The following are some key changes introduced pursuant to the BVI Business Companies (Amendment) Act, 2012 and the BVI Business Companies Regulations, 2012:
Solvent Voluntary Liquidations
Liquidator
Any person who has during the two years prior to commencement of the liquidation been a director or employed in the
management of the company or any close relative of such person is no longer permitted to act as a liquidator.
Advertising
In addition to advertising the liquidation in the BVI, a liquidator must now advertise in the location of the company’s
principal place of business, and if the company has no principal place of business, in the location where the liquidator believes that it is most likely to come to the creditors’ attention.
Solvency declaration
Formerly directors had to make a solvency declaration on a cash flow basis. This has now been widened to include a declaration of balance sheet solvency.
It is now expressly permitted to file an extract of the declaration of solvency (i.e. without the names of the company’s
directors). The company’s registered agent is required to certify that it is an accurate extract and that only the
names and the signatures of the directors are excluded from it.
Commencement
Previously, the liquidation formally commenced on the appointment of a liquidator. This has been changed to the date of the filing of the notice of appointment of the liquidator (which must be made within 14 days of the date of the
liquidator’s appointment).
Striking Off and Dissolution
Previously, a company that had been struck off the register of companies was deemed dissolved after 10 years. This period has been reduced to seven years. In addition, any person who has an interest in having a company restored may now apply to restore the company to the register.
Security
A BVI-law governed charge or mortgage over BVI shares is no longer required to include a moratorium period, and can therefore provide that remedies are available immediately on enforcement.
Directors
Alternate Directors
Changes have been made expressly to permit alternate directors to sign written resolutions in addition to attending and
voting at board meetings. In addition, the procedure for appointment and removal of alternate directors has been
clarified.
Removal of Directors
A drafting error in the BCA has been amended so that subject to a company’s memorandum and articles of association a director may be removed by a resolution passed by the holders of 75% (by number of shares held) of the voting shareholders (rather than 75% of the shareholders).
Director Resolution
Previously, there was no definition of a director’s resolution in the BCA (although typically this would be defined in a company’s memorandum and articles of association). Now, the default position is that all the directors must sign a written resolution and a resolution passed at a meeting must be approved by a majority of the directors.
First Directors
If the first appointed director of the company resigns, dies or ceases to exist before any shares have been issued, the registered agent now has the power to appoint one or more replacement directors.
Shares and Shareholders
In addition to being able to restrain the directors of a company prior to a breach of the BCA or the company’s memorandum and articles of association, the court now has a power to make a restraining order or to order that the company or directors comply with the BCA or the memorandum and articles of association after any such breach has occurred. Interpreted widely, this may in certain circumstances give the court the power to set aside transactions.
The BCA now expressly provides that shares of one class or series may provide for conversion into another class or series.
Company Names
The most significant change is to allow for the re-use of company names in certain circumstances (for example where a company has changed its name, continued to another jurisdiction or been dissolved).
Segregated Portfolio Companies
The BCA now makes specific provision for the termination of segregated portfolios which no longer have any assets and
liabilities and a procedure to reinstate such portfolios has now also been introduced.
Key contacts:
Catherine Ross, Partner
+44 (0) 207 0143 224
Karen Gilbert, Senior Associate
+44 (0) 207 0143 225
