Historically, the Commonwealth of the Bahamas has been a highly respected, well-established, and sophisticated international financial center. Non-resident professionals consider the jurisdiction to be one of the best locations to form International Business Companies (IBCs). The corporate registry of the Registrar General’s Department contains around 25.000 companies. The majority of these companies have non-resident ownership and qualify as offshore IBCs. As with many offshore jurisdictions, companies incorporated in the Bahamas may stop their activities by choice, necessity, or accidently. The scope and nature of the Bahamas offshore IBC sometimes may require reactivation and thus legal restoration of the corporate entity. Such reactivation usually arise in matters of potential personal liability to beneficiaries of the company, where the lapsed company has silent assets to be distributed in the far future, or when legal action and asset recovery procedures eventually allow for repayment.
Offshore Company Reactivation
Bahamas (offshore) IBCs that have been taken off the corporate register can be reinstated. Reactivation is not affected by the grounds for dissolution or removal. However, there are several requirements for achieving a successful restoration and revival of the company. Chapter 309 of the Statute Law of the Bahamas on International Business Companies equalizes the legal entity and its name. Thus, a Bahamian (offshore) IBC has perpetual standing and to bring a lapsed company back into good standing, different financial and administrative matters must be resolved. Beneficiaries of the company must perform an appropriate assessment of the financial consequences of reinstating the (offshore) IBC.
Apart from the usual grounds for ending an IBC, such as termination of activities, financial problems, and insolvency, the Registrar General’s Department is also entitled to strike off an IBC. It therefore needs reasonable cause to believe that the company no longer satisfies the requirements of the International Business Companies Act. The registrar provides the beneficiaries of the designated company ninety days to respond and disprove the allegations. Without an adequate response from the beneficiaries, the company is removed from the corporate registry. Even though the company does not exist anymore, it remains liable for all claims, debts, liabilities and obligations of the company and the removal from the registry does not affect the (personal) liability of any of its members, directors, officers or agents. Consequently, a simple dissolution will not release members from their personal responsibilities. Liability is enforced instead.
Reactivating a Bahamas (offshore) IBC can be beneficial for both company members and other beneficiaries. There are often legal and financial issues involved. Essentially, the company is treated as a separate legal entity from its members and beneficiaries under the doctrine of corporate personality. The members and beneficiaries of a corporation may then be liable for careless, clumsy, and inadequate dissolution procedures. In addition, legal proceedings, asset recovery, and estate planning predominantly requires corporate reactivation and restoration. Such matters are unique and personal. As a result, reactivation and restoration applications require professional customization and tailored advice.
Bahamas Offshore IBC Reactivation and Restoration Procedures
After a company is struck from the corporate register, its directors and members are forbidden from initiating legal action, conducting any business, or dealing with its assets. Also, it cannot defend any legal proceeding, make any claim or claim any right on behalf of the corporation, or act in any manner in connection with the corporate affairs. To take such steps, a restoration application must be filed.
Within five years of its removal from the registrar, the company itself, the creditors, members, or a liquidator can apply to the court for fair and reasonable restoration of the company. Once the five years period has expired, the court can still approve restoration of the IBC but only after an official liquidator has been appointed. When the court approves restoration of the IBC, it is considered never to have been struck off the register.
The procedures for Bahamas Offshore IBC Reactivation and Restoration are complicated but straightforward. When the appropriate rules are followed, restoration and revival can take anywhere from several weeks to a few months. As such, parties willing to apply for restoration of a Bahamas offshore IBC must act with diligence, care and accuracy. It is therefore recommended to retain expert advice and assistance to get things done in the correct way. By completing the form below, one of our representatives will get back with you to discuss your needs and find the appropriate solution for your case. We look forward to hearing from you.