Practically Speaking

In this episode, Partner Rachel Graham and Managing Director of Client Services Amy Roost, along with guest expert Sonia Dhesi, Owner and Managing Director of Appleton Company Services Limited, provide key information in relation to the newly implemented Overseas Entity register.Key takeawaysAny non-UK entity, which holds land in the UK, needs to register as an Overseas Entity at Companies House. The deadline for registration is 31 January 2023. There are significant penalties (£2500 per day) for failure to register before the deadline, and restrictions are imposed on the ability to acquire and transfer land. If you have not already begun the registration process, do so urgently. Where an entity held land on or after 28 February 2022 but disposed of it before 5 September 2022, it will likely still need to register with Companies House. As part of the registration process, the entity will need to identify its registrable beneficial owners – in simple terms, anyone holding at least 25 per cent of the shares or voting rights in the entity or with significant control of the entity (where there is a trust involved in the ownership structure the process can be quite complicated). Seek advice if you need help determining which registrable beneficial owners should be identified and verified.Current certified proof of identity and address will need to be presented to a UK verification agent to complete the process. We can assist with the registration and verification process via an authorised agent in the UK, where we are the registered agent of an entity. Once registered, there is an annual renewal obligation.

In this episode, Transactional Partner Rachel Graham and Dispute Resolution Counsel Francesca Gibbons look at information disclosure and the available options in respect of BVI companies Key takeaways: The information a BVI company is required by law to maintain and retain includes: Statutory records and registers – relating to the company Financial and other Records relating to business of the company All BVI companies are required to have a registered agent in the BVI – they are required to hold copies of statutory registers, they make most of the filings, they are considered the administrator of the company in the BVI Not all information is available publicly – registered agents can be contacted to request additional information (and sometimes those requests may be declined) There are three main options available for requesting information about a BVI company: Norwich Pharmacal Orders (NPO) – Allows parties to apply to Court on an ex parte basis most commonly against the registered agent for documents they hold Section 100 (of the BVI Business Companies Act 2004) applications– Directors can make this application to Court with statutory backing for an order for delivery up of documents Disclosure – A stage within the litigation process that grants parties disclosure and inspection of documents in the control of other parties where they are directly relevant to an issue in dispute in the claim.

In this episode, Transactional Partner Rachel Graham and Director of Client Services Amy Roost outline the process of becoming a shareholder of a BVI company. Key Takeaways: Do your due diligence as to what your rights as a shareholder will be, BVI law is very flexible in this regard. Key documents will be the memorandum and articles of association. Decision making for BVI companies tends to be predominantly at board level but protections for shareholders are possible. Compliance and regulatory obligations with respect to information about shareholders of BVI companies, different to those in the United Kingdom.

Welcome to season two of our Practically Speaking podcast. This season London based, Transactions Partner, Rachel Graham and Director of Client Services, Amy Roost will be exploring the ins and outs of the lifecycle of a BVI company. In the first episode, Rachel and Amy will be talking about becoming and acting as a director of a BVI company. Key takeaways The importance of directors for BVI companies The appointment process for a BVI director Resignation and removal of a director Use of reserve directors Key duties of a BVI director Find out more information about BVI company directors here.

Our podcast series Practically Speaking, was launched to provide our listeners with practical advice and insights on issues applicable to stakeholders of BVI entities. In our eighth episode, Transactional Partner Rachel Graham and Senior Associate within Harneys’ Private Wealth team, Matthew Howson discuss the following: What happens when a non-resident holder of BVI shares passes away, whether they held the shares absolutely or via a nomineeship? How to bridge the gap between the law of the BVI company and the law of the Deceased’s home jurisdiction: covering some near universal misperceptions. What works to ensure that BVI assets and shares are transferred directly to beneficiaries, and what doesn’t. Provisions necessary for nominating a reserve director for a BVI company holding vehicle, in the event that the sole individual shareholder and director passes away.

Our podcast series Practically Speaking, was launched to provide our listeners with practical advice and insights on issues applicable to stakeholders of BVI entities. In our sixth episode, Transactional Partner Rachel Graham and Transactional Counsel Thomas Dugdale discuss the following: What a continuation, “re-domiciliation” or “migration” is Why continue or migrate to another jurisdiction Practical considerations of continuing your company in or out of a jurisdiction How continuations might affect creditors and other interested parties Commonly encountered issues and solutions To read more about continuations into the BVI click here

Our podcast series Practically Speaking, was launched to provide our listeners with practical advice and insights on issues applicable to stakeholders of BVI entities. In our fourth episode, Transactional Partner Rachel Graham and Director of Fiduciary & Custodial Kerry Graziola discuss the following: the liquidation process in the BVI the external factors that might affect how quickly the company can be liquidated how to reorganise the company to help simplify the liquidation process the on-going duties and annual reporting obligations under the economic substance regime Our recently updated article on Bringing your BVI company to an end: strike off vs liquidation can be found here.

In our second episode, Transactional Partner Rachel Graham and Director of Client Services Amy Roost discuss the options available to directors and shareholders when a BVI company has reached the end of its useful life, with a particular focus on the on-going annual reporting obligations under the economic substance regime. Key Takeaways: Where an entity is no longer required there are two options available: first is solvent liquidation, a formal process to wind up and dissolve the company, bringing it to an orderly end; second is to allow the company to fall out of good standing and be struck off the register and eventually dissolved some 7 years later. Liquidation: This formal but straight-forward process brings the company to an orderly end. It brings formal closure and much greater certainty as well as mitigating risk for directors, shareholders and other stakeholders. In many cases, where the company has already disposed of its assets and settled all its liabilities, the entire liquidation process can be completed within four to six weeks. Once a company which has been voluntarily liquidated and dissolved, it no longer exists and can no longer incur liabilities or sue or be sued. The date of dissolution is significant, however, since the company will continue to have reporting obligations under the economic substance regime, for the financial period that the entity is in at the time of its liquidation. Strike off: For decades it has been the norm to leave entities that are no longer required to be struck off. Strike off is automatic, when an entity no longer meets certain requirements eg not paying its annual licence fee. A company remains struck off for 7 years before it is formally dissolved and during that period the company, as well as its directors and shareholders, are exposed to ongoing risk of liability and uncertainty. The risk and uncertainty is increased with the introduction of ongoing reporting obligations under the economic substance regime, which continues to apply during this 7 year period, even if the struck off company is not carrying on any activity. Fines and penalties for non-reporting under the economic substance regime Potential penalties are severe with significant financial and criminal actions available to the competent authorities. Conclusion: Where an entity is no longer required, directors (and shareholders) of BVI companies are strongly advised to consider liquidating the company rather than allowing the company to be struck off. Entities may wish to consider seeking further legal advice to go over their options, and the ongoing implications. Stay tuned for more episodes of Practically Speaking.