Business Barbados

The Companies Act, Cap 308 makes provision for the liquidation of a solvent company incorporated or continued under the Companies Act and refers to the Bankruptcy and Insolvency Act Cap.303 where a company is insolvent.

The Regulations of the Companies Act specify that all taxes of every description due from the company at the date of the appointment of a receiver or receiver manager by the Court shall take priority over all the following debts:

  • all contributions payable pursuant to the National Insurance and Social Security Act
  • wages or salary of employee in respect of services rendered to the company four months before the date of the appointment of a Receiver
  • amounts due as severance payment under the Severance Payment Act and
  • Holders of floating debentures.

Holders of fixed debentures however will have priority over all of the above stated debts.

Voluntary Liquidation

To process of voluntarily liquidating a company which is solvent includes, inter alia:

  • the filing of a Statement of Intent to dissolve the Company at the Corporate Affairs and Intellectual Property Office
  • advertising a Notice of Intent to Dissolve in the Official Gazette and a daily newspapers
  • the filing of Articles of Dissolution and supporting Affidavit at the Corporate Affairs and Intellectual Property Office

The process can take as long as six months to be completed since the Notice of Intent to Dissolve must be advertised for 120 days to give creditors ample time to make their claims.

Bankruptcy

The Bankruptcy and Insolvency Act, Cap.303 of the laws of Barbados (the “B&l Act”) is modelled on the 1992 Canadian Bankruptcy and Insolvency Act.

The B&l Act offers the debtor Company three options:

  • Receivership
  • Bankruptcy (Voluntary and Involuntary)
  • Reorganisation (the making of a proposal to creditors for sorting out the insolvent debtor’s affairs)

The B&l Act also provides that the proceeds realized from the property of a bankrupt shall be applied in priority of payment as follows:

In the case of bankruptcy:

  • Secured creditors
  • The funeral and testamentary expenses of a deceased bankrupt
  • The costs of administering the estate of a deceased bankrupt
  • A levy payable to the Supervisor of Insolvency
  • Wages or salaries
  • All taxes
  • Outstanding rent
  • Unsecured creditors

In the case of a reorganisation proposal:

  • The funeral and testamentary expenses of a deceased bankrupt
  • The costs of administering the estate of a deceased bankrupt
  • A levy payable to the Supervisor of Insolvency
  • Claims for wages, salaries, commissions or compensation of employees (excluding severance payment)
  • Contributions payable by the bankrupt, as an employer, pursuant to the National Insurance and social security legislation
  • All taxes including land taxes and income taxes
  • Outstanding rent due to a landlord
  • Secured creditors
  • Unsecured creditors

Additionally the B&I Act places responsibility on the debtor to make full discovery as to the particulars of his assets and liabilities and the names and addresses of all his creditors.