The Bahamian Private Foundation -
A civil law concept in a common law world (pg.2)

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A foundation is required to pay a registration fee which amount can vary from between $125 to $500 depending on the calendar quarter in which the foundation is registered.

On registration, the foundation will be issued a certificate of registration and from the date in the certificate, the foundation shall be a legal person capable from that date on of exercising all the functions of a foundation.

On an annual basis, the foundation is required to pay annual government fees in the amount of $500.00. This amount will be increased if it is paid after 30th April.

Assets of the foundation

The foundation is required to have assets endowed to it, in a minimum amount of $10,000, by its founder, which can consists of cash, shares or other assets.

Subsequent assets can be endowed and persons endowing any subsequent assets will not be regarded as the founder for purposes of the Act.

The Act defines "founder" as "(a) the person who, by transfer of title, subscribes his name to the charter establishing a foundation acting either for himself or on behalf of another and who endows that foundation with its initial assets; or (b) in the case of establishment of a foundation by the duly executed will of a deceased person, the testator, whose estate by transfer of title endows that foundation with its initial assets."

The Act defines "to endow" as "…. to pass, or covenant to pass, the title in property absolutely, with or without consideration, to a foundation so that the property is the asset of that foundation and to pass, for the purposes of this definition includes whatever act may be necessary in relation to that property to transfer title effectively."

Assets effectively transferred to a foundation, in the absence of fraud, are the property of the foundation, with full legal and beneficial title, and cease to be the property of the founder and shall not become the property of a beneficiary unless distributed in accordance with the provisions of the foundation charter or the articles (if any) or the Act.

Objects or purposes

Under the Act, the foundation's main purposes or objects shall include the management of its assets. Commercial or business transactions can comprise the purposes or objects of the foundation but must be secondary to its main purposes or objects.

Officers and governing body

A Bahamian foundation is required to have at least one officer, that is, a secretary or foundation agent. If the foundation appoints as its officer a secretary, such foundation is not required to have or appoint another entity as its governing body and in such case, the secretary can and will be the governing body of the foundation. If the foundation appoints as its officer a foundation agent, such foundation will be required to appoint a foundation council which foundation council will be the governing body of the foundation as the foundation agent's duties will usually be, in such case, primarily administrative.

An officer of the foundation (that is the secretary or foundation agent) must be a licensed trust company or a financial and corporate service provider licensed pursuant to the laws of The Bahamas.

The foundation council can be comprised of (i) two or more natural persons or (ii) a legal person and one or more natural persons or (iii) one or more legal persons. Such persons can be non-Bahamian individuals or companies and can reside or be located outside of The Bahamas; but, officers and auditors (and their related parties) of the foundation are not eligible to be members of the foundation council.

Meetings and financial matters

The foundation is required to hold at least one officer's meeting in each year. The founder and members of the foundation council shall be entitled to be notified of the meeting, can table business to be considered at the meeting and attend and be heard at the meeting but are not able to vote.

The foundation is required to keep such financial statements, accounts and records as the officers or the foundation council consider necessary or desirable in order to reflect the financial position of the foundation.

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