British Virgin Islands: BVI Continuations And Discontinuations

Last Updated: 17 October 2017
Article by Joshua Mangeot

Most Read Contributor in British Virgin Islands, October 2017

One of the many flexible features of the BVI Business Companies Act 2004 (the BC Act) is the ability both to continue a foreign company as a BVI company under the BC Act and also to continue a BVI company under the laws of another jurisdiction (commonly referred to, respectively, as a continuation and a discontinuation or continuation out). This guide provides a brief overview of the process and requirements for continuations and discontinuations.

General requirements to continue in the BVI

Broadly, to continue as a BVI company a foreign company must:

  • be permitted to continue in the BVI under the laws of its jurisdiction of incorporation (the Old Jurisdiction), and
  • not (a) be in, or be the subject of any undetermined court application for, liquidation or equivalent insolvency proceedings in any other jurisdiction; (b) have a receiver or manager appointed in relation to any of its assets; or (c) have entered into an arrangement with creditors that has not been concluded

An application is then filed in the BVI, together with supporting documents (including evidence of approval of both the continuation and also the company's new memorandum and articles of association (MAA)). These must be approved (a) by a majority of directors or persons exercising the powers of the company or (b) in the manner established for exercise of the company's powers.

If satisfied, the BVI Registrar of Corporate Affairs (the Registrar) shall issue a certificate of continuation confirming the incorporation of the company under the BC Act. However, the Registrar may refuse any continuation she believes would be contrary to the public interest.

General requirements to continue out

Broadly, in order to continue out a BVI company must:

  • be in good standing (that is, up-to-date with government fees and not struck-off)
  • be permitted to continue out under its MAA
  • subject to any specific approvals required under its MAA, resolve to continue out by a board or shareholder resolution, and
  • file a declaration, via its BVI registered agent, confirming that the laws of the relevant foreign jurisdiction (the New Jurisdiction) permit the continuation and that the company has complied with them

If satisfied these requirements have been complied with, the Registrar will issue a certificate of discontinuance, following which the company will be struck-off in the BVI and ceases to be a company under the BC Act.

Practical considerations

In practice, BVI counsel will need to consider the requirements of the Old or New Jurisdiction (as applicable) in advance with overseas counsel. For example, the laws of that jurisdiction may impose additional legal formalities (such as a BVI legal opinion). On a continuation in the BVI, the Registrar may rely on a formal director's certificate to satisfy herself that the BVI requirements have been met but this must be duly legalised under, and include an extract of, the relevant laws of the Old Jurisdiction. On a continuation out of the BVI, the Registrar must be provided with proof that the company has complied with the laws of the New Jurisdiction and, whilst this is often in the form of a certificate of registration, or equivalent document, the Registrar may also rely on a provisional certificate of continuance to allow her to issue the BVI certificate of discontinuance.

The timings of the various filings will also need to be carefully co-ordinated. In particular, it is usually desirable to ensure "same-day" treatment of the continuation or discontinuation (to avoid the company's existing at the same time under two different company laws and any resulting conflicts of laws or other issues).

Discontinuations – declaration regarding registered security interests

On a discontinuation, if a charge or other security interest (a charge) is registered publicly in the BVI in respect of the company's property which has not been released or satisfied, it must first make a written declaration to the Registrar. The declaration must state either:

  • that a notice of satisfaction or release has been filed and registered in respect of the charge
  • if such a notice has not been filed and registered, that the holder of the charge (the chargee) has been notified in writing of the intention to discontinue and has consented or not objected
  • if the chargee has not so consented or has objected following notice, that the chargee's interest secured by the charge shall not be diminished or compromised by the discontinuation and, broadly, will continue to be a liability recognised under the relevant provisions of the BC Act (see below)

Effect of continuations and discontinuations

Broadly, under the BC Act, the effect of a continuation or discontinuation is as neutral and seamless as possible and the relevant company is regarded as one and the same legal entity. From the date of continuation in the BVI, a company is subject to the BC Act and its new MAA and, under BVI law, is no longer treated as incorporated in the Old Jurisdiction. On a discontinuation, from a BVI law perspective, a company will not cease to be subject to BVI law until a certificate of discontinuance is issued.

Broadly, the BC Act provides that (a) the company continues to be liable for all of its obligations that existed prior to its continuation or discontinuation; (b) the continuation or discontinuation does not impair or release any such liabilities or obligations or any judgments or claims against the company; and (c) any pending or actual proceedings by or against the company remain unaltered.

It should be noted that, in the case of a BVI company that has been discontinued, service of process may continue to be effected on its BVI registered agent in respect of any claim, debt, liability or obligation of the company during the period of its existence under the BC Act.

Conclusion

The BVI is the world's leading incorporation jurisdiction due to the clarity and flexibility of its company law. The ability to continue a foreign company as a BVI company or to continue a BVI company as a company under the laws of another jurisdiction quickly and seamlessly is just one example of this flexibility and is particularly useful in the context of corporate reorganisations.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.