IBC’s

BVI BC’s

Applicable Law

International Business Companies Act, 1984 (CAP. 291) (“the IBC Act”), as amended from 1988 to 2004.  This Act regulates IBC’s.

BVI Business Companies Act, 2004 (No. 16 of 2004), as amended in 2005 (“the BVI BC Act”).
Note:  The BVI BC Act replaces the existing regimes, which govern the IBC’s and the BVI Domestic Companies known as CAP 285.

Types of Companies

An IBC may only be incorporated as a company limited by shares.

A BVI BC may be incorporated as

• 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;
• a segregated portfolio company.
• a restricted purpose company.

Note:  A statement of the type of BVI BC must be included in the Memorandum of Association.  We will provide further information concerning each type of BVI BC upon request.

Limitations

An IBC cannot carry out businesses with persons resident in the BVI, except if special circumstances apply.

There is no limitation on the business that the BVI BC may carry out within or outside BVI.

Liabilities

If at any time there is no member of an IBC, any person doing business in the name of or on behalf of the IBC shall be personally liable for the payment of all the company’s debts contracted during the time, and such person may be sued therefore without joinder in the proceeding of any other person. 

There is no liability against the members of a BVI BC unless a shareholder owes for any amount of the shares held by the shareholders.  No director, agent or voluntary liquidator is liable for any debts, obligations or default of the BVI BC, except in so far as he/she may be liable for his/her own conduct or acts.  If at any time there is no member of a BVI BC, any person doing business in the name of or on behalf of the BVI BC shall be personally liable for the payment of all BVI BC’s debts contracted during the time and such person may be sued therefore without joinder in the proceedings of any other person. We therefore strongly recommend the issuance of shares upon incorporation of a BVI BC.

Name Ending

The name of the IBC may be in any language and must end in the word “Limited,” “Corporation,”“Incorporated,” “Société Anonyme” or “Sociedad Anónima,” or the abbreviations “Ltd.,” “Corp.,” “Inc.,” or “S.A.”. 

• The name of a limited company, shall end with the word “Limited”, “Corporation” or “Incorporated”; the words “Societe Anonyme” or “Sociedad Anonima”; the abbreviation “Ltd”, “Corp”, “Inc” or “S.A.”; or such other word or words, or abbreviations thereof, as may be specified in any Regulations adopted by the BVI Government.
• The name of an unlimited company shall end with the word “Unlimited” or the abbreviation “Unltd”.
• The name of a restricted purposes company shall end with the phrase “(SPV) Limited” or the phrase “(SPV) Ltd”.
• The name of a segregated portfolio company shall include the designation “Segregated Portfolio Company Limited” or “SPC” placed immediately before one of the endings specified above, or a permitted abbreviation thereof.  The name of a segregated portfolio company that is a restricted purposes company shall include the designation “(SPV)” immediately before or immediately after the designation specified above.
• Where the abbreviation “Ltd”, “Corp” or “Inc” is used, a full stop may be inserted at the end of the abbreviation.

A BVI BC may use, and be legally designated by, either the full or the abbreviated form of any word or words required as part of its name under this section.

Company number as company name

Not applicable

The name of a BVI BC may comprise the expression “BVI Company Number” followed by its company number in figures and the ending required, as specified above, that is appropriate for the BVI BC.

Foreign character name

Not applicable.

A BVI BC may have an additional foreign character name approved by the Registrar of Corporate Affairs (“the Registrar”).)

Restrictions on company names

• The words “Assurance,” “Bank,” “Building Society,” “Chamber of Commerce,” “Chartered,” “Cooperative”, “Imperial,” “Municipal,” “Royal,” “Trust Company” and “Trustee Company” or any word conveying a similar meaning, cannot be used except with the approval in writing of the Registrar of BVI.
• “Insurance,” “Insurance Agents,” “Insurance Brokers,” or “Insurance Holding” may be allowed. 
• Any name identical to that of an IBC already existing or suggesting the patronage of Her Majesty or that of a member of the Royal Family, or a connection with Her Majesty's Government or a department thereof, or with a municipality or other local authority, or with a society or body incorporated by Royal Charter, cannot be used.

No BVI BC shall be registered, whether on incorporation, continuation, merger or consolidation under a name -

• whose use would contravene another enactment or the Regulations;
• that is identical to the name under which a BVI BC is or has been registered under the BVI BC Act or whose use would, in the opinion of the Registrar, be likely to confuse or mislead;
• that contains a restricted word or phrase (list must be published in the Gazette), unless the Commission has given its prior written consent to the use of the word or phrase; or
• that, in the opinion of the Registrar, is offensive or, for any other reason, objectionable.

Object Clause

It was mandatory to set the objects or purposes in the IBC’s M&AA. 

There is no requirement to specify the purposes of the BVI BC in the M&AA.

Authorised Share Capital

The M&AA of an IBC must state the maximum number of shares that the IBC is authorised to issue, and its classes, rights and privileges and if the IBC is able to issue fractional shares and/or bearer shares.  Regarding the latter, the IBC is subject to the appointment of a Custodian for its bearer shares.

There is no concept of authorised capital or authorised share capital in the BVI BC.
In case a BVI BC is authorised to issue bearer shares, the BVI BC shall be subject to the appointment of a Custodian for its bearer shares.
If a BVI BC is limited by a guarantee, the M&AA shall state the amount which each guaranteed member of the BVI BC is liable to contribute to the BVI BC’s assets in the event a voluntary or an Insolvency Act liquidator is appointed whilst he is a member.

Share Register or Register of Members

A copy of the Share Register, commencing from the date of the registration of the IBC, shall be kept at the Registered Office of the IBC.  This register may be in any such form as the directors may approve, but if it is in magnetic, electronic or other data storage form, the IBC must be able to produce legible evidence of its contents.

• A BVI BC shall keep the Register of Members, or a copy of the Register of Members, at the office of its registered agent. This register may be in such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the BVI BC must be able to produce legible evidence of its contents.
• Where a BVI BC keeps a copy of the Register of Members at the office of its registered agent, it shall within 15 days of any change in the register, notify the registered agent in writing, of the change; and provide the registered agent with a written record of the physical address of the place or places at which the original Register of Members is kept.
• Where the place at which the original Register of Members is changed, the company shall provide the registered agent with the physical address of the new location of the records within 14 days of the change of location.

Directors

There must be at least one director who is appointed initially by the subscriber of the M&AA.  The director can be an individual or a company.  Directors need not be residents of BVI.  An IBC is not obliged to file the names of the directors at any public registry, although it may choose to do so.

Same.
Where a BVI BC has only one member who is an individual and that member is also the sole director of the BVI BC, notwithstanding anything contained in the M&AA, that sole member/director may, by instrument in writing, nominate a person who is not disqualified from being a director of the BVI BC as a reserve director of the BVI BC to act in the place of the sole director in the event of his death.

Register of Directors

An IBC shall keep a Register of Directors, of which a copy, commencing from the date of the registration of the IBC, shall be kept at the Registered Office of the IBC. This register may be in such form as the directors approve, but if it is in magnetic, electronic or other data storage form, the IBC must be able to produce legible evidence of its contents.

• A BVI BC shall keep a Register of Directors, or a copy of the Register of Directors, at the office of its registered agent.  This register may be in such form as the directors approve, but if it is in magnetic, electronic or other data storage form, the BVI BC must be able to produce legible evidence of its contents.
• Where a BVI IBC keeps a copy of the Register of Directors at the office of its registered agent, it shall within 15 days of any change in the register, notify the registered agent in writing, of the change; and provide the registered agent with a written record of the physical address of the place or places at which the original Register of Directors is kept.

Where the place at which the original Register of Directors is changed, the BVI BC shall provide the registered agent with the physical address of the new location of the records within 14 days of the change of location.

Books and Records

The IBC shall keep such accounts and records as the directors consider necessary or desirable in order to reflect the financial position of the IBC.  Such accounts and records shall be kept at the registered office of the IBC or at such other place as the directors may determine.

A BVI BC shall keep the following records at the office of its registered agent or at such other place or places, within or outside the BVI, as the directors may determine:

• Minutes of meetings and resolutions of members and of classes of members.
• Minutes of meetings and resolutions of directors and committees of directors.

Where any records specified above are kept at a place other than at the office of the BVI BC’s registered agent, the BVI BC shall provide the registered agent with a written record of the physical address of the place or places at which the records are kept.  Where the place at which any records specified above is changed, the BVI BC shall provide the registered agent with the physical address of the new location of the records within 14 days of the change of location.
Also, the BVI BC shall keep records that are sufficient to show and explain the BVI BC’s transactions; and will, at any time, enable the financial position of the BVI BC to be determined with reasonable accuracy.
The records required to be kept by a BVI BC under the BVI BC Act shall be kept in written form; or either wholly or partly as electronic records complying with the requirements of the Electronic Transactions Act.

Powers of Attorney

The directors of an IBC may grant a special or general power of attorney to any person, whether connected or not with the company, named “the Agent”. 

The directors may appoint any person, including a person who is a director, to be an agent of the BVI BC.  Subject to the M&AA of the BVI BC, an agent of the BVI BC has such powers and authority of the directors as are set forth in the articles or in the resolution of directors appointing the agent, except that no agent shall have any power or authority to amend the M&AA; to change the registered office or agent; to designate committees of directors; to delegate powers to a committee of directors; to appoint or remove directors; to appoint or remove an agent; to fix emoluments of directors; to approve a plan of merger, consolidation or arrangement; to make a declaration of solvency or to approve a liquidation plan; or to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the Virgin Islands.

IBC’s

BVI BC’s

Companies authorised to issue Registered Shares only

Companies authorised to issue Registered Shares and Bearer Shares

US$1,100.00 irrespective of authorised capital.

Note:  The annual fee payable by an IBC that, on the 31st December 2004, was not prohibited by its M&AA from issuing bearer shares is

Additional transitional provisions shall apply.

IBC’s

BVI BC’s

General

A company incorporated under the Companies Act (CAP. 285) or under the laws of a jurisdiction outside the BVI (foreign company) may continue (permanently or provisionally) as an IBC if it fulfills the requirements prescribed by the IBC Act.

A foreign company may continue as a BVI BC if the laws of the jurisdiction in which it is registered permit it to continue in another jurisdiction, subject to BVI limitations.

Required Documents/ Information

Note: A foreign company may not continue as a company incorporated under the BVI BC Act if it is in liquidation or insolvency proceedings; if a receiver or manager has been appointed in relation to any of its assets; if it has entered into an arrangement with its creditors, that it has not concluded; or if an application for its liquidation is being processed by a Court outside the foreign company’s jurisdiction.

Effects of Continuation

IBC’s

This exemption does not apply to an instrument relating to the transfer to or by a BVI BC of an interest in land situate in the BVI; or transactions in respect of the shares, debt obligations or other securities of a land owning company (i.e. if its subsidiaries, have an interest in any land in the BVI.)