BVI Companies Act

CONTENTS

 

The BVI Business Companies Act

The BVI Business Companies (Amendment) Act 2015

The BVI Business Companies (Amendment) Act 2016

Legal Texts - the BVI Business Companies Acts

 

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.

 

Financial records

 

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.

As per section 98(2) of the Act, A company that contravenes this commits an offence and is liable on summary conviction to a fine of USD10,000.

 

Register of Directors and members

 

  • As per Section 96(1), a BVI company should keep records of registers of members and directors at the office of the registered agent. [Note: S96(1) has been amended as 118A and 118B under BVI Business Companies Act 2015 and 2016 respectively. Called "the Amendment Act 2015 and 2016"]

 

  • As per Section 96(2), where a company keeps a COPY of the register of members or register of directors at the office of the registered agent, it shall notify the registered agent of the change within 15 days of such change, and provide the registered agent with a written record of the physical address of the place at which the register of directors or members is kept. [S96(2) has been amended as 118A and 118B under the Amendment Act 2015 and 2016 respectively]

 

  • As per Section 96(3), where the place at which the original register of members or directors is changed, the company should provide the registered agent with the physical address of the new location of the records within 14 days of the change.[renamed as section 98 under the Amendment Act 2015]

 

Non-compliance

 

As per Section 96(4), a company that contravenes sub-section (1), (2) or (3) commits an offence and is liable on summary conviction to a fine of USD10,000.

 

Filing requirement

 

The BVI company has to file the records about the directors and members to the office of the registered agent, or the BVI Companies Registry (the Registry of Corporate Affairs).

If the above information is filed at the Companies Registry, the information about the directors and members will be public. If the above information is filed at the office of the registered agent, the information remains private.

 

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.

 

Effective from 30th June 2017, a BVI company has the legal obligation to maintain a register of members (shareholders), and notify the Registered Agent of any changes in shareholders within 15 days from the date such change took place. Non-compliance will result in heavy penalties. See details. [here]

 

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 30thSeptember 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 31stMarch 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

$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.

 

Update on the BVI Business Companies Act


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

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