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BVI Business Companies Act, 2004

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LIQUIDATION, STRIKING-OFF AND DISSOLUTION

Division 1 - Liquidation

197. A company may only be liquidated under this Division if

(a) it has no liabilities; or

(b) it is able to pay its debts as they fall due.

198. (1) Where it is proposed to appoint a voluntary liquidator under this Division, the directors of the company shall

(a) make a declaration of solvency in the approved form stating that, in their opinion, the company is and will continue to be able to discharge, pay or provide for its debts as they fall due; and

(b) approve a liquidation plan specifying

(i) the reasons for the liquidation of the company,

(ii) their estimate of the time required to liquidate the company,

(iii) whether the liquidator is authorised to carry on the business of the company if he determines that to do so would be necessary or in the best interests of the creditors or members of the company,

(iv) the name and address of each individual to be appointed as liquidator and the remuneration proposed to be paid to each liquidator, and

(v) whether the liquidator is required to send to all members a statement of account prepared or caused to be prepared by the liquidator in respect of his actions or transactions.

(2) A declaration of solvency has no effect for the purposes of section

203(1)(d) unless

(a) it is made on a date no more than four weeks earlier than the date of the resolution to appoint a voluntary liquidator; and

(b) it includes a statement of the company’s assets and liabilities as at the latest practical date before the making of the declaration.

(3) A liquidation plan has no effect for the purposes of section 203(1)(e) unless it is approved by the directors no more than six weeks prior to the date of the resolution to appoint a voluntary liquidator.

(4) A director making a declaration of solvency under this section without having reasonable grounds for the opinion that the company is and will continue to be able to discharge, pay or provide for its debts in full as they fall due, commits an offence and is liable on summary conviction to a fine of $10,000.

199. (1) Subject to section 200, a voluntary liquidator may be appointed in respect of a company

(a) by a resolution of directors passed under subsection (2); or

(b) by a resolution of members passed under subsection (3).

(2) The directors of a company may, by resolution, appoint an eligible individual as the voluntary liquidator of the company

(a) upon the expiration of such time as may be specified in its memorandum or articles for the company’s existence;

(b) upon the happening of such event as may be specified in its memorandum or articles as an event that shall terminate the existence of the company;

(c) in the case of a company limited by shares, if it has never issued any shares; or

(d) in any other case

(i) if the memorandum or articles permit them to pass a resolution for the appointment of a voluntary liquidator, and

(ii) the members have, by resolution, approved the liquidation plan.

(3) The members of a company may, by resolution

(a) approve the liquidation plan; and

(b) appoint an eligible individual as the voluntary liquidator of the company.

(4) The following provisions apply to a members’ resolution under subsection (2)(d)(ii) or (3):

(a) holders of the outstanding shares of a class or series of shares are entitled to vote on the resolution as a class or series only if the memorandum or articles so provide;

(b) if a meeting of members is to be held, notice of the meeting, accompanied by a copy of the liquidation plan, shall be given to each member, whether or not entitled to vote on the liquidation plan; and

(c) if it is proposed to obtain the written consent of members, a copy of the liquidation plan shall be given to each member, whether or not entitled to consent to the liquidation plan.

(5) The Regulations may provide for descriptions or categories of individuals who are eligible to be appointed as the voluntary liquidator of a company under this section.

200. (1) In this section, the term “long term insurance company” has the meaning specified in section 237(1) of the Insolvency Act.

(2) A voluntary liquidator shall not be appointed under this Division in respect of a long term insurance company and any appointment made in contravention of this subsection is void and of no effect.

(3) A resolution to appoint a voluntary liquidator shall not be passed under subsection 199 by the directors or members of a company that is a regulated person, other than a long term insurance company, unless the Commission has

(a) given its prior written consent to the company being put into voluntary liquidation; and

(b) approved the appointment of the individual proposed as voluntary liquidator.

(4) Any resolution passed in contravention of subsection (3)(a) and any appointment of a liquidator who has not been approved by the Commission under subsection (3)(b) is void and of no effect.

201. (1) The Commission may, at any time during or after the completion of the voluntary liquidation of a regulated person, require the liquidator to produce for inspection, at such place as it may specify

(a) his records and accounts in respect of the liquidation; and

(b) any reports that he has prepared in respect of the liquidation.

(2) The Commission may cause the accounts and records produced to it under subsection (1) to be audited.

(3) The voluntary liquidator of a regulated person shall give the Commission such further information, explanations and assistance in relation to the records, accounts and reports as the Commission may require.

202. The liquidation of a company under this Division commences at the time at which a voluntary liquidator is appointed under section 199 and continues until it is terminated in accordance with section 207A or section 208 and throughout this period, the company is referred to as being in voluntary liquidation.

203. (1) A voluntary liquidator may not be appointed under section 199 by the directors or the members of a company if

(a) an administrator or liquidator of the company has been appointed under the Insolvency Act;

(b) an application has been made to the Court to appoint an administrator or a liquidator of the company under the Insolvency Act and the application has not been dismissed;

(c) the person to be appointed voluntary liquidator has not consented in writing to his appointment;

(d) the directors of the company have not made a declaration of solvency complying with section 198; or

(e) the directors have not approved a liquidation plan under section 198(1)(b).

(2) A resolution to appoint a voluntary liquidator under this Part in the circumstances referred to in subsection (1) is void and of no effect.

(3) Where a voluntary liquidator is appointed under this section, the directors or the members, as the case may be, shall, as soon as practicable, give the liquidator notice of his appointment.

204. Where a voluntary liquidator is appointed under section 199 the liquidator shall,

(a) within fourteen days of the commencement of the liquidation, file the following documents:

(i) a notice of the his appointment,

(ii) the declaration of solvency made by the directors, and

(iii) a copy of the liquidation plan; and

(b) within thirty days of commencement of the liquidation, advertise notice of his appointment in the manner prescribed.

205. (1) Subject to subsections (2) and (3), with effect from the commencement of the voluntary liquidation of a company,

(a) the voluntary liquidator has custody and control of the assets of the company; and

(b) the directors of the company remain in office but they cease to have any powers, functions or duties other than those required or permitted under this Part.

(2) Subsection (1)(a) does not affect the right of a secured creditor to take possession of and realise or otherwise deal with assets of the company over which the creditor has a security interest.

(3) Notwithstanding subsection (1)(b), the directors, after the commencement of the voluntary liquidation, may

(a) authorise the liquidator to carry on the business of the company if the liquidator determines that to do so would be necessary or in the best interests of the creditors or members of the company where the liquidation plan does not give the liquidator such authorisation; and

(b) exercise such powers as the liquidator, by written notice, may authorise them to exercise.

206. (1) The principal duties of a voluntary liquidator are to

(a) take possession of, protect and realise the assets of the company;

(b) identify all creditors of and claimants against the company;

(c) pay or provide for the payment of, or to discharge, all claims, debts, liabilities and obligations of the company;

(d) distribute the surplus assets of the company to the members in accordance with the memorandum and articles;

(e) prepare or cause to be prepared a statement of account in respect of the actions and transactions of the liquidator; and

(f) send a copy of the statement of account to all members if so required by the liquidation plan required by section 198(1)(b).

(2) A transfer, including a prior transfer, described in section 28(3) of all or substantially all of the assets of a company incorporated under this Act for the benefit of the creditors and members of the company, is sufficient to satisfy the requirements of subsection (1)(c) and (d).

207. (1) In order to perform the duties imposed on him under section 206, a voluntary liquidator has all powers of the company that are not reserved to the members under this Act or in the memorandum or articles, including, but not limited to, the power

(a) to take custody of the assets of the company and, in connection therewith, to register any property of the company in the name of the liquidator or that of his nominee;

(b) to sell any assets of the company at public auction or by private sale without any notice;

(c) to collect the debts and assets due or belonging to the company;

(d) to borrow money from any person for any purpose that will facilitate the winding-up and dissolution of the company and to pledge or mortgage any property of the company as security for any such borrowing;

(e) to negotiate, compromise and settle any claim, debt, liability or obligation of the company;

(f) to prosecute and defend, in the name of the company or in the name of the liquidator or otherwise, any action or other legal proceedings;

(g) to retain solicitors, accountants and other advisers and appoint agents;

(h) to carry on the business of the company, if the liquidator has received authorisation to do so in the plan of liquidation or from the directors under section 205(3)(a), as the liquidator may determine to be necessary or to be in the best interests of the creditors or members of the company;

(i) to execute any contract, agreement or other instrument in the name of the company or in the name of the liquidator; and

(j) to make any distribution in money or in other property or partly in each, and if in other property, to allot the property, or an undivided interest therein, in equal or unequal proportions.

(2) Notwithstanding subsection (1)(h), a voluntary liquidator shall not, without the permission of the Court, carry on the business of a company in voluntary liquidation for a period of more than two years.

207A. (1) The Court may, at any time after the appointment of a voluntary liquidator under section 199, make an order terminating the liquidation if it is satisfied that it would be just and equitable to do so.

(2) An application under subsection (1) may be made by the voluntary liquidator or by a director, member or creditor of the company.

(3) Before making an order under subsection (2), the Court may require the voluntary liquidator to file a report with respect to any matters relevant to the application.

(4) An order under subsection (1) may be made subject to such terms and conditions as the Court considers appropriate and, on making the order or at any time thereafter, the Court may give such supplemental directions or make such other order as it considers fit in connection with the termination of the liquidation.

(5) Where the Court makes an order under subsection (1), the company ceases to be in voluntary liquidation and the voluntary liquidator ceases to hold office with effect from the date of the order or such later date as may be specified in the order.

208. (1) A voluntary liquidator shall, upon completion of a voluntary liquidation, file a statement that the liquidation has been completed and upon receiving the statement, the Registrar shall

(a) strike the company off the Register of Companies; and

(b) issue a certificate of dissolution in the approved form certifying that the company has been dissolved.

(2) Where the Registrar issues a certificate of dissolution under subsection

(1), the dissolution of the company is effective from the date of the issue of the certificate.

(a) (Repealed)

(b) (Repealed)

(3) Immediately following the issue by the Registrar of a certificate of dissolution under subsection (1), the person who, immediately prior to the dissolution, was the voluntary liquidator of the company shall cause to be published in the Gazette, a notice that the company has been struck off the Register of Companies and dissolved.