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New Business Companies Act passed in Senate

GeneralNew Business Companies Act passed in Senate

BELIZE CITY, Thurs. June 30, 2022

The new Business Companies Act, which updates and consolidates the International Business Companies Act, Chapter 270, and the Companies Act, Chapter 250, was read a third time in the Senate yesterday—thus resulting in the repeal and replacement of the previous legislation and the installation of a modernized framework for the registration and operation of businesses. According to the senator who represents the business community, Hon. Kevin Herrera, the legislation has received the support of that community, which was involved in the process of modernizing the law, and he said that it is an important step that will open doors for new businesses.

“Some of the things that we like in the bill that certainly improved on what there before, and I will just be very brief as I’ve said before – is it provides for a listing of companies and stock exchanges, and as you know, this is important to raise capital. Whether through equity or debt, it certainly gives us another avenue or will give us another avenue within the country by which companies or individuals can raise capital with respect to companies,” Senator Herrera said.

He added that the provision stipulating that there will be no requirement regarding the number of shareholders for private trust companies is also an extremely important advancement and is in line with best practice jurisdictions.

“It removes the statutory limits regarding a limited number of shareholders. This change aligns again with best practices in other jurisdictions,” he said.

The Public Service Union (PSU), however, which is claiming it was not properly consulted prior to the introduction of the law in Parliament, had sent a letter to the government of Belize requesting a meeting with GoB reps concerning the status of staff of the current company registries in Belize before the bill was passed. During her remarks in the Senate, Senator Elena Smith, who represents the country’s labor unions, stated that she was informed by the PSU that they had not received a reply to the letter.

During her presentation, she read a portion of the PSU’s letter, which stated, “The Public Service Union of Belize notes, not surprisingly, that the bill has been introduced in the House of Representatives without any prior notice or input from the PSU to address the employment tenure, the superannuation benefits of public officers therein.”

Senator Eamon Courtenay, lead government senator, replied to the public query on the matter of the staff’s employment status.

“Information is that the 7 members of staff at the IBC registry, are open vote workers. Those 7 will be offered contracts. Upon the establishment of the registry, there are I believe 7 or 8, that are at the domestic companies registry, who are on the permanent establishment. Those positions will become redundant, because a new registry will be created, and those employees will be offered their full benefits – whether it is that they want to retire, whether they want to be transferred within the public service or continue in the public service, or whether they want to retire and get their benefits – and then be offered a position at the new registry. My understanding from the memorandum that was sent to me was that those employees will be given priority to continue if they so choose,” Senator Courtenay said.

He said it is not government’s intention for any employee to be negatively affected by the passage of the legislation. 

The current Companies Act is over 100 years old, and the International Companies Act which governs offshore companies was adopted largely from the British Virgin Islands. The recently passed bill is expected to bring these two outdated laws together and strengthen the legislation through the inclusion of modernized features that are in place in best practice jurisdictions. Senator Courtenay noted that raising capital is also an objective in the passing of the new law.

“By the bringing of International Business Companies and the Domestic Companies into one type, you can raise capital locally, as well as externally in order to make investments in Belize,” Senator Courtenay said.

He also pointed out that the new legislation will give statutory rights to minority shareholders and provide remedies to ensure that they are treated fairly. 

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