"Valentine's Day 2003 will be a big day for Bermuda's lawyers" according to Conyers Dill & Pearman partner, John Collis.

Lawyers are not renowned for being romantic, but February 14 is the date when the new Companies Amendment Act (the "Amendment Act") will come into effect.

While hardly likely to make the average man on the street go weak at the knees, these amendments make scintillating reading for corporate attorneys.

Assuming the Amendment Act gets the nod from the Governor this week, from Friday onwards, new companies will no longer need to obtain consent for their objects and powers which means that it should be possible to incorporate new companies much more quickly.

Mr. Collis is head of the corporate department at Conyers Dill & Pearman.

He explains that for many years Bermuda companies have had to get regulatory consent to the terms of their memorandum of association.

"Bermuda became obsessed with objects clauses and the incorporation process suffered. In a modern, sophisticated financial world, this quaint, but antiquated, mechanism was not only cumbersome, but ineffective."

Over the past several years, therefore, the Bermuda government has introduced a suite of financial regulatory statutes designed to replace regulation by objects clauses. The Amendment Act means that companies can now be formed for any purpose although there is a list of (a) "restricted" activities which require permission (such as licensed financial services activities (including banking, trust business, insurance business, mutual funds, investment business, etc) and a handful of cash-handling and similar services) and (b) "prohibited" activities (such as trading in armaments, gambling, etc).

The change has been welcomed by the legal industry and should significantly improve speed, efficiency and service in the Bermuda market place. The process of incorporation should henceforth be divorced from the shareholder clearance process. Existing clients of Bermuda engaging in new transactions should see the greatest benefit where it should be possible to incorporate a new company within a day.

The Amendment Act has also allowed the Bermuda government to make a number of changes summarised below which will bring certain international business legislation up to date with modern business developments:

Prospectuses Certain offerings of shares by Bermuda companies require the publishing and filing of a prospectus. Up to now, the prospectus had to be filed prior to the offer.

In order to accommodate the mechanics and procedures of various stock exchanges outside of Bermuda, the Amendment Act enables the filing to be made slightly later, particularly "as soon as reasonably practicable after publication".

Share Premium Premium arising on the issue of shares must generally be credited to a statutory account known as the share premium account

That account may be used by a company in certain capital transactions, including a bonus issue of the same class of shares.

The Amendment Act has removed the restriction that the premium must be applied only in share transactions of the same class so that it can be used in capital transactions of any class of share.

Redemptions and Repurchases of Shares The Amendment Act clarifies the basis upon which a company may set terms and conditions for the redemption and/or repurchase of its own shares.

Share Registers Companies are required to maintain a share register and include therein certain particulars of each shareholding, including the date on which a person ceased to be a shareholder for a year thereafter.

While the idea of making one year's history a matter of public record was not out of keeping with the requirement in some jurisdictions, it was considered to serve very little purpose. Further, because some countries did not require one year's history, there were practical problems for those Bermuda companies listed on stock exchanges in those countries.

The Amendment Act has done away with the requirement for one year's history of past shareholders. The share register will, therefore, now simply contain a "snapshot" of the shareholdings on any given date.

Summary of Financial Statements The laws of many jurisdictions permit listed companies to distribute summary financial statements to their shareholders.

The Amendment Act has now introduced similar provisions into Bermuda law although a member remains able to demand a copy of the full financial statements.

Gateways In order to meet its commitments given as a part of the Overseas Territories Review, Bermuda introduced into the Companies Act provisions whereby regulatory related information can be shared with overseas regulators.