Before the advantages and the disadvantages of incorporation in Bahamas are presented, the meaning of ‘incorporation’ needs to be cleared. Incorporations are those entities that exist only in the contemplations of the law. Therefore, an incorporation has the characteristics of being intangible, invisible and would be known as an artificial being.
Having the definition cleared we will further add that an incorporation is made up of many shareholders who have bought shares in it. The people who own these shares are called shareholders.
* Since by law the corporation is a legal body, this works as an advantage as you can buy and sell shares without effecting the operations of the corporation. Shares can be bought by anyone at any time. * Another advantage is that a corporation is a limited liability. This means that the corporation will be responsible for anything that happens to it. This includes all actions and duties under the umbrella of the law. This is advantageous as the loss to the share holders suffered is the amount that they have invested. This is particularly beneficial when creditors claim losses, they cannot claim more than the assets of the corporation. * The management of the corporation is handled by the shareholders. The shareholders meet to elect the directors of the company and the directors of the company see that the management is well managed. * The advantage of incorporating your business in the Bahamas is that the setup fee required to set up your corporation is significantly lower than other places. * It is guaranteed that you will not pay any taxes for life. * Local taxes are also nullified with the exception of the annual fee. * You don’t have to bother about the treaties with other countries.
* The first biggest disadvantage of incorporation is taxes. You will be paying your taxes to the federal government unlike the businesses of sole proprietorship and partnerships. * The second disadvantage is that the corporation is taxed twice. First the corporation pays its share. Then, the shareholders are also taxed on the income earned from the profits of the shares. * In the Bahamas, it is difficult to prove the ownership. * You will need to find a trusted local registered agent.
The disadvantages are outweighed by the advantages and should be thought of as feasible for incorporating a business in the Bahamas.