On 15 January 2016, new requirements came into force regarding BVI companies’ record keeping practices and, specifically, their private register of charges which now must be updated within 14 days of any changes.
1. What is the private register of charges?
The mandatory private register containing details of charges created by a BVI company under the BVI Business Companies Act 2004 (the BVI BCA). A copy must be kept at the BVI company’s registered office or the office of its registered agent.
2. What does this amendment mean?
Where there have been changes to an existing registered charge or in the details of the charges required to be recorded in a BVI company’s private register of charges, any such change must be notified to the BVI company’s registered agent within 14 days of the change occurring. A contravention of this requirement could attract a fine of US$5,000.
3. Why the change?
There has always been a requirement to register all security that a BVI company has created in the private register of charges and the sanction for non-compliance is not new. All that has changed is there is now a specific requirement and timeframe for registering amendments to existing security in the private register of charges.
The new statutory requirement has formalised what BVI lawyers had in practice been advising their clients to do, and brings the keeping of the private register of charges in line with the requirements for keeping other company records up-to-date, such as the register of directors or members.
4. Is the requirement retroactive?
To some extent, since the new requirement affects all relevant charges which were created after 1 January 2005 by BVI companies incorporated under the BVI BCA or, in the case of BVI companies incorporated under the BVI BCA’s statutory predecessor, the International Business Companies Act 1984 (the IBC Act), after the date of their re-registration as a company under the BVI BCA. It does not impact charges registered pursuant to the IBC Act.
5. Does this affect public filings in the register of registered charges maintained by the BVI Registrar of Corporate Affairs?
No, although there is a requirement under the BVI BCA to publicly file variations to a publicly registered charge, there is no statutory time limit within which to file such changes.