international businesses were outlined in the House of Assembly yesterday.

The Companies Amendment Act 1996 was introduced by Finance Minister Grant Gibbons in the House of Assembly.

"This Act is the core piece of legislation at the centre of international business in Bermuda and is the operating piece of legislation for most of our overseas companies.'' said Dr. Gibbons.

"The amendments are a good example of Government working with the private sector to maintain the freshness of the Act to ensure Bermuda is as competitive as it can possibly be.'' There are several amendments to the existing Act, including allowing a company to lend money to people to buy its shares provided the company remains solvent afterwards.

Another amendment ends the practice of making company officers and auditors jointly and separately liable to pay all damages.

That has been amended to make them proportionately liable for any damages -- except where dishonesty or fraud is concerned.

And a section requiring that at least two directors of a company be resident in Bermuda has been amended to allow greater flexibility.

Trading of securities by computer will also be allowed, Dr. Gibbons said.

Shadow Finance Minister Eugene Cox criticised the Government for not allowing enough time to consider the Act before it was introduced in the House.

"While we must try to facilitate the companies coming to Bermuda we have to be every mindful that overseas companies often come here because we are clean and trustworthy and have some stringent rules,'' he said. "We should not always relax these. We should not just be changing because we find our competitors are changing.'' Trevor Moniz (UBP) said he was heartened that at last Bermuda was moving toward proportionate liability where liability will be determined by the degree of a person's fault.

However he added: "Although we are protecting the public, we are to some extent lowering the bar of the high jump and lowering the standards. It must be watched carefully so it does not damage the credibility of Bermuda.'' Shadow Finance Minister Mr. Cox said Government needed to look at the issue of corporate secretaries if Bermudianisation was really their goal.

Information and Technology Minister John Barritt said the corporate secretary was an officer of the company.

He suggested that as Bermuda moved toward the 21st Century the name should be changed from corporate secretary to corporate administrator.

Mr. Barritt said that the changes to the Companies Act were important because they did away with the words "wilful negligence'' and "wilful default'' because they were unclear.

In their place he suggested that words such as fraud and dishonesty are used which are easier to understand.

Consequently if a company officer is found guilty in a court they would be responsible for one hundred per cent of the loss.

Mr. Barritt said that the amendment also took into account omissions and commissions.

Dr. Gibbons said that the changes to the Companies Act included the ability of non-Bermudian firms to merge with local companies.

It would also allow two or more firms to amalgamate at one time.

Government Whip Rick Spurling said the amendments to the amalgamation provisions followed the provisions that already existed and created greater flexibility when it came to moving companies to and from Bermuda.

But Lois Browne Evans (PLP) said Government had to guard against exempted companies having free rein in a foreign jurisdiction.

She said when this has been permitted in other countries they had been brought into disrepute.

Mr. Cox asked whether Bermuda had the resources within the Country as well as the controls to effectively make this newly amended legislation work.

Sir John Swan (UBP) said changes in the marketplace such as the advent of paperless transactions were a significant feature of the newly amended legislation.

Paperless transactions he said would allow a buyer to use instruments and simultaneously transfer funds from a bank account to another place.

As a consequence he said the proper regulatory environment needed to be set up. To ensure Bermuda's success, he said Bermuda's regulations had to be consistent with those found elsewhere.

Sir John said paperless transactions were important for everyone, especially young people studying overseas.

"Our young people must understand instantaneous transactions and how opportune they can be if they understand the marketplace,'' he said.

With the changes in technology he said words like "stock exchange'' would become a misnomer since all kinds of transactions will be transferable.

Mr. Spurling said paperless trading and computerised trading were the wave of the future but were still a developing field at the moment.

The changes to the Companies Act would add to the process, he said, and required appointed agents to ensure that the process worked.

The bill was then passed.