The new International Business Companies Act, 2016 (the “2016 Act”) will, when it comes into force on 1 December 2016, introduce the concept of reserve directors in Seychelles.
The use of reserve directors has been prevalent in the BVI as part of succession planning since they were introduced in the BVI Business Companies Act, 2004.
Where a Seychelles IBC has only one member who is an individual and that member is also the sole director of the company, the 2016 Act will allow that sole member/director (the “Investor”) to nominate a reserve director to act in his place, as director, in the event of his death.
While a single person company can be helpful for the running and administration of a Seychelles IBC, it can present difficulties upon the death of the Investor. In the event of the death of the Investor, the company will not be able to operate for several months while the probate process is being completed.
The nomination of a reserve director is intended to overcome this difficulty by allowing the reserve director to immediately take up the running of the company, acting in place of the deceased director. As a result, the company will not be in limbo while probate is resolved.
The reserve director may resign at any time before the death of the Investor and the Investor may also revoke the nomination. In addition, the nomination will cease to have effect if the Investor ceases to be the sole director/member for any reason other than his death.
We believe that reserve directors are a very useful addition to Seychelles law, and we recommend that companies with an individual as the sole member/director should consider nominating one.
We can assist with the relevant paperwork and may also be able to act as a reserve director. For more information please contact Lee Moore by emailing firstname.lastname@example.org.