What you should observe during the operation of the Offshore Company?

The typical mistakes made in the operating Offshore Companies are failures to follow formal corporate procedures (documents, resolutions, book of accounts - where they are required). Observing the correct corporate procedures means keeping all the proper documents with respect to the appointment of directors, issue the waiver of meetings, record the minutes of meetings, the issue of shares. Shareholders’ meetings may have to be connected at prescribed intervals and records tο be kept. When the Company opens bank accounts or enters into contracts, directors' meeting must be held, resolutions passed and minutes kept. Likewise proper books of accounts should also be kept. These matters are often neglected particularly if the Corporation is registered in a jurisdiction where filing of audited accounts, or names of directors and shareholders in the public registry is not compulsory. The failure to observe the proper corporate procedures is likely to expose the Company to the risk of legal dispute or to invalidate it.

In other words the beneficial owners could lose all the benefits of offshore Company (limited personal liability, tax advantages etc.) at precisely the moment when they need them most.

The following are in brief the basic minimum requirements, which are important for a corporation to be followed:

• The Articles of Incorporation (or Articles of Association) and By-laws (or Memorandum of Association) to be carefully followed.
• For any meetings proper notice (waiver) to be issued and distributed tο the interested parties.
• The annual meetings, of stockholders and directors to be maintained.
• The election of the new directors to be made properly and to be recorded in the Minute book.
• Proper minutes to be recorded during the meetings of shareholders and directors.
• The election of the officers tο be recorded properly.
• Any amendments in the list of the directors, shareholders οr any other information concerning the company and necessary to be maintained in the public files to be recorded properly.
• File statements of profits and expenses.
• Retain continuously the services of a resident agent.
• All action of stockholders to be made by vote and recorded in Minutes of meeting.
• Α proper contract to be made for any services contracted for by the Company.
• All funds and assets are properly conveyed between the Company and other entities or individuals.
• Corporate and personal funds to be kept separately.
• All corporate loans to be properly recorded in Corporate Minutes.
• Maintain current accounting and other records for the Company.
• Stock ledger tο be kept. New stock certificates tο be issued when necessary and redeem transferred certificates as such transactions take place.
• Always recording same in stock ledger.
• Whenever signing official corporate instruments or documents, sign on behalf of the Company and indicate title, rather than as an individual. This presentation is for information purposes only and cannot be taken to constitute legal or other professional advice.