Sole Directors
A growing number of centres permit local companies to be incorporated and operate with only one director. Often such centres will have no restrictions on where that sole director must be resident.

Examples of the centres which allow one director are the Bahamas (IBC's), BVI (IBC's), the Cayman Islands (exempted and non-resident), Cyprus and Gibraltar.

Clearly, only having one director can make the decision making process easier.

Single Members
Similarly, as many companies require only one director, an increasing number of centres now allow single member companies to be incorporated, or for existing centres now allow single member companies to be incorporated, or for existing companies to be switched to single member status. Such an option can create administration efficiencies (e.g. only one share certificate may be required, only one entry in the register of members, resolutions might be easier to pass etc.).

Redomiciliation
A number of centres will permit a company which has been incorporated in another centre to redomicile locally. This goes much further than simply registering in another centre as it will involve relinquishing the registration which was acquired in the original centre.

Usually, redomiciliation is only possible if the company laws of the original country are similar to those of the country where the company wishes to move to. Often the Registrar of Companies will require sight of the company's memorandum and articles of association to make sure that there are no conflicts with local requirements.

In those centres which permit a change of domicile it will often only be specific types of company which can redomicile. For example, in the Cayman Islands and Bermuda only exempted companies can transfer to another jurisdiction, whilst in the BVI only an IBC can transfer in this manner. Similarly, companies wishing to transfer their domicile to one of those centre mentioned would also be expected to take on the characteristics of an exempted company or IBC, depending on the location chosen.

Audit Exemption
Only a few centres still insist that all local companies must have their annual accounts audited. Most centres now allow exempt companies or IBC's (or their equivalents) to waive the requirement for an audit. This reduces costs for the clients and also saves administration time but it would still be advisable for some types of company (especially trading companies) to have their figures audited.

The articles of association should be checked in case there is a requirement to audit accounts for a particular company.

Accounts Submission
Similarly, many centres now allow local companies to dispense with the requirement that their annual accounts must be presented to the members at the AGM. When you consider that most offshore companies are managed by agents who provide the directors as well as members, this option tends to make sense. However, it would still be advisable for accounts to be presented in some cases, especially where members are not being provided by the offshore agent.

Objects Clause
Again, a number of centres no longer require local companies to include their intended objects in their memorandum of association. This feature can be advantageous as it effectively means that such companies can conduct their business without being concerned whether they are specifically authorised to do so under its memorandum. It also means that the affairs of those companies enjoy a certain degree of confidentiality on the basis that the outside world need never know what their intended activities or purposes are.

Company Seals
Company Seals are not generally required for offshore companies. Instead documents can be executed under signature of the directors or a director and secretary acting together. In practice, most companies do still have and use a company seal. The articles of association often cover whether a seal is required and if so, who is empowered to use it on behalf of the company.

The articles may also cover whether a second or additional seal can be issued. This facility would be useful in those instances where a company is registered in more than one location and a seal is needed to execute documents in different locations. Usually, the second seal would require board approval and would often have to state in its imprint that it is only for use in a particular country or jurisdiction and that it cannot be used elsewhere.

Written Resolutions
To create greater administration efficiencies you will find that many centres will allow local companies to pass written resolutions without the need for a meeting to be held. A written resolution must be circulated to all those who would be entitled to attend and/or vote at a meeting at which the proposed resolution would otherwise have to be discussed and the various parties would be asked to sign it. Once all the parties have signed it the resolution would be returned to the company and would be deemed to have been approved. Written resolutions are particularly useful when there is either a single member or a single director.

Bearer Shares
Although not all centres offer this type of share those which do have found many clients keen to take advantage of this facility.

There are two main reasons why bearer shares are popular with some clients. Firstly, they provide confidentiality as the holder's details are not recorded on the company's register of members, nor are these details held by the Registrar of Companies or required to be submitted. Secondly, the ownership of the shares passes by delivery and some clients prefer the comfort which comes with holding the share certificate which actually records and proves their ownership rights over a particular company.

There are, by the very nature of the rights of ownership of such shares, some important considerations which the agent must address if he is to provide services for a company which will or has issued bearer shares.

Security of the Share Certificate
As the ownership of the shares will pass by delivery it is important that the certificates be kept in a secure place. Most service providers would prefer to retain them locally rather than risk sending them to the client in case they are lost in transit (or even lost by the client). If the certificates are kept by the agent he should make sure they are retained under secure conditions, perhaps in a safe under dual control. They certainly must not be retained with the other papers in a documents file as registered share certificates are often held.

Change of Ownership
This should perhaps be of more serious concern to the service provider. If he decides to send the bearer share certificates to his client there would be nothing to prevent the client from passing those shares to someone else, which would effectively transfer the ownership of the company without the service provider being aware that a transfer had taken place.

The concern here would be that the new owner might by the type of client which the agent would want to provide services for. Nor would the agent have been able to perform his usual checks on the new owner or put in place the usual agreements and indemnities which we covered in Unit 7.

For these reasons, service providers are generally reluctant to provide services for companies which have issued bearer shares.

Share premium
In many centres it is possible for shares to be issued at a premium. For example, a beneficial owner may want to contribute capital of US$1 million into his company but does not want to increase the authorised share capital beyond US$50,000 (perhaps because of the additional duty this might create).

Instead, the company could receive, for example, US$50,000 to cover the par value of 50,000 US$1.00 shares and the remaining cash could be treated as a premium on the shares of US$19 per share. The share premium would be recorded in the company's finances and could be used for certain cash requirements in the future (although there may be local restrictions on the use of such a reserve).