BVI passes amendments to Business Companies Act

On July 26, the British Virgin Islands (BVI) published the BVI Business Companies (Amendment) Act, 2012. This Act is an amendment to the original act passed in 2004. The main purpose of this amendment is to develop and maintain a sustainable and flexible legislative framework which will in turn help to keep the BVI in its position as a leading domicile for international corporations.

Although the BVI has published the Amendment Act in its Official Gazette, no date has yet been set for when the Act enters into force.

The following are key elements included in the amendments:

Removal of Foreign Company: The Amendment clarifies the circumstances in which a foreign company may be removed from the Register of Foreign Companies

Director’s Resolutions: The Amendments state that a written resolution of the directors may be passed by a majority of the directors

Registered Agents: The Amendment states that if a Company does not have a registered agent, a new registered agent can be appointed by the members or the directors. The amendment also specifies rules and regulations regarding the change of name, change of address, resignation or change of eligibility of Registered Agents

Re-use of Company names: The high number of companies that have been incorporated in the BVI has caused an issue in the availability of company names. In order to alleviate this issue, the Amendment allows for the reutilization of company names, as long as certain conditions are met.

Foreign Character Names: Regulations have been formalized for the approval, registration, change and use of BVI companies with foreign character names.

Bearer Shares: Current legislation requires that bearer shares are held by a custodian. The Amendment confirms that custodian doesn’t become a shareholder of the company. Requirements in regards to reporting about these custodians have been enhanced.

Convertible Shares: The amendment provides a legal framework for converting shares from one class to another. This clarifies that the conversion of shares between classes is legal so long as the memorandum and articles of association permits such action.

Source: Overseas Management Company