BVI agent bulls**t

[Dagobert Duckson]

So, in case anyone here is interested, it looks like the BVI gov has specified lump sum penalties per month, and in the first month it would have been $300 (plus $50 filing fee), in the second month $500, etc. Weirdly enough, the agent tells me it's $350 for me, even though we're in the second month now... So now I need to ask again why that is. I hate having to pull the answers out of them like this.

 

[mnschwarz]

Below is some info my previous registered agent gave me. I actually just redomiciled my company to Seychelles from BVI due these and other changes in BVI. If you're not using the structure I would let it be struck from the register and walk away. You also don't need to incorporate in a new jurisdiction until such time as you need the entity as you'll be incurring yearly fees unnecessarily. Incorporating in most jurisdictions can be done quite fast when you need it in future.

3.1 Allowing a company to be struck off the Register: an option which is sometimes used as an alternative to voluntary liquidation, carries with it significant dangers, which should be well understood before being pursued.

3.2 All BVI companies must pay an annual fee to the Registry. If the fee is not paid by the due date, a 10% penalty accrues, increasing to 50% if the fee remains outstanding after two months. If the annual fee and penalties have not been paid at the expiry of the further prescribed period (effectively 5 months later), the company will be struck off the Register.

3.3 There is an important distinction to appreciate between a company which has been struck off the Register and a company which has been dissolved.

3.4 A company which has been struck off the Register for non-payment of annual fees still exists, so that it can still incur liabilities; the Registry's fees continue to accrue and it can still be sued. Its directors still hold office and their duties as directors are in no way diminished as a result of the company being struck off. Fundamentally, the directors of a company which has been struck off can be held liable for the actions, or indeed the inactions, in a way which is not possible if the company has been liquidated and dissolved.

3.5 Should a company remain continuously struck off the register for a period of seven years only then will it be automatically deemed dissolved.

3.6 As a matter of good corporate governance and to assure the protection of all stakeholders, including current and former directors, XXX strongly advises clients to pursue the voluntary liquidation route, rather than simply allow the company to be struck off.

 

[Dagobert Duckson]

@mnschwarz That's valuable insight. Many thanks for sharing this. What might the dangers be that are mentioned in 3.1?

 

[clemens]

great information.. however, I would like to clarify was this per month or just one off penalty?

 

[crownblown]

I prefer that they never ever send anything to me! Why would you risk attention from anyone if not needed.

Ask the agent to keep your documents in custody!

 

[crownblown]

3.5 Should a company remain continuously struck off the register for a period of seven years only then will it be automatically deemed dissolved.

hmmm, you are sure this apply for all jurisdictions?

 

[mnschwarz]

@mnschwarz That's valuable insight. Many thanks for sharing this. What might the dangers be that are mentioned in 3.1?

I believe they're referring largely to the information in 3.4. Still incurring fees, able to be sued etc. For most I don't think it's really a 'danger' but something to keep in mind. I'm sure the company that gave me this information is a little biased also as they would prefer their clients pay for their services to dissolve.

 

[mnschwarz]

hmmm, you are sure this apply for all jurisdictions?

This is information I was given regarding BVI. I couldn't say for other jurisdictions.

 

[mnschwarz]

great information.. however, I would like to clarify was this per month or just one off penalty?

The way I understood it, is that it's a one off fee per year. 10% after one month. 50% after 2 months. Struck from the register at 5 months. Year 2 the annual fees would add to the debt, 10% extra a month later, 50% after 2 months and so on for 7 seven years until the company is deemed dissolved. Of course these fees are not a concern if you don't plan on using the company again. And after year 2 it's most likely cheaper to incorporate a new company anyway.

 

[clemens]

The way I understood it, is that it's a one off fee per year. 10% after one month. 50% after 2 months. Struck from the register at 5 months. Year 2 the annual fees would add to the debt, 10% extra a month later, 50% after 2 months and so on for 7 seven years until the company is deemed dissolved. Of course these fees are not a concern if you don't plan on using the company again. And after year 2 it's most likely cheaper to incorporate a new company anyway.

Thank you now I understand. I agree if the company has been left unsused for 2 years or more it make no sense to renew it, better to incorporate a new company!

 

[adoffshore]

@adoffshore Like I said, *some* institutions, not all. Maybe not even many. If you are happy with your Cyprus bank account, and if your clients/customers don't care about the place where your company is registered then good for you. There are businesses where people do care about these things, and the bigger the money, the more important it becomes.

Didn't faced any issues. I will even get a real office setup in Cyprus soon

 

[adoffshore]

The way I understood it, is that it's a one off fee per year. 10% after one month. 50% after 2 months. Struck from the register at 5 months. Year 2 the annual fees would add to the debt, 10% extra a month later, 50% after 2 months and so on for 7 seven years until the company is deemed dissolved. Of course these fees are not a concern if you don't plan on using the company again. And after year 2 it's most likely cheaper to incorporate a new company anyway.

You know if this is how it works in the BVI? curious?

 

[thinkat]

Isle of Sark

First time i hear about it. Is considered also UK, no?

 

[mnschwarz]

You know if this is how it works in the BVI? curious?

That is the information I was provided by my registered agent. I don't have personal experience going through it.