not contain the minimum statutory particulars identified in section 207(1) of the Act;

d) Where the amalgamation is effected under section 209 ("vertical short-form amalgamation") or under section 210 ("horizontal short-form amalgamation"), the Articles are not accompanied by a copy of the required director's resolution of each amalgamating company;

e) The Statutory Declaration attached to the Articles does not contain sufficient factual information to fulfill the "solvency test" established by section 211(2) of the Act;

f) Notice of Directors (Form 9) missing or not properly filled-in;

g) Notice of Registered Office (Form 4) missing or not properly filled-in.

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What is a prospectus?

A "prospectus" is defined in section 288 (c ) of the Companies Act, Cap. 308 to include "any notice...or other document that invites applications from the public, or invites offers from the public, to subscribe for or purchase...any shares or debentures of the company or any units of any such shares or debentures of the company."

What rules and regulations govern the issuance to the public of invitations to subscribe for or purchase shares or debentures in a company?

Part II Division D of the Companies Act, Cap. 308 contains detailed provisions designed to protect investors and to regulate the manner in which company promoters as well as companies may go about raising money from the public with which to finance the operation of public companies. Other prospectus requirements are also prescribed in the First and Second Schedules to the Companies Regulations, 1984 made under the Act.

The statutory prospectus requirements seek to ensure that companies make the fullest disclosure about the company's state of affairs to members of the public who are being invited to invest in the enterprise. Accordingly, the Act requires disclosure of such matters, inter alia, as the number of founders or management or deferred shares, if any, the nature and extent of the interest of the holders in the property and profits of the company, any commissions payable and any material contracts referred to in the prospectus.

Who is required to register a prospectus?

Sections 290(1) and 297(1) of the Companies Act, Cap. 308 expressly provide that no person shall issue a prospectus or any form of application for shares or debentures unless a prospectus has been registered by the Registrar of Companies and the prospectus states on its face the fact of the registration and the date on which it was effected.

Although the prohibition is directed at "persons" generally, the requirement to register the prospectus is in practical terms directed to the company promoters and directors of companies who are seeking to raise funds from the public in the name of the company through the medium of a prospectus.

What are the consequences of failing to register a prospectus with the Registrar?

The willful contravention of the requirement to register a prospectus is a criminal offence under section 433(1)(c ) of the Companies Act, Cap. 308. A person found guilty of the offence is liable on summary conviction to a fine of $5,000 or to imprisonment for a term of 6 months or both.

What documents must be filed with the Registrar?

Section 297(2) of the Companies Act, Cap. 308 provides, inter alia, that the Registrar may not register a copy of the prospectus unless the following documents are lodged with the Registrar together with the prescribed fee:-

1) A copy of the prospectus. Such copy to be lodged with the Registrar for filing on or before the date of its issue and signed by every director and by every person named in the prospectus as a proposed director, or by his duly authorized agent;

2) A copy of a written consent by an expert agreeing to the inclusion in the prospectus of an opinion or statement made by the expert in relation to the prospectus as required by section 299 of the Act;

3) Copies of all material contracts referred to in the prospectus;

4) Where such material contracts are not reduced to writing, a memorandum giving full particulars of the contract must be lodged with the Registrar together with the prospectus.

Prior to going to print with the final text of the prospectus and to lodging same with the Registrar for registration, it is advisable for the company to obtain the preliminary views of the Registrar of Companies (as well as the Securities Exchange of Barbados) on the draft text of the proposed prospectus. In practice, this approach will save unnecessary printing costs and ensure that there are no last minute surprises which can jeopardize the legality of the public offering.

What other matters should be addressed by the company prior to filing the prospectus for registration?

1) Since the Registrar of Companies also functions as adjudicator of stamp duty under the Stamp Duty Act, Cap. 91, an inquiry may be made by the Registrar in relation to whether any material contracts referred to in the prospectus attract Government stamp duty. Accordingly, companies should ensure that the documents are appropriately stamped at the time they are lodged for registration;

2) If it appears from the Registrar's examination of the prospectus as well as of the company file kept at the Corporate Registry that the company is not in good-standing by reason of the company's failure to file annual returns or to notify the Registrar about changes in directorships or changes in the registered office or any other matter, the Registrar may require such changes to be filed before proceeding with the registration of the prospectus. It is therefore important that companies ensure that the company records are kept up to date as required by the Companies Act so that the processing of the prospectus will not be unnecessarily delayed or held-up.

3) The above advice is especially apposite where a prospectus is lodged for registration by or on behalf of an external company wishing to make a public offering in Barbados. External companies have special obligations under section 342 of the Companies Act to notify "fundamental company changes" to the Barbados Registrar within 30 days of such changes taking place. Failure by an external company to notify such fundamental changes to the Barbados Registrar within 60 days of the change will result in the registration of the external company ceasing to be valid in Barbados. In such circumstances, the external company will not be in good standing in Barbados and the prospectus will not be registered by the Registrar, placing the public offering in jeopardy.

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What is corporate continuance?

Just as natural persons may 'pull up roots' in one country and migrate to a new jurisdiction, so too can companies abandon their jurisdiction of incorporation and establish a new, permanent home as an immigrant in another jurisdiction. There may be many reasons for such a move. The most obvious reason might be that the focus of the corporation's business has shifted to take advantage of new opportunities in another area. Again, the company may decide that the laws of a particular jurisdiction are more advantageous to the company than its present domicile and that it is in the company's strategic interests to emigrate elsewhere.

What provisions of the Barbados Companies Act, Cap. 308 govern corporate migration to and from Barbados?

Section 356.1 to Section 356.6 of the Companies Act, Cap. 308 set out the rules which govern corporate migration to and from Barbados, in the Act referred to as "corporate mobility" or continuance.

In what circumstances are companies permitted to emigrate from Barbados?

Barbadian companies are prohibited by section 356.5 of the Companies Act, from applying for continuance in another jurisdiction or from being continued under the laws of another jurisdiction unless, the laws of the jurisdiction to which they are emigrating provide in effect that:

(a) the property of the company continues to be the property of the body corporate;

(b) the body corporate continues to be liable for the obligations of the company;

(c) any existing cause of action, claim or liability to prosecution is unaffected;

(d) a civil, criminal or administrative action or proceeding pending by or against the company can be continued to be prosecuted by or against the body corporate; and

(e) a conviction against or ruling order or judgment in favour of or against, the company can be enforced by or against the body corporate.

How do Barbados companies obtain permission to emigrate from Barbados?

In practice, a Barbados company desirous of emigrating to another jurisdiction must first apply to the Registrar of Companies in Barbados under section 356.4 of the Companies Act for permission to continue as a corporation in the other jurisdiction. The application must be made in writing (by letter) and supported by a Statutory Declaration which satisfies the Registrar in relation to the following matters:-

1) that the company has a right to apply for continuance by reason of the fact that the laws of the jurisdiction to which the company intends to migrate make provision for the matters set out in section 356.5 of the Act;

2) that the company is authorized by special resolution of its shareholders to continue in another jurisdiction in accordance with section 356.4 of the Act; and

3) that the proposed continuance in another jurisdiction will not adversely affect the company's creditors.

[N.B. In practice, Item 1 above may be established by reference to a legal opinion from someone expert in the law of the other jurisdiction which should be attached to the Statutory Declaration as an exhibit together with extracts from the relevant foreign law for the Registrar's information.]

How is the Registrar's approval for the continuance signified?

When the Registrar approves the company's request to continue as a corporation in another jurisdiction, a letter of approval will be issued to the company signifying the Registrar's consent to the proposed migration of the company from Barbados. Issuance of the Registrar's letter of approval will facilitate the company's application for continuance in the jurisdiction to which it is emigrating.

How is the continuance procedure brought to finality in Barbados?

When the company has been continued as a corporation in accordance with the laws of the other jurisdiction, the company is required to give notice to the Registrar of the fact of the continuance in the other jurisdiction. In practice, the Certificate of Continuance issued by the competent authority in the other jurisdiction (or a certified copy thereof) must be filed with the Registrar. Upon receipt of satisfactory notice regarding the company's continuance in the other jurisdiction, the Registrar of Companies will thereupon issue a Certificate of Discontinuance.[See section 356.6]

What is the effect of the Registrar's Certificate of Discontinuance?

Upon the issuance of a Certificate of Discontinuance in Barbados, the company ceases to exist as a Barbadian company and becomes an "external company" for all the purposes of the Companies Act.

In what circumstances can a company which is incorporated in another jurisdiction migrate to Barbados?

In short, Barbados law permits any externally incorporated body corporate to apply for continuance in Barbados. The only pre-condition for migration to Barbados which exists is that the law of the jurisdiction in which the company is incorporated must authorise the continuance.

Sections 356.1 to 356.3 of the Companies Act, Cap. 308 govern the circumstances in which a body corporate which is incorporated in a jurisdiction other than Barbados may apply to the Registrar of Companies for a Certificate of Continuance.

What is the procedure to be followed to effect the migration to Barbados of an externally incorporated company?

An externally incorporated company desirous of migrating to Barbados is required to file the following documents with the Registrar of Companies (in duplicate) together with the prescribed fees:

1) Articles of Continuance in the prescribed form (Form 17);

2) The application must be supported by a Statutory Declaration which satisfies the Registrar that the proposed continuance is permitted by the law of the jurisdiction from which the company is migrating;

3) Request for Name Search and Name Reservation (Form 33);

4) Notice of Registered Office (Form 4);

5) Notice of Directors (Form 9)

[N.B. In practice Item 2 above is established by reference to a legal opinion from someone expert in the law of the other jurisdiction which should be attached to the Statutory Declaration as an exhibit, together with extracts from the relevant foreign law for the Registrar's information]

What is the legal effect of the Registrar's Certificate of Continuance?

On the date shown in the Certificate of Continuance issued by the Barbados Registrar of Companies:

* the body corporate becomes a company to which the Companies Act, Cap. 308 applies as if the company had been incorporated under the Act;

* the Articles of Continuance become the articles of incorporation of the continued company; and

* the Certificate of Continuance is the certificate of incorporation of the Company.[see section 356.2]

In addition, by operation of law, sections 353 and 354 of the Companies Act apply to the continued company with such modifications as the circumstances require, as if the company were a former-Act company continued under the Act.

By virtue of section 353, continuance of the company in Barbados will have the following legal consequences:

(a) the property of the company continues to be the property of the body corporate;

(b) the body corporate continues to be liable for the obligations of the company;

(c) any existing cause of action, claim or liability to prosecution is unaffected;

(d) a civil, criminal or administrative action or proceeding pending by or against the company can be continued to be prosecuted by or against the body corporate; and

(e) a conviction against or ruling order or judgment in favour of or against, the company can be enforced by or against the body corporate.

Furthermore, by virtue of section 354, continuance under the Barbados Companies Act, will not deprive a shareholder of any right or privilege that he claims under an issued share, nor relieve him of liability in respect of an issued share of the company.

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