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The Amending Act is part of the BVI Government's continuing process of modernisation of the companies regime. The Amending Act is complemented by amendments to the BVI Business Companies Regulations, 2012.
The following are the key aspects of the Amending Act. It should be noted that the provisions relating to the register of directors will come into force on 1 April 2016. All other provisions are effective from 15 January 2016.
Register of directors and members
Registration of register of directors
Under the Amending Act every company must file for registration with the Registrar a copy of its register of directors. For new companies, the register must be filed within 14 days of the appointment of first directors. The Registrar must be notified of any subsequent changes within 21 days by the filing of an updated copy of the register. Companies in existence before the commencement of the Amending Act generally have until 31 March 2017 to make the filing.
A filed register of directors will only be accessible by obtaining a Court order or by a competent authority. While it can also be accessed by the company itself, its registered agent or any other person authorised by the company, importantly, it is not accessible by the public.
Particulars of directors to be registered
A company's register of directors must contain certain particulars.
Optional registration of register of members
The Amending Act provides for the option of filing the register of members with the Registrar.
A company shall keep at the office of its registered agent or at such other places, within or outside the BVI, as determined by the directors, the records and underlying documentation of the company; retain the records and underlying documentation for at least 5 years; and provide the registered agent without delay the records.
The records and underlying documentation shall be in such form as are sufficient to show and explain the company's transactions; and will, at any time, enable the financial position of the company to be determined with reasonable accuracy.
The "records and underlying documentation" includes accounts and records (such as invoices, contracts and similar documents) in relation to: all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place; all sales and purchases of goods by the company; and the assets and liabilities of the company.
The Amending Act allows for the articles of association of a BVI company to provide for any dispute involving the company, or the company and its members, or the members themselves to be settled through arbitration in the BVI.
Registered agent acting on resolution of directors
Subject to the memorandum and articles, a registered agent shall act on the instructions of the directors of the company, and recognise and accept the appointment or removal of a director or directors by members of the company.
Issue of shares for non-cash consideration
Prior to the Amending Act, the 2004 Act required directors, before issuing shares for non-cash consideration, to pass a resolution stating: (i) the amount to be credited for the issue of shares; (ii) their determination of the reasonable present cash value of the non-cash consideration for the issue; and (iii) that, in their opinion, the present cash value of the non-cash consideration is not less than the amount to be credited for the issue of shares. The Amending Act removes requirement (ii).
Under the Amending Act, a bonus share issued by the company is deemed to be fully paid.
Surrender of shares
The Amending Act introduces an express provision that a company may acquire its own fully paid shares for no consideration by way of surrender of the shares. Any such surrender must be in writing and signed by the shareholder.
There are also changes relating to the execution of deeds; the register of charges; time scales for restorations; continuations; listed companies; and bearer share companies. There are also significant increases in the fines payable for breaches of the Act.
The information provided in this publication are put forward for further consideration only and are not intended to be acted upon without independent professional advice. Neither Jordans Trust Company Limited nor its associated group companies , nor any employees or directors of these companies can accept any responsibility or liability for any loss occasioned to any person no matter howsoever caused or arising as a result of or in consequence of action taken or not taken in reliance on the contents of this publication.