Halvorsen & Reith

Articles of association review in Bermuda

Articles of association review in Bermuda starts from a naming problem: a Bermuda company does not have articles of association in the English law sense, it has bye-laws, and a review that treats the two labels as interchangeable will end up marking up the wrong document. The exercise checks whether the bye-laws, the memorandum of association and any shareholders' agreement still describe the same governance arrangement. For a foreign-owned group, that consistency check is the point where Bermuda practice diverges most sharply from the parent jurisdiction's own version of the same task.

A group with a Bermuda holding company usually meets this issue only when something forces the document open: a new investor asks for approval rights, a director resigns and the appointment mechanics have to be checked, or a parent company plans a restructuring and needs to know what the Bermuda entity's constitution actually permits. At that point the live question is not what bye-laws generally provide, but whether the ones on file still match the arrangement the group believes is in place.

This page sets out what drives the review in Bermuda, what reaches the corporate register once a change is made, and where the advisory boundary sits for a firm that does not itself hold office in the company.

What changes in Bermuda

The constitutional document of a Bermuda company is called bye-laws, not articles of association, and it sits alongside a separate memorandum of association that sets out the company's objects and share capital in outline. A review of a Bermuda entity therefore has two documents to reconcile rather than one, and the two do not automatically move together: amending the bye-laws does not update the memorandum, and the reverse is also true. This page follows the same test set out in the practice-wide articles of association review service, adjusted for what Bermuda calls the document and what its company law lets a company do with it.

The distinction matters for corporate governance because Bermuda company law gives shareholders certain rights that exist independently of what the bye-laws say, and a bye-law provision that appears to remove one of those rights is not necessarily effective for that reason alone. A review has to separate what the bye-laws can validly change from what sits above them in company law, and that separation is easy to miss when the reviewer is working from a template drafted for a different jurisdiction's articles rather than from Bermuda's own bye-laws.

The same reconciliation exercise looks different in the British Virgin Islands, where the equivalent document is a memorandum and articles of association following its own amendment threshold. A group running entities in both jurisdictions should not assume that a drafting habit formed on one register transfers cleanly to the other. Most of the gaps a review turns up repeat a small set of patterns, catalogued in common mistakes in articles of association review, and Bermuda's bye-laws are not immune to them simply because the document has a different name.

The test that drives articles of association review in Bermuda

The test that determines whether a set of bye-laws is fit for purpose is not a fixed checklist. It asks whether the document still reflects three things: who can appoint and remove directors, what majority is needed to amend the bye-laws themselves, and what happens if a shareholder wants to block a particular category of decision. Where the answer to any of the three has moved on, most often through a new investor, a restructuring, or a change in where the board actually meets, and the bye-laws have not been updated to match, the company is operating under a document that no longer describes its own governance.

That gap is also where the Bermuda management and control test becomes relevant. Bye-laws drafted on the assumption that decisions are taken locally do not protect a board that, in practice, defers every substantive decision to a parent company abroad; the written procedure and the lived one have to describe the same body making the same calls. Whether a separate shareholders' agreement can override what the bye-laws say, or only supplement them, is addressed directly in how shareholders' agreements and articles interact, and Bermuda follows the general company law position on that question rather than applying a local carve-out.

A bye-law provision that has quietly fallen out of use does not disappear from the record. Once a due diligence exercise or a dispute brings the bye-laws into view, the gap between what the document says and what the company actually does becomes visible to whoever is asking, and there is no drafting fix that operates retroactively on a disclosure that has already been made.

The filing, register or forum consequence

A change to the bye-laws is, in the first instance, a matter for the company's own records; it is not on its own an event that has to be lodged with the Bermuda corporate register. What does reach the register is a narrower set of facts: the registered office of the company, its directors and officers, and the constitutional documents themselves where the company's own structure requires them to be held centrally. A group that assumes every bye-law amendment triggers a regulatory filing will either file unnecessarily, or, more often, wrongly conclude that because no filing is due, no further step is required.

Where the bye-laws are silent or ambiguous on a governance question, the forum for resolving it is not chosen by the company after the dispute has already started. Bermuda company law, and the general law that sits behind it, determines which court and which class of remedy applies to a shareholder who says the bye-laws have been breached, and that determination follows the place of incorporation, not wherever the parent group happens to litigate its other disputes.

Once a bye-law amendment is recorded in the minute book, it takes effect internally at once. If the register is later checked against the underlying board resolution and the two do not match, the mismatch becomes visible to anyone running that check, and the earlier filing cannot then be treated as though the discrepancy had never existed.

What this service does not include in Bermuda

The review does not extend to acting as a director, secretary or resident representative of the Bermuda company, and it does not extend to finding, proposing or arranging for anyone else to take up those roles. Bermuda licenses the business of providing company management and directorship services to third parties, and advising on the content of a constitutional document is not the same activity as holding an office under it or supplying someone who will.

The boundary is drawn by licence, not by preference. A firm that gave the second kind of service without holding the licence that covers it would put the client's own filings at risk, not just its own position, which is why the two are kept structurally separate rather than blended into a single engagement.

What the client receives instead is a defined set of outputs:

A holding structure whose bye-laws still name a director who resigned two board cycles ago is a common version of this problem, and it is not fixable by a single clean-up filing once the appointment procedure it relies on has already been relied on elsewhere. The fastest way to see whether that has happened in a specific structure is to have the appointment terms themselves checked against what the bye-laws currently say.

A group carrying this question for a Bermuda entity is usually also carrying it for at least one other office holder whose terms were drafted before the current bye-laws took their present form. Leaving the two undisturbed avoids one conversation now at the cost of a harder one later, once a counterparty or a register check raises the mismatch first.

Review your appointment terms

Write to info@hreithlaw.com with the jurisdiction and the structure.

Frequently asked questions

Does articles of association review in Bermuda change for a foreign-owned company?
The test itself does not change, but a foreign-owned company faces a sharper version of it. The bye-laws have to describe who actually makes decisions, and where a parent company effectively directs the board, the written procedure and the practical one have to be checked against each other rather than assumed to match.
What does articles of association review in Bermuda require in practice?
It requires reading the bye-laws and the memorandum of association together, not separately, and checking both against any shareholders' agreement currently in force. The output is a marked-up document identifying where the three no longer agree, not a general commentary on Bermuda company law.
Who inside the company is responsible for articles of association review in Bermuda?
Responsibility sits with the board, not with a company secretary acting alone, because the bye-laws govern how the board itself is constituted and removed. A secretary can maintain the minute book and the register entries, but cannot authorise the substantive changes a review recommends.
What evidence should the board keep on articles of association review in Bermuda?
The board should keep the resolution authorising any amendment, the version of the bye-laws it was measured against, and a dated record of when the reconciliation was last carried out. Without that record, a later dispute has no way to establish when a gap between document and practice first arose.
What happens if articles of association review in Bermuda is not addressed?
The gap between the bye-laws and actual practice does not resolve itself; it surfaces at the moment a counterparty, an investor or a dispute forces the document open, which is rarely a moment the company chooses. By then the discrepancy is already visible to whoever found it, and the available response is limited to correcting the record going forward rather than avoiding the disclosure that has already happened.

Halvorsen & Reith advises on the content and consistency of constitutional documents across multiple jurisdictions, including Bermuda. The firm does not act as director, secretary, nominee shareholder or trustee of any client entity, and does not arrange for another person to do so; that activity sits with licensed providers, and the firm's own work is confined to the analysis a board needs before it instructs one.

Author: Author specialising in constitutional documents and cross-border board governance, reasoning from the constitution outward to the transactions and disputes it constrains. Advises groups on reconciling bye-laws, articles and shareholder arrangements across common-law and civil-law registers. Writes primarily on board structure, amendment mechanics and the boundary between drafting advice and regulated appointment services.

By Sofia Anselm