The British Virgin Islands have a new Company Law

The British Virgin Islands have a new Company Law
January 20th, 2006

Oller Abogados wishes to inform clients of recent amendments to the BVI Business Companies Act of 2004 ("the Act"). The British Virgin Islands have therefore replaced the International Business Companies Act of 1984.

Of the utmost importance for our clients with companies formed under the former legislation is the fact that they can (a) Embrace the changes and therefore amend their memoranda and articles of incorporation pursuant to this new piece of legislation or, (b) Expect the changes to be adopted automatically, pursuant to re-registration, on January, 1st 2007.

There are other miscellaneous innovations, amongst which we would like to point out:

  1. New Companies: The Act allows the formation of previously unavailable companies such as: Segregated portfolio companies, companies limited by guarantee and restricted purpose companies.
  2. Shares:
    1. No value is to be assigned to the undersigned shares, only the number of outstanding shares issued.
    2. Classes of shares are to be identified and expressly allowed.
  3. Board of Directors:
    1. Directors, even a single director, must be appointed within six months.
    2. Reserve directors - i.e. those acting on behalf of single shareholders who jointly act as single directors - can be appointed but designation, and acceptance, must be in writing.
    3. Subsidiary directors may, if authorized in writing, act in the best interest of the holding company notwithstanding the interests of the subsidiary company.
  4. Purpose: There are no requirements for stating the company's purpose in the articles of incorporation. There is full flexibility in this regard.
  5. Records: Specifically designated records are to be kept in the British Virgin Islands, these are:
    1. Memorandum and articles of incorporation.
    2. Register of members.
    3. Register of directors
    4. Copies of registration and notices made by the company with the Registrar of Corporate Affairs for a period of up to ten previous years.
    The company should also maintain minutes for the shareholder and director meetings. However, the company need not keep or prepare financial statements. In this regard, the Act states the company shall maintain records sufficient to evidence the company's transactions and to enable the financial position of the company with reasonable accuracy.

Further information can be obtained by contacting us