British Virgin Islands company law Warning: You are not logged in. Your IP address will be publicly visible if you make any edits. If you log in or create an account, your edits will be attributed to your username, along with other benefits.Anti-spam check. Do not fill this in! ==Shares and shareholders== Although British Virgin Islands companies can be formed without the power to issue [[share (finance)|shares]], in practice almost all companies are registered as share issuing companies. It is sometimes said - misleadingly - that the British Virgin Islands has abolished the concept of [[share capital]].<ref>{{cite web|url=http://www.legal500.com/c/british-virgin-islands/developments/11254|title=BVI companies β ready again for listings in an improving market|publisher=Legal 500|date=August 2010}}</ref> This is based upon the removal of the requirement to state an [[authorised capital]] in a company's constitutional documents (instead a company only needs to state the maximum number of shares it is authorised to issue), combined with the abrogation of [[capital maintenance]] rules (in the British Virgin Islands so long as a company remains solvent after the distribution, it can distribute money or other assets back to its shareholders by way of [[dividend]] or share redemptions<ref>{{cite web|url=http://www.harneys.com/publications/guides/shares-and-distributions-under-the-bvi-business-companies-act|title=Shares and Distributions under the BVI Business Companies Act|author=Harney Westwood & Riegels|author-link=Harney Westwood & Riegels|date=15 May 2013}}</ref>). That power does not, however, remove the requirement to account for the share capital in the company's books of account. Furthermore, various other British Virgin Islands statutes require companies conducting certain types of business to maintain certain levels of share capital. The approach to share capital in the British Virgin Islands is extremely flexible, and this reflects the desire to maintain the appeal of companies formed in the jurisdiction for finance transactions. Some of those features include: * Validation of companies providing [[Financial assistance (share purchase)|financial assistance]] for the acquisition of their own shares * Absence of capital maintenance rules in relation to dividends and distributions * Power to hold [[treasury share]]s * Absence of [[thin capitalisation]] rules Shareholders in a British Virgin Islands company do not enjoy statutory [[pre-emption right]]s or [[Right of first refusal|rights of first refusal]] in relation to new issuances or sales of shares. Although companies may opt into a statutory pre-emption scheme provided for under the legislation, in practice relatively few companies do so. Companies may provide for bespoke provisions relating to such rights in their constitutional documents, and this will sometimes occur in joint ventures or where preferred shareholders invest in the company. Shareholder voting in the British Virgin Islands is still predicated by the normal basis of majority-control. However, where the majority exercises their power in a way which is unfairly prejudicial to the minority shareholders, the court may give relief to the minority shareholders.<ref>BVI Business Companies Act, section 184I</ref> However, the minority shareholders will need to satisfy the court that the conduct of the majority was unfair - simply exercising their votes to overrule the minority is not unfair in and of itself. The court also has power to order that a minority shareholder may bring proceedings on behalf of the company against a party whom the company has claims against where the wrongdoers are effectively in control of the company and refuse to take action.<ref>BVI Business Companies Act, section 184C</ref> British Virgin Islands companies still technically have the power to issue [[bearer shares]] where their constitutional documents so provide. However, bearer shares have become so circumscribed that they are rarely seen in practice. Companies which issue bearer shares are subject to punitive increased licence fees, and all bearer shares are required to be held by licensed custodians ("de-materialised" in the parlance of the statute) and so operate in much the same way as registered shares in any event. Bearer shares which are not deposited with a licensed custodian are disabled by law, and cannot vote or receive distributions. Summary: Please note that all contributions to Christianpedia may be edited, altered, or removed by other contributors. If you do not want your writing to be edited mercilessly, then do not submit it here. You are also promising us that you wrote this yourself, or copied it from a public domain or similar free resource (see Christianpedia:Copyrights for details). Do not submit copyrighted work without permission! Cancel Editing help (opens in new window) Discuss this page