Social Enterprise Law Surveys |
|
Bahamas |
|
| (Latin America/Caribbean) Firm McKinney, Bancroft & Hughes | |
| What jurisdiction(s) do you practice in? | The Bahamas |
| What are the most commonly used types of for-profit corporate organizational forms in your jurisdiction (e.g., corporation, limited liability company, benefit corporation, social purpose corporation, etc.) used by Enterprises operating a trade ... | The most common for-profit corporate organizational form utilized in The Bahamas is a company incorporated under the Companies Act (also known as a Companies Act Company or “CAC”).
A common for-profit corporate organizational form utilized for conducting offshore business from The Bahamas is a company incorporated under the International Business Companies Act (also known as an “IBC”).
a. Both CACs and IBCs are commonly used by Enterprises seeking financing from investors and that will have multiple owners. b. Social Enterprises often use a CAC limited by guarantee. A CAC structured in this way limits liability to a specified amount provided for in the Memorandum of Association to which the members need only contribute upon the winding up of the company. Due to the capital structure of a CAC limited by guarantee, members do not make initial contributions to the company’s capital which traditionally is obtained from outside contributions, donations or funds raised in pursuit of the social enterprise.
|
| Do any of your jurisdiction’s traditional organizational forms require or permit the board or managers to consider, balance or prioritize interests other than shareholder value in decision making? What other interests, if any, are they required... | No. |
| Does your jurisdiction have organizational forms specifically designed for Social Enterprises? If so:a. What type(s) of organizational forms are they?b. How do they materially differ from the most closely analogous traditional organizational ... | No. |
| Are Social Enterprises permitted to be formed and operated as Nonprofits? If so: a. Are Nonprofits that are Social Enterprises treated differently under the law as compared to Nonprofits that are not Social Enterprises, whether from a corporat... | Certain Social Enterprises are permitted to be formed and operated as non-profit organizations (“NPOs”) with approval upon application to Registrar General of Companies. Under the Non-profit Organisations Act, 2019, a non-profit organization is a body of persons whether incorporated or unincorporated, formed and established for the purpose of promoting public policies or objects that are religious, charitable, educational, scientific, environmental, historical, cultural, fraternal, literary, sporting, artistic, athletic or promoting health, and whose gross annual income or any part thereof, if any, and other income are applied to the promotion of those objects, and there is a prohibition of any dividend or refund of contributions to its members, but excludes a religious or charitably founded school registered with the Ministry of Education, and any organization with political objectives.
|
| Does your jurisdiction allow for worker-owned Enterprises, such as cooperatives? If so, please describe any material benefits of, and/or restrictions on, using such forms. | No. |
| Are there unique reporting requirements for Social Enterprises? If there are, please describe them. Please also discuss what government bodies Social Enterprises are required to report to. | There are not any unique reporting requirements for Social Enterprises, although NPOs are required to maintain certain records for inspection by the Registrar General of Companies. For example, where the Registrar has reasonable grounds to believe or has information that an] NPO that is exempt from the requirement to maintain financial statements is engaged in activities that are identified risks, the Registrar may require the submission of bank records or other information that show its financial status. NPOs are required to keep at its registered address records that are sufficient to show (i) its purposes, objectives and activities; and (ii) the identity of the persons who control or direct its activities, including senior officers, directors and trustees. NPOs must also maintain reliable financial statements to be kept at its registered office address which (i) show and explain its transactions in sufficient detail to demonstrate that its funds have been used in a manner consistent with its purposes, objectives and activities and (b) show the sources of its gross annual income so that its financial position can be determined with reasonable accuracy. All Bahamian companies and partnerships are required to make annual substance filings pursuant to the Commercial Entities (Substance Requirements) Act. Consequently, where a Social Enterprise is a company or partnership it will be required to make such filings. |
| In your jurisdiction, has case law and jurisprudence evolved to address Social Enterprises? If there is meaningful jurisprudence around Social Enterprises, please provide some brief examples. | As our jurisdiction does not make a formal distinction for Social Enterprises there is little meaningful case law and jurisprudence in this area. |
| Does your jurisdiction have any ESG requirements for Enterprises generally? If it does, please describe. | No. |
| Does your jurisdiction have any ESG requirements specifically for Social Enterprises? If it does, please describe. | No. |
| Does your jurisdiction have any ESG requirements for investors? If it does, please describe. | No. |
| Are any major investor classes (e.g., pension funds, mutual funds, etc.) required to look at ESG issues when making investment decisions in your jurisdiction? a. If they are, please describe the requirements.b. If they are not, are they permi... | No. We acknowledge and appreciate the trend of investors that attribute more weight to ESG considerations and issues in making their final determination in their proposed investment. |
| What kinds of philanthropic funding do Social Enterprises in your jurisdiction commonly receive (e.g., grants, charitable investment, traditional investment)? | Social enterprises receive grants, charitable investments, and traditional investments. However, nonprofit social enterprises most commonly receive charitable donations. |
| How prevalent, if at all, are new for-profit impact investments in your jurisdiction (e.g. traditional instruments with impact terms, new investment instruments, aggregation with philanthropic capital, community based funding, etc.)? | We are not aware of any notable for-profit impact investments in our jurisdiction. |
| What are the types of government funding and support available to Social Enterprises, if any, available in your jurisdiction (e.g., grants, investments, bonds, and guarantees)? a. How difficult is it for Social Enterprises to obtain government... | We are not aware of any special government funding specifically available to support Social Enterprises. |
| Are there any companies that are formed as a Social Enterprise listed on your jurisdiction’s leading securities exchange(s)? | There are no Social Enterprises listed on our jurisdiction’s Securities exchange. |
| To what extent are publicly traded Enterprises required to disclose ESG related factors in annual reports/public filings in your jurisdiction. | They are not required to disclose ESG factors. |
| How prevalent, if at all, are impact bonds in your jurisdiction? | Not applicable. |
| In your jurisdiction, are there any restrictions on foreign investments or donations that are unique to Social Enterprises (whether incorporated as for profit entities or as Nonprofits)? | No. |
| Is “crowdfunding” legal in your jurisdiction? Are there rules under applicable securities laws that make it easier for smaller businesses or Social Enterprises to take money from investors that are not sophisticated/accredited/qualified under a... | Crowdfunding is not presently a funding tool used in The Bahamas, however, it appears as if at least two crowdfunding platforms will be registered with the Securities Commission of The Bahamas shortly. |
| Are there any tax exemptions that are uniquely available for Social Enterprises? a. Please describe any tax exemptions that are available and whether they are partial or full.b. Are they dependent on the Social Enterprise utilized using a spe... | There are tax exemptions available for goods and services provided by NPOs generally, but there are no tax exemptions that are uniquely available for Social Enterprises.
|
| Are individuals or other organizations able to provide tax deductible donations to for-profit Social Enterprises? If they are, please describe any restrictions applicable to tax deductible donations? | No. |
| Are there any other tax benefits uniquely available for Social Enterprises? (e.g. deferrals, favorable tax rates, business deductions, etc.) | No. |
| Does your jurisdiction provide for reciprocal recognition of tax-exempt status that has been granted under the law of any other jurisdictions? | The Bahamas is not currently a party to any bilateral or multilateral double taxation agreements. |
| Does your jurisdiction have Regulatory Sandboxes or similar policy frameworks for Social Enterprises? If it does, please describe. | No. |
| What government operational support, resources, training or services, are available for small businesses or Social Enterprises? | Government grants and loans are available to small businesses in The Bahamas through a quasi-governmental entity known as the Small Business Development Centre Bahamas “SBDC”. |
| Are there different compliance requirements for different types of Social Enterprises than for traditional Enterprises? Please provide examples if there are. | No. |
| Is there a dedicated government agency or department that oversees Social Enterprises? If there is, please describe its mandate and effectiveness. | No. |
| Is there a different bankruptcy system available for Social Enterprises? | No. |
| What are the average time and filing fees to form an Enterprise in your jurisdiction? | The average time to form an Enterprise in The Bahamas is 3-5 business days. There is an option offered by some registered agents to provide express incorporation, which is incorporation within 24 hours. Government filing fees in connection with International Business Companies (IBC’s) are $480.00 for IBC’s with up to $50,000.00 in share capital and $1,280.00 for IBC’s with over $50,000.00 in share capital. Government filing fees in connection with Companies Act Companies (CAC’s) are $415.00 for CAC’s with up to $50,000.00 in share capital and $1,280.00 for CAC’s with over $50,000.00 in share capital. |
| What government or third-party certifications or accreditations, if any, are available for Social Enterprises that allow for access to benefits e.g. funding, beneficial tax status, etc.? Please provide examples and briefly describe them as well... | There are no certifications in The Bahamas that afford beneficial tax status or other beneficial legal status on Social Enterprises. |
| Please describe whether, in your opinion, startups and other entrepreneurial Enterprises generally can easily form and flourish in your jurisdiction. | Yes, startups may easily form and flourish in The Bahamas. Through the SBDC there are many opportunities to acquire adequate financing for the start of entrepreneurial endeavors. The Incorporation process is fast and simple for Non-profits, IBC’s and CAC’s. |
| Please describe whether, in your opinion, Social Enterprises, in particular, can easily form and flourish in your jurisdiction. | Social Enterprises may easily be formed and flourish in The Bahamas. As a small island developing nation whose primary industry is tourism, social enterprises geared towards environmental objectives are especially welcome in The Bahamas. |
| Please describe whether in your opinion there are any laws that are obstructive to the formation of Social Enterprises (i.e. that actively disfavor or penalize, or otherwise discourage their formation) in your jurisdiction (for example, are Soc... | None. |
| In your jurisdiction, are there any major fraud concerns or defects due to corruption or fraud that should be addressed? If there are, please briefly discuss the concerns or defects. | No. |
| What changes to the law do you think would be most beneficial to enabling Social Enterprises to flourish in your jurisdiction? | Legislation to specifically encourage the formation of Social Enterprises by providing tax exemptions, expedited formation, etc. |
| What changes to the law do you think would be most beneficial to enhancing the social and environmental responsibility of Enterprises generally (whether or not Social Enterprises)? | The option for enterprises to engage in philanthropic causes and earn a tax credit to be applied to taxes owed to the government. This would encourage many enterprises to finance and champion social and environmental issues. |
| Is there anything else you would like to add or guidance you would like to provide? Are there any questions we should have asked but did not? | No. |
Social Enterprise Law Surveys
The Bahamas
The most common for-profit corporate organizational form utilized in The Bahamas is a company incorporated under the Companies Act (also known as a Companies Act Company or “CAC”).
- A CAC enjoys limited liability and customarily operates as a domestic resident company conducting business within the local marketplace. A CAC may be formed by two (2) or more subscribers executing a Memorandum of Association and Articles of Association. Once incorporated, a Certificate of Incorporation issued by the Registrar General reflects that a CAC has fulfilled all requisite legal requirements and has been validly incorporated.
- CACs must have at least 2 directors and file an annual return noting the shareholders, directors and officers of the company.
A common for-profit corporate organizational form utilized for conducting offshore business from The Bahamas is a company incorporated under the International Business Companies Act (also known as an “IBC”).
- IBCs also enjoy limited liability and are similar in nature to CACs save that they are restricted (subject to obtaining specific approval) from dealing in local currency or operating in the local marketplace.
- IBCs also enjoy the flexibility of maintaining only one director and one shareholder which may be natural persons or corporate entities.
- Furthermore, IBCs are only required to file on the public registry a list of its officers and directors.
a. Both CACs and IBCs are commonly used by Enterprises seeking financing from investors and that will have multiple owners.
b. Social Enterprises often use a CAC limited by guarantee. A CAC structured in this way limits liability to a specified amount provided for in the Memorandum of Association to which the members need only contribute upon the winding up of the company. Due to the capital structure of a CAC limited by guarantee, members do not make initial contributions to the company’s capital which traditionally is obtained from outside contributions, donations or funds raised in pursuit of the social enterprise.
No.
No.
Certain Social Enterprises are permitted to be formed and operated as non-profit organizations (“NPOs”) with approval upon application to Registrar General of Companies. Under the Non-profit Organisations Act, 2019, a non-profit organization is a body of persons whether incorporated or unincorporated, formed and established for the purpose of promoting public policies or objects that are religious, charitable, educational, scientific, environmental, historical, cultural, fraternal, literary, sporting, artistic, athletic or promoting health, and whose gross annual income or any part thereof, if any, and other income are applied to the promotion of those objects, and there is a prohibition of any dividend or refund of contributions to its members, but excludes a religious or charitably founded school registered with the Ministry of Education, and any organization with political objectives.
-
No
-
Certain tax exemptions are available to NPOs. These are discussed further in Section III below.
-
There is no hybrid Nonprofit form.
-
NPOs are commonly used for Social Enterprises in The Bahamas.
No.
There are not any unique reporting requirements for Social Enterprises, although NPOs are required to maintain certain records for inspection by the Registrar General of Companies.
For example, where the Registrar has reasonable grounds to believe or has information that an] NPO that is exempt from the requirement to maintain financial statements is engaged in activities that are identified risks, the Registrar may require the submission of bank records or other information that show its financial status.
NPOs are required to keep at its registered address records that are sufficient to show (i) its purposes, objectives and activities; and (ii) the identity of the persons who control or direct its activities, including senior officers, directors and trustees. NPOs must also maintain reliable financial statements to be kept at its registered office address which (i) show and explain its transactions in sufficient detail to demonstrate that its funds have been used in a manner consistent with its purposes, objectives and activities and (b) show the sources of its gross annual income so that its financial position can be determined with reasonable accuracy.
All Bahamian companies and partnerships are required to make annual substance filings pursuant to the Commercial Entities (Substance Requirements) Act. Consequently, where a Social Enterprise is a company or partnership it will be required to make such filings.
As our jurisdiction does not make a formal distinction for Social Enterprises there is little meaningful case law and jurisprudence in this area.
No.
No.
No.
No.
We acknowledge and appreciate the trend of investors that attribute more weight to ESG considerations and issues in making their final determination in their proposed investment.
Social enterprises receive grants, charitable investments, and traditional investments. However, nonprofit social enterprises most commonly receive charitable donations.
We are not aware of any notable for-profit impact investments in our jurisdiction.
We are not aware of any special government funding specifically available to support Social Enterprises.
There are no Social Enterprises listed on our jurisdiction’s Securities exchange.
They are not required to disclose ESG factors.
Not applicable.
No.
Crowdfunding is not presently a funding tool used in The Bahamas, however, it appears as if at least two crowdfunding platforms will be registered with the Securities Commission of The Bahamas shortly.
There are tax exemptions available for goods and services provided by NPOs generally, but there are no tax exemptions that are uniquely available for Social Enterprises.
- Goods and services provided by NPOs are exempt from the payment value added tax.
- No Business Licence tax is chargeable on NPOs in The Bahamas.
- Additionally, certain goods imported by NPOs may be exempt from customs duty with prior approval from the Comptroller of Customs.
No.
No.
The Bahamas is not currently a party to any bilateral or multilateral double taxation agreements.
No.
Government grants and loans are available to small businesses in The Bahamas through a quasi-governmental entity known as the Small Business Development Centre Bahamas “SBDC”.
No.
No.
No.
The average time to form an Enterprise in The Bahamas is 3-5 business days. There is an option offered by some registered agents to provide express incorporation, which is incorporation within 24 hours.
Government filing fees in connection with International Business Companies (IBC’s) are $480.00 for IBC’s with up to $50,000.00 in share capital and $1,280.00 for IBC’s with over $50,000.00 in share capital.
Government filing fees in connection with Companies Act Companies (CAC’s) are $415.00 for CAC’s with up to $50,000.00 in share capital and $1,280.00 for CAC’s with over $50,000.00 in share capital.
There are no certifications in The Bahamas that afford beneficial tax status or other beneficial legal status on Social Enterprises.
Yes, startups may easily form and flourish in The Bahamas. Through the SBDC there are many opportunities to acquire adequate financing for the start of entrepreneurial endeavors. The Incorporation process is fast and simple for Non-profits, IBC’s and CAC’s.
Social Enterprises may easily be formed and flourish in The Bahamas. As a small island developing nation whose primary industry is tourism, social enterprises geared towards environmental objectives are especially welcome in The Bahamas.
None.
No.
Legislation to specifically encourage the formation of Social Enterprises by providing tax exemptions, expedited formation, etc.
The option for enterprises to engage in philanthropic causes and earn a tax credit to be applied to taxes owed to the government. This would encourage many enterprises to finance and champion social and environmental issues.
No.