operate in Bermuda.

The Companies Amendment Act 1992, which has just become law, has been welcomed by the international business community as an important piece of legislation.

It was compiled after many months of discussion between Government and the private sector and updates the Companies Act 1981.

A spokesman for the Ministry of Finance said: "Hopefully, all of these changes will make it easier and quicker for companies to carry on their business.

"It should also make Bermuda a more attractive jurisdiction in terms of international business.'' The Act contains many technical and detailed clauses affecting several areas of both local and international businesses.

One of the more noticeable effects will be that far fewer exempted companies will have to go through the long, costly and laborious procedure of being incorporated by a private Bill in the House of Assembly, which can sometimes cost as much as $6,000.

Instead, the provisions of the Companies Act have been broadened so that more international firms, such as Hong Kong-based businesses re-registering their holding companies here, can incorporate by registration, which is a lot cheaper and, in some instances, like when the House is not sitting, be several months quicker.

Another important part of the legislation is the clause which states that overseas companies based here no longer have to hold all their board meetings in Bermuda.

The Act provides that board and shareholder meetings may be held by conference telephone, with a link-up to Bermuda, of course, unless the bye-laws of the company stipulate otherwise.

Exempted companies which are listed on an appointed stock exchange may now appoint a resident representative in Bermuda instead of having at least two resident directors.

The necessity for directors to hold qualifying shares in a firm has been removed.

All Bermuda companies, including strictly local firms, must maintain a register of directors and officers at their registered offices, which shall be open for inspection by members of the public without charge.

The new Act repeals and replaces the part of the old law which dealt with the prohibition of financial assistance by a company for the purchase of or subscription for its shares or those of its holding company.

The new section removes some of the difficulties arising from this area and, in broad terms, follows the approach of UK legislation.

A solvency test has been introduced with respect to the declaration of dividends and other distributions.

When having its accounts audited, a company is free to choose generally accepted accounting principles (GAAP) or generally accepted auditing standards (GAAS) of a country other than Bermuda.

The Act extends the operation of certain parts of the old law, including the compulsory winding-up provisions, to permit companies and non-resident insurance undertakings.

Also, permit companies in Bermuda are obliged to maintain the same financial records of their acts and financial affairs as is the case for exempted companies.

A new clause will allow the Minister of Finance to issue regulations which will permit the shares of Bermuda companies which are traded on appointed stock exchanges to be transferred electronically and without a written instrument.

A Ministry of Finance spokesman said the new Act would "improve the old Act and make it more compatible'' in the current economic climate.

"It is modernising the procedures which are now 10 years old,'' he said. "We took a long look at other countries' legislation, particularly the UK's and Hong Kong's, and held a lot of talks before coming up with the changes.'' Another law affecting international business, called The Exempted Partnerships Act 1992, is awaiting the Governor's signature and is about to become law.

One of the significant points of the Act, which replaces the Exempted Partnerships Act 1958, is that it provides for an application to be made to the Minister of Finance for consent to register a partnership which is both exempted and limited.