Tuesday, 2th June 2009Immobilisation of Bearer Shares
Deadline 31 December 2009
Companies incorporated in the BVI since 1 January 2005, have been required to lodge bearer share certificates with custodians rather than releasing the bearer share certificates to the shareholder. Companies incorporated in the BVI prior to 31 December 2004 have not been subject to these statutory bearer share immobilisation provisions, however, these companies will be subject to changes that come into effect on 31 December 2009.
The transitional provisions of the BVI Business Companies Act provide that with effect from midnight on 31 December 2009, companies with the ability to issue bearer shares will have their Memorandum and Articles of Association ("MAA") deemed to have been amended by statute. On that date, all companies incorporated prior to 1 January 2005, which currently have the power in their MAA to issue bearer shares, will be deemed to no longer have that power. The MAA will be deemed to be amended to state that the company is not authorised to issue bearer shares, convert registered shares to bearer shares or exchange registered shares for bearer shares. Those companies that wish to retain the ability to issue bearer shares will need to elect to file a notice to elect to disapply the deeming provision prior to 31 December 2009.
Existing bearer share certificates that have been issued must be deposited with a custodian, which has been recognised or authorised by the BVI Financial Services Commission. An authorised custodian is defined as a custodian, the registered office and head office of which are situated in the Virgin Islands. Bearer share certificates will not be deemed to have been deposited with a custodian until the Registered Agent has received notification of the deposit from an authorised custodian or proof of deposit from a recognised custodian in accordance with the procedures set out in the BVI Business Companies Act Part III Division 5 - Immobilisation of Bearer Shares.
You should also note that companies that retain the ability to issue bearer shares will be subject to higher annual licence fees from 1 January 2010.
| ≤50,000 | ≥50,000 | |
| Current Annual Fee | $350 | $1,100 |
| Annual fee after 1 January 2010 | $1,100 | $1,350 |
| Reduced annual fee after 1 January 2010 if bearer shares lodged with authorized custodian | $800 | $1,250 |
If you have questions about bearer share companies or for more information contact Andrea Douglas.