The amendments to the BVI Business Companies Act have brought focus to restructuring options for BVI companies looking to simplify their operations across different jurisdictions. Historically, migrating or continuing a company out of the BVI was a common approach due to its simplicity and speed. However, since January 1, 2023, new advertising and notification requirements have extended the timeline for such migrations, intending to safeguard shareholders and creditors. This article aims to elucidate these new requisites and also highlights the statutory merger provisions available as an alternative.
Detailing the process of continuation out of the BVI, the Act permits a BVI company to move out and continue under foreign jurisdiction laws, provided the foreign laws allow for such continuation. This involves adhering to specific resolutions, advertising intentions, notifying stakeholders, and complying with both BVI and foreign jurisdiction laws. The practicalities involving property charges, timing considerations aligned with publication schedules, and the final filing process with the Registrar are emphasized.
Alternative process to a continuation out: a BVI-based company has the option to merge or consolidate with an entity incorporated in a foreign jurisdiction, given that the laws of that specific jurisdiction permit such actions.
A merger denotes the integration of two or more companies, forming a single entity referred to as the “Surviving Company.” Conversely, consolidation involves multiple entities uniting to establish an entirely new entity known as the “New Company.”
Within the provisions of the Act, there exists flexibility to tailor the structure and terms of these mergers or consolidations to align with particular requirements and objectives, especially concerning the shares held by each constituent company and the resulting Surviving or New Company.
Shares of a constituent company can undergo various alterations, such as cancellation, reclassification, or conversion into shares, debt obligations, or other securities within the Surviving or New Company. This flexibility also allows for the conversion of shares into monetary assets or a combination thereof. This adaptable approach facilitates the possibility of shares being acquired in exchange for either cash, assets, or a combination thereof.
While the process of merger or consolidation remains fundamentally similar under the Act, nuanced differences arise in the structural aspects of the constitutional documents concerning the Surviving or New Company.
Conclusively, while distinct, both the continuation out and merger/consolidation processes possess similarities in their legal implications concerning assets, debts, liabilities, and ongoing proceedings, offering stakeholders a clear understanding of their options within the BVI Business Companies Act framework. Such similarities are:
| Continuation out | Merger or consolidation | |
| Assets | Continue to be the assets of the continued company | Will be the assets of the Surviving Company or the New Company |
| Debts and liabilities | The continued company is liable for all debts and liabilities | The Surviving Company or New Company is liable for all debts and liabilities of each of the Constituent Companies |
| No conviction, judgment, ruling, order, claim, debt, liability or obligation, due or to become due and no cause existing, or against any member, director, officer or agent thereof is released or impaired | Applies to the continued company and against any member, director, officer or agent thereof | Applies to each Constituent Company and against any member, director, officer or agent thereof |
| No proceedings, whether civil or criminal are abated or discontinued | Applies to the continued company and against any member, director, officer or agent thereof. However, the proceedings, may be enforced, prosecuted, settled, or compromised by or against the continued company, or against the member, director, officer, or agent thereof | Applies to each Constituent Company and against any member, director, officer, or agent thereof. However, the proceedings, may be enforced, prosecuted, settled, or compromised by or against the Surviving Company or New Company or against the member, director, officer, or agent thereof; or the Surviving Company or New Company may be substituted in the proceeding |
| Rights of Dissenters | Not applicable | Applicable if exercised within the timeframes set out in the Act |
