A sometimes overlooked, yet critical, aspect of a British Virgin Islands (BVI) company is the role of its registered agent. Only a registered agent can incorporate a BVI company, and they are essential in its ongoing maintenance.
Registered agents are licensed by the BVI Financial Services Commission (the Commission) and are subject to its regulatory oversight under various laws, including the Regulatory Code and the Anti-Money Laundering and Terrorist Code of Practice.
Legally, a BVI company must at all times have a registered agent, except when it is in insolvent liquidation.
Section 91(6) of the BVI Business Companies Act, 2004 (as amended) (the Act) provides that, "A company that does not have a registered agent in contravention of [subsection (1)] commits an offence and is liable on summary conviction to a fine of $10,000."
Further, section 91(A) of the Act provides that, "If at any time a company does not have a registered agent it shall forthwith, by resolution of members or directors, appoint a registered agent."
What are the ongoing obligations of a BVI company and its registered agent?
Key obligations of a BVI company and its registered agent include:
- The company shall keep the following documents at the office of its registered agent:
(a) the memorandum and articles of the company;
(b) the register of members maintained in accordance with section 41 of the Actor a copy of the register of members;
(c) the register of directors maintained under section 118 of the Actor a copy of the register of directors; and
(d) copies of all notices and other documents filed by the company [with the Registry] in the previous ten years.
- Where the company keeps a copy of the register of members or the register of directors at the office of its registered agent, it shall:
(a) within fifteen days of any change in the register, notify the registered agent, in writing, of the change; and
(b) provide the registered agent with a written record of the physical address of the place or places at which the original register of members or the original register of directors is kept.
When 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 fourteen days of the change.
- The company shall keep the following records at the office of its registered agent or at such other place or places, within or outside the BVI, as the directors may determine:
(a) minutes of meetings and resolutions of members and of classes of members maintained in accordance with section 102 of the Act; and
(b) minutes of meetings and resolutions of directors and committees of directors maintained in accordance with section 102 of the Act.
Where any records specified above are kept at a place other than at the office of the company's registered agent, the company shall provide the registered agent with a written record of the physical address of the place or places at which the records are kept.
Where the place at which any records specified above is changed, the company shall provide the registered agent with the physical address of the new location of the records within fourteen days of the change of location.
- The company shall:
(a) keep at the office of its registered agent or at such other place or places, within or outside the BVI, as the directors may determine, the records and underlying documentation of the company;
(b) retain the records and underlying documentation for a period of at least five years from the date:
(i) of completion of the transaction to which the records and underlying documentation relate; or
(ii) the company terminates the business relationship to which the records and underlying documentation relate; and
(c) provide its registered agent without delay any records and underlying documentation in respect of the company that the registered agent requests.
"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.
- Subject to the memorandum and articles of the company, the registered agent shall:
(a) act on the instructions of the directors of the company if those instructions are contained in a resolution passed by the directors and a copy of the resolution is made available to the registered agent, and
(b) recognise and accept the appointment or removal of a director or directors by members of the company.
- Service of a document may be effected on the company by addressing the document to the company and leaving it at, or sending it by a prescribed method to:
(a) the company's registered office; or
(b) the office of the company's registered agent.
- The company shall have a common seal and an imprint of the seal shall be kept at the office of the registered agent of the company.
- The company is required through its registered agent to privately file a copy of its register of directors at the Registry. If it fails to do so, then it is subject to penalties at the rate of US $1,000 per month up to a maximum of US $5,000. (The maximum penalty was recently reduced from US $8,000, and companies that paid above the current maximum will receive a refund.)
Resignation of registered agent / registered agent ineligible to act
Given a registered agent's obligations, in terms of the maintenance of due diligence and records for a company, it is not uncommon for registered agents to resign from their role if they find themselves unable to comply with their obligations under the Act, the Regulatory Code, or the Anti-Money Laundering and the Terrorist Financing Code of Practice.
If a registered agent wishes to resign, it shall:
(a) give not less than ninety (90) days written notice of its intention to resign as registered agent of the company on the date specified in the notice to a director or the last person from which the registered agent has received instructions concerning the company;
(b) indicate in writing on the written notice that the list of all approved registered agents in the BVI with their names and addresses may be found on the Commission's internet site; and
(c) file a copy of the written notice with the Registrar.
If a company does not change its registered agent on or before the date specified in the notice given above, the registered agent may file a notice of resignation. Unless the company has previously changed its registered agent, the registered agent's resignation is effective the day after the notice is registered by the Registrar. Note that, a registered agent may rescind the notice of its intention to resign, which usually occurs if they are able to resolve their issues with the company.
Additionally, where a registered agent ceases to be eligible to act, for example, if it surrenders or loses its license, it must provide notice to the company in a manner similar to the resignation procedure.
Replacing a Registered Agent
How does a company go about replacing its registered agent: (i) where it wishes to do so; (ii) its registered agent intends to resign; or (iii) the registered agent ceases to be eligible to act?
In either of the three scenarios, the company first needs to find a new registered agent that is willing to accept the company based on due diligence that they will need to conduct.
In any of the scenarios, once the new registered agent is satisfied and willing to act, then it can coordinate with the existing registered agent and the company regarding the filing of the notice of change of registered agent with the Registrar, which is usually done by the existing registered agent and endorsed by the new registered agent. As part of the process, the company will need to pass appropriate resolutions to change its registered agent.
In scenarios two (ii) and three (iii), particularly when the existing registered agent is unwilling to participate in the process because of some unresolved issue with the company, then the company may, with the assistance of a legal practitioner, file notice of a change of registered agent. As part of that process, the legal practitioner would make the necessary filing with the Registrar, but before the legal practitioner can do so, they must be satisfied that the company has complied with the relevant laws including passing the appropriate resolutions and that the new registered agent has conducted the necessary due diligence on the company and has given confirmation to that effect.
Also, in scenarios two (ii) and three (iii), the company may not be able to obtain all its records from its former registered agent and could pose a problem in the due diligence process for the new registered agent. Dialogue and payment of any outstanding fees, along with outstanding due diligence compliance, may help to resolve the issue. But if the former registered agent goes out of business, then it becomes more difficult. In such a case, the company will need to reconstruct records and provide adequate due diligence to a new registered agent who is willing to work with them.
The relationship between a registered agent and a BVI company is crucial to its operations. Both parties must work together to achieve the best outcome. However, when that is not possible, there are mechanisms in place to allow the company to change its registered agent or for the registered agent to resign. In all cases, a BVI company must have a registered agent, and that agent must be satisfied with the due diligence provided and believe that they will be paid for their services. These two items remain the hallmark of the relationship.
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.