A bill modernising company law with lower administrative costs, less red-tape, and more electronic filing was passed with all-party blessing yesterday.

Finance Minister Paula Cox said the Companies Amendment Act 2006 would ensure Bermuda-based businesses operated within a framework that promotes growth and investment.

She told the House: "This will act as a reduction in unnecessary regulation and will, by stripping out unnecessary elements of the compliance regime, yield direct savings for companies."

She said it would provide greater clarity to questions as to who is liable for a particular breach in a particular set of circumstances.

"It is expected the new regime will lead to greater understanding by all market participants of the requirements they are under and potentially, to achieve better levels of compliance."

It recognised the majority of Bermuda businesses are private and the impact of dated, inappropriate, or excessively complex regulation can be disproportionate on firms without sufficient in-house resources or expertise to deal with compliance issues.

"The proposals should make the law more accessible and comprehensible."

Mrs Cox added: "Streamlining processes, also brings savings for Government. Both business and government benefit when processes are simple and set incentives for growth."

She said the Finance Ministry was initially responsible for most of the administrative machinery of the financial and non-financial sector.

But the responsibility for the regulation of insurance and mutual fund business has now been transferred to the Bermuda Monetary Authority.

"I am presently working with technical officers within the Ministry to transfer other areas of company matters to the Registrar of Companies.

"We have determined the Ministry works best when its administration is simple.

"The process is undermined by processes that clearly can and ought to be performed by bodies which are established for these purposes."

The Opposition called for more consultation over the changes but Ms Cox said the amendments were proposed by the Bermuda International Business Association or BIBA in the BIBA 2005 and 2006 reports as part of its review of legislation that affects business in Bermuda.

The Bill eliminates the statutory provision requiring certain directors have particular titles, eliminates the requirement for common seals in a corporate setting and confirms the inspection and copying provisions affecting registers of directors and officers and register of shareholders.

She said the bill would simplify, codify and remove uncertainty and ambiguity which could discourage people from viewing Bermuda as a place to do business.

Opposition Finance spokeswoman Patricia Gordon-Pamplin said the Act was being brought into the 21st century but she queried a clause which allowed a company to pay money to an auditor who is suspected of fraud to fund their legal costs which can be recouped if the charges are upheld.

She said: "That's an extraordinary concept. I am not sure I understand the rationale."

Fellow United Bermuda Party MP Grant Gibbons welcomed the bill but said the act needed a regular overhaul is it was the cornerstone for company operations.

He welcomed the clause which abolished the need for seals to validate contracts and he praised the changes which legitimised electronic records which could cut down on the number of documents company directors had to mail out.

Ms Cox called the move toward electronic filings to the Registrar of Companies as "part of the process of making business simpler - making business in Bermuda nimble on its feet and innovative".

Dr Gibbons said he was concerned it might take too long to put these new electronic techniques into place, but when the Minister explained a timetable of six months, he replied, "Excellent."

Mrs Gordon-Pamplin echoed the praise for e-filing and told the House: "Considering the world wide culture, we are already behind in this regard."

The Bill was well-supported on both sides, but the Minister and her Shadow colleague seemed to differ strongly on the issue of liquidating companies.

Ms Cox said Government was losing as much as $3m in revenues each year to companies who, when going out of business, would be granted a refund of their taxes and fees in the fourth quarter.

The Finance Minister called it a wind fall for the liquidating company and moved to repeal this provision in the Companies Amendment Act.

Mrs Gordon-Pamplin saw it differently from her seat on the other side of the aisle.

She's concerned that companies already facing a list of creditors, and "worried about every single dime," should not be pursued by the Finance Ministry in their final hours.