Under section 5 of the BVI Business Companies Act (as amended)
(the "Act"), a company may be incorporated or continued
under the Act as:
a company limited by guarantee that is not authorised to issue
a company limited by guarantee that is authorised to issue
Companies limited by guarantee are often used for non-profit
organisations, particularly companies limited by guarantee that are
not authorised to issue shares.
Companies Limited By Guarantee Not Authorised to Issue
Companies limited by guarantee and not authorised to issue
shares do not have shares and their members are known as
The memorandum of association of the company
(the"memorandum") must state that it is a company limited
by guarantee that is not authorised to issue shares. A company
limited by guarantee must at all times have one or more guarantee
members, other than during the period from the incorporation of the
company to the appointment of its first directors. A guarantee
member is entitled to one vote on any resolution on which he or she
is entitled to vote, unless the memorandum or articles of
association (the "articles") of the company provide
Under section 9(1)(f) of the Act, a guarantee member is liable
to contribute to the company's assets if the company goes into
voluntary liquidation under the Act or insolvent liquidation under
the Insolvency Act 2003 whilst he or she is a member. However, a
guarantee member's contribution is limited to:
that the company is a company limited by guarantee that is
authorised to issue shares;
the amount stated in the memorandum;
any other liability expressly provided for in the memorandum or
any liability to repay a distribution, where a distribution was
made to the member but at the time of the distribution the company
did not satisfy the solvency test.
Guarantee members are not liable for the debts or obligations of
the company except to the extent of their guarantee upon the
company going into insolvent liquidation.
Companies Limited by Guarantee and Authorised to Issue
Companies limited by guarantee and authorised to issue shares
are hybrid of a company limited by guarantee and a company limited
by shares. The memorandum must contain the relevant clauses for
companies limited by shares and companies limited by guarantee.
Accordingly, the memorandum must state:
the amount which each guarantee member is liable to contribute
to the company's assets in the event that a voluntary
liquidator or an Insolvency Act liquidator is appointed;
the maximum number of shares the company is authorised to issue
or, that the company is authorised to issue an unlimited number of
the classes of shares the company is authorised to issue and,
if the company is authorised to issue two or more classes of
shares, the rights, privileges, restrictions and conditions
attaching to each class of shares.
At least one member of the company must be a guarantee member.
The guarantee member may also be a shareholder of the company. The
guarantee member's liability to the company will be the same as
that set out at paragraph 2 above. As with a company limited by
shares, the shareholders will have no liability for the
company's debt and obligations (unless otherwise specified in
the memorandum or articles of the company). Shareholders will have
the votes attached to their shares, whilst a guarantee member
will have one vote on any resolution on which he or she is entitled
to vote, unless the memorandum or articles provide otherwise.
Incorporation of a Company Limited by Guarantee
Incorporating a company limited by guarantee can be done quickly
and efficiently by the Carey Olsen BVI team. On receipt of
satisfactory "know your client" documents, we can arrange
for a company limited by guarantee (or otherwise) to be
incorporated on the same day. Carey Olsen in the BVI offers a
variety of corporate services including but not limited to
incorporations, corporate director and shareholder services and
registered agent and registered office services.
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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The States of Guernsey, Carey Olsen, Northern Trust and Sure will be hosting Guernsey's first Blockchain Technology Conference to explore how Blockchain technology could change the world as well as what this means for the future of local businesses in Guernsey.
Expert FinTech speakers from different business sectors will be presenting the opportunities and risks for local businesses as well as exploring where the technology is already having an impact in global financial services.
Carey Olsen counsel, Richard Field, will be taking part in the panel session to discuss the opportunities of Blockchain for Guernsey.
In its 18th year this leading conference brings together top legal, business and fund professionals from around the globe to analyse the current market and future of private investment funds, and the prospects of changes and updates to regulatory and tax regimes, among other timely topics.
The Guernsey branch of Soroptimist International have announced that Edwina Currie, former politician, will be the after dinner speaker at their annual dinner, which is sponsored by Carey Olsen.
Edwina Currie was Conservative MP for South Derbyshire and Health Minister in the Margaret Thatcher government. She has since become a respected author, speaker and broadcaster and a contestant in celebrity realty TV shows including Strictly Come Dancing, I'm a Celebrity Get me Out of Here and Celebrity
Soroptimist President, Karen Jagger, said "It is great news that Edwina Currie will be joining us. She is an excellent speaker and we are promised an entertaining and informative evening with her participation. Although our organisation is primarily focussed on female initiatives, this event is open to both men and women and we are hoping the Guernsey community will come out in force to support it."
She added "We are delighted that the Lieutenant Governor and our Patron, Lady Corder, as well as the Chief Minister, Gavin St Pier and Mrs Jane St Pier who is Chair of the Youth Commission have confirmed they will be attending."
The black tie event takes place on 8th March 2017 at St Pierre Park Hotel. Individual tickets and tables of 10 are available to book on www.sigbi.org/guernsey - or by contacting Shirley Marsh on 01481 72144.
When working with family businesses, it's sometimes surprising to see the gap between the founder and the next generation, particularly when the next generation do not see the importance of the business.
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