Corporate terms explained and defined

back to top

What is a corporation?
A corporation is an entity recognised by law as a separate ‘person’ with limited liability. A corporation has the option to sell shares, the right to sue and be sued, and has perpetual existence.

back to top

How are offshore corporations used?
Offshore corporations may be used to own and operate business, issue shares, bonds or otherwise raise capital, guarentee obligations, hire employees, buy goods and services, sell goods and services, make contracts, rent office space, maintain checking and savings accounts, and maintain retirement plans for employee. A few applications are explained later on in this section.

Although most offshore coporations are private and closely held, some are publicly traded on major stock exchanges.

back to top

What are articles of incorporation?
The articles of incorporation is the document that establishes the corporation and contains basic information such as the name, share structure, and purpose of the corporation

back to top

What are by-laws?
The by-laws, or in some jurisdictions, ‘articles of association’, are rules the corporation creates for its shareholders, officers , and directors. By-laws are adopted by the board of directors as one of the first organizational steps in setting up a corporation.

Upon instruction, we can adopt a standard set of by-laws for a new corporation. Unlike articles of association, by-laws are usually maintained internally but may be publicly filled if requested.

back to top

What does a corporate search reveal?
A corporate search will reveal the name of the corporation, the date of existence, amendments, and any other publicly filed document. Under many offshore jurisdictions, there is no requirement that the names of the corporate officers, directors or shareholders be filed in any public registry. In other jurisdictions, nominee officers can be used. Therefore, the actual beneficial owner's identity remains a secret.

back to top

What are bearer shares?
Bearer share certificates do not indicate the name of the owner. The certificate is endorsed in blank such that the person having physical possession of the document is the owner. Bearer shares facilitate the transfer of assets because simply the transfer of the certificate accomplishes the transfer of ownership. Many jurisdictions no longer permit bearer shares or alternatively insist they are held by an approved intermediary.

back to top

What are registered shares?
Registered share certificates indicate the name of the owner on the document. The name of the shareholder is also recorded in the internal corporate records of the company. Although the registered owner is recorded in the corportion’s internal records, no public registry of shareholders is maintained in some jurisdictions.

The share registry is an internal corporate document available only to directors, officers and shareholders, under conditions specified in the jurisdiction’s corporate statute.

back to top

What are off the shelf companies?
Off the shelf companies are ready made, never used corporations that have been created to meet a client’s immediate needs.

back to top

What is a registered agent?
A registered agent is required to ensure that the corporation has an assigned representative at a know address to receive all service of process (legal notices) on its behalf. The registered agent forwards these documents to the address of record of the corporation.