The Bahamas offers a number of possible business structures from which aspiring business owners can choose. Each business structure has slightly different benefits depending on your industry and specific business area, your goals, your desire for liability protection, and your practical limitations.
Will Your Business Operate in The Bahamas?
If you plan to conduct business in The Bahamas with local residents, consider forming a company under the Companies Act, 1992. Although many domestic companies operate only in The Bahamas, Bahamian law does not require that any Bahamian citizens be directors or participants in domestic companies. People starting businesses that will work mostly offshore should consider forming an International Business Company instead. IBCs have flexible incorporation and operation requirements intended to accommodate overseas business, including the option to conduct shareholder and director meetings anywhere in the world or by telephone.
How Many People Will Manage or Invest in the Business?
If your business will have a large number of investors, directors, or employees, consider forming a company rather than a partnership. A partnership with too many partners can become unwieldy and difficult to manage. In a company, a smaller team of directors or managers often handle the day-to-day operations of the business while the investors largely are not involved. Partnerships are better for a small group of business partners working together on a venture. There are several types of partnerships available in The Bahamas, including a limited liability partnership.
How Will the Business Limit Liability for Investors and Managers?
Different types of business structures provide for different types of protection from legal liability for actions taken on behalf of the business structure. For example, companies limited by guarantee limit investors' liability to an agreed “guarantee” amount each person will pay to cover the company's debts in case of insolvency. In contrast, companies limited by shares limit shareholders' liability to the amount unpaid on the shares held by such shareholder.
Do You Need to Protect Valuable Assets?
Consider how you will protect real property and valuable goods held by your business. If you anticipate the need to protect certain assets, you might consider using a segregated account company or trust structure for peace of mind. Segregated account companies have a series of separate accounts, each of which holds some valuable asset. Under Bahamian law, creditors of one segregated account will have access only to the asset in a particular account but will have no claim to the assets in other segregated accounts.
The considerations listed above regarding choice of a business structure are a few of many. Consult an attorney who can advise you about the best structure for your specific circumstances.
To find out more about trust disputes and conflict of laws, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.