BVI Business Company Structure

The following gives you some information about BVI Business Companies, the required documents and how companies are set up:

INCORPORATION DOCUMENTS:
The incorporation documents for a BVIBC, which are prepared and filed by the Registered Agent, consist of the Memorandum and Articles of Association (M&A), Name Approval and Certificate of Compliance. These are the only documents required to be filed with the Companies Registry and available for public inspection. Once these original documents are filed and the necessary fees paid, the Registrar of Companies will issue a Certificate of Incorporation ("CI"), (which constitutes legal evidence of the company's existence). The CI specifies the name of the company, the date on which it was incorporated, and Company Number.

The Memorandum sets out the structure of the company and includes the name, the registered office and agent, the objects for which the company is established, authorized capital, par value, denomination, classes and the rights / restrictions, rights to amend and any other matters which affect the existence of the company. The standard objects are quite broad, but clients may choose to include any specific business activity which is not prohibited by the laws of the BVI.

The Articles of Association are basically the by-laws of the company which govern relations between the various members of the company. Clauses in the Articles deal with procedures regarding shareholders and directors meetings, voting rights, share transfers (including any restrictions which may apply), resolutions, seal, records, audit, winding up and amendments. The Articles detail specific powers or restrictions of the directors or shareholders of the company, and generally serve as a guide for operating the company.
The Memorandum & Articles may be amended by way of directors/shareholders resolutions after incorporation.

 Name Approval must be sought through the Companies Registry prior to proceeding with incorporating of the company (2 free 10-days periods and thereafter 90-day period for US$25, if necessary). Once written Name Reservation Confirmation is given by the Registrar of Companies, you may submit the incorporation documents. Words such as "Limited", "Corporation", "Incorporated", "Societe Anonyme", or "Sociedad Anonima", "Gesellschaft mit beschrankter Haftung" or abbreviations thereof, "Ltd.", "Corp.", "Inc.", " S.A." "GmbH" must be used at the end of each company name. (example Syrus Investments Inc.). However, use of the following words is restricted: "Assurance", "Bank", "Building Society", "Chamber of Commerce", "Chartered", "Cooperative", "Imperial", "Insurance", "Municipal", "Royal", "Trust", or any word conveying a similar meaning.
 Certificate of Compliance attests that the Registered Agent has complied with all the requirements as per the BVIBC Act so that the company may be registered.

CAPITAL STRUCTURE:
The BVIBC Act and BVI Law place almost no limits on the classes, rights, amounts, denominations or nature, of share capital for which a company can be established.

Authorized Capital is the amount and number of shares which the Company may issue. There is no obligation to issue any more than one share to one shareholder, and it is up to the directors to decide when and how many shares shall be issued. The standard Authorized Share Capital is US$50,000 divided into 50,000 shares of US$1 par value each. However, clients may decided on the currency (can also be multiple currencies), the amount of issued capital and par value. The BVI Government fee on incorporation annually for the standard capital is US$350 and US$1,100 for capital that exceeds that amount.

Issued Capital is the amount and value of shares which are actually paid for by shareholders. Shares in a BVIBC must be paid for when they are issued and the consideration can be anything from cash to promissory notes, shares in other companies, performance of services or receipt of other property. Shares may be sold at a premium or surplus above the par value (subscription price). Each issued share gives the shareholder certain voting rights, receipt of dividends and ownership of a proportion of the BVIBC which depends on how many shares are issued to all shareholders and the value of the company; not on the stated par or nominal value of the shares (e.g. a company worth US$2 million may have two shareholders each with one share of par value US$1, yet each shareholder owns 50% of the company, or US$1 million in asset value). However, wording can be inserted to set out specifically how much each shareholder receives for each share held in the company.
Shares may be issued in both registered and bearer form.  Bearer shares must be held with an authorized or approved custodian and fees for registration are higher for such companies.   Notwithstanding any restrictions in the company's M&A, registered shares may be transferred by way of director's resolution and shareholder executed share transfer form. No details regarding the shareholding of the company are filed with Government or any other authority in the BVI. More privacy can be obtained by having nominee shareholders in whose name the shares are registered. The nominee will sign a document confirming that they hold the shares for the true owner. In this way the owner's name does not appear on any documents.   The BVI Government fee for companies permitted to incorporate with bearer shares is US$1,100.

Par Value is the amount notionally attributed to each share and denotes the minimum amount which must be paid for each share. The par value may be in any currency or fraction of a currency unit, and it is also possible to have different classes of shares denominated in different currencies. However, it is possible under BVI Law to issue shares without par value, in which case there is no minimum price and no authorized capital. Shares with no par value are simply worth as much as the company divided by the number of shares issued. Most companies though issue shares with a par value.

Classes of Shares may be divided into a number of classes which give different rights to the shareholders. One class may be created to give a certain preferential right for dividends, voting, and redemption. Other classes may allow only some of these rights and in many cases after certain classes are given the benefits of their rights and privileges. Some classes of shares may be redeemable (i.e., they can be re-purchased by the company), others may not. Usually these sorts of divisions require the consent of a majority of the shareholders before any amendments are done, and usually are stated specifically in the Articles of Association.

DAILY MANAGEMENT of the company is the responsibility of the directors (unless otherwise specified in the Articles of Association) who decide the way in which the company will operate in its course of business matters such as the purchase of real estate, the granting of charges or security interests, or other matters which may affect the basic structure of the company. Unless otherwise specified in the Articles of Association, one director may sign legal documents on behalf of the company. The first directors are appointed by the Subscribers to the M&A. Thereafter, directors are elected by other directors or shareholders. The directors or shareholders may hold other offices or be appointed offices such as President, Vice President, Treasurer and Secretary. Meetings can be held anywhere in the world via fax, telephone, signing written document or other electronic medium.