Drawing The Memorandum And Articles Of Association
The minimum fee for Texas Incorporation is $800.00. This includes drawing the Memorandum and Articles of Association, the holding of the first meeting of the incorporators to appoint the officers and directors (who are elected annually thereafter), initial issuing of share certificates and (if applicable) the initial application to the Exchange Control Department referred to above.
The expenses incurred for incorporation amount to approximately $800.00, covering filing fees payable to the Registrar General's Department, stamp duties payable to the Public Treasury (based on an authorized share capital of $5,000.00), the cost of a Common Seal, Share Certificate Book, the publication of Registered Office notices and other incidentals.
Stamp duties are based on the Authorized (not the Issued) Capital and are calculated on a sliding scale ($60.00 on the first $5,000.00 and $3.00 per $1,000.00 in excess of $5,000.00). Unless a greater Authorized Capital is required, or thought desirable, we would suggest a capital of $5,000.00. The company must at all times have a Registered Office within The Bahamas at which legal processes may be served and where the statutory records must be kept.
If the company's Registered Office is located in our Chambers and we maintain the statutory Registers and prepare and file the annual returns to the Registrar General, we charge a minimum annual retainer of $550.00, adjusted upwards to reflect increased work or responsibilities. Naturally, the annual retainer fee does not include special services such as conveyance, leases, etc., or the holding of Directors' or Shareholders' meetings other than the routine Annual General Meeting. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. As can be seen, the difficulty for KPMG is that the courts do not look to the words and appearances, but to what the judges perceive to be the substance of the relationship. So, if the court regards KPMG's strictly drawn-up letters of engagement as no more than the 'separation of different stipulations of one arrangement into different deeds', this device will have been of no assistance. Moreover, although they may not often openly discuss 'policy' factors in their judgments, it cannot be doubted that the judges will be fully aware of the fact that the present move to incorporation follows on from the failure of a lengthy and persistent campaign by the Big Six to persuade the government to reform the law to their advantage, for example by amending the Companies Act to allow auditors to cap their liability in the face of potentially crippling negligence claims. Whatever the merits of that campaign, the judges can be expected to be wary of taking a decisive step in a direction along which the elected legislature is so obviously reluctant to move. It will be interesting to see which of the other Big Six firms, appointed as liquidators following the collapse of a KPMG Audit plc client (or should we now say 'customer'?) has the first opportunity to test KPMG's gamble. Another thought: if the gamble fails, will KPMG sue its legal advisers for bad advice, seeking to make them liable for that part of the damages exceeding the audit company's capacity to pay? Or have those legal advisers sensibly capped their own liability towards KPMG?
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