Amendments to the BVI Business Companies Act will take effect from 1 January 2023
1. Striking-off and dissolution
BVI companies may be struck off the Register of Companies (the “Register”) in a number of different circumstances but are most often struck because they have failed to pay their annual fees.
Under current legislation, a BVI company that is struck off the Register will not be immediately dissolved; rather it must remain struck off for a continuous period of 7 years before it is dissolved. During this period, the company will retain its legal status, but is incapacitated for 7 years, unless it is brought back to good standing.
However, the new legislation will streamline the rules regarding struck-off companies by abolishing the 7 year period. This means that all newly struck-off companies from 1 January 2023 will be dissolved immediately upon publication of the striking-off by the Registrar of Corporate Affairs (the “Registrar”). Brief transitional arrangements will apply to companies which are currently in a struck-off state.
2. Restoration of struck off and dissolved companies
For companies that are in a dissolved state, the process of restoration will change significantly. Under the current law, a dissolved company can only be restored by court order. Under the new legislation, a fast-track restoration process will be introduced. Such companies may be restored without the need to apply to Court, provided that such application is made within 5 years of the date of dissolution.
3. Publicly available director names
The names of a company’s current directors may be made available publicly on application to the Registrar via the online filing platform, VIRRGIN, of the BVI Financial Services Commission (“FSC”)Only registered users of VIRRGIN will be able to make such applications. There is expected to be an additional cost to the search.
All companies have been required to file their full and up-to-date Register of Directors with the Registrar on a private basis since 2016. Other information from the register of directors will remain private, such as dates of birth, addresses or former directors’ names. It is recommended that you ensure that your Register of Directors filings are correct and up-to-date.
4. Financial records and accounts
In addition to existing record keeping obligations, the new legislation requires BVI companies to provide certain financial information, in the form of an annual return, to their Registered Agents. It is expected to consist of a simple balance sheet and profit and loss statement, which will not need to be audited.
An annual return will need to be prepared for each financial year of the company and filed with the Registered Agents within nine months following the end of the financial year to which it relates. The Registered Agents will have an obligation to inform the FSC if it has not received the annual return within 30 days of the due date.
5. Liquidators must have physically lived in the BVI for at least 180 days
The new legislation will require voluntary liquidators must have physically lived in the BVI for at least 180 days, either continuously or in aggregate, prior to their appointment.
The authorities have also taken into account that the establishment of a local liquidator in the location of the company’s main business may bring foreign language or time zone advantages to the business, joint liquidators may also be appointed if only one liquidator meets the residency test.
6. Register of persons with significant control
The new legislation outlines a brief framework by which the BVI might in the future introduce a public register of persons with significant control. This is in line with the previous commitments by the BVI Government to introduce such a register by 2023, subject to certain caveats and qualifications.