The Companies Amendment Act 2006

In an effort to keep Bermuda as modern and attractive a venue as possible for creating new exempt businesses, the Ministry of Finance often reconsiders and updates the original Bermuda Companies Act 1981, which first established exempt companies on Bermuda. The Legislative Change Committee of the Bermuda International Business Association (BIBA) and the Ministry of Finance reviewed the legislation and agreed to update the act in several ways, including:

• Electronic Delivery of Documents: Rather than delivering official documents by mail or fax, companies can now deliver these records by e-mail or on a website; for example, shareholders can get company updates on the company website. The Registrar of Companies now also accepts electronic filings as official documents. [Bermuda already has a Standard for Electronic Transactions and an Electronic Transactions Act; its e-commerce legislation is intended to provide a sense of security to companies who frequently transact business online (which is virtually all of them), and especially to companies whose chief mode of business is e-commerce. It's the second country in the world to enact specific e-commerce legislation, providing a legal framework for considering electronic transactions.]
• Permitting the Use of Secondary Names: Companies can now apply for secondary names with, if necessary or applicable, characters rather than alphabetic letters.
• Authorised Share Capital: Businesses (other than insurance companies, which are still bound by the requirements of the Insurance Act of 1978) are no longer required to incorporate or maintain incorporated with the former minimum of $12,000. Any amount will now do.
• Indemnification of Directors and Officers: The company can now lend money to an officer who is defending himself from allegations of wrongdoing, as long as he returns the money if he loses the proceeding.
• The "Private Character" Exemption: Changes to the private character exemption have been made that make it less ambiguous.

• Majority Approval for Written Resolutions: Written shareholders' resolutions no longer require a unanimous vote; a majority, as is the case for a vote at a general meeting, is sufficient.
• Treasury Shares: The amendment has introduced "treasury shares" to the Bermuda corporation, which are issued shares that have been obtained and held by the company for a particular duration.
• Execution of Instruments: Companies no longer need to use a common seal to sign deeds or certificates; an authorised signature is now sufficient.
• Appointment of Officers: Exempt companies are no longer required to appoint an officer/director president and vice president or chairman and deputy chairman. Companies can now appoint officers of any title, and the directors are not required to be these officers.
• Directors' Authority: The former ambiguity about the scope of the directors' authority in relation to the shareholders has been removed with this amendment. Directors now explicitly can use all powers of the company that are not explicitly forbidden elsewhere.
• Fetter of Company's Power: Companies are now allowed to fetter the powers reserved to shareholders under certain circumstances, whereas before the amendment they were barred from doing so, pursuant to the Russell decision.

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