CONTENTS

 

The BVI Business Companies Act

Documents to be kept at the registered agent's office

Register of directors and change in the register

Appointment of directors

Removal of directors

Certificate of Incumbency

Certificate of Good Standing

Transfer of shares

Financial records and underlying documents

Dissolution by striking off

Legal Texts 

 


 

The BVI Business Companies Act

 

The BVI Business Companies Act (No 16 of 2004) is the principal statute of the British Virgin Islands relating to BVI company law, regulating both offshore companies and local companies. It replaced the International Business Companies Act, and came into force on 1 January 2005. The Act has been amended several times since 2005.

 

Documents to be kept at the office of Registered Agent

 

Under subsection (1) of section 96, A Company shall keep the following documents at the office of the registered agent:

  • Memorandum and Articles of Associations; 
  • Register of directors maintained under section 118;
  • Register of members maintained under section 41;
  • Copies of all notices and other documents filed by the company in previous ten years

 

Under subsection (2) of section 96, a company shall

(a) notify the registered agent within 15 days of any change in the register. 

(b) provide the registered agent with a writtne record of the physical address of the places at which the original register of members or the original register of directors is kept.

 

Under subsection (3) of section 96, where the place at which the original register of members or the original register of directors is changed, the company shall provide the registered agent with the physical address of the new location of the records within 14 days of the change of the location.

 

Non-compliance

 

As per subsection (5) of section 96, a company that contravenes subsection (1), (2), or (3) commits an offence and is liable on summary conviction to a fine of $10,000. 

 

Register of Directors and change in the register

 

Section 118B of the BVI Business Companies Act provides that

  • 118B(1) - A BVI company should keep records of registers of members and directors at the office of the registered agent and file a copy of the directors' register for registration by the Registrar. [The Registrar of Corporate Affairs, BVI]
  • 118B(2) - The initial copy of a company's regisgter of directors shall be filed for registration by the Registrar within 21 days of the appointment of the first directors under section 113.
  • 118B(3) - A company that has filed for registration by the Registrar a copy of its register of directors, shall file the change of register by filing a copy of the register containing the change, within 30 days of the change ocurring.
  • 118B(4) - Information relating to filing for registration by the Registrar shall not be made available to any person, except on an order of the court or on a written request by the competent authority acting in the exercise of its powers as a regulator of inancial services business, tax administrator or law enforcement agency, or under an obligations to a mutual legal assistance request received or made by them. 
  • 118B(5) - A company, the registered agent or any person authorized in writing by the company shall have access to the copy of the company's register of directors.
  • 118B(9) - If an existing company fails to comply with subsection (1) or (2), or where it has been granted extension under subsection (8), it fails to comply within the period of extension, the existing company shall be laible to the penalty specified in Part II of Schedule 1.

 

Appointment of directors - Section 113

 

Registered agent to appoint first director(s) - subsection (1)

The registered agent of a company shall, within 6 months of the date of incorporation of the company, appoint one ore more persons as the first directors of the company.

 

Subsequent appointment - subsection (3)

Subsequent directors may be appointed

(a) unless the memorandum or articles provide otherwise, by the members; or

(b) where permitted by the memorandum or articles, by the directors.

 

Vacancy on the board of directors - subsection (4)

Unless the memorandum or articles of a company provide otherwise, the directors of a company may appoint one ore more directors to fill a vacancy on the board.

 

Reserve director - subsection (7)

Where a company has only one individual member who is also the sole director, notwithstanding anything in the memorandum or articles, that sole member/director may appoint a person as reserve director of the company to act in the place of the sole director in the event of his death.

 

Removal of directors - Section 114

 

Subsection (1) - Subject to the memorandum or articles of a company, a director of the company may be removed from office by resolution of the members of the company, either passed in a meeting of members or in writing.

 

Subsection (2) - Subject to the memorandum and articles, a resolution under subsection (1) may only be passed

(a) at the meeting of the members called for the purpose of removing the director or for purposes including the removal of director; or

(b) by a written resolution passed by at least seventy five percent of the votes of the members of the company entitled to vote.

 

Subsection (3) - The notice of a meeting called under subsection 2(a) above, shall state that the purpose of the meeting is, or the purposes of the meeting include, the removal of a director.

 

Subsection (4) - Where permitted by the memorandum or articles of a company, a director of the company ay be removed from office by a resolution of the directors.

 

Subsection (5) - Subject to memorandum and articles, subsections (2) and (3) apply to resolution of directors passed under subsection (4) with the substitution, in subsection (3), of "directors" for "members".

 

Certificate of Incumbency

The registered agent can give certification on the information of directors and members at a particular date. Such information is given in a Certificate of Incumbency (在任董事及股东证明).

An agent fee is payable for the issue of Certificate of Incumbency.

 

Certificate of Good Standing

If required, the BVI government authority can issue a Certificate of Good Standing to show that the following information at a given date:

  • the Company is in existence;
  • the Company has no outstanding licence fee;
  • the Company has not been under a process of striking off or liquidation

A fee is payable for the issue of a Certificate of Good Standing.  

 

Transfer of shares

The change of shares can be effected by the transferor and transferee signing an Instrument of Transfer, with or without an agreement for purchase and sale of shares. No stamp duty is payable for the share transfer.

 

Financial records and information

 

The Business Companies Act (the Act) requires that a company should keep records that sufficiently show and explain the company's transaction, and will enable the financial position of the company to be determined with reasonable accurary.

 

The Act also requires that the company must file a notice to the registered agent of the place where the accounting records are kept. However, there is no requirement for audits.

 

"Records and underlying documentation" includes accounts and records (such as invoices, contracts and similar documents) in relation to -

(i) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place;

(ii) all sales and purchases of goods by the company; and

(iii) the assets and liabilities of the company.

 

As per section 98(8) of the Act, A company that contravenes this commits an offence and is liable on summary conviction to a fine of USD50,000.

 

Dissolution

 

A BVI Company can be dissolved / closed in two ways: striking off or liquidation.

  • In respect of striking off, the liabilities of the directors and members shall remain for 7 years from the date of dissolution.
  • In respect of liquidation for a solvent company, the liabilities of the directors and members shall come to an end upon the completion of the liquidation.

 


 

 

The BVI Business Companies (Amendment) Act, 2015

 

  • The BVI Business Companies (Amendment) Act, 2015 (“the 2015 Amendment Act”), which includes new requirements for the filing of director information with the Registry of Corporate Affairs, was published on 31 December 2015, and came into force on the same date.
  • Sections 27 and 28 of the 2015 Amendment Act, which sets out the requirement for the provisions/filing of the Register of Directors, will come into force on 1 April 2016 [amended as 15 January 2016 under the 2016 Amendment Act].
  • Director information filed at the BVI Registry will still be kept private, and will not be available to anybody other than BVI regulatory and law enforcement authorities.

 

The BVI Business Companies (Amendment) Act, 2016

 

The 2016 Amendment Act was passed into law, retroactive to 15 January, 2016, which makes some additional changes to the director requirements. The details of the change are as follows:

  • All existing companies (incorporated on or before 31 March 2016) will have a 12-month transitional period, from 1 April 2016 until 31 March 2017, to comply with the filing requirement.
  • All new companies (incorporated from 1 April 2016 onwards) will need to file director information at the Registry within 21 days of the appointment of the first directors.  

 

Legal texts of the Companies Act and Amendments

 

Section 118B - Registration of Register of Directors

 

Subsection (1)

A BVI company shall file for registration by the Registrar (the Registrar of Corporate Affairs) a copy of its register of directors.

 

Subsection (2)

Subject to subsection (6), the initial copy of a company's register of directors shall be filed for registration by the Registrar of the BVI within 21 days of the appointment of the first directors under section 113.

 

Subsection (3)

A company that has filed for registration by the Registrar a copy of its register of directors shall, within 30 days of any changes occurring, file the changes in the register by filing copy of the register containing the changes.

 

Subsection (6)

Subject to subsection (8), an existing company has until 31st March 2017 to comply with the requirement of subsection (1).

 

Subsection (8)

Where an existing company is unable to comply with the requirement in subsection (1) within the period specified in subsection (6), the Registrar may, upon written application received from the company and after being satisfied that

 

  1. The existing company has taken steps to comply with subsection (1), and
  2. The delay in complying with subsection (1) is due to its registered agent's inability to file the register of directors on account of large filings that the registered agent has to undertake or for some other good reason acceptable to the Registrar,

 

The Registrar may grant the existing company an extension of up to 6 months to comply with subsection (1).

 

Subsection (9)

Where an existing company fails to comply with subsection (1) or (2), where it has been granted an extension under subsection (8), it fails to comply with the period of an extension, the existing company shall be liable to the applicable penalty specified in Part II of Schedule I.

 

Schedule 1

 

Part I - Government registration fee

118B(1)

For the initial registration by the Registrar of a copy of a register of directors

$50

118B(3)

For the registration of a change in a register of directors

$50

118B(6)(a)

For the registration by the Registrar on or before 30th September 2016 of a copy of a register of directors of an existing company, including a struck-off company that is restored to the register within that period

$0

118B(6)(b)

For the registration by the Registrar on or before 31st March 2017, or if an extension is granted, on or before the end of the period of extension, of a copy of a register of directors of an existing company, including a struck-off company that is restored to the register within that period

$25

118B(6)(c)

For the registration by the Registrar after 31st March 2017, of a copy of a register of directors of an existing company, including a struck-off company that is restored to the register within that period

$50

 

Part II –

 

Penalty for failure to file copy of register of directors

 

2A (1) where a company fails to comply with section 118B, the following penalties shall apply –

 

2A (1)(a)

For failure to file a copy of a register of directors within the specified period, the penalty payable shall be $100;

$100

2A (1)(b)

For failure to file changes in particulars in a register of directors within the specified period, the penalty payable shall be

$100

2A (1)(c)

Where an existing company fails to file a copy of its register of directors on or before 31st March 2007, or if an extension has been granted, on or before the end of the period of extension, the following penalties shall apply:

 

2A (1)(c)

(i)

For the first month or part thereof after 31st March 2007 or extension

$300

 

(ii)

For the next 3 months or part thereof after the period specified in sub-paragraph (i) or extension

$500

 

(iii)

For the next 3 months or part thereof after the period specified in sub-paragraph (ii) or extension

$750

 

(iv)

After the end of the period specified in sub-paragraph (iii) or extension, for each month or a part thereof that the failure continues

$1,000

 

Section 118A - 

Particulars of Directors to be Registered

 

(1)

A company’s register of directors shall contain the following particulars -

 

(a)

In the case of an individual director, the individual's -

 

 

(i)

Full name;

 

 

(ii)

Former name, if any, unless the former name was changed by deed poll or other legal means or disused for more than 10 years;

 

 

(iii)

Date of appointment as director or nomination as reserve director;

 

 

(iv)

Date of cessation as director or reserve director;

 

 

(v)

Address for the service of documents;

 

 

(vi)

Usual residential address, unless that address is the same as the individual’s address for the service of documents;

 

 

(vii)

Date and place of birth; and

 

 

(viii)

Nationality; and

 

(b)

In the case of a corporate director, the corporate director's -

 

 

(i)

Corporate name;

 

 

(ii)

Corporate or registration number, if any;

 

 

(iii)

Registered office or principal office;

 

 

(iv)

Address, but if the corporate director is incorporated or registered in the Virgin Islands, its corporate or registration number only;

 

 

(v)

Date of appointment as corporate director;

 

 

(vi)

Date of cessation as corporate director; and

 

 

(vii)

Place of incorporation or registration and date of such incorporation or registration;

 

(c)

Such other information as may be prescribed.

 

 

 

(2)

Where a person is or was formerly known by more than one name, each name must be stated.

 

BVI Business Companies Act


The BVI Business Companies Act are available with the BVI Registry of Corporate Affairs on the website. [Read