By L. Ryan Pinder K.C. | Pinder Commercial Chambers
A corporate structure that served a family or investment business well at inception may need to change. Family branches can develop different objectives, investment strategies can diverge and a business may prepare for a sale or succession. The practical question is how to reorganise ownership and assets while preserving value and dealing properly with liabilities.
My view is that flexibility is an important measure of a financial centre’s usefulness. In discussions with industry, the ability to respond to changing client needs has been a consistent reason for reform. The Bahamas’ IBC demerger provisions and its Segregated Accounts Companies Act, 2025 provide options that deserve consideration as part of that exercise. [1] [2]
Begin with the commercial objective
Before selecting a mechanism, establish what the reorganisation must achieve. Does the family want separate ownership? Does an investment business need distinct portfolios within a common administration? Is separate legal personality important to a counterparty? Those questions lead to different legal solutions.
The review should map the assets, liabilities, contractual commitments, security interests and decision-making powers. It should also identify the countries whose laws affect the owners or property. The best structure is one that works legally, commercially and administratively after completion.
A demerger can separate a company into distinct companies
The International Business Companies (Amendment) (No. 2) Act, 2023 introduced a statutory route for an IBC to demerge into two or more IBCs. The original company may survive alongside new companies, or all the resulting companies may be new. The legislation requires a written plan addressing the allocation of the undertaking, property, rights and liabilities. [1]
Consider a family investment company holding both a long-term portfolio and an operating business. Separate companies may support different ownership arrangements or prepare one activity for a transaction. A demerger is one option to assess against alternatives such as asset transfers or a share reorganisation. The appropriate choice depends on the facts and the consequences in each relevant jurisdiction.
Creditor protection is part of the design
The statutory process requires attention to directors’ decisions, solvency, member approval and prescribed procedures. Certain regulated companies need their regulator’s prior written consent. The plan must address liabilities as well as assets, and the legislation prevents a liability attached to property from being separated from that property. [1]
A family agreement about how assets should be divided does not resolve every third-party issue. Finance documents, guarantees, licences, contracts and security arrangements must be reviewed. Where assets or obligations are governed by foreign law, local advice is needed on recognition and any additional steps required to give the reorganisation effect.
The same discipline applies to tax. A reorganisation’s treatment under Bahamian company law does not establish its treatment in an owner’s country of residence or the jurisdiction where an asset is situated. Tax classification, valuation and reporting should be considered before the legal steps are settled.
Segregated accounts serve a different purpose
The Segregated Accounts Companies Act, 2025 replaced the earlier framework and provides for both segregated accounts companies and incorporated segregated accounts companies. It also addresses restructuring and continuation mechanisms. The distinction between an ordinary segregated account and an incorporated account is central to choosing the appropriate arrangement. [2]
An ordinary segregated account is not a separate legal person. The statutory framework separates assets and liabilities within the company, subject to its provisions. Its usefulness therefore depends on how the governing instruments, accounts and transactions identify the relevant portfolio. Counterparties must understand the capacity in which the company is dealing with them. [2]
This may be relevant where investment participants need exposure to different portfolios while sharing an administrative structure. It should not be presented as a substitute for careful documentation or an assurance that every foreign court will give identical effect to the Bahamian segregation rules.
Incorporated accounts have separate legal personality
Under the incorporated framework, an incorporated segregated account is a separate legal entity. The Act provides for its corporate constitution and requires the assets and liabilities of the company and its incorporated accounts to remain separately identifiable. It also addresses transactions among incorporated accounts and their associated company. [2]
That distinction may matter where a portfolio needs to enter contracts or hold assets in its own legal capacity. The benefit should be weighed against the additional governance, documentation and administration involved. Separate legal personality is a useful feature when it serves the transaction’s objectives.
Administration must preserve the intended separation
A structure diagram is only the beginning. Banking and custody records, contracts, accounting systems and board decisions must consistently reflect the intended ownership and allocation of obligations. Shared investment management or administration should be documented so that assets and liabilities remain attributable to the correct company or account.
For a private bank or fund manager considering a reorganisation, the implementation team should agree who will update the registers, notify counterparties, obtain approvals and reconcile the opening records. The handover to ongoing administration is as important as the filing that completes the legal process.
The 2025 Act also contains specific procedures for demergers of segregated accounts companies. Those procedures include solvency and approval requirements at account level. They should not be treated as interchangeable with the ordinary IBC demerger process. [2]
International coordination determines the practical outcome
A continuation into The Bahamas or a reorganisation involving foreign assets requires coordination with the outgoing jurisdiction, relevant regulators and the institutions holding the assets. Legal continuity should be checked alongside contracts, security, tax status and reporting. A statutory mechanism can simplify an element of a transaction without removing the wider implementation work.
For illustration, an investment structure moving between jurisdictions may need its governing documents adjusted, its service-provider appointments renewed and its counterparties satisfied about legal identity and authority. These steps should be scheduled together, with responsibility assigned before completion.
At PCC, we approach restructuring by identifying the client’s objective and testing the available mechanisms against the whole arrangement. Demergers and segregated accounts can provide valuable flexibility. Their long-term success depends on a coherent plan that accommodates creditors, regulators, tax advisers and the people who will administer the structure.
Discuss corporate and investment restructuring with PCC
Adapted from L. Ryan Pinder K.C.’s addresses to the BFSB CEO Conclave on 29 January 2026 and the AIBT Nassau Conference on 17 September 2025. Updated for publication.
Sources and further reading
This article provides general information and commentary as at 10 September 2026. It is not legal or tax advice. Application depends on the facts, the relevant documents and the laws of each jurisdiction concerned.