Who can form a company?
An application to the Registry to incorporate a BVI business company may only be made by the person who will be the first registered agent of the company. The Registrar is prohibited by the Act from accepting an application that is made by any other person. If you attempt to file an application yourself, it will be rejected. You must, therefore, instruct a registered agent to incorporate the company on your behalf.
Who can act as a registered agent?
Only a person licensed by the Financial Services Commission as a company management company or as a Class I or III trust company [under the Banks and Trust Companies Act, 1990] can lawfully act as the registered agent of a BVI business company. You can obtain a list of authorised registered agents from the Commission’s website.
Steps to incorporating
The steps to incorporating are:
- A name must be chosen for the company.
- A decision must be taken on the location of the company’s registered office.
- The company’s memorandum and articles of association must be drafted.
It is also advisable to decide who the first directors and shareholders will be and to obtain their consent.
Step 1 – Choose an available name.
The Act contains a number of requirements with respect to the names that may be used by companies. Your registered agent can conduct an online search to discover whether a name is in use or has been in use and should be able to advise you on whether your proposed name is likely to be accepted by the Registry. Alternatively, you can go to the Registry and undertake a search yourself. It is not necessary for you to choose a specific name for your company. If you prefer, the name of the company can be its BVI Company Number, which the Registry will give to the company when it is registered, together with the required ending. A BVI company number name will be in the form “BVI Company Number 12345” with the appropriate ending, such as “Limited” or “Ltd.”. A company may also have a foreign character name.
Step 2 – Decide where the company’s registered office will be.
Every company must have a registered office. The registered office is where documents may be legally served on the company. However, if the Registry ever needs to write to a company, it will always write to its registered agent, not its registered office. The registered office must be a real physical address in the BVI - a post box is not sufficient. The registered office of a BVI company may be, and usually is, the office of the company’s registered agent. This will ensure that any documents served on the company will be brought to the attention of the directors quickly, but this is not a requirement under the Act. You should be aware that it is unlawful for any person other than a licensed trust company or a licensed company manager to charge you or your company for providing the registered office for your company.
Step 3 – The Memorandum and Articles.
Every company must have a memorandum and articles of association that complies with the Act. See User Guide No. 3 [Memorandum and Articles] for further information. The memorandum and articles are the equivalent of a company’s constitution. The matters covered by the memorandum and articles include the company’s internal governance procedures and the relationship between its members. The memorandum and articles of a proposed company must be filed with the application to incorporate..
Step 4 – Decide on the directors and shareholders and obtain their consent.
Every company limited by shares must have at least one shareholder and at least one director, who may be the same person. The registered agent has a period of 6 months from the incorporation of the company to appoint the first director(s) and it is the first director(s) who will issue the first shares in the company. Although it is not essential to decide who the shareholders and directors will be before a company is incorporated, a company cannot commence its operations until at least one director has been appointed and at least one share has been issued. If your company conducts business without a director and shareholder, you may be liable for its debts. Furthermore, if a company does not have a director, any person who manages the business and affairs of the company is deemed to be a director.
Once you have decided to incorporate a company and instructed a registered agent, in most cases it makes good sense to decide who the directors and shareholders will be and to agree on the number of shares that each shareholder will take. As someone cannot be appointed director without his or her written consent, it is important to confirm at this stage that your nominee is willing to serve in that capacity.
It is particularly important at this stage to obtain the agreement of any professional service provider whom you may wish to hold shares as a nominee on your behalf or whom you wish to act as a director of the company. Only licensed trust companies or licensed company managers may provide nominee shareholder services or act as a director by way of business.