Non-profit companies in The Bahamas

A non-profit company may be incorporated in The Bahamas under Sections 170 to 178 of the Companies Act, 1992 (as amended) (“the Act”) for social, cultural, charitable, and other non-pecuniary causes, as specified in Section 14 of the Act.

Section 170 of the Act defines a “non-profit company” as a company with no authorised share capital, which is carried on without pecuniary gain to its members.

As a company with no authorised share capital, the non-profit company may be incorporated as a company limited by guarantee, as an alternative to a trust structure.

By its very nature, as a company limited by guarantee, the non-profit company is not permitted to make distributions to its members, but can only make payments for charitable purposes, as the objects in its Memorandum of Association must specifically state.

Notwithstanding that fact, each member participates equally in the assets of the company, irrespective of any variation in subscriptions paid, unless contrary provisions exist in the Articles of Association.

Each first director becomes a member of the company upon the incorporation of a non-profit company. The directors of the non-profit company may also make the by-laws of the company. The minimum number of directors for a non-profit company is three (3) directors. There is no restriction on the number of members of a non-profit company, unless otherwise determined by the Articles of Association.

The Articles of Association of the company may provide for more than one class of membership, the designations and terms of which must be specifically stated. A person is permitted to be admitted to a non-profit company by resolution of the directors, subject to the provisions of the Articles of Association. Each member of a non-profit company may have one or more votes or no votes, depending upon the Articles of Association.

With regard to the transferability of membership in a non-profit company, the interest of a member may not be transferable, unless otherwise stated in the Articles of Association, and such membership will lapse and cease to exist upon the resignation or death of the member. However, the interest in the non-profit company may continue, notwithstanding the cessation of membership.

Section 178 (2) of the Act states that: “where the Articles do not provide for the distribution of its remaining property, the company, resolution the property of a non-profit company may, by resolution of directors, after payment of all debts and liabilities, distribute or dispose of the remaining property to any organization in The Bahamas, the undertaking of which is charitable or beneficial to the community at large.”

The non-profit company is incorporated similar to that of regular Companies Act company with the requirement to reserve and confirm the availability of the name at the Companies Registry of the Registrar General’s Department for ninety (90) days, and prepare and submit the Memorandum and Articles of Association of the company (with its specific objects), in order to incorporate the company.

However, a draft copy of the Memorandum and Articles of Association of the non-profit company is required to be submitted to the Registrar General for review, before submission for incorporation of the company, in order to verify and confirm the objects and purpose of the company, in accordance with the provisions of the Act.

Once the Registrar General has confirmed that the objects of the non-profit company are for a charitable or non-pecuniary purpose, in conformity with Section 14 of the Act, the draft Memorandum and Articles of Association must be finalized, properly executed by the first directors, and re-submitted to the Companies Registry, for incorporation.

Stamp duty in the amount of dollars ($5.00) must be paid to the Public Treasury and an incorporation fee of $330.00 must be paid to the Companies Registry, on submission of the Memorandum and Articles of Association and incorporation of the non-profit company.

If you require assistance with setting up a non-profit company, you should contact a Bahamian corporate attorney or Bahamian corporate services provider.  If you wish to contact a Bahamian corporate attorney or Bahamian corporate services provider, you can do so by clicking here.