Unprecedented clean-up will wipe inactive companies off Bahamas register

The Bahamas’ companies registrar general is striking thousands of companies from the register because they are inactive and have not complied with the rules on fees and filings for many years.

The action results from the jurisdiction’s new beneficial ownership reporting regime, as set out last November in the Register of Beneficial Ownership Act, 2018. This law, part of a set of Bills required to satisfy the Financial Action Task Force (FATF), amended the Companies Act to create an obligation on all Bahamas companies to notify the registrar of persons with significant control over the company. As even the identities of the current directors of inactive companies were not accurately known, this provided an opportunity to ‘clean up’ the companies register.

The measures came into force on 30 April this year, at which point the registrar’s office published a notice giving non-compliant companies 90 day’s notice to pay any unpaid fees and submit all required regulatory filings. That grace period expired at the end of July 2019, giving the registrar, Sallyann Lockhart-Pratt, the power to strike off any companies that have not complied. She accordingly did so, and on 15 August published the names of the deregistered companies in the Bahamas official gazette, as well as publishing newspaper advertisements announcing her action.

The companies affected are those that have been inactive for 20 years, though the Bahamas’ finance minister Peter Turnquest estimates that about 50 per cent of the jurisdiction’s 80,000 companies are, in fact, inactive. He said the scale of the registry clean-up had never occurred before in the Bahamas, and that it was a long time overdue.