Social Enterprise Law Surveys |
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Barbados |
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| (Latin America/Caribbean) Firm Clarke Gittens Farmer | |
| What jurisdiction(s) do you practice in? | Barbados |
| What are the most commonly used types of for-profit corporate organizational forms in your jurisdiction (e.g., corporation, limited liability company, benefit corporation, social purpose corporation, etc.) used by Enterprises operating a trade ... | The most common for-profit organizational forms utilized in Barbados are the company and the society with restricted liability (“SRL”). They are similar in form with the major difference being the SRL’s issuance of quotas instead of shares. Neither a company nor an SRL is subject to prescribed minimal capital requirements and shares in a company and quotas in an SRL are without nominal or par value. An enterprise may also be registered as a sole proprietorship or a partnership. Enterprises may choose to be formed as a general or limited partnership, which allows individuals entering into a partnership to restrict liability. Where there is a limited partnership, a general partner may be appointed to assume all liability for all obligations and debt of the firm. a. Both an SRL and a company are compatible for this purpose. An SRL is typically the form used by foreign investors due to its flexibility in being treated as a “pass-through vehicle” under certain jurisdictions’ tax regimes. b. There are no organizational forms specifically for social enterprises. Social enterprises may operate in the forms identified above. A company may be formed as a not-for-profit company. |
| Do any of your jurisdiction’s traditional organizational forms require or permit the board or managers to consider, balance or prioritize interests other than shareholder value in decision making? What other interests, if any, are they required... | The Companies Act requires the directors of a company or managers of an SRL to act honestly and in good faith with a view to the best interests of the company; and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. In determining what are the best interests of the company, a director or manager must have regard to the interests of the company’s employees in general as well as to the interests of the shareholder. |
| Does your jurisdiction have organizational forms specifically designed for Social Enterprises? If so:a. What type(s) of organizational forms are they?b. How do they materially differ from the most closely analogous traditional organizational ... | No. |
| Are Social Enterprises permitted to be formed and operated as Nonprofits? If so: a. Are Nonprofits that are Social Enterprises treated differently under the law as compared to Nonprofits that are not Social Enterprises, whether from a corporat... | Yes. A company or SRL formed as a non-profit is subject to the similar corporate legal requirements as any other company or SRL. a. A non-profit company or SRL which is additionally registered as a charity may benefit from certain tax exemptions and reduced filing fees. b. No. c. There is no hybrid form of company or SRL available. d. Non-profit companies are usually used for charitable enterprises, and must therefore be registered under the Charities Act, Cap.243. |
| Does your jurisdiction allow for worker-owned Enterprises, such as cooperatives? If so, please describe any material benefits of, and/or restrictions on, using such forms. | Yes. The Co-Operative Societies Act, Cap.378A governs the registration, supervision, and management of certain societies the members of which have a common bond of philosophy and social and economic objectives and for related purposes. |
| Are there unique reporting requirements for Social Enterprises? If there are, please describe them. Please also discuss what government bodies Social Enterprises are required to report to. | There are no reporting requirements specific to Social Enterprises. Generally speaking, companies and SRLs are required to file:
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| In your jurisdiction, has case law and jurisprudence evolved to address Social Enterprises? If there is meaningful jurisprudence around Social Enterprises, please provide some brief examples. | There is no case law and jurisprudence of which we are aware specifically addressing Social Enterprises. |
| Does your jurisdiction have any ESG requirements for Enterprises generally? If it does, please describe. | ESG requirements may be reflected in various pieces of legislation or regulatory guidance relating to a specific industry or sector. |
| Does your jurisdiction have any ESG requirements specifically for Social Enterprises? If it does, please describe. | No. |
| Does your jurisdiction have any ESG requirements for investors? If it does, please describe. | No. |
| Are any major investor classes (e.g., pension funds, mutual funds, etc.) required to look at ESG issues when making investment decisions in your jurisdiction? a. If they are, please describe the requirements.b. If they are not, are they permi... | No. |
| What kinds of philanthropic funding do Social Enterprises in your jurisdiction commonly receive (e.g., grants, charitable investment, traditional investment)? | There is no funding specific to Social Enterprises. They may be funded by grants, charitable investment, traditional investment, etc. as the case may be. |
| How prevalent, if at all, are new for-profit impact investments in your jurisdiction (e.g. traditional instruments with impact terms, new investment instruments, aggregation with philanthropic capital, community based funding, etc.)? | Not common. |
| What are the types of government funding and support available to Social Enterprises, if any, available in your jurisdiction (e.g., grants, investments, bonds, and guarantees)? a. How difficult is it for Social Enterprises to obtain government... | Currently there is no government funding specifically for Social Enterprises. a. The enterprise’s size and the industry under which it operates may permit the availability of government grants, loans and technical assistance. b. Government funding is not driven by the form of the Social Enterprise. |
| Are there any companies that are formed as a Social Enterprise listed on your jurisdiction’s leading securities exchange(s)? | No. |
| To what extent are publicly traded Enterprises required to disclose ESG related factors in annual reports/public filings in your jurisdiction. | Publicly traded Enterprises may have to disclose ESG related factors dependent upon any specific legislation or guidelines governing the sector in which they operating. |
| How prevalent, if at all, are impact bonds in your jurisdiction? | Not prevalent. |
| In your jurisdiction, are there any restrictions on foreign investments or donations that are unique to Social Enterprises (whether incorporated as for profit entities or as Nonprofits)? | No. |
| Is “crowdfunding” legal in your jurisdiction? Are there rules under applicable securities laws that make it easier for smaller businesses or Social Enterprises to take money from investors that are not sophisticated/accredited/qualified under a... | We are not aware of any published statistics surrounding “crowdfunding”. There are no laws specifically targeting this approach. The Securities Act, Cap.318A will apply to all public companies which make offers to the public for investment funding. |
| Are there any tax exemptions that are uniquely available for Social Enterprises? a. Please describe any tax exemptions that are available and whether they are partial or full.b. Are they dependent on the Social Enterprise utilized using a spe... | There are no tax exemptions that are specific to Social Enterprises. However, tax exemptions are available to non-profit companies, which are registered as charities. |
| Are individuals or other organizations able to provide tax deductible donations to for-profit Social Enterprises? If they are, please describe any restrictions applicable to tax deductible donations? | No. Tax-deductible donations are restricted to charitable donations to registered or tax-exempt charities. |
| Are there any other tax benefits uniquely available for Social Enterprises? (e.g. deferrals, favorable tax rates, business deductions, etc.) | No. |
| Does your jurisdiction provide for reciprocal recognition of tax-exempt status that has been granted under the law of any other jurisdictions? | No. |
| Does your jurisdiction have Regulatory Sandboxes or similar policy frameworks for Social Enterprises? If it does, please describe. | There is no regulatory sandbox specific to Social Enterprises. The Financial Services Commission (FSC) and the Central Bank of Barbados (CBB) have established a regulatory sandbox targeted towards technology-based financial products and services offered by businesses. It is regulated by a regulatory review panel (RRP) comprised of representatives from the FSC, CBB and the Director of Finance and Economic Affairs. Its operation allows for a greater understanding of the nature of the product and an opportunity to determine whether new legislation is required to govern those products. |
| What government operational support, resources, training or services, are available for small businesses or Social Enterprises? | The Small Business Development Act, Cap.318C provides grants, technical assistance and tax and duty incentives for the development of approved small businesses, by way of any government department or agency or other approved private sector organization. Additionally, the CBB Enhanced Credit Guarantee Fund (ECGF) provides medium to long-term financing for small businesses from private financial institutions. |
| Are there different compliance requirements for different types of Social Enterprises than for traditional Enterprises? Please provide examples if there are. | No. |
| Is there a dedicated government agency or department that oversees Social Enterprises? If there is, please describe its mandate and effectiveness. | No. |
| Is there a different bankruptcy system available for Social Enterprises? | No. |
| What are the average time and filing fees to form an Enterprise in your jurisdiction? | The formation of an Enterprise may usually be achieved in seven to ten business days. There have been delays in this time frame since the beginning of the pandemic. |
| What government or third-party certifications or accreditations, if any, are available for Social Enterprises that allow for access to benefits e.g. funding, beneficial tax status, etc.? Please provide examples and briefly describe them as well... | There are no certifications available for Social Enterprises specifically that allow for benefits. |
| Please describe whether, in your opinion, startups and other entrepreneurial Enterprises generally can easily form and flourish in your jurisdiction. | Startups and other entrepreneurial Enterprises generally face challenges in obtaining financing. |
| Please describe whether, in your opinion, Social Enterprises, in particular, can easily form and flourish in your jurisdiction. | This will be dependent upon the resources and support available to the Social Enterprise. |
| Please describe whether in your opinion there are any laws that are obstructive to the formation of Social Enterprises (i.e. that actively disfavor or penalize, or otherwise discourage their formation) in your jurisdiction (for example, are Soc... | No. |
| In your jurisdiction, are there any major fraud concerns or defects due to corruption or fraud that should be addressed? If there are, please briefly discuss the concerns or defects. | No. |
| What changes to the law do you think would be most beneficial to enabling Social Enterprises to flourish in your jurisdiction? | The changes that would be most beneficial are:
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| What changes to the law do you think would be most beneficial to enhancing the social and environmental responsibility of Enterprises generally (whether or not Social Enterprises)? | The implementation of additional ESG standards, where relevant for specific sectors or industries, where those do not currently exist or can be updated; refinement or provision for disclosure and reporting mechanisms might permit a higher level of transparency and encourage investment. |
| Is there anything else you would like to add or guidance you would like to provide? Are there any questions we should have asked but did not? | No. |
Social Enterprise Law Surveys
Barbados
The most common for-profit organizational forms utilized in Barbados are the company and the society with restricted liability (“SRL”). They are similar in form with the major difference being the SRL’s issuance of quotas instead of shares. Neither a company nor an SRL is subject to prescribed minimal capital requirements and shares in a company and quotas in an SRL are without nominal or par value.
An enterprise may also be registered as a sole proprietorship or a partnership. Enterprises may choose to be formed as a general or limited partnership, which allows individuals entering into a partnership to restrict liability. Where there is a limited partnership, a general partner may be appointed to assume all liability for all obligations and debt of the firm.
a. Both an SRL and a company are compatible for this purpose. An SRL is typically the form used by foreign investors due to its flexibility in being treated as a “pass-through vehicle” under certain jurisdictions’ tax regimes.
b. There are no organizational forms specifically for social enterprises. Social enterprises may operate in the forms identified above. A company may be formed as a not-for-profit company.
The Companies Act requires the directors of a company or managers of an SRL to act honestly and in good faith with a view to the best interests of the company; and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
In determining what are the best interests of the company, a director or manager must have regard to the interests of the company’s employees in general as well as to the interests of the shareholder.
No.
Yes. A company or SRL formed as a non-profit is subject to the similar corporate legal requirements as any other company or SRL.
a. A non-profit company or SRL which is additionally registered as a charity may benefit from certain tax exemptions and reduced filing fees.
b. No.
c. There is no hybrid form of company or SRL available.
d. Non-profit companies are usually used for charitable enterprises, and must therefore be registered under the Charities Act, Cap.243.
Yes. The Co-Operative Societies Act, Cap.378A governs the registration, supervision, and management of certain societies the members of which have a common bond of philosophy and social and economic objectives and for related purposes.
There are no reporting requirements specific to Social Enterprises. Generally speaking, companies and SRLs are required to file:
- annual audited financial statements at the Corporate and Intellectual Property Office (CAIPO) where the prescribed threshold for an audit is met
- annual corporation tax returns at the Barbados Revenue Authority (other than companies which are registered charities); and
- annual returns at CAIPO.
There is no case law and jurisprudence of which we are aware specifically addressing Social Enterprises.
ESG requirements may be reflected in various pieces of legislation or regulatory guidance relating to a specific industry or sector.
No.
No.
No.
There is no funding specific to Social Enterprises. They may be funded by grants, charitable investment, traditional investment, etc. as the case may be.
Not common.
Currently there is no government funding specifically for Social Enterprises.
a. The enterprise’s size and the industry under which it operates may permit the availability of government grants, loans and technical assistance.
b. Government funding is not driven by the form of the Social Enterprise.
No.
Publicly traded Enterprises may have to disclose ESG related factors dependent upon any specific legislation or guidelines governing the sector in which they operating.
Not prevalent.
No.
We are not aware of any published statistics surrounding “crowdfunding”. There are no laws specifically targeting this approach.
The Securities Act, Cap.318A will apply to all public companies which make offers to the public for investment funding.
There are no tax exemptions that are specific to Social Enterprises. However, tax exemptions are available to non-profit companies, which are registered as charities.
No. Tax-deductible donations are restricted to charitable donations to registered or tax-exempt charities.
No.
No.
There is no regulatory sandbox specific to Social Enterprises.
The Financial Services Commission (FSC) and the Central Bank of Barbados (CBB) have established a regulatory sandbox targeted towards technology-based financial products and services offered by businesses. It is regulated by a regulatory review panel (RRP) comprised of representatives from the FSC, CBB and the Director of Finance and Economic Affairs. Its operation allows for a greater understanding of the nature of the product and an opportunity to determine whether new legislation is required to govern those products.
The Small Business Development Act, Cap.318C provides grants, technical assistance and tax and duty incentives for the development of approved small businesses, by way of any government department or agency or other approved private sector organization.
Additionally, the CBB Enhanced Credit Guarantee Fund (ECGF) provides medium to long-term financing for small businesses from private financial institutions.
No.
No.
No.
The formation of an Enterprise may usually be achieved in seven to ten business days. There have been delays in this time frame since the beginning of the pandemic.
There are no certifications available for Social Enterprises specifically that allow for benefits.
Startups and other entrepreneurial Enterprises generally face challenges in obtaining financing.
This will be dependent upon the resources and support available to the Social Enterprise.
No.
No.
The changes that would be most beneficial are:
- The implementation of legislation which recognizes social enterprises.
- Tax benefits for social enterprises
The implementation of additional ESG standards, where relevant for specific sectors or industries, where those do not currently exist or can be updated; refinement or provision for disclosure and reporting mechanisms might permit a higher level of transparency and encourage investment.
No.