BVI Company Law - BVI Business Companies Act 2004
The BVI’s International Business Companies Act has become one of the most widely-used corporate statutes with over six hundred thousand IBCs incorporated under it. The new corporate statute for the BVI called the BVI Business Companies Act 2004 came into force on 1 January 2005. This single statute allows for the incorporation of international offshore companies.
Guide to the New BVI Business Companies Act
Companies regulated by the Act are required to use a corporate suffix. Limited companies must end their name with either “Limited”, “Corporation”, “Incorporated”, “Societe Anonyme”, “Sociedad Anonima”, and their respective abbreviations such as “Ltd”, “Corp”, “Inc” and “S.A.”
Your BVI company name cannot be the same as another BVI company’s name, or be offensive. The BVI Business Companies Act new regulations provide for the use of foreign character names which must also be approved by the Registrar.
Division 3 – Company Names
17. (1) Subject to subsections (3), (4), (5) and (6), the name of a limited company shall end with
(a) the word “Limited”, “Corporation” or “Incorporated”;
(b) the words “Societe Anonyme” or “Sociedad Anonima”;
(c) the abbreviation “Ltd”, “Corp”, “Inc” or “S.A.”;
Memorandum and Articles
The Memorandum and Articles are the company’s corporate constitution and together with the BVI legislation regulate the relationship between the IBC company, its shareholders and the directors. The Memorandum and Articles contains the name and type of company, its registered office, and the name and address of the registered agent.
In the BVI Business Companies Act there is no requirement to state the company objects or purposes in the Memorandum of Association. A company can however decide to state its objects or purposes but, is not required to do so.
Division 2 – Memorandum and Articles
9. (1) The memorandum of a company shall state
(a) the name of the company;
(b) whether the company is
(i) a company limited by shares,
(ii) a company limited by guarantee that is not authorised to issue shares,
(iii) a company limited by guarantee that is authorised to issue shares,
(iv) an unlimited company that is not authorised to issue shares, or
(v) an unlimited company that is authorised to issue shares;
(c) the address of the first registered office of the company;
(d) the name of the first registered agent of the company;
(e) in the case of a company limited by shares or otherwise authorised to issue shares
A BVI company must have at least one director and it must keep a register of directors. The BVI Business Companies Act provides that the business affairs of the company are managed by, or under supervision of, the directors, but subject to any limitations specified within the memorandum and articles.
Division 1 – Management by Directors
109. (1) The business and affairs of a company shall be managed by, or under the direction or supervision of, the directors of the company.
(2) The directors of a company have all the powers necessary for managing, and for directing and supervising, the business and affairs of the company.
(3) Subsections (1) and (2) are subject to any modifications or limitations in the memorandum or articles.
(4) Subject to subsection (4A), a company shall, at all times, have one or more directors.
(4A)Subsection (4) does not apply during the period between the incorporation of the company and the appointment of the first directors by the registered agent under section 113(1).
(5) Subject to subsection (4), the number of directors of a company may be fixed by, or in the manner provided in, the articles of the company.
(6) If at any time a company does not have a director, any person who manages, or who directs or supervises the management of, the business and affairs of the company is deemed to be a director of the company for the purposes of this Act.
The BVI Business Companies Act specifies the rights that the shareholders have, namely, the right to one vote, the right to an equal share of any dividend, and the right to an equal share in the distribution of surplus asset. These rights can be varied by the companies Memorandum and Articles.
With limited liability IBC companies in the BVI the shareholders are not liable for the debts or obligations of the company, they are only liable for the amount unpaid on their shares and as may be specified in the Memorandum and Articles.
Division 1 - General
41. (1) A company shall keep a register of members containing, as appropriate for the company,
(a) the names and addresses of the persons who hold registered shares in the company;
(b) the number of each class and series of registered shares held by each shareholder;
(c) in the case of a shareholder who holds bearer shares, the total number of each class and series of bearer shares held;
(2) The register of members may be in such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the company must be able to produce legible evidence of its contents.
Share Capital and Shares
In the BVI there is no concept of authorised share capital for companies, and companies authorised to issue shares must state only the maximum number of shares they are authorised to issue.
Division 2 - Issue of Shares45. Subject to this Act and to the memorandum and articles, shares in a company may be issued, and options to acquire shares in a company granted, at such times, to such persons, for such consideration and on such terms as the directors may determine.