Update on the BVI Bearer Share situation
The "transition date" for bearer shares held by BVI companies is January 1, 2010. On that date, all those companies, incorporated prior to January 1, 2005, that currently have the power in their M&A to issue bearer shares, will be deemed to no longer have that power.
For those companies that wish to retain bearer shares in issuance, they will need to elect to disapply the deeming provision, (and they will also need to ensure that the bearer shares are placed in custody), prior to the transition date. The relevant legislation can be found in Schedule 2, Part IV, Division 5, paragraph 34A of the BVI Business Companies Act.
The overall BVI bearer share situation is summarised below:
- BVI companies with bearer share provisions that were incorporated prior to 1 January 2005 and which do not have bearer shares in issuance, (or which intend to exchange any existing bearer shares for registered shares, prior to the transition date), do not have to take any action. On the transition date, 31 December 2009, the M&A will be deemed to have been amended to prohibit bearer shares.
- BVI companies, with bearer share provisions that were incorporated prior to 1 January 2005, and which intend to retain bearer shares, will need to elect to disapply the deeming provision, before the transition date. The licence fee for such companies will increase in 2010 from $350 to $1,100, (or from $1,100 to $1,350, if the company is authorised to issue more than 50,000 shares), and their bearer share certificates will need to be placed in custody, before the transition date;
- BVI companies that were incorporated after 1 January 2005 with the capacity to issue bearer shares already pay an increased licence fee.
- Any bearer share certificates that are issued after 1 January 2005 must already be immobilised and be placed with an Authorised Custodian or a Recognised Custodian.
Those existing clients who still have bearer shares in issuance will be contacted by NovaSage over the coming months, with a reminder that action is required to be taken before the end of the year.
