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Company Liquidation in BVI

Company Liquidation in BVI

Company liquidation in BVI is a process that takes place according to the BVI Business Companies Act. Because it involves several mandatory and essential steps, it is advisable to seek qualified assistance for this process.

Our team assists local and foreign investors with BVI company formation, as well as the formalities needed to end or dissolve the legal entity.

In this brief guide, our team summarizes the steps needed to close a company in BVI. Do not hesitate to reach out to our agents for dedicated assistance. We also specialize in company formation in BVI, should you wish to incorporate a different business form after the closure of an existing one.

How can you close a company in BVI?

There are two ways in which a company’s activities can be terminated:

  • through liquidation;
  • by having the company struck off from the Registrar of Companies.

The former is a process that takes place voluntarily, as decided by the company shareholders. The latter will occur if the company is struck off as a result of an administrative measure.

Both forms of terminating the life of a company in the British Virgin Islands take place according to the Business Companies Act. One important condition for a company to be liquidated under the laws in BVI is for the legal entity to be solvent.

What are the differences between the two methods?

Company liquidation in BVI is different from the administrative strike off of the legal entity. Some of the most important differences are listed below:

  • liquidation is a voluntary process that takes place following a resolution taken by the members;
  • the company cannot be forced to liquidate; the Registrar, can, however, strike off a company that did not go through the liquidation process;
  • after liquidation, the company is dissolved immediately, however, after being struck off the company will not be dissolved for 10 years;
  • striking off the company does not influence the liability of the company’s members or directors.

What are the main conditions for company liquidation in BVI?

A BVI company can be liquidated when it has no liabilities or when it has liabilities, but it can prove that these can be paid in full.

A liquidator is appointed in cases involving voluntary liquidation in BVI, however, if the Financial Services Commission regulates the business, it must receive the approval of the Commission before it can appoint the liquidator.

The process concludes when the liquidator completes the steps under his assignment and the Registrar dissolves the company. After the Registrar strikes off the company, it ceases to exist.

In some cases, winding up a company in BVI can also take place by court order.

What are the situations in which a company can be struck off by the Registrar?

Striking off can take place when:

  • the company does not appoint a registered agent;
  • it fails to file the documents, as required by law;
  • it does not pay the annual fee or the applicable late payment penalty;
  • when the Registrar decides that the company has ceased to carry out business activities in the BVI.

Investors who are interested in BVI company setup can remember that some of the annual fees set forth by the Financial Services Commission are:

  • $16,000 for the annual license renewal of a Class I Trust License;
  • $14,000 for the annual renewal of a Class II Trust License;
  • $500 plus $10 for each company under management for the Company Management License.

How can you help me?

As seen in this article, winding up a company in BVI is a process that takes place under clear rules and regulations.

Forming the liquidation plan and making the declaration of solvency can be assisted by our team which also specializes in BVI company incorporation.

Moreover, our lawyers in BVI can give you complete information about the duties and liabilities of the company founders, and those of the company directors, during the course of the liquidation process.

Contact us for more information about company liquidation in BVI.