More importantly than ever before, BVI companies that have already served their purpose or that are no longer needed should be brought to an end in a proper manner. By proper manner, it is meant that such BVI companies should be closed by way of a members’ voluntary liquidation as opposed to the strike-off method. BVI companies that are left to be automatically struck off the Register of Companies (through the non-payment of the annual registry fee) are legally restricted from conducting any affairs, are not considered as dissolved and can be re-instated at any time within a seven year period. During this seven year period, such company continues to have certain reporting obligations, its shareholders and directors continue to be exposed for non-compliance as well as to various inherent risks (e.g. claims by creditors, third parties, foreign authorities or even the BVI authorities). With the recent introduction of the BVI Economic Substance Law, even BVI companies that are undergoing the strike-off method and which do not conduct any business activities nor generating any income, are obliged to make a relevant reporting under the economic substance regime on an annual basis. Failure to do so could still bring significant penalties. It is therefore imperative that BVI companies that are:
- in good standing but no longer needed, to be closed by way of voluntary liquidation.
- undergoing the strike-off method, to be restored and proceed with proper closure by way of voluntary liquidation.
A voluntary liquidation is in most cases relatively straightforward (without involving Courts like other jurisdictions) and brings the company to a proper and formal closure by obtaining the relevant Certificate of Dissolution. After the official date of dissolution the company does not exist, no longer has any reporting obligations and can no longer be sued or incur liabilities. Successful reinstatement of a liquidated company is extremely rare and limited. For further information or assistance on the matter, you may liaise with your main contact person at Totalserve or email us at [email protected].