IBC Act Amendments

5 February, 2003

ANTICIPATED BVI LEGISLATION
Bearer Shares
Director information

Draft amendments to the International Business Companies Act have been finalized, and are to be introduced in the Legislative Council in the near future. Changes may be made during the passing of the amendment Act, but the terms of the legislation in its present form are summarized below.
It is currently anticipated that the amendments will come into effect on 1st January 2004.

Bearer shares

1. It will still be possible for an IBC to issue bearer shares.
   
2. If an IBC issues bearer shares, then the share certificates must be deposited with an Authorized or Recognized Custodian (see 6. and 7. below).
   
3. When a bearer share certificate is issued to, or deposited with, an Authorized or Recognized Custodian, the Custodian must be given the following information:
   a) the full name of the beneficial owner of the shares
   b) the full name of any other person having an interest in that share, or confirmation that no other person has any interest in the share, and
   c) any other information as may be prescribed
   
4. The duties of the Custodian include the keeping of records, including prescribed notices and records of the transfer of bearer shares, and ensuring that the bearer shares remain at all times within its custody and control.
   
5. It will no longer be possible for companies automatically to include the power to issue bearer shares in their Memorandum & Articles of Association. Companies that wish to do so will have to pay a higher licence fee. Consideration is currently being given to the requirements, if any, for existing companies in this regard.
   
6. An Authorized Custodian will have to hold a general licence under the BVI Banks & Trust Companies Act, and will have to obtain specific approval from the BVI Financial Services Commission.
   
7. Companies not licensed under the BVI Banks & Trust Companies Act will be able to apply to the FSC for approval as a Recognized Custodian, foreseen to be available to a select list of readily identifiable financial institutions specializing in the custody business, and to other suitable financial institutions in recognized regulated jurisdictions.
   
8. Existing companies that have issued bearer shares will have a period of 2 years from the effective date of the legislation in which to meet its requirements.

Director information

1. It will be mandatory for a Register of Directors to be kept at the registered office of the company. Note, not at the public registry.
   
2. For existing companies, the Register need only contain details of the directors at the effective date of the amendment Act, not a full history from the date of incorporation.
   
3. Existing companies will have one year to comply with this requirement.