CORPORATE TRANSACTIONS & COMPLIANCE BLOG

The British Virgin Islands: Due Diligence and Company Searches

By: Andy Chen, COGENCY GLOBAL INC. on Mon, Sep 08, 2014

The British Virgin Islands, a.k.a. the BVI, is one of the largest and most reputable international financial jurisdictions both in the Caribbean and around the world. Although exact figures are not disclosed by the BVI Registrar of Corporate Affairs (the “Registrar”), the latest estimates in 2012 by the BVI professional services industry puts the number of companies formed at 1 million since the introduction of the International Business Companies Act (subsequently changed to the Business Companies Act) in 1984.

The Business Companies Act 2004 requires the Registrar to maintain a Register of Companies incorporated under the Act, a Register of Foreign Companies registered under Part XI and a Register of Charges registered under part VIII.

Documents Available for Public Inspection

British Virgin Islands Due DiligenceDocuments filed by a BVI Business Company (“BVI BC”) are available for public inspection and generally include:

  • Memorandum and Articles of Association:  This is similar to Articles of Incorporation for a U.S. company, but contains more details on the governing of the company, which, in the U.S., would normally be included in the corporate bylaws.
  • Certificate of Incorporation:  This is a one page certificate that shows that a company is duly registered. A Certificate of Good Standing may also be obtained, which will show both registration and current status.
  • Register of Charges:  A simple company search will reflect mortgages and charges (a charge means any form of security interest over property, wherever situated, other than an interest arising by operation of law; which is registered to the entity on the public record.) Under the law, BVI companies are required to create and maintain an internal register of charges. Registering these charges in the company’s registry is also usually done, but not always.

Documents containing more details about the company, such as the Register of Directors, Register of Members and Register of Officers would be available for public inspection if a BVI BC has elected to file the same with the Registrar. Copies of documents retrieved by public inspection can be certified by the Registrar. If needed, they can then be notarized in the BVI before being sent to London to complete the Apostille by the Foreign and Commonwealth Office. 

Under the Business Companies Act 2004, a BVI BC abides to a different standard of privacy where the constitution documents, or Memorandum and Articles of Association, together with any amendments, are required to be filed with the BVI Registrar of Corporate Affairs.  But like a Delaware corporation, a BVI BC can elect (or is otherwise unobligated) to file its Register of Directors, Register of Members or Register of Officers with the Registrar. With that said, a BVI BC is not permitted to elect to file such Registers once and then subsequently re-elect not to refile any changes in the particulars of the directors, members and/or officers in the future. The Registrar will consider the filing of such registers as a binding precedent to be enforced by the named registered agent in the BVI perpetually for the life of the same BC.

Records and Documents Registered Agent is Required to Maintain

As stated above, there are limited requirements to file documents with the Registrar in the BVI.  However, a BVI BC is required by the Business Companies Act 2004 to maintain certain records and documents at the office of the registered agent, a complete record of the Memorandum and Articles of Association and amendments, most up-to-date Register of Members, Register of Directors, Register of Officers and copies of all notices and documents filed with the Registrar in the previous 10 years.  However, in terms of privacy, there is no public right for inspection of said documents at the office of the registered agent. Although the Business Companies Act 2004 states that the registered agent of a BVI BC is responsible for maintaining records, in practice, the registered agent is often reliant on the directors to keep records up-to-date and accurate.

In conclusion, it is possible to get three basic pieces of documentation from the public record for a BVI company, but a more complete record is likely available from the registered agent as many companies opt to keep some information out of the public registry. To secure the release of documents from the registered agent, permission from the target company is usually required. 

 

This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.

Topics: International Secured Transactions