The BVI Business Companies Act “BCA” was introduced in 2004 and consists of various components. Each section covers a specific topic related to business corporations, such as incorporation, director responsibilities, meetings, accounts, and dissolution. The BCA also provides definitions for terms that are used frequently throughout the law.
BVI BUSINESS COMPANIES ACT 2024
Incorporation
The requirements for incorporating a BVI business are outlined in the BCA. This entails submitting specific paperwork, paying related costs, and disclosing fundamental details about the business, such as its name, objective, and board of directors. Additionally, the BCA mandates that BVI firms have a registered office and at least one BVI resident director. Refer to BVI company registration for more information.
Administration
Financial reporting
In order to be presented at the AGM, BVI corporations must provide financial reports. Additionally, BVI corporations are required to retain books of accounts and financial records and to make them available to shareholders upon request.
Annual filing
The BVI Registry of Corporate Affairs is where BVI businesses must file annual returns and other periodic documentation according to the BCA. This comprises reports on any significant changes in the BVI commercial affairs, financial statements, audited accounts, economic substance filings, and economic substance submissions.
Corporate governance
The BCA provides the duties of directors, members, and executive officers as well as the framework for corporate governance.
Director responsibilities and liabilities
A minimum of one director, who can be an individual or a corporate body, is required for BVI firms. This director must be involved in the management, accounting, and financial reporting of the BVI business. Directors can be held accountable for breaking their fiduciary duty to operate in the company’s best interests. Additionally, BVI corporations are required to have at least one officer in charge of day-to-day operations.
Shareholder rights
On shareholder rights and obligations, the BCA offers comprehensive information. This includes the ability to vote, receive dividends or other payments, view the BVI business records, and agree to certain BVI corporate resolutions. Additionally, BVI corporations must make sure that they have detailed records of their shareholders’ rights and duties.
Meetings and resolutions
Resolutions and corporate meetings are covered under the BCA. AGMs must be held at least once a year by BVI firms, either in person or online. Businesses in the BVI may also adopt written resolutions in place of formal meetings.
Liquidation and dissolution
If specific conditions are met, BVI firms may be subject to either voluntary liquidation or dissolution or involuntary liquidation or dissolution. The BVI courts are in charge of enforcing the BCA’s clear and transparent procedure for liquidation and dissolution.
IMPORTANT AMENDMENTS TO THE BVI AMENDMENT ACT 2023
The updated guidelines became effective on January 1, 2023.
Director information disclosure
From January 1, 2023, a company search at the BVI Registry of Corporate Affairs (the “BVI Registry”) will make the identities of directors of BVI companies publicly accessible. In other words, upon receiving payment of the required fees, the BVI Registry will release the names of the present directors to other parties. However, sensitive personal information of the directors and information on past directors before the BVI Amendment Act’s effective date in 2022 won’t be made available to the public.
Earlier, a BVI company’s directors had registered their names, addresses, birthdates, and nationalities with the BVI Registry. However, this data was not searchable by the general public and can only be given to a third party with the company’s permission by the registered agent.
Abolition of bearer shares
The bearer shares system is totally eliminated by the BVI Amendment Act 2022. All outstanding bearer shares shall be deemed converted to registered shares on January 1, 2023.
In fact, the issuing of new bearer shares was restricted as of January 1, 2010. However, given that they are kept by a licensed custodian and are subject to specific record-keeping requirements, bearer shares issued prior to 2010 have continued to be legitimate.
New procedure for striking off, dissolution, and restoration
Any BVI corporation that is struck off by the BVI Registry (often for failing to pay government fees) will only have a maximum 90-day grace time to correct the default act and restore to normal status as of 1 January 2023. If the firm has not been reestablished after this 90-day grace period, it will be regarded as having been dissolved. This grace period can last up to seven years at the moment.
A new, more efficient procedure is now available to reinstate the automatically disbanded firm. Within five years of the date of its automatic dissolution, a company that has been struck off may petition to the BVI Registry for restoration, provided that all of the records related to its shareholders and directors are accurate and in good standing. Furthermore, the registered agent must consent to and carry out such a quick restoration process.
The applicable period has been lowered from seven years to five years following the automatic dissolution date. However, the automatically dissolved firm may still appeal to the High Court to have the company restored.
It should be noted that certain transitional rules will apply to businesses that are struck off before January 1, 2023, but have not yet been resolved (and are therefore still in a grace period awaiting the restoration of status). If such companies are not reinstated before July 1, 2023, they will be automatically disbanded. The BVI Registry will not accept applications for the simplified process from these automatically dissolved entities in order to reinstate their normal status. Instead, they must go through the more expensive legal process and risk penalty from the BVI Registry.
New requirements of financial reporting and record keeping
According to the BVI Amendment Act 2022, BVI businesses must deliver their annual financial reports to their registered agent nine months after the end of the fiscal year. All businesses must comply with this rule; listed businesses, regulated organizations, and BVI taxpayers are exempt. The annual return format has not been decided, but it is anticipated to include a balance sheet and a profit and loss statement, neither of which must be audited.
The information submitted to the registered agent will not be disclosed to the public, and the registered agent is not required to provide the information to any authorities or BVI government agencies.
If an annual return is not filed within 30 days of the filing deadline, the registered agent will be required to notify the BVI Financial Services Commission. Additionally, they must keep the annual report for at least five years after they stop serving as the company’s registered agent.
Reach out to us at Relin Consultants for more information about the BVI Business Companies Act.
FAQs
Do BVI corporations have to submit accounts?
Annual financial reports for businesses must be submitted to the registered agent within nine months of the due date.
How do liquidation and BVI strike off differ from one another?
Even if a corporation may still have assets and debts and be actively conducting business, it is possible for it to be administratively removed from the Register. A company that has been administratively stricken from the Register will not be dissolved for another 10 years, but a corporation that has been liquidated is instantly dissolved.
Do BVI businesses pay taxes?
Regardless of their income source, BVI Business Companies are not subject to any taxes.
Do BVI corporations have to hold annual general meetings?
A BVI corporation is not required by law to hold an AGM after it is established. Meetings of shareholders may be held over the phone or using other technology, both inside and outside the British Virgin Islands.
Do BVI corporations file annual returns?
With effect from 1 January 2023, BVI firms will be required to file an annual return (also known as a financial return) with their registered agent under the BVI Business firms Act .
