The Grand Court may appoint one or more than one competent
inspectors to examine the affairs of any company and to report
thereon in such manner as the Court may direct.
Application to appoint inspectors
The application to appoint inspectors may be made by the
company's members however the precise requirements vary. In the
case of a banking company having a capital divided into shares, the
application will need to be made by members holding not less than
one-third of the issued shares of the company. In the case of any
other company having a capital divided into shares, the application
must be made by members holding not less than one-fifth of the
issued shares of the company for the time being issued. In the case
of a company not having a capital divided into shares, the
application shall be made by not less than one-fifth of the total
number of persons for the time being entered on the register of the
company as members.
Powers of inspectors
It shall be the duty of all officers and agents of the company
to produce for examination by an inspector all books and documents
in their custody or power. Any inspector may examine upon oath the
officers and agents of the company in relation to its business and
may administer such oath accordingly.
Sanctions for non-compliance
An individual cannot rely on the privilege against
self-incrimination to justify a refusal to answer the
inspector's questions. Any officer or agent who refuses or
neglects to produce any book or document directed to be produced,
or to answer any question relating to the affairs of the company,
shall incur a penalty not exceeding forty dollars in respect of
"Officers and agents"
This law applies to officers and agents both past and present.
Officers of the company will include the company's board
members and senior managers. Agents include will include the
company's bankers, attorneys and accountants.
Report of inspectors
Upon the conclusion of the examination, the inspectors shall
report their opinions to the Court. The report shall be filed by
the Clerk of the Court, but shall not, unless the Court so directs,
be open to public inspection.
Funding of the inspection
All expenses of and incidental to any such examination and
report shall be defrayed by the members upon whose application the
inspectors were appointed, unless the Court shall direct the same
to be paid out of the assets of the company. Depending on the
findings of the inspectors report, such costs may be recoverable
from any persons whose actions have resulted in loss to the
Inspection by resolution of the company
Any company may, by special resolution, appoint inspectors for
the purpose of examining into the affairs of such company.
Inspectors so appointed shall have the same powers and perform
the same duties as inspectors appointed by the Grand Court, except
that instead of making their report to the Court, they shall make
the same in such manner and to such persons as the company by
resolution of its members directs.
The officers and agents of the company shall incur the same
penalties in case of any refusal or neglect to produce any document
or answer any question as they would have incurred if such
inspectors had been appointed by the Court.
Inspectors report admissible as evidence
The report of any inspectors, or any copy thereof certified and
signed by the inspectors, shall be admissible in any legal
proceeding as evidence of the opinion of the inspectors in relation
to any matter contained in such report.
The answers to the inspector's questions will not in
themselves be admissible for evidential purposes in criminal
proceedings against the person making them (since they will have
been given under compulsion). Such answers may potentially be used
in non-criminal proceedings, for example, civil litigation or
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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