Bermuda has many resourceful and hard-working business proprietors. Each one loves the enterprise he or she has built and for many, the hope is that it will continue many years and possibly many generations into the future. The successful continuation of the business after the death of the proprietor is not, however, a foregone conclusion and if this is a paramount goal of the proprietor, estate planning will be required.
The specific issues that arise in the context of succession to a family business will depend, in the first instance, on the form of that business. Different considerations arise in the context of a sole proprietorship than a limited liability company or partnership, but regardless of the form of business, it is essential to address the future. This article will deal solely with sole proprietorships and I will consider issues related to succession in the context of a limited liability company at a later time.
The recent Budget announcement by the Bermuda government included one significant policy proposal which has the power to provide a welcome stimulus to the Bermuda economy over the course of the coming years. The Premier, also Minister of Finance, David Burt, indicated that a relaxation of the business ownership ‘60:40 rule’ was to be implemented to boost investment by non-Bermudians.
For those not familiar with this rule, Bermuda companies fall into two principal categories:
(i) local companies, which are usually incorporated by Bermudians to trade primarily in Bermuda; and
(ii) exempted companies, which are usually incorporated by non-Bermudians for the purpose of conducting business outside of Bermuda.
MJM Limited is pleased to announce that its Dispute Resolution Team is Ranked BAND 1 in Bermuda in results released today by Chambers & Partners in the Chambers Global 2018 rankings.
Chambers reported the following:
What the team is known for Distinguished, independent Bermudian firm that is widely respected in the jurisdiction. Maintains a very strong reputation for domestic Bermudian cases and is regularly instructed by the government of Bermuda on a variety of constitutional and public law matters. Also possesses expertise in a broad range of other areas, including trust and employment disputes.
Meritus Trust Company Limited v Butterfield Trust (Bermuda) Limited  Bda LR 82
In October 2017, Chief Justice Kawaley ruled that an outgoing trustee is neither entitled to retain any part of the trust assets as security for its equitable indemnity as former trustee nor demand a contractual indemnity.
This case involved an outgoing institutional trustee who upon being removed (as opposed to having retired) as trustee of two trusts, refused to hand over sizeable trust assets or trust documents to the new trustee without first obtaining a contractual indemnity and retention of assets from the two trusts. This was against the backdrop of a potential breach of trust claim of an approximate value of $5 million. The trust deeds did not confer any express retention or contractual indemnity rights on the former trustee.
For the third year running, MJM Director Fozeia Rana-Fahy has been listed as one of the Top 200 international Powerwomen by Citywealth. The list honours 200 of the most powerful women in government, private wealth, education, private client advisory and philanthropy across the international financial centres (IFCs). The IFC Powerwomen Top 200 list focuses on influencers as well as professionals and celebrates powerful women from diverse backgrounds. It recognises women of achievement who are trailblazers in their field, helping to promote business excellence in their home jurisdiction and consolidating the reputations of the financial services industry globally.
In the first decision of its kind, the Bermuda Supreme Court has utilized its powers under Section 39 of the Arbitration Act 1986 (the “Act”) to terminate an arbitration - and in this case a very important one - the arbitration between The Allied Trust and Allied Development Partners Limited (together “Allied”) and The Government of Bermuda. This decision follows Parliament’s voiding of Allied’s lease over the Hamilton Waterfront (the “Waterfront Arbitration”).