Companies in the BVI are incorporated under the BVI Business Companies Act 2004 (the "Act"). These companies are incorporated to carry on business with non-residents of the BVI and are commonly referred to as "business companies".
Under the Act, it is possible to incorporate five different types of companies:
- a company limited by shares
- a company limited by guarantee that is not authorised to issue shares
- a company limited by guarantee that is authorised to issue shares
- an unlimited company that is not authorised to issue shares
- an unlimited company that is authorised to issue shares
Companies limited by shares are by far the most common.
Companies that were incorporated before the Act came into force were automatically re-registered under the Act to streamline the application of company law, although some additional provisions of the former legislation continue to apply to these re-registered companies.
Every BVI company must have a "registered agent" that is located in the BVI. The registered agent is responsible for incorporating the company and appointing the first directors, amongst other things. A company must have a registered agent at all times, otherwise it will be liable for a substantial fine and could be struck off the Register. The company may change its registered agent at any time, but the Registrar must be notified.
Every BVI company must have a "physical address" in the BVI (the address may not be a post office box). This can be the address of the registered agent. The company may change its registered office at any time, but the Registrar must be notified of the change.
To incorporate the company, its registered agent will file with the Registrar the Memorandum and Articles of Association.
When satisfied that the company has fulfilled the requirements of the Act, the Registrar will allot the company a unique number and issue a certificate of incorporation. Incorporation can take as little as a day to complete, although more usually takes three to five days.
The Registered Agent will appoint the company's first director(s), and this must be done within six months of incorporation. The number of directors can be fixed by the Articles of Association, although a company must have at least one director. There is no legal requirement to appoint a company secretary.
There is no requirement for any of the directors to be actual residents of the BVI, and directors can either be an individual or a corporate entity. The register of directors of a company is not publicly filed in the BVI unless the company chooses to do so, and so the identity of the directors generally remains confidential.
The Registered Agent will generally require details of the shareholders at the time of incorporation. Once directors have been appointed, they will be able to issue shares to shareholders. A company can be authorised to issue shares with or without par value, and shares issued with par value can be issued in any currency. Where a company issues shares with par value, the consideration paid must be at least equal to the par value of the shares, meaning that a company cannot issue partly paid shares.
Until shares are issued, the directors are personally liable for any contracts entered into by the company. The legal title to the shares passes to the shareholders when their names are entered in the register of members. Like the register of directors, this is not publicly filed unless the company chooses to do so.
The Act does not require companies to hold an AGM. Nevertheless, a company's memorandum or articles may require a meeting of member in certain circumstances and will set out the rules and procedures relating to these meetings.
The only documents held on public record are the Memorandum and Articles of Association.
Details of the company's beneficial owners, directors and shareholders are not part of the public record. Register of members, register of directors and minutes of all meetings and resolutions are kept only at the offices of the registered agent in complete confidentiality. These files are available for inspection to shareholders of the company. As noted above, if the owners of the company so desire, these documents may be filed with the Registrar, but this is entirely optional.
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Simcocks is an established provider of offshore legal services broadly grouped into the areas of corporate and commercial, dispute resolution and private client. Many of our lawyers have been named as leaders in their field by independent researchers.
Simcocks has BVI qualified lawyers on its team who are able to advise individual and institutional clients on all aspects of BVI law.
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.