The BVI Business Companies Act (the Act) and the Mutual Legal Assistance (Tax Matters) Amendment Act 2003 (as amended) (MLAT) set out a number of on-going administrative and record-keeping obligations with which all companies incorporated in the British Virgin Islands (BVI) must comply. Failure to comply with these obligations can result in fines being imposed against the company (and its directors), the directors being exposed to liabilities and/or the company being "struck off" the register of companies (the Register) maintained by the BVI Registrar of Corporate Affairs (the Registrar).
Registered Office and Registered Agents
All BVI companies ("Companies") are required to appoint a registered agent and maintain a registered office physically located in the BVI. The registered agent must be a regulated entity, licensed by the BVI Financial Services Commission to provide registered agent services. The Company's registered office is usually the office of its registered agent. If the Company changes its registered office or registered agent, it must notify the Registrar.
If a Company fails to comply with these obligations, it commits an offence and is liable on summary conviction to a fine of US10,000.
A Company must keep the following documents at the office of its registered agent in the BVI:
- its memorandum and articles of association, and
- a copy of all notices and other documents filed by the Company in the previous 10 years.
A Company that fails to correctly maintain these documents at the office of its registered agent commits an offence and is liable on summary conviction to a fine of up to US$10,000.
A Company must also maintain a private register of charges at the office of its registered agent. The register of charges must include details of all relevant charges created by it, including details of the security document, a short description of the liabilities secured and property charged by the security document, and details of any prohibition or restrictions (if any) on the power of the company to create any future charges. If a Company fails to correctly maintain the private register of charges it commits an offence and is liable on summary conviction to a fine of up to US$5,000. A Company can also elect to file a public register of charges with the Registrar. This public register of charges will contain the same information as the private register, but it will be available for public inspection. The public register of charges determines the priority of security under BVI law.
A Company must maintain its register of directors and register of shareholders (or a copy thereof) at the office of its registered agent. If the registered agent only holds a copy of these registers (rather than the originals), the Company must notify its registered agent in writing within fifteen days of any change to the registers and provide it with an updated copy of the same. The Company must notify the registered agent in writing of the physical address at which the original registers are held. The Company must also provide updates, in writing, to the registered agent within fourteen days of any change to the location at which the original registers are held. If a Company fails to comply with these obligations, it commits an offence and is liable on summary conviction to a fine of up to US$10,000.
The register of directors must include the name and address of each director and the date on which each director was appointed and ceased to be a director. The register of shareholders must include the name and address of the shareholders and the number and class of shares they hold. If a Company fails to correctly maintain its register of shareholders, it commits an offence and is liable on summary conviction to a fine of up to US$1,000.
The register of directors and the register of shareholders are private documents and not available for public inspection in the BVI. However, a Company may elect to file a copy of these registers with the Registrar (this usually occurs where a shareholder has created a security over the shares it holds in the Company). Once the registers have been filed with the Registrar, they are available for public inspection. Until the Company files a notice electing to cease filing changes to the register, it must file an amended register with the Registrar each time any changes are made to it.
A Company must also maintain the minutes of all meetings and all resolutions consented to by its directors, shareholders and committees (the "Minute Book") at the office of its registered agent or such other location as its directors may determine. If the Minute Book is not maintained at the office of its registered agent, the Company must notify its registered agent in writing of the physical address where the Minute Book is maintained. If the Company changes the physical location where the Minute Book is kept, it must notify its registered agent in writing of the new location within fourteen days. If a Company fails to correctly maintain its Minute Book, it commits an offence and is liable on summary conviction to a fine of up to US$10,000.
All written communications sent by or on behalf of a Company must clearly state the Company's name (and its foreign character name, if applicable). The Company's name should also be noted on every document issued or signed by the Company, which evidences or creates its legal obligations. A Company that contravenes these requirements commits an offence and is liable on summary conviction to a fine of US$1,000.
A Company must have a seal and an imprint of the seal must be kept at the office of the registered agent of the Company. Where a Company has a foreign character name, the seal must contain the Company's name and may also contain its foreign character name. If a Company fails to comply with this obligation, it commits an offence and is liable on summary conviction to a fine of US10,000.
A Company must maintain financial records (and underlying documents) that are sufficiently detailed to show and explain the Company's transactions and which will, at all times, enable the financial position of the Company to be determined with reasonable accuracy (the "Financial Records"). MLAT provides that the Financial Records must include accounts, although it does not stipulate any accounting procedures that the Company needs to adhere to.
The Financial Records must be kept for a minimum of five years from either:
- the completion date of the transactions to which the Financial Records relate, or
- the date the Company terminates the business relationship to which such Financial Records relate.
A Company can maintain its Financial Records at any location. If the Financial Records are not maintained at the Company's registered office, the Company must notify its registered agent in writing of the physical address where the Financial Records are maintained. If the Company changes the physical location where the Financial Records are kept, it must notify (in writing) its registered agent of the new location within fourteen days.
If a Company fails to correctly maintain its Financial Records, it commits an offence and is liable on summary conviction to a fine of up to US$5,000 and/or imprisonment for a term of up to two years or, on conviction on indictment to a fine of up to US$100,000 and/or imprisonment for a term of up to five years.
A Company must provide its registered agent with certain know-your-client compliance information about its directors, shareholders, controlling owners and ultimate beneficial owners.
The registered agent must receive compliance information on at least two of the Company's directors (or the sole director, if applicable) and all individual or corporate shareholders that hold 10 per cent. (or more) of the shares issued by the Company.
A Company must provide its registered agent with updated compliance documents every three years and/or when there are any relevant changes to its register of directors/shareholders.
A Company must pay an annual licence fee to the Registrar, which is based on the number of shares the Company is authorised to used, namely:
US$350 for a Company that is authorised to issue a maximum of 50,000 shares; and
US$1,100 for a Company that is authorised to issue more than 50,000 shares.
If a Company fails to pay its annual licence fee on time, it is liable to penalties and will be subsequently struck-off the Register. If a Company is struck-off the Register, the Company, its directors, shareholders and any voluntary liquidator/receiver that may have been appointed, may not commence legal proceedings, carry on any business or in any way deal with the assets of the Company, defend any legal proceedings, make any claim or claim any right for (or in the name of) the Company or act in any way with respect to the affairs of the Company.
A Company will also have to pay its registered agent an annual licence fee, for providing registered agent and registered office services.