Bermuda Companies Act Update

Prohibition of Bearer Shares, Removal of Nominee Directors, and Enhanced Record-Keeping on Discontinuance

Bermuda has introduced further reforms to strengthen corporate governance and align with international transparency standards. The Companies (Prohibition of Bearer Shares and Nominee Directors) Amendment Act 2025 (the Act) received Royal Assent on 10 December 2025 and is now in force. The Act amends both the Companies Act 1981 (Revised) (the Companies Act) and the Limited Liability Company Act 2016 (Revised) (the LLC Act).

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Prohibition of Bearer Shares

Bearer shares—shares owned by whoever physically holds the certificate—have long been prohibited under Bermuda law. The Act now addresses any historic issuances that may remain in existence:

• Conversion requirement: Existing bearer shares must be converted to registered shares within 90 days of the Act coming into force. The registered shareholder’s name must be entered in the register of members.
• Failure to comply: Any bearer shares not converted within this timeframe will be null and void.
• Notification obligation: Companies and LLCs must notify beneficial owners of the new requirements and obtain confirmation of the name in which the converted shares should be registered.
• Reinstatement restriction: Struck-off companies or LLCs cannot be reinstated with bearer shares in issue; conversion is mandatory.

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Removal of Nominee Directors and Disclosure of Alternate Directors

The Act prohibits the use of nominee directors. While not defined in the Companies Act, nominee directors are generally understood to be individuals appointed to represent a specific shareholder’s interests rather than the company’s interests as a whole.

• Fiduciary duties: All directors under Bermuda law must act in the best interests of the company. These duties cannot be waived or modified.
• Alternate directors: Companies must now disclose details of alternate directors in the register of directors and officers, including the particulars of the director for whom the alternate is appointed.
• Filing requirement: This information must be recorded both in the company’s internal register and with the Registrar of Companies.

Record-Keeping on Discontinuance

Exempted companies and LLCs discontinuing out of Bermuda must now appoint a Bermuda-based agent to retain key records:

• Retention period: Beneficial ownership registers and records of account must be held for at least five years from the effective date of discontinuance.
• Deed poll requirement: A copy of the deed poll appointing the local agent must accompany the discontinuance application filed with the Registrar of Companies.

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Next Steps

• Companies with bearer shares must ensure timely conversion to registered shares.
• Boards should review their composition to confirm compliance with the prohibition on nominee directors and ensure directors understand their fiduciary obligations.
• Exempted companies and LLCs planning to discontinue should appoint a Bermuda-based agent and execute the required deed poll before submitting their application.

Marbury would be pleased to advise on compliance with these new requirements and to provide local agency services where needed. For further information or assistance, please contact your usual Marbury relationship manager or email us at info@marburys.com.