What is the distinction between a merger and a consolidation in the BVI?
A merger occurs when one company remains in existence and incorporates the assets and liabilities of the other entity or entities, which cease to exist. In contrast, a consolidation involves the dissolution of all merging companies and the creation of a new company, which assumes ownership of all assets and liabilities of the former entities.
What law governs commercial contracts in the BVI?
The law governing commercial contracts in the British Virgin Islands is primarily derived from English common law, encompassing established principles such as offer, acceptance, consideration, intention, and capacity. There is no overarching commercial code in the jurisdiction.
What legislation governs employment in the BVI?
Employment relationships in the British Virgin Islands are regulated by the Labour Code, 2010, and are overseen by the Labour Department.
What types of companies can redomicile into the BVI?
Generally, most types of foreign companies can redomicile into the BVI if their home jurisdiction allows continuation out and they are not subject to liquidation, insolvency, or winding up proceedings.
When should a company consider a solvent liquidation?
A company should consider a solvent liquidation when it has accomplished its intended objectives or is no longer required, and all debts and obligations can be settled in full. Typical scenarios include group restructuring, retirement of business activities, or distribution of assets to shareholders.
When should a shareholder agreement be signed?
Ideally, a shareholder agreement should be executed at the time of incorporation or prior to the issuance of equity to new shareholders.
Who appoints the liquidator in a solvent liquidation?
The liquidator in a solvent liquidation is appointed by the shareholders through the passage of a special resolution at a duly convened general meeting.
Why would a company choose to redomicile to the BVI?
Common reasons include:
Tax neutrality (no corporate income tax)
Political and economic stability
Flexible corporate law
Investor familiarity with BVI structures
Ease of doing business
What happens to the company’s assets, liabilities, and contracts?
They remain unaffected. The legal identity of the company remains the same; only its place of incorporation changes.
What is a Registered Agent, and is one required?
A Registered Agent is a BVI-licensed service provider responsible for incorporation and ongoing compliance matters. Appointment of a Registered Agent is mandatory for all BVI Business Companies.
