New BVI Business Companies Act expected by year end
A Bill to amend the BVI Business Companies 2004 (the BC Act) has been introduced in the BVI’s House of Assembly. The Bill, and the BVI Business Companies Regulations 2012 (“Regulations”), have also been published in the official BVI Gazette.
The resulting BVI Business Companies (Amendment) Act 2012 (Amendment Act), along with the Regulations, are expected to come into force towards the end of this year.
The Amendment Act and Regulations are the result of the first comprehensive review of the BC Act since it came into operation seven years ago. While most of the reforms are relatively minor and uncontroversial, the reforms as a package have been designed with the input of the private sector to ensure that the BVI maintains its position as the leading domicile for international business companies. There are currently close to 500,000 active BVI business companies.
While Appleby is to publish a comprehensive guide to the reforms once implemented, the firm has outlined the key changes which are expected to be made through the Amendment Act and Regulations:
Foreign Character Names: The Regulations set out in detail provision for the registration of an additional foreign character name for a BVI company, and will require a notarised statement by a “person with the necessary competence” confirming the translation and meaning of the foreign character name when applying for registration.
Reuse of Company Names: The Regulations provide that a company name will be available for re-use, inter alia, once that BVI company has been dissolved, or continues out of the BVI to another jurisdiction (at any time after the expiry of a period of seven years from the date of the certificate of discontinuance).
Company Names Generally: The Amendment Act will make it clear that the Registrar, when considering whether to allow a company name, is not to be concerned with the legal rights any person has to the name or to the use of the names— whether this arises out of trade or service mark legislation in the BVI or elsewhere, or under common law.
Bulk Change of Registered Office and Registered Agent: The Amendment Act will address a problem that has arisen when a BVI company’s registered agent changes the address of its office in the BVI. The Amendment Act will permit the bulk changing of registered office and the address of the registered agent through a filing by the registered agent, without the need for a resolution or separate notices to be filed by each company. Further, once the registered agent files notice with the Registry of a change of its principal office, a company’s Memorandum of Association will be deemed to be amended to state the changed address of the registered agent’s principal office. The Amendment Act also provides for a deemed amendment to a company’s Memorandum of Association where its registered agent changes its own company name.
Alternate Directors: The Amendment Act will provide alternate directors with the power to sign written resolutions, and confirm that alternates have the responsibilities of a director under law when acting as alternate directors.
Registration of Charges: The Amendment Act will provide that an application to register a charge against a BVI company’s assets by a chargee (or a person authorised to act on the chargee’s behalf) may only be filed by a person qualified to act as a registered agent in the BVI or by a legal practitioner in the BVI, who is acting on behalf of the chargee or authorised person. Further, chargees outside the BVI who apply to register a charge in the BVI will be required to designate a person located in the BVI to receive copies of notices from the Registrar.
Voluntary Liquidation: Under the Amendment Act, the liquidation of a solvent BVI company will commence on the registration with the Registry of a notice of appointment by the voluntary liquidator, rather than at the time of resolution to appoint the voluntary liquidator. Further, the Regulations provide that BVI companies which are regulated entities (e.g. banks; trust companies; certain insurance companies that are BVI business companies; money services companies and insurance intermediaries and managers, but not funds) will be required to appoint a licensed insolvency practitioner as voluntary liquidator.
Dissolution: Under the Amendment Act, an application to restore a BVI company (by paying the outstanding license fees, etc.) will need to be made within seven years of the company being struck off, rather than the current ten years, before the company will be dissolved.
Listed Company and Funds Regulations: The Amendment Act will also enable regulations to be made to exclude or modify the provisions of the BC Act in relation to listed BVI companies and BVI companies operating as funds.
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