Amendment to Standard Form Articles of Association in the British Virgin Islands

The changes made to the Articles of Association were made primarily to address the difficulties that arise on the death/incompetence of the shareholder in a company which has a single shareholder/director. There are many instances of BVI companies being structured in this way. The difficulty is that typically there is no mechanism in the Articles of Association to register a new member without the agreement of the director(s) or to appoint a new director other than by the members. Thus, strictly speaking, it was necessary to go to Court for directions as to who should be registered as the shareholder or appointed a director.

The new provisions address this issue by providing that upon the production of suitable documentation to the Registered Agent, a new director can be appointed or be recognised as the beneficial owner of the shares, thereby averting the time delays and expense involved in having to refer the matter to the Court.

As advised, our new standard Memorandum and Articles of Association have been amended to include the abovementioned changes. Clients may wish to consider amending the Articles of Association of specific companies to include these changes. A copy of the particular provisions relating to transmission of shares can be obtained from us so please feel free to contact us.