Bermuda Prohibits Bearer Shares and Nominee Directors
On 21 November 2025, Bermuda passed the Companies (Prohibition of Bearer Shares and Nominee Directors) Amendment Act 2025 (Act). The Act, which came into full force on 10 December 2025, amends both the Companies Act 1981 (Companies Act) and Limited Liability Company Act 2016 (Limited Liability Company Act) in respect of bearer shares, nominee directors, alternate directors and beneficial ownership record keeping for companies and limited liability companies (LLCs) discontinuing to another jurisdiction.
The Act forms a significant part of Bermuda’s ongoing efforts to strengthening corporate governance and align with international transparency standards including the Financial Action Task Force Recommendations (FATF Recommendations).
Bearer shares prohibited and to be converted
Under the amendments to the Companies Act and Limited Liability Company Act, all existing bearer shares must be converted into registered shares within 90 days of the Act’s commencement. Beneficial owners of bearer shares must also be notified by the company in which they hold the bearer shares of the requirement to convert bearer shares into registered shares and confirm to the company a name in which the converted shares will be registered. Any bearer shares not converted within the 90-day period will be null and void.
Nominee directors prohibited
Under the amendments to the Companies Act, the appointment of nominee directors is explicitly prohibited. A nominee director is not defined in the Companies Act but the FATF Recommendations make reference to an individual or legal entity who routinely performs the functions of a director on behalf of, and under the direct or indirect instructions of, another person (the nominator).
Alternate directors
The Companies Act has also been amended to mandate the disclosure of additional details concerning alternate directors. The register of directors and officers, as well as the filings with the Bermuda Registrar of Companies, must now also specify for each director:
- whether a director holds the position as an alternate; and
- where applicable, the identity of the director for whom the alternate director has been appointed.
Record Keeping Agent in Bermuda for Discontinuance
Under the amendments to the Companies Act and Limited Liability Company Act, exempted companies and exempted LLCs discontinuing to another jurisdiction must appoint a Bermuda based agent to retain the company’s beneficial ownership register and records of account for a minimum of five years from the effective date of discontinuance. The appointment of the agent and retention of the beneficial ownership register and records of account must be contained in an irrevocable deed poll that is filed with the Bermuda Registrar of Companies.
