What Businesses Need to Know for the New Year

The end of a year and the beginning of a new one is a great time to review your business’s status. Take another look at the books, taxes, licenses, and more to get a fresh start for the new year.

Accounting and Taxes

When is the last time you reviewed your business’s bookkeeping or spoke to your accountant? If you need to make some updates, do it now. If you do not have a bookkeeper or accountant, you may want to evaluate if you need one. The larger your business grows, the more important it is to carefully track assets and liabilities, as well as transactions.

As to taxes, while The Bahamas does not levy any direct corporate taxes (including income taxes), your business may owe other kinds of taxes. For example, The Bahamas does assess:

  • Real property tax, if your business owns real estate
  • National Insurance Board contributions if you have employees
  • Stamp duty
  • Import tax
  • Value added tax

Some businesses’ transactions may qualify for exemptions from the value added tax or import tax. Check if your business qualifies.

Company Legal Requirements

The new year is an ideal time to sign any new legal documents that your company needs. Take a look at your articles of association, partnership agreement, or other agreements which may have expired to see whether any changes are needed. Have any required board or shareholder meetings before the end of the old year, and schedule meetings for the new year.

Employee Evaluations

If your business has employees and does not already do evaluations, this year may be a great time to start. Assessing your employees’ performance on a regular basis can help you make changes when needed and document problems from the start. Also, consider setting up a way for employees to give anonymous feedback about the company and their managers.

Business Licenses

You may need a business license to operate some types of companies or operate in certain industries in The Bahamas. If you already have a license, check if you need to renew it and how much it will cost.

To find out more about running a company in The Bahamas, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.

 

The hiring of an attorney is an important decision that should not be based solely upon the information contained in this website.  This website is designed for general information purposes only and the information provided should not be construed to be formal legal advice nor the formation of an attorney/client relationship.

Multi-Generation Estate Planning in The Bahamas

If you are planning your estate and want to help your family for years to come, think beyond your immediate heirs to the next generation. There are a few techniques you can use to plan for giving to many members of your family.

Trusts and Multi-Generation Estate Planning

Setting up one or more trusts is a great way to make a multi-generation estate plan. When you create a trust, you place money or property in the hands of a trustee, who manages it for the benefit of beneficiaries you choose. The trustee must invest and manage the money or property wisely, so it may gain significant value over time.

You can set conditions on who receives distributions from the trust, how much they receive, and when they receive them. For example, you could decide that your children will receive all interest and dividends earned by the trust until they pass away. At that point, your grandchildren receive distributions of the trust property regularly until the trust is depleted.

This is just one of many, many ways that you can structure a trust to benefit multiple generations. Trusts are very flexible devices to help your family if you have accumulated money, real estate, stocks, or other valuable items.

Wills and Multi-Generation Estate Planning

You can make gifts to multiple generations of your family in your will, as well as in a trust. When your family has several generations of living members, you may experience marriages, births or deaths in the family after you create your will. This may lead to somewhat unequal gifts that you did not expect. Depending on how your will is structured, some grandchildren could receive their parents’ shares of your gifts while others receive nothing. More distant relatives could be cut out of the will altogether. As a result, you may want to consider how to spread your estate to multiple generations in your will.

There are several other estate planning devices that can help you give to your whole family. Start making an estate plan today with the help of a Bahamian lawyer.

To learn more about estate planning, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.

 

The hiring of an attorney is an important decision that should not be based solely upon the information contained in this website.  This website is designed for general information purposes only and the information provided should not be construed to be formal legal advice nor the formation of an attorney/client relationship.

Do Directors Face Liability When a Company Gets Sued?

In specific situations, directors may face personal liability in The Bahamas when their company is sued. While companies provide substantial protection for directors, there are some circumstances when directors must take financial responsibility. If you are a director of a Bahamian company or international business company, you should be aware of your possible liability risk.

When Do Directors Face Liability?

Directors may face personal liability to the company for:

  • Authorizing prohibited loans, purchases of shares, commissions, or dividend payments
  • Authorizing the issue of a share for consideration other than money

Shareholders could sue a director on behalf of the company to recover money under these circumstances.

In addition, shareholders may sue directors who violate their fiduciary duties in relation to the company. Directors must act in good faith looking to the best interest of the company and act honestly. They should exercise the care and diligence that a reasonably prudent person would exercise in similar circumstances. Their fiduciary duties include:

  • The duty to avoid conflicts of interest;
  • The duty not to personally gain or profit from their position;
  • The duty to act in good faith in relation to the company;
  • The duty to exercise their powers for their proper purpose; and
  • The duty not to exceed their powers.

What Happens if Directors Violate Their Fiduciary Duties?

If directors do not uphold their fiduciary duties, the shareholders can pursue legal action to protect the company. The shareholders are the owners of the company, not the directors. The directors cannot do whatever they want with the company’s money and resources. If they abuse their positions, they may have to reimburse the company.

Directors can seek legal advice before they make decisions that may be unpopular with shareholders, or if they believe they have conflicts of interest. If you are in this position, seek the advice of a Bahamian lawyer.

To find out more about directors of Bahamian companies and IBCs, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.

 

The hiring of an attorney is an important decision that should not be based solely upon the information contained in this website.  This website is designed for general information purposes only and the information provided should not be construed to be formal legal advice nor the formation of an attorney/client relationship.

 

Limiting Personal Liability When Forming a Business in The Bahamas

When you form a business in The Bahamas, you should consider how to limit your personal liability in case of a legal claim. It is very risky to assume that you will never face personal financial consequences related to your business. Choosing a business entity that limits liability is a good way to lower your risk.

Why Would You Be Personally Liable for a Business Debt?

Depending on how you structure your business, creditors may be able to access your personal financial resources to satisfy a debt owed by your business. For example, if you run a small business as a sole proprietor, you have no liability protection at all. The business is registered under its own name, but you must pay all of its debts. Creditors will come after you if your business has overdue bills.

Similarly, partners in a general partnership are liable for the partnership’s debts. You may agree with your partners that the amount of your liability is proportionate to the value of your share in the partnership. If the partnership owes money, creditors will seek to use your personal assets to satisfy the debts.

Which Kinds of Business Structures Limit Liability?

You have several choices of business structure that provide some protection against personal liability for business debts. For example, you could choose to form a limited liability company. Members of a limited liability company are liable only for company debts up to the amount of their individual investment in the company, or up to another agreed-upon amount.

In a limited partnership, some partners have significant personal liability for partnership debts. These are called general partners. Limited partners, in contrast, are only liable up to the amount they invest in the partnership. Of course, if you want to be a limited partner, you need a partner willing to take on the possible personal liability.

Alternatively, you could form a segregated accounts company. A segregated accounts company (SAC) has a series of accounts, each of which holds one or more assets. The accounts are separate, so creditors of an asset held in one account cannot access an asset held in another account to satisfy the debt.

To find out more about business structures and limiting personal liability in The Bahamas, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.

 

The hiring of an attorney is an important decision that should not be based solely upon the information contained in this website.  This website is designed for general information purposes only and the information provided should not be construed to be formal legal advice nor the formation of an attorney/client relationship.

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