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   regulations   

    COMPANY FORMATION
     

    The 1996 Act covers formation and regulation of exempt companies, which pay no income, capital gains, withholding, and stamp taxes as long as they conduct business exclusively with persons who are not resident in the Federation. Other companies, referred to as ordinary companies, are subject to taxation and stricter controls. A distinction is also made between (1) a public company that has 51 members and may invite the public to subscribe to shares and debentures; and (2) a private company that has fewer than 51 members and refrains form making public offerings. In all cases, liability must be limited either by shares or guarantee.

     

    The law makes clear that an exempt company does not lose its tax waivers because of activities within the Federation including signing contracts or concluding arrangements for employing residents, purchasing goods and services, and exercising other powers to carry on its business such as holding directors' and members' meetings, transacting banking and reinsurance business, and conducting securities transactions or serving as adviser to Federation residents who enjoy exempt status.

     

    All private companies can dispense with an annual general meeting, if members unanimously agree to this in writing. They have the right to appoint only one director, but a sole director may not be the mandatory secretary. In addition, private exempt companies enjoy the privileges of:

     

     
    Issuing bearer certificates
     

     

     

    Not having to engage auditors or submit annual audited accounts, although they must keep accounting records and prepare annual accounts; and

     

    Limiting inspection of the mandatory members' register to members and company officers.

     

     
    Company Formation
     

     

     

    One or more persons associated for a lawful purpose can form a company by subscribing their names to a Memorandum of Association written in the English language. Incorporators either adopt model Articles or draw up their own Articles of Association. These documents are submitted to the Registrar of Companies along with payment of a 540 East Caribbean dollars ($200) registration fee, after which a certificate is issued. In its Memorandum, a company limited by shares must state the maximum number of shares that the company is authorized to issue and the share value, which can be expressed in any currency but may not be printed on shares certificates. A company limited by guarantee must state in its Memorandum the number of members it proposes to register and the amount of the guarantee expressed in any currency. The company's name must end in "Limited," "corporation" or their abbreviations.

     

    Since the doctrine of ultra vires has been abolished, a company has the capacity, rights, powers and privileges of an individual. Perpetuity options are a limited life-span (with the number of years specified) or an unlimited life-span.

     

    Fractional and Treasury shares are permitted, but shares cannot be sold at a discount except for commission payments. Every company must keep a register of its members at its registered office in the Federation except that if the register was compiled at another place, the register is kept at that place. Trust may not be entered in the Register of Members.

     

     

     

     

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