:: JURIS MAGISTER Servicios Corporativos Internacionales - Libreria Jurídica - Sociedades Offshore - Fideicomisos

THE INTERNATIONAL BUSINESS COMPANIES
Act, 1984 (AS AMENDED)

ARRANGEMENT OF SECTIONS

PART I
SHORT TITLE AND INTERPRETATION

1 Short Title
2 Interpretation

3 Incorporation
4 Restrictions on Incorporation
5 Requirements of International Business Companies
6 Effect of failure to satisfy requirements of Section 5
7 Personal Liability
8 Business objects or purposes
9 Powers
10 Validity of acts of Company
11 Name
12 Memorandum
13 Articles
14 Registration
15 Certificate of Incorporation
16 Amendment of Memorandum and Articles
17 Copies of Memorandum and Articles to members

PART III
CAPITAL & DIVIDENDS

17A Power to allot shares
18 Shares to be fully paid
19 Kind of consideration for shares
19A Forfeiture of shares
20 Amount of consideration for shares
21 Fractional shares
21A Authorized capital in several currencies
22 Capital and surplus accounts
23 Dividend of shares
24 Increase or reduction of authorized capital
25 Division and combination
26 Character of a share
27 Share certificates
28 Share register
29 Rectification of share register
30 Transfer of registered shares
31 Transfer of bearer shares
32 Seizure
33 Acquisition of own shares
34 Treasury shares disabled
35 Increase or reduction of capital
36 Dividends
37 Appreciation of assets
37A Mortgages and charges of shares

PART IV
REGISTERED OFFICE AND AGENT

38 Registered office
39 Registered agent
40 R E P E A L E D.
40A Registered agents
41 Penalty for contravention of sections 38 and 39

PART V
DIRECTORS, OFFICERS, AGENTS AND LIQUIDATORS

42 Management by directors
43 Election, term and removal of directors
43 Optional register of directors
44 Number of directors
45 Powers of directors
46 Emoluments of directors
47 Committees of directors
48 Meetings of directors
49 Notice of meetings of directors
50 Quorum for meetings of directors
51 Consents of directors
52 Alternates for directors
53 Officers and agents
54 Standard of care
55 Reliance on records and reports
56 Conflict of interests
57 Indemnification
58 Insurance

PART VI
PROTECTION OF MEMBERS AND CREDITORS

59 Meetings of members
60 Notice of meetings of members
61 Quorum for meetings of members
62 Voting by members
62A Voting trusts
63 Consents of members
64 Service of notice on members
65 Service of process, etc. on company
66 Books, records and common seals
67 Inspection of books and records
68 Contracts generally
69 Contracts before incorporation
70 Contracts for payment or transfer
70A Optional register of mortgages and charges
71 Notes and bills of exchange
72 Power of Attorney
73 Authentication or attestation
74 Company without members

PART VII
MERGER, CONSOLIDATION, SALE OF ASSETS, FORCED REDEMPTIONS, ARRANGEMENTS AND DISSENTERS

75 Interpretation for purposes of Part VII
76 Merger and consolidation
77 Merger with subsidiary
78 Effect of merger or consolidation
79 Merger or consolidation with foreign company
80 Disposition of assets
81 Redemption of minority shares
82 Arrangements
83 Rights of dissenters

PART VIII
CONTINUATION

84 Continuation
85 Provisional registration
86 Certificate of continuation
87 Effect of continuation
88 Continuation under foreign law

PART IX
WINDING UP, DISSOLUTION AND STRIKING-OFF

89 Compulsory winding-up and dissolution
90 Voluntary winding-up and dissolution
91 Powers of directors in a winding-up and dissolution
92 Duties of liquidator
93 Powers of liquidator
94 Procedure on winding-up and dissolution
95 Rescission of winding-up and dissolution
96 Winding-up and dissolution of company unable to pay its claims, etc.
97 Winding-up and dissolution by the court
98 Receivers and managers
99 Striking-off
100 Restoration to Register
101 Effect of striking-off
102 Appointment of official liquidator
103 Dissolution of company struck off

PART X
FEES AND PENALTIES

104 Fees
105 Licence fees
106 Penalties to be paid to Registrar
107 Recovery of penalties, etc.
108 Company struck off liable for fees, etc.
109 Fees, etc. to be paid into Consolidated Fund
110 Fees payable to Registrar

PART XI
INCOME TAXES, STAMP DUTIES AND REGISTRATION OF DOCUMENTS

110A Exemptions from tax, etc.
110B Optional registration of registers
111 Optional registration of mortgages and
charges.

PART XII
MISCELLANEOUS

112 Regulations
113 Form of certificate
114 Certificate of good standing
115 Inspection of documents
116 Jurisdiction
117 Declaration by court
118 Judge in Chambers
119 Commencement

PART I
SHORT TITLE AND INTERPRETATION

Short Title.

1.This act may be cited as the International Business Companies Act,
1984.

Interpretation.

2.(1) In this Act

"Articles" means the Articles of Association of a company incorporated under this Act;

"authorized capital" of a company means the sum of the aggregate par value of all shares with par value which the company is authorized by its Memorandum to issue plus the amount, if any, stated in its Memorandum as authorized capital to be represented by shares without par value which the company is authorized by its Memorandum to issue;

"capital" of a company means the sum of the aggregate par value of all outstanding shares with par value of the company and shares with par value held by the company as treasury shares plus

(a) the aggregate of the amounts designated as capital of all outstanding shares without par value of the company and shares without par value held by the company as treasury shares, and

(b) the amounts as are from time to time transferred from surplus to capital by a resolution of directors;

"Companies Act" means the Companies Act of the British Virgin Islands;

"continued" means continued within the context of Part VIII;

"court" means the Supreme Court or a Judge thereof;

"licence fee payment date" means the date on which the company licence fee is paid pursuant to the provisions of section 105;

"licence fee final payment date" means 30th April or 31st October in any year;

"member" means a person who holds shares in a company;
"Memorandum" means the Memorandum of Association of a company incorporated under this Act;

"person" includes a trust, the estate of a deceased individual, a partnership, or an unincorporated association of persons;

"person resident in the British Virgin Islands" means a person who ordinarily resides within the British Virgin Islands or carries on business from an office or other fixed place of business within the British Virgin Islands but does not include a company incorporated under this Act;

"Register" means the Register of International Business Companies maintained by the Registrar in accordance with subsection (1) of section 14;

"registered agent" means the person who is at any particular time performing the functions of registered agent of a company incorporated under this Act pursuant to subsection (1) of section 39;

"Registrar" means the Registrar of Companies;

"securities" means shares and debt obligations of every kind, and options, warrants and rights to acquire shares or debt obligations;

"surplus" in relation to a company, means the excess, if any, at the time of the determination, of the total assets of the company over the sum of its total liabilities, as shown in the books of account, plus its capital;

"treasury shares" means shares of a company that were previously issued but were repurchased, redeemed or otherwise acquired by the company and not cancelled.

(2) A reference to money in this Act is a reference to the currency of the United States of America.

(3) A company that is incorporated under the Companies Act or under the laws of a jurisdiction outside the British Virgin Islands shall be a company incorporated under this Act if it is continued as a company incorporated under this Act in accordance with Part VIII and references in this Act to a "company incorporated under this Act" shall be construed accordingly.

(4) A reference in this Act to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is the votes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meeting shall be given a corresponding construction.

(5) Unless otherwise defined in the Articles of a company incorporated under this Act, the expression "resolution of directors" means

(a)a resolution approved at a duly constituted meeting of directors or of a committee of directors of a company, by affirmative vote of a simple majority or such larger majority as may be specified in the Articles, of the directors present at the meeting who voted and did not abstain; or

(b)a resolution consented to in writing by an absolute majority, or such larger majority as may be specified in the Articles, of all the directors or of all the members of the committee, as the case may be;

but, where a director is given more than one vote in any circumstances, he shall in the circumstances be counted for the purposes of establishing majorities by the number of votes he casts.

(6)Unless otherwise defined in the Articles of a company incorporated under this Act, the expression "resolution of members" means

(a)a resolution approved at a duly constituted meeting of the members of a company by the affirmative vote of

(i)a simple majority, or such larger majority as may be specified in the Articles, of the votes of the shares that were present at the meeting and entitled to vote thereon and were voted and did not abstain, or

(ii)a simple majority, or such larger majority as may be specified in the Articles of the votes of each class or series of shares which were present at the meeting and entitled to vote thereon as a class or series and were voted and not abstained and of a simple majority, or such larger majority as may be specified in the Articles, of the votes of the remaining shares entitled to vote thereon that were present at the meeting and were voted and not abstained; or

(b)a resolution consented to in writing by

(i)an absolute majority, or such larger majority as may be specified in the Articles, of the votes of shares entitled to vote thereon, or

(ii)an absolute majority, or such larger majority as may be specified in the Articles, of the votes of series of shares entitled to vote thereon as a class or series and of an absolute majority, or such larger majority as may be specified in the Articles, of the votes of the remaining shares entitled to vote thereon.

PART II
CONSTITUTION OF COMPANIES

3.Subject to the requirements of this Act, the registered agent named in the Memorandum may, by subscribing to a Memorandum and to Articles, incorporate a company under this Act.

4.No company shall be incorporated under this Act unless immediately upon its incorporation the company is an International Business Company.

5.(1) For purposes of this Act, an International Business Company is a company that does not

(a) carry on business with persons resident in the British Virgin Islands;

(b) own an interest in real property situate in the British Virgin Islands, other than a lease referred to in paragraph (e) of subsection (2);

(c) carry on banking or trust business, unless it is licensed under the
Banks and Trust Companies Act, 1990;

(d) carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under an enactment authorizing it to carry on that business;

(e) carry on the business of company management unless it is licensed under the Company Management Act, 1990; or

(f) carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands.

(2) For purposes of paragraph (a) of subsection (1), an International Business Company shall not be treated as carrying on business with persons resident in the British Virgin Islands by reason only that

(a) it makes or maintains deposits with a person carrying on banking business within the British Virgin Islands;

(b) it makes or maintains professional contact with solicitors, barristers, accountants, bookkeepers, trust companies, administration companies, investment advisers or other similar persons carrying on business within the British Virgin Islands;

(c) it prepares or maintains books and records within the British Virgin Islands;

(d) it holds, within the British Virgin Islands, meetings of its directors or members;

(e) it holds a lease of property for use as an office from which to communicate with members or where books and records of the company are prepared or maintained.

(f) it holds shares, debt obligations or other securities in a company incorporated under this Act or under the Companies Act; or

(g) shares, debt obligations or other securities in the company are owned by any person resident in the British Virgin Islands or by any company incorporated under this Act or under the Companies Act.

6.(1) Without affecting the operation of section 99, if a company is incorporated under this Act without having satisfied the requirements prescribed for an International Business Company under section 5, or if having satisfied the requirements it subsequently ceases to satisfy the requirements for a continuous period of more than 30 days, the company shall upon expiration of that period notify the Registrar of that fact.

(2) A company that wilfully contravenes subsection (1) is liable to a penalty of $100.00 for each day or part thereof during which the contravention continues, and a director who knowingly permits the contravention is liable to a like penalty.

7. Subject to section 74, no member, director, officer, agent or liquidator of a company incorporated under this Act is liable for any debt, obligation or default of the company, unless specifically provided in this Act or in any other law for the time being in force in the British Virgin Islands, and except in so far as he may be liable for his own conduct or acts.

8. A company may be incorporated under this Act for any object or
purpose not prohibited under this Act or under any other law for the time being in force in the British Virgin Islands.

9.(1) Subject to any limitations or provisions to the contrary in its Memorandum or Articles, this Act or any other law for the time being in force in the British Virgin Islands, a company incorporated under this Act has the power, irrespective of corporate benefit, to perform all acts and engage in all activities necessary or conducive to the conduct, promotion or attainment of the objects or purposes of the company, including the power to do the following:

(a) issue registered shares or shares issued to bearer or both;

(b) issue the following:

(i) voting shares,

(ii) non-voting shares,

(iii) shares that may have more or less than one vote per share,

(iv) shares that may be voted only on certain matters or only upon the occurrence of certain events, and

(v) shares that may be voted only when held by persons who meet specified requirements;

(c) issue common shares, preferred shares, limited shares or redeemable shares;

(d) issue shares that entitle participation only in certain assets;

(e) issue options, warrants or rights, or instruments of a similar nature, to acquire any securities of the company;

(f) issue securities that, at the option of the holder thereof or of the company or upon the happening of a specified event, are convertible into, or exchangeable for, other securities in the company or any property then or to be owned by the company;

(g) purchase, redeem, or otherwise acquire and hold its own shares;

(h)guarantee a liability or obligation of any person and to secure any of its obligations by mortgage, pledge or other charge, of any of its assets for that purpose; and

(i) protect the assets of the company for the benefit of the company, its creditors and its members, and at the discretion of the directors, for any person having a direct or indirect interest in the company; and

(j) issue shares in any one or more currencies.

(2) For purposes of paragraph (i) of subsection (1), notwithstanding any other provision of this Act or of any other law for the time being in force in the British Virgin Islands or any rule of law to the contrary, the directors may cause the company to transfer any of its assets in trust to one or more trustees, to any company, association, partnership, foundation or similar entity; and, with respect to the transfer, the directors may provide that the company, its creditors, its members or any person having a direct or indirect interest in the company, or any of them, may be the beneficiaries, creditors, members, certificate holders, partners or holders of any other similar interest.

(3) The rights or interests of any existing or subsequent creditor of the company in any assets of the company are not affected by any transfer under subsection (2), and those rights or interests may be pleaded against any transferee in any such transfer.

10.(1) No act of a company incorporated under this Act and no transfer of
real or personal property by or to a company so incorporated is invalid by reason only of the fact that the company was without capacity or power to perform the act, or to transfer or receive the property, but the lack of capacity or power may be pleaded in the following cases:

(a) in proceedings by a member against the company to prohibit the performance of any act or the transfer of real or personal property by or to the company; or

(b) in proceedings by the company, whether acting directly or through a receiver, trustee, or other legal representative, or through members in a derivative action, against the incumbent or former directors of the company for loss or damage due to their unauthorized act.

(2) For purposes of paragraph (a) of subsection (1), the court may set aside and prohibit the performance of a contract if

(a) the unauthorized act or transfer sought to be set aside or prohibited is being, or is to be, performed or made under any contract to which the company is a party;

(b) all the parties to the contract are parties to the proceedings; and

(c) it appears fair and reasonable to set aside or prohibit the performance of the contract;

and in so doing the court may, in applying this subsection, award to the company or to the other parties to the contract such compensation as may be reasonable except that in determining the amount of compensation the court shall not take into account anticipated profits to be derived from the performance of the contract.

11.(1) The word "Limited", "Corporation", "Incorporated", "Societe Anonyme" or "Sociedad Anonima" or the abbreviation "Ltd.", "Corp.", "Inc." or "S.A." must be part of the name of every company incorporated under this Act, but a company may use and be legally designated by either the full or the abbreviated form.

(2) No company shall be incorporated under this Act under a name that

a) is identical with that under which a company in existence is already incorporated under this Act or registered under the Companies Act or so nearly resembles the name as to be calculated to deceive, except where the company in existence gives its consent; or

(b) contains the words "Assurance", "Bank", "Building Society", "Chamber of Commerce", "Chartered", "Cooperative", "Imperial", "Insurance", "Municipal", "Royal", "Trust Company", "Trustee Company", or a word conveying a similar meaning, or any other word that, in the opinion of the Registrar, suggests or is calculated to suggest

(i) the patronage of Her Majesty or that of a member of the Royal Family,

(ii) a connection with Her Majesty's Government or a department thereof, or

(iii) a connection with a municipality or other local authority or with a society or body incorporated by Royal Charter;

except with the approval of the Registrar in writing.

(c) is indecent, offensive, or, in the opinion of the Registrar, objectionable.

(3) A company may amend its Memorandum to change its name.

(4) If a company is incorporated under a name that

(a) is identical with a name under which a company in existence was incorporated under this Act or registered under the Companies Act, or

(b) so nearly resembles the name as to be calculated to deceive;
the Registrar may, without the consent of the company in existence, give notice to the last registered company to change its name and if it fails to do so within 60 days from the date of the notice, the Registrar must amend the Memorandum of the company to change its name to such name as the Registrar deems appropriate, and the Registrar must publish notice of the change in the Gazette.

(5) Subject to subsections (2) and (4), where a company changes its name, the Registrar must enter the new name on the Register in place of the former name, and must issue a certificate of incorporation indicating the change of name.

(6) A change of name does not affect any rights or obligations of a company, or render defective any legal proceedings by or against a company, and all legal proceedings that have been commenced against a company by its former name may be continued against it by its new name.

(7) Subject to subsection (2) the Registrar may, upon a request made by any person, reserve for 90 days a name for future adoption by a company under this Act.

12.(1) The Memorandum must include

(a) the name of the company;

(b) the address within the British Virgin Islands of the registered office of the company;

(c) the name and address within the British Virgin Islands of the registered agent of the company;

(d) the objects or purposes for which the company is to be incorporated;

(e) the currency in which shares in the company shall be issued;
(f) a statement of the authorized capital of the company setting forth the aggregate of the par value of all shares with par value that the company is authorized to issue and the amount, if any, to be represented by shares without par value that the company is authorized to issue;

(g) a statement of the number of classes and series of shares, the number of shares of each such class and series and the par value of shares with par value and that shares may be without par value, if that is the case;

(h) a statement of the designations, powers, preferences and rights, and the qualifications, limitations, or restrictions of each class and series of shares that the company is authorized to issue, unless the directors are to be authorized to fix any such designations, powers, preferences, rights, qualifications, limitations and restrictions, and in that case, an express grant of such authority as may be desired to grant to the directors to fix by a resolution any such designations, powers, preferences, rights, qualifications, limitations and restrictions that have not been fixed by the Memorandum;

(i) a statement of the number of shares to be issued as registered shares and the number of shares to be issued as shares issued to bearer, unless the directors are authorized to determine at their discretion whether shares are to be issued as registered shares or to bearer, and in that case an express grant of such authority as may be desired must be given to empower the directors to issue shares as registered shares or to bearer as they may determine by resolution of directors;

(j) whether registered shares may be exchanged for shares issued to bearer and whether shares issued to bearer may be exchanged for registered shares;
(k) if shares issued to bearer are authorized to be issued, the manner in which a required notice to members is to be given to the holders of shares issued to bearer; and

(l) a statement that the company may not carry on the activities set forth in subsection (1) of section 5 which statement shall set forth verbatim the activities described in that subsection, unless it is licensed to carry out any of the activities referred to in that subsection; and

(2) For purposes of paragraph (d) of subsection (1), if the Memorandum contains a statement either alone or with other objects or purposes that the object or purpose of the company is to engage in any act or activity that is not prohibited under any law for the time being in force in the British Virgin Islands, the effect of that statement is to make all acts and activities that are not illegal part of the objects or purposes of the company, subject to any limitations in the Memorandum.

(3) The Memorandum must be subscribed by the registered agent named in the Memorandum in the presence of another person who must sign his name as a witness.

(4) The Memorandum, when registered, binds the company and its members from time to time to the same extent as if each member had subscribed his name and affixed his seal thereto and as if there were contained in the Memorandum, on the part of himself, his heirs, executors and administrators, a covenant to observe the provisions of the Memorandum, subject to this Act.

13.(1) The Memorandum, when submitted for registration, must be accompanied by Articles prescribing regulations for the company.

(2) The Articles must be subscribed by the registered agent named in the Memorandum in the presence of another person who must sign his name as a witness.

(3) The Articles, when registered, bind the company and its members from time to time to the same extent as if each member had subscribed his name and affixed his seal thereto and as if there were contained in the Articles, on the part of himself, his heirs, executors and administrators, a covenant to observe the provisions of the Articles, subject to this Act.

14.(1) The Registrar shall not register the Memorandum or the Articles delivered to him unless he is satisfied that all requirements of this Act in respect of registration have been complied with and

(a) a solicitor engaged in the formation of the company; or

(b) the registered agent named in the Memorandum of the company to be registered agent, certifies in writing that the requirements of this Act in respect of registration have been complied with and the written certification delivered to the Registrar is sufficient evidence of compliance.

(2) Subject to subsection (1), the Registrar shall retain and register the Memorandum and Articles submitted to him in a Register to be maintained by him to be known as the Register of International Business Companies.

(3) Upon the registration of the Memorandum and the Articles, the Registrar shall issue a certificate of incorporation under his hand and seal certifying that the company is incorporated.

15.(1) Upon the issue by the Registrar of a certificate of incorporation of a company, the company is, from the date shown on the certificate of incorporation, a body corporate under the name contained in the Memorandum with the full capacity of an individual who is sui juris.

(2) A certificate of incorporation of a company incorporated under this Act issued by the Registrar is prima facie evidence of compliance with all requirements of this Act in respect of incorporation.

16.(1) Subject to any limitation or provisions to the contrary in its Memorandum or Articles, a company incorporated under this Act may amend
its Memorandum or Articles by a resolution of members or, where permitted by its Memorandum or Articles or by this Act, by a resolution of directors.

(2) A company that amends its Memorandum or Articles must submit to the Registrar an extract of the resolution of members or the resolution of directors amending the Memorandum or Articles, as the case may be, certified as a true copy of the resolution amending the Memorandum or Articles by

(a) the solicitor engaged in advising the company; or

(b) the registered agent named in the Memorandum of the company,
and the Registrar must retain and register the certified copy of the extract of the resolution.

(3) An amendment to the Memorandum or Articles has effect from the time the amendment is registered by the Registrar.

(4) A company that wilfully contravenes subsection (2) is liable to a penalty of $50.00 for each day or part thereof during which the contravention continues, and a director who knowingly permits the contravention is liable to a like penalty.

17.A copy of the Memorandum and a copy of the Articles must be given to any member who requests a copy on payment by the member of such amount as the directors may determine to be reasonably necessary to defray the costs of preparing and furnishing them.

PART III
CAPITAL AND DIVIDENDS

17A. Subject to any limitations or provisions to the contrary in its Memorandum or Articles, the unissued shares and treasury shares of a company incorporated under this Act shall be at the disposal of the directors who may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot, grant options over or otherwise dispose of shares to such persons, at such times and upon such terms as the company may, by resolution of directors, determine.

18. No share in a company incorporated under this Act may be issued until the consideration in respect of the share is fully paid, and when issued the share is for all purposes fully paid and non-assessable save that a share issued for a promissory note or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in section 19A.

19.Subject to any limitations or provisions to the contrary in the Memorandum or Articles, each share in a company incorporated under this Act shall be issued for money, services rendered, personal property (including other shares, debt obligations or other securities in the company), an estate in real property, a promissory note or other binding obligation to contribute money or property, or any combination thereof.

19A.(1) The Memorandum or Articles, or agreement for the subscription of shares, of a company incorporated under this Act may contain provisions for the forfeiture of shares for which payment is not made pursuant to a promissory note or other written binding obligation for payment of a debt.

(2) Any provision in the Memorandum or Articles, or in an agreement for the subscription of shares of a company incorporated under this Act providing for the forfeiture of shares shall contain a requirement that written notice specifying a date for payment to be made be served on the member who defaults in making payment pursuant to a promissory note or other written binding obligation to pay a debt.

(3) The written notice referred to in subsection (2) shall name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which the payment required by the notice is to be made and shall contain a statement that in the event of non-payment at or before the time named in the notice the shares, or any of them, in respect of which payment is not made will be liable to be forfeited.

(4) Where a notice has been issued under this section and the requirements of the notice have not been complied with, the directors may, at any time before tender of payment, by resolution of directors forfeit and cancel the shares to which the notice relates.

(5) The company is under no obligation to refund any moneys to the member whose shares have been cancelled pursuant to subsection (4) and that member shall be discharged from any further obligation to the company.

20.(1) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, shares in a company incorporated under this Act may be Issued for such amount as may be determined from time to time by the directors, except that in the case of shares with par value, the amount shall not be less than the par value; and, in the absence of fraud, the decision of the directors as to the value of the consideration received by the company in respect of the issue is conclusive, unless a question of law is involved.

(2) A share issued by a company incorporated under this Act upon conversion of, or in exchange for, another share or a debt obligation or other security in the company, shall be treated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the company in respect of the other share, debt obligation or security.

(3) R E P E A L E D.

21. Subject to any limitations or provisions to the contrary in its Memorandum or Articles, a company incorporated under this Act may issue fractions of a share and unless and to the extent otherwise provided in the Memorandum or Articles, a fractional share has the corresponding fractional liabilities, limitations, preferences, privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.

21A.(1)The authorized capital, if any, of a company incorporated under this Act may be stated in more than one currency in which case the par value of the shares, if any, shall be expressed in the same currencies.

(2) The Registrar may issue guidelines with respect to the calculation of fees payable pursuant to section 104 for companies with an authorized capital stated in a currency other than United States dollars.

22.(1) Upon the issue by a company incorporated under this Act of a share
with par value, the consideration in respect of the share constitutes capital to the extent of the par value and the excess constitutes surplus.

(2) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, upon the issue by a company incorporated under this Act of a share without par value, the consideration in respect of the share constitutes capital to the extent designated by the directors and the excess constitutes surplus, except that the directors must designate as capital an amount of the consideration that is at least equal to the amount that the share is entitled to as a preference, if any, in the assets of the company upon liquidation of the company.

(3) Upon the disposition by a company incorporated under this Act of a treasury share, the consideration in respect of the share is added to surplus.

23.(1) A share issued as a dividend by a company incorporated under this Act shall be treated for all purposes as having been issued for money equal to the surplus that is transferred to capital upon the issue of the share.

(2) In the case of a dividend of authorized but unissued shares with par value, an amount equal to the aggregate par value of the shares shall be transferred from surplus to capital at the time of the distribution.

(3) In the case of a dividend of authorized but unissued shares without par value, the amount designated by the directors shall be transferred from surplus to capital at the time of the distribution, except that the directors must designate as capital an amount that is at least equal to the amount that the shares are entitled to as a preference, if any, in the assets of the company upon liquidation of the company.

(4) A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having a proportionally smaller par value does not constitute a dividend of shares.

24.(1) Subject to any limitations or provisions to the contrary in its Memorandum or Articles, a company incorporated under this Act may amend its Memorandum to increase or reduce its authorized capital, and in connection therewith, the company may

(a) increase or reduce the number of shares which the company may issue;

(b) increase or reduce the par value of any of its shares; or

(c) effect any combination under paragraphs (a) and (b).

(2) Where a company reduces its authorized capital under subsection (1), then, for purposes of computing the capital of the company, any capital that immediately before the reduction was represented by shares but immediately following the reduction is no longer represented by shares shall be deemed to be capital transferred from surplus to capital.

(3) A company shall, in writing, inform the Registrar of any increase or decrease of its authorized capital.

25.(1) A company incorporated under this Act may amend its Memorandum

(a) to divide the shares, including issued shares, of a class or series into a larger number of shares of the same class or series; or

(b) to combine the shares, including issued shares, of a class or series into a smaller number of shares of the same class or series.

(2) Where shares are divided or combined under subsection (1), the aggregate par value of the new shares must be equal to the aggregate par value of the original shares.

26.Shares of a company incorporated under this Act are personal property and are not of the nature of real property.

27.(1) A company incorporated under this Act must state in its Articles
whether or not certificates in respect of its shares shall be issued.

(2) If a company incorporated under this Act issues certificates in respect of its shares, the certificates

(a) must be signed by two directors or two officers of the company, or by one director and one officer; or

(b) must be under the common seal of the company, with or without the signature of any director or officer of the company; and the Articles may provide for the signatures or common seal to be facsimiles.

(3) A certificate issued in accordance with subsection (2) specifying a share held by a member of the company is prima facie evidence of the title of the member to the share specified therein.

28.(1)A company incorporated under this Act shall cause to be kept one or
more registers to be known as share registers containing

(a) the names and addresses of the persons who hold registered shares in the company;

(b) the number of each class and series of registered shares held by each person;

(c) the date on which the name of each person was entered in the share register;

(d) the date on which any person ceased to be a member;

(e) in the case of shares issued to bearer, the total number of each class and series of shares issued to bearer; and

(f) with respect to each certificate for shares issued to bearer,

(i) the identifying number of the certificate;

(ii) the number of each class or series of shares issued to bearer specified therein; and

(iii) the date of issue of the certificate; but the company may delete from the register information relating to persons who are no longer members or information relating to shares issued to bearer that have been cancelled.

(2) The share register may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the company must be able to produce legible evidence of its contents.

(3) R E P E A L E D.

(4) A copy of the share register, commencing from the date of registration of the company, shall be kept at the registered office of the company referred to in section 38.

(5) The share register is prima facie evidence of any matters directed or authorized by this Act to be contained therein.

(6)A company that wilfully contravenes this section is liable to a penalty of $25.00 for each day or part thereof during which the contravention continues, and a director who knowingly permits the contravention is liable to a like penalty.

29.(1) If (a) information that is required to be entered in the share register under Section 28 is omitted therefrom or inaccurately entered therein; or

(b) there is unreasonable delay in entering the information in the share register, a member of the company, or any person who is aggrieved by the omission, inaccuracy or delay, may apply to the court for an order that the share register be rectified, and the court may either grant or refuse the application, with or without costs to be paid by the applicant, or order the rectification of the share register, and may direct the company to pay all costs of the application and any damages the applicant may have sustained.

(2) The court may, in any proceedings under subsection (1), determine any question relating to the right of a person who is a party to the proceedings to have his name entered or omitted from the share register, whether the question arises between

(a) two or more members or alleged members; or

(b) between members or alleged members and the company;

and generally the court may in the proceedings determine any question that may be necessary or expedient to be determined for the rectification of the share register.

30.(1) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, registered shares of a company incorporated under this Act may be transferred by a written instrument of transfer signed by the transferor and containing the name and address of the transferee.

(2) In the absence of a written instrument of transfer mentioned in subsection (1), the directors may accept such evidence of a transfer of shares as they consider appropriate.

(3) A company shall not be required to treat a transferee of a registered share in the company as a member until the transferee's name has been entered in the share register.

(4) Subject to any limitations or provisions to the contrary in its Memorandum or Articles, a company incorporated under this Act must, on the application of the transferor or transferee of a registered share in the company, enter in its share register the name of the transferee of the share.

(5) A transfer of registered shares of a deceased, incompetent or bankrupt member of a company incorporated under this Act made by his personal representative, guardian or trustee, as the case may be, or a transfer of registered shares owned by a person as a result of a transfer from a member by operation of law, is of the same validity as if the personal representative, guardian, trustee or transferee had been the registered holder of the shares at the time of the execution of the instrument of transfer.

(6) For the purposes of subsection (5), what amounts to incompetence on the part of a person is a matter to be determined by the court after having regard to all the relevant evidence and the circumstances of the case.

31. A share issued to bearer is transferable by delivery of the certificate relaing to the share.

32.(1) Where a governmental authority, whether it is legally constituted or not, in any jurisdiction outside the British Virgin Islands

(a) by or in connection with a nationalization, expropriation, confiscation, coercion, force or duress, or similar action; or

(b) by or in connection with the imposition of any confiscatory tax, assessment, or other governmental charge, takes or seizes any shares or other interests in a company incorporated under this Act, the company itself or a person holding shares or any other interest in the company, including an interest as a creditor, may apply to the court for an order that the company disregard the taking or seizure and continue to treat the person who would have held shares or any other interest in the company but for the taking or seizure of the shares or other interest as continuing to hold the shares or other interest.

(2) Without affecting subsection (1), where a person whose shares or other interests have been taken or seized as referred to in subsection (1) is other than a natural person, the person making the application under subsection (1), or the company itself, may apply to the court for an additional order for the company to treat the persons believed by the company to have held the direct or indirect beneficial interests in the share or other interests in the company as the holder of those shares or other interests.

(3) The court may, upon application made to it under subsection (1) or (2),
(a) grant such relief as it considers equitable and proper; and

(b) order that any shares of or other interests in the company vest in such trustees as the court may appoint upon such trusts and for such purposes as the court determines.

33.(1) Subject to any limitations or provisions to the contrary in its Memorandum or Articles, a company incorporated under this Act may purchase, redeem or otherwise acquire and hold its own shares but only out of surplus or in exchange for newly issued shares of equal value.

(1A) Subject to subsection (1), a company incorporated under this Act may not purchase, redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired, unless the company is permitted to purchase, redeem or otherwise acquire the shares without that consent by virtue of

(a) the provisions of the Memorandum or Articles of the company;

(b) the designations, powers, preferences, rights, qualifications, limitations and restrictions with which the shares were issued; or

(c)the subscription agreement for the issue of the shares.

(2) No purchase, redemption or other acquisition permitted under subsection (1) shall be made unless the directors determine that immediately after the purchase, redemption or other acquisition

(a) the company will be able to satisfy its liabilities as they become due in the ordinary course of its business; and

(b) the realizable value of the assets of the company will not be less than the sum of its total liabilities, other than deferred taxes, as shown in the books of account, and its capital; and, in the absence of fraud, the decision of the directors as to the realizable value of the assets of the company is conclusive, unless a question of law is involved.

(3) A determination by the directors under subsection (2) is not required where shares are purchased, redeemed or otherwise acquired,

(a) pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for money or other property of the company;

(b) by virtue of a transfer of capital pursuant to paragraph (b) (iii) of section 35(1);

(c) by virtue of the provisions of section 83; and

(d) pursuant to an order of the court.

(4) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, shares that a company purchases, redeems or otherwise acquires may be cancelled or held as treasury shares unless the shares are purchased, redeemed or otherwise acquired by virtue of a reduction in capital in a manner that would be a contravention of the requirements of section 35(3), in which case they shall be cancelled but they shall be available for reissue; and upon the cancellation of a share, the amount included as capital of the company with respect to that share shall be deducted from the capital of the company.

(5) A company incorporated under this Act may purchase, redeem or otherwise acquire the shares of the company at a price lower than fair value if permitted by, and then only in accordance with, the terms of

(a) its Memorandum or Articles; or

(b) a written agreement for the subscription for the shares to be purchased, redeemed or otherwise acquired.

34. Where shares in a company incorporated under this Act

(a) are held by the company as treasury shares; or

(b) are held by another company of which the first company holds, directly or indirectly, shares having more than 50 per cent of the votes in the election of directors of the other company, the shares of the first company are not entitled to vote or to have dividends paid thereon and shall not be treated as outstanding for any purpose under this Act except for purposes of determining the capital of the first Company.
35.(1) Subject to any limitations or provisions to the contrary in the Memorandum or Articles and subject to subsections (3) and (4), the capital of a company incorporated under this Act may, by a resolution of members or by a resolution of directors be

(a) increased by transferring an amount out of the surplus of the company to capital; or

(b) reduced by transferring an amount out of capital of the company to surplus.

(2) R E P E A L E D.

(3) No reduction of capital shall be effected that reduces the capital of the company to an amount that is less than the sum of

(a) the aggregate par value of

(i) all outstanding shares with par value, and

(ii) all shares with par value held by the company as treasury shares; and

(b) the aggregate of the amounts designated as capital of

(i) all outstanding shares without par value, and

(ii) all shares without par value held by the company as treasury shares that are entitled to a preference, if any, in the assets of the company upon liquidation of the company.

(4) No reduction of capital shall be effected under subsection (1) unless the directors determine that immediately after the reduction

(a) the company will be able to satisfy its liabilities as they become due in the ordinary course of its business; and

(b) the realizable value of the assets of the company will not be less than its total liabilities, other than deferred taxes, as shown in the books of account, and its remaining capital; and, in the absence of fraud, the decision of the directors as to the realizable value of the assets of the company is conclusive, unless a question of law is involved.

36.(1) Subject to any limitations or provisions to the contrary in its Memorandum or Articles, a company incorporated under this Act may, by a resolution of directors, declare and pay dividends in money, shares or other property.

(2) Dividends shall only be declared and paid out of surplus.

(3) No dividend shall be declared and paid unless the directors determine that immediately after the payment of the dividend

(a) the company will be able to satisfy its liabilities as they become due in the ordinary course of its business; and

(b) the realizable value of the assets of the company will not be less than the sum of its total liabilities, other than deferred taxes, as shown in the books of account, and its capital; and, in the absence of fraud, the decision of the directors as to the realizable value of the assets of the company is conclusive, unless a question of law is involved.

37. Subject to any limitations or provisions to the contrary in its Memorandum or Articles, a company incorporated under this Act may, by a resolution of directors, include in the computation of surplus for any purpose under this Act the net unrealized appreciation of the assets of the company, and, in the absence of fraud, the decision of the directors as to the value of the assets is conclusive, unless a question of law is involved.

37A.(1) A mortgage or charge of shares of a company incorporated under this Act must be in writing signed by, or with the authority of, the holder of the bearer share or the registered holder of the registered share to which the mortgage or charge relates.

(2) In the case of a bearer share, a mortgage or charge thereof is not valid and enforceable unless the certificate for the share to be mortgaged or charged is deposited with the mortgagee or chargee but the deposit of the certificate with the mortgagee or chargee shall not constitute a transfer of the bearer share, title to which shall only pass upon due compliance with the provisions of law governing realization of the security by the mortgagee or chargee.

(3) A mortgage or charge of shares of a company incorporated under this Act need not be in any specific form but it must clearly indicate

(a) the intention to create a mortgage or charge; and

(b) the amount secured by the mortgage or charge or how that amount is to be calculated.

(4) A mortgage or charge of shares of a company incorporated under this Act may be governed by the law of a jurisdiction other than the British Virgin Islands, but if a law other than the law of the British Virgin Islands is specified as the governing law

(a) the mortgage or charge must be in compliance with the requirements of its governing law in order for the mortgage or charge to be valid and binding on the company; and

(b) the remedies available to a mortgagee or chargee shall be governed by the governing law and the instrument creating the mortgage or charge save that the rights between the mortgagor or mortgagee as a member of the company and the company shall continue to be governed by the Memorandum and the Articles of the company and this Act.

(5) If no law is specified to govern a mortgage or charge of shares of a company incorporated under this Act, the instrument creating the mortgage or charge shall be governed by the laws of the British Virgin Islands and, in the case of a default by the mortgagor or chargor on the terms of the mortgage, the mortgagee or chargee is entitled to the following remedies:

(a) subject to any limitations or provisions to the contrary in the instrument creating the mortgage or charge, the right to sell the shares; and

(b) the right to appoint a receiver who, subject to any limitations or provisions to the contrary in the instrument creating the mortgage or charge, may
(i) vote the shares,

(ii) receive dividends and other payments in respect of the shares, and

(iii) exercise other rights and powers of the mortgagor or chargor in respect of the shares, until such time as the mortgage or charge is discharged.

(6) Subsection (5) also applies to a mortgage or charge of shares of a company incorporated under this Act where the law of the British Virgin Islands is specified as the governing law.

(7) Subject to any provisions to the contrary in the instrument of mortgage or charge of shares of a company incorporated under this Act, all amounts that accrue from the enforcement of the mortgage or charge shall be applied in the following manner:

(a) firstly, in meeting the costs incurred in enforcing the mortgage or charge;

b) secondly, in discharging the sums secured by the mortgage or charge; and

(c) thirdly, in paying any balance due to the mortgagor or chargor.

(8) The remedies referred to in subsection (5) are not exercisable until

(a) a default has occurred and has continued for a period of not less than 30 days, or such shorter period as may be specified in the instrument creating the mortgage or charge; and

(b) the default has not been rectified within 14 days from service of the notice specifying the default and requiring rectification thereof.

(9) In the case of the mortgage or charge of registered shares there may be entered in the share register of the company

(a) a statement that the shares are mortgaged or charged;

(b) the name of the mortgagee or chargee; and

(c) the date on which the statement and name are entered in the share register.

PART IV
REGISTERED OFFICE AND AGENT

38. A company incorporated under this Act shall at all times have a registered office in the British Virgin Islands, and the registered office must be an office maintained in the British Virgin Islands by the company or its registered agent.

39.(1) A company incorporated under this Act shall at all times have a
registered agent in the British Virgin Islands.

(2) No person shall be a registered agent unless he has been licensed as a registered agent under the Company Management Act or under the Banks and Trust Companies Act.

40. R E P E A L E D.

40A.(1) The Registrar shall maintain a register of licensed registered agents in which the following details shall be recorded:

(a) the name of the registered agent;

(b) the address of the registered agent;

(c) the names of the individuals authorized to sign on behalf of any firm or corporation that is a registered agent;

(d) the date when the first licence to act as a registered agent was issued pursuant to the Company Management Act, 1990 or the Banks and Trust Companies Act, 1990; and

(e) in a case where a registered agent ceases to be a registered agent,

(i) the date on which the registered agent ceased to be licensed, and

(ii) whether the cessation was due to failure to renew his licence, death or liquidation or revocation under the Company Management Act or under the Banks and Trust Companies Act.

(2) The Registrar shall, during the month of February in each year, publish in the Gazette, a list of registered agents as appeared on the register of licensed registered agents on 31st January in that year.

(3) Any change in the details kept by the Registrar in the register of registered agents pursuant to subsection (1) shall be notified immediately by the registered agent to the Registrar, and, upon payment of such fee as may be prescribed by the Governor in Council, the Registrar shall record the change in the register of registered agents.

(4) Where the registered agent of a company desires to cease to act as registered agent and the registered agent is unable to reach an agreement with the company for which he is registered agent concerning his replacement, the following provisions apply:

(a) the registered agent shall give not less than 90 days written notice to any director or officer of the company of which he is the registered agent at the director's or officer's last known address, or if the registered agent is not aware of the identity of any director or officer then the person from whom the registered agent last received instructions concerning the company, specifying the wish of the registered agent to resign as registered agent and shall together with the notice provide a list of all registered agents in the British Virgin Islands with their names and addresses;

(b) the registered agent shall submit to the Registrar a copy of the notice and list of registered agents referred to in paragraph (a);

(c) if, at the time of expiry of the notice, the company has not adopted a resolution to amend its Memorandum to change its registered agent, the registered agent shall inform the Registrar in writing that the company has not changed its registered agent whereupon the Registrar shall publish a notice in the Gazette that the name of the company will be struck off the Register, unless the company, within 30 days from the date of the publication of the notice in the Gazette, registers with the Registrar a copy of a resolution amending its Memorandum to change its registered agent; and

(d) if a company fails within 30 days from the date of the publication of the notice referred to in paragraph (c) to register with the Registrar a copy of a resolution amending its Memorandum to change its registered agent, the Registrar shall strike the name of the company off the Register and shall publish in the Gazette a notice that the name of the company has been struck off the Register.

(5) Where the licence of a registered agent has been revoked under the Company Management Act, 1990 or the Banks and Trust Companies Act, 1990, or if a registered agent dies or fails to renew his licence the Inspector of Company Managers or the Inspector of Banks and Trust Companies, as the case may be, shall, for the purpose of changing the registered agent of the company, communicate with each company for which the person whose licence has been revoked or who has died or has failed to renew his licence is the registered agent and the provisions of subsection (4) have effect mutatis mutandis for the purpose of providing the procedures for changing the registered agent.

(6) A company that has been struck off the Register under this section remains liable for all claims, debts, liabilities and obligations of the company, and the striking-off does not affect the liability of any of its members, directors, officers or agents.

41. A company that wilfully contravenes sections 38 or 39 is liable to a penalty of $25.00 for each day or part thereof during which the contravention continues, and a director who knowingly permits the contravention is liable to a like penalty.

PART V
DIRECTORS, OFFICERS, AGENTS AND LIQUIDATORS

42. Subject to any limitations or provisions to the contrary in its Memorandum or Articles, the business and affairs of a company incorporated under this Act shall be managed by a board of directors that consists of one or more persons who shall be individuals or companies.

43.(1) The first directors of a company incorporated under this Act
shall be elected by the subscribers to the Memorandum; and thereafter, the directors shall be elected by the members for such term as the members may determine and where permitted by the Memorandum or Articles of a company incorporated under this Act, the directors may also elect directors for such term as the directors may determine.

(2) Each director holds office until his successor takes office or until his earlier death, resignation or removal.

(3) Subject to any limitations or provisions to the contrary in the Memorandum or Articles

(a) a director may be removed from office by a resolution of members or by a resolution of directors; and

(b) a director may resign his office by giving written notice of his resignation to the company and the resignation has effect from the date the notice is received by the company or from such later date as may be specified in the notice.

(4) Subject to any limitations or provision to the contrary in the Memorandum or Articles, a vacancy in the board of directors may be filled by a resolution of members or of a majority of the remaining directors.

43A.(1) A company incorporated under this Act may keep a register to be known as a register of directors containing

(a) the names and addresses of the persons who are directors of the company;

(b) the date on which each person whose name is entered in the register was appointed as a director of the company; and

(c)the date on which each person named as a director ceased to be a director of the company.

(2)The register of directors may be in such form as the directors approve, but if it is in magnetic, electronic or other data storage form,the company must be able to produce legible evidence of its contents.

(3) A copy of the register of directors, commencing from the date of the registration of the company, shall be kept at the registered office of the company referred to in section 38.

(4) The register of directors is prima facie evidence of any matters directed or authorized by this Act to be contained therein.

44. The number of directors shall be fixed by the Articles and, subject to any limitations or provisions to the contrary in the Memorandum or Articles, the Articles may be amended to change the number of directors.

45. The directors have all the powers of the company that are not reserved to the members under this Act or in the Memorandum or Articles.

46. Subject to any limitations or provisions to the contrary in the Memorandum or Articles, the directors may, by a resolution of directors, fix the emoluments of directors in respect of services to be rendered in any capacity to the company.

47.(1) The directors may, by a resolution of directors, designate one or more committees, each consisting of one or more directors.

(2) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, each committee has such powers and authority of the directors, including the power and authority to affix the common seal of the company, as are set forth in the resolution of directors establishing the committee, except that no committee has any power or authority with respect to the matters requiring a resolution of directors under sections 43 and 53.

48.(1) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, the directors of a company incorporated under this Act may meet at such times and in such manner and places within or outside the British Virgin Islands as the directors may determine to be necessary or desirable.

(2) A director shall be deemed to be present at a meeting of directors if

(a) he participates by telephone or other electronic means; and

(b) all directors participating in the meeting are able to hear each other.

49.(1) Subject to a requirement in the Memorandum or Articles to give longer notice, a director shall be given not less than 3 days notice of meetings of directors.

(2) Notwithstanding subsection (1), subject to any limitations or provisions to the contrary in the Memorandum or Articles, a meeting of directors held in contravention of that subsection is valid if all of the directors, or such majority thereof as may be specified in the Memorandum or Articles entitled to vote at the meeting, have waived the notice of the meeting; and, for this purpose, the presence of a director at the meeting shall be deemed to constitute waiver on his part.

(3) The inadvertent failure to give notice of a meeting to a director, or the fact that a director has not received the notice, does not invalidate the meeting.

50. The quorum for a meeting of directors is that fixed by the Memorandum or Articles; but, where no quorum is so fixed, a meeting of directors is properly constituted for all purposes if at the commencement of the meeting one half of the total number of directors are present in person or by alternate.

51. Subject to any limitations or provisions to the contrary in the Memorandum or Articles, an action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee of directors consented to in writing or by telex, telegram, cable or other written electronic communication, without the need for any notice.

52.(1) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, a director may by a written instrument appoint a written instrument appoint an alternate who need not be a director.

(2) An alternate for a director appointed under subsection (1) is entitled to attend meetings in the absence of the director who appointed him and to vote or consent in the place of the director.

53.(1) The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the company.

(2) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, each officer or agent has such powers and authority of the directors, including the power and authority to affix the common seal of the company, as are set forth in the Articles or in the resolution of directors appointing the officer or agent, except that no officer or agent has any power or authority with respect to the matters requiring a resolution of directors under this Act.

(3) The resolution of directors appointing any person to be an agent of the company may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powers conferred on the agent by the company.

54.(1) Every director, officer, agent and liquidator of a company incorporated under this Act, in performing his functions, shall act honestly and in good faith with a view to the best interests of the company and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

2) No provision in the Memorandum or Articles of a company incorporated under this Act or in any agreement entered into by the company relieves a director, officer, agent or liquidator of the company from the duty to act in accordance with the Memorandum or Articles or from any personal liability arising from his management of the business and affairs of the company.

55. Every director, officer, agent and liquidator of a company incorporated under this Act, in performing his functions, is entitled to rely upon the share register kept under section 28, the books of accounts and records and the minutes and copies of consents to resolutions kept under section 66 and any report made to the company by any other director, officer, agent or liquidator or by any person selected by the company to make the report.

56.(1) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, no agreement or transaction between

(a) a company incorporated under this Act; and

(b) one or more of its directors or liquidators, or any person in which any director or liquidator has a financial interest or to whom any director or liquidator is related, including as a director or liquidator of that other person, is void or voidable for this reason only or by reason only that the director or liquidator is present at the meeting of directors or liquidators, or at the meeting of the committee of directors or liquidators, that approves the agreement or transaction or that the vote or consent of the director or liquidator is counted for that purpose.

(2) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, an agreement or transaction referred to in subsection (1) is valid if

(a) the material facts of the interest of each director or liquidator in the agreement or transaction and his interest in or relationship to any other party to the agreement or transaction are disclosed in good faith or are known by the other directors or liquidators; and

(b) the agreement or transaction is approved or ratified by a resolution of directors or liquidators that has been approved

(i) without counting the vote or consent of any interested director or liquidator, or

(ii) by the unanimous vote or consent of all disinterested directors or liquidators if the votes or consents of all disinterested directors or liquidators is insufficient to approve a resolution of directors or liquidators.

(3) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, an agreement or transaction referred to in subsection (1) is valid if

(a) the material facts of the interest of each director or liquidator in the agreement or transaction and his interest in or relationship to any other party to the agreement or transaction are disclosed in good faith or are known by the members entitled to vote at a meeting of members; and

(b) the agreement or transaction is approved or ratified by a resolution of members.

(3A) subject to any limitations or provisions to the contrary in the Memorandum or Articles, an agreement or transaction referred to in subsection (1) is valid unless it is shown that at the time the agreement or transaction was authorized, approved or ratified by resolution of directors or by resolution of members the agreement or transaction was unfairly prejudicial to one or more members of the company or to the creditors of the company except that no person who voted in favour of the resolution authorizing, approving or ratifying the agreement or transaction shall be capable subsequently of impugning or objecting to the agreement or transaction.

(4) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, a director or liquidator who has an interest in any particular business to be considered at a meeting of directors, liquidators or members may be counted for purposes of determining whether the meeting is duly constituted in accordance with section 50 or otherwise.

57.(1) Subject to subsection (2) and any limitations in its Memorandum or Articles, a company incorporated under this Act may indemnify against all expenses, including legal fees, and against all judgments, fines, and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who

(a) is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the company; or

(b) is or was, at the request of the company, serving as a director, officer or liquidator of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise.

(2) Subsection (1) only applies to a person referred to in that subsection if the person acted honestly and in good faith with a view to the best interests of the company and, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.

(3) The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the company and as to whether the person had no reasonable cause to believe that his conduct was unlawful is in the absence of fraud, sufficient for the purposes of this section, unless a question of law is involved.

(4) The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create a presumption that the person did not act honestly and in good faith and with a view to the best interests of the company or that the person had reasonable cause to believe that his conduct was unlawful.

(5) If a person referred to in subsection (1) has been successful in defence of any proceedings referred to in subsection (1), the person is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection with the proceedings.

58.A company incorporated under this Act may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the company, or who at the request of the company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not the company has or would have had the power to indemnify the person against the liability under subsection (1) of section 57.

PART VI
PROTECTION OF MEMBERS AND CREDITORS

59.(1) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, the directors of a company incorporated under this Act may convene meetings of the members of the company at such times and in such manner and places within or outside the British Virgin Islands as the directors consider necessary or desirable.

(2) Subject to a provision in the Memorandum or Articles for a lesser percentage, upon the written request of members holding more than 50 per cent of the votes of the outstanding voting shares in the company, the directors shall convene a meeting of members.

(3) Subject to any limitations or provisions to the contrary in the Memorandum or Articles, a member shall be deemed to be present at a meeting of members if

(a) he participates by telephone or other electronic means; and

(b) all members participating in the meeting are able to hear each other.

(4) A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.

(5) The following apply in respect of joint ownership of shares;

(a) if 2 or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;

(b) if only one of them is present in person or by proxy, he may vote on behalf of all of them; and

(c) if 2 or more are present in person or by proxy, they must vote as one.

60.(1) Subject to a requirement in the Memorandum or Articles to give longer notice, the directors shall not give less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear as members in the share register referred to in section 28 and are entitled to vote at the meeting;

(2) Notwithstanding subsection (1), and subject to any limitations or provisions to the contrary in the Memorandum or Articles, a meeting of members held in contravention of the requirement to give notice is valid if members holding a 90 per cent majority, or such lesser majority as may be specified in the Memorandum of Articles, of

(a) the total number of shares entitled to vote on all the matters to be considered at the meeting; or

(b) the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with an absolute majority of he remaining votes, have waived notice of the meeting; and, for this purpose, the presence of a member at the meeting shall be deemed to constitute waiver on his part.

(3) The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received the notice, does not invalidate the meeting.

61. The quorum for meeting of members for purposes of a resolution of members is that fixed by the Memorandum or Articles; but, where no quorum is so fixed, a meeting of members is properly constituted for all purposes if at the commencement of the meeting there are present in person or by proxy one-half of the votes of the shares of each class or series of shares entitled to vote as a class or series thereon and the same proportion of the votes of the remaining shares entitled to vote thereon.

62.(1) Except as otherwise provided in the Memorandum or Articles, all
shares vote as one class and each whole share has one vote.

(2) The directors of a company incorporated under this Act may fix the date notice is given of a meeting as the record date for determining those shares that are entitled to vote at the meeting.

62A.(1) One or more members of a company incorporated under this Act may by agreement in writing deposit bearer shares with, or transfer registered shares to, any person authorized to act as trustee for the purpose of vesting in such person, who may be designated voting trustee, the right to vote thereon and the following provisions shall apply:

(a) the period of time for which the trustee may vote shall not exceed 10 years;

(b) subject to paragraph (a), the agreement may contain any other provisions not inconsistent with the purpose of the agreement;

(c) a copy of the agreement shall be filed at the registered office of the company and shall be open to the inspection of members of the company

(i) in the case of any beneficiary of the trust under the agreement, daily during business hours, and

(ii) in the case of members of the company, subject to the provisions of section 67;

(d) where certificates for registered shares have been issued for shares that are to be transferred to a trustee pursuant to this section, new certificates shall be issued to the voting trustee to represent the shares so transferred and the certificates formerly representing the shares that have been transferred shall be surrendered and cancelled;

(e) where a certificate is issued to a voting trustee, an endorsement shall be made on the certificate that the shares represented thereby in the case of registered shares and the certificates in case of bearer shares are held by the person named therein pursuant to an agreement;

(f) there shall be noted in the share register of the company against the record of the shares held by the trustee the fact that such an agreement exists;

(g) the voting trustee may vote the shares so issued or transferred during the period specified in the agreement;

(h) shares registered in the name of the voting trustee may be voted either in person or by proxy and, in voting the shares, the voting trustee shall not incur any liability as member or trustee, except in so far as he may be liable for his own conduct or acts;

(i) where two or more persons are designated as voting trustees and the right and method of voting any shares registered in their names at any meeting of members or on any resolution of members are not fixed by the agreement appointing the trustees, the right to vote shall be determined by a majority of the trustees, or if they are equally divided as to the right and manner of voting the shares in any particular case, the votes of the shares in such case shall be divided equally among the trustees;

(j) at any time within 2 years prior to the time of expiration of any voting trust agreement as originally fixed or as last extended as provided in this subsection, one or more beneficiaries of the trust under the voting trust agreement may, by written agreement and with the written consent of the voting trustee, extend the duration of the voting trust agreement for an additional period not exceeding 10 years from the expiration date of the trust as originally fixed or as last extended; and

(k) the voting trustee shall, prior to the time of expiration of a voting trust agreement, as originally fixed or as previously extended, as the case may be, file at the registered office of the company a copy of the extension agreement and of his consent thereto, and thereupon the duration of the voting trust agreement shall be extended for the period fixed in the extension agreement, but no extension agreement shall affect the rights or obligations of persons not parties thereto.

(2) Two or more members of a company incorporated under this Act may by agreement in writing provide that in exercising any voting rights the shares held by them shall be voted

(a) as provided by the agreement;

(b) as the parties may agree; or

(c) as determined in accordance with such procedure as they may agree upon.

(3) No agreement made pursuant to subsection (2) shall be effective for a period of more than 10 years from the date it is made, but at any time within the 2 years immediately preceding the date of the expiration of the agreement the parties may extend its duration for an additional period, not exceeding 10 years at any one time, as they may desire.

(4) The validity of any voting trust or other voting agreement is not affected during a period of 10 years from the date when it was created or last extended by reason only of the fact that under its terms, it will or may last beyond a period of 10 years.

(5) This section shall be deemed not to invalidate any voting or other agreement among members or any irrevocable proxy that is not otherwise illegal.

63. Subject to any limitations or provisions to the contrary in the Memorandum or Articles, an action that may be taken by members at a meeting of members may also be taken by a resolution of members consented to in writing or by telex, telegram, cable or other written electronic communication, without the need for any notice.

64.(1) Any notice, information or written statement required under this Act to be by a company incorporated under this Act to members must be served

(a) in the case of members holding registered shares,

(i) in the manner prescribed in the Memorandum or Articles, as the case may be, or

(ii) in the absence of a provision in the Memorandum or Articles, by personal service or by mail addressed to each member at the address shown in the share register; and

(b) in the case of members holding shares issued to bearer, in the absence of a provision in the Memorandum or Articles, or if the notice, information or written statement can no longer be served as specified in the Memorandum and Articles, if the notice, information or written statement is published in a newspaper circulated in the British Virgin Islands and a newspaper in the place where the company has its principal office.

(2) Subject to a requirement in the Memorandum or Articles to give a specific length of notice, the directors must give sufficient notice of meetings of members to members holding shares issued to bearer to allow a reasonable opportunity for them to take action in order to secure or exercise the right or privilege, other than the right or privilege to vote, that is the subject of the notice.

(3) For purposes of subsection (2), what amounts to sufficient notice is a matter of fact to be determined after having regard to all the circumstances.

65.(1) Any summons, notice, order, document, process, information or written statement to be served on a company incorporated under this Act may
be served by leaving it, or by sending it, by registered mail, addressed to the company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent of the company.
(2)Service of any summons, notice, order, document, process, information or written statement to be served on a company incorporated under this Act may be proved by showing that the summons, notice, order, document, process, information or written statement

(a) was mailed in such time as to admit its being delivered in the normal course of delivery, within the period prescribed for service; and

(b) was correctly addressed and the postage was prepaid.

66.(1) A company incorporated under this Act shall keep such accounts and records as the directors consider necessary or desirable in order to reflect the financial position of the company.

(2) A company incorporated under this Act shall keep

(a) minutes of all meetings of

i) directors,

(ii) members,

(iii) committees of directors,

(iv) committees of officers, and

(v) committees of members; and

(b) copies of all resolutions consented to by

(i) directors,

(ii) members,

(iii) committees of directors,

(iv) committees of officers, and

(v) committees of members.

(3) The books, records and minutes required by this section shall be kept at the registered office of the company or at such other place as the directors determine.

(3A) A company incorporated under this Act shall have a common seal and an imprint thereof shall be kept at the registered office of the Company.

(4) A company that wilfully contravenes this section is liable to a penalty of $25.00 for each day or part thereof during which the contravention continues, and a director who knowingly permits the contravention is liable to a like penalty.

67.(1) A member of a company incorporated under this Act may, in person
or by attorney and in furtherance of a proper purpose, request in writing
specifying the purpose to inspect during normal business hours the share
register of the company or the books, records, minutes and consents kept by the company and to make copies or extracts therefrom.

(2) For purposes of subsection (1), a proper purpose is a purpose reasonably related to the member's interest as a member.
(3) If a request under subsection (1) is submitted by an attorney for a member, the request must be accompanied by a power of attorney authorizing the attorney to act for the member.

(4) If the company, by a resolution of directors, determines that it is not in the best interest of the company or of any other member of the company to comply with a request under subsection (1), the company may refuse the request.

(5) Upon refusal by the company of a request under subsection (1), the member may before the expiration of a period of 90 days of his receiving notice of the refusal, apply to the court for an order to allow the inspection.

68.(1) Contracts may be entered into on behalf of a company incorporated
over this Act as follows:

(a) a contract that, if entered into between individuals, is required by law to be in writing and under seal, may be entered into by or on behalf of the company in writing under the common seal of the company, and may, in the same manner, be varied or discharged;

(b) a contract that, if entered into between individuals is required by law to be in writing and signed by the parties, may be entered into by or on behalf of the company in writing and signed by a person acting under the express or implied authority of the company, and may, in the same manner, be varied or discharged; and

(c) a contract that, if entered into between individuals, is valid although entered into orally, and not reduced to writing, may be entered into orally by or on behalf of the company by a person acting under the express or implied authority of the company, and may, in the same manner, be varied or discharged.

(2) A contract entered into in accordance with this section is valid and is binding on the company and its successors and all other parties to the contract.

(3) Without affecting paragraph (a) of subsection (1), a contract, agreement or other instrument executed by or on behalf of a company by a director or an authorized officer or agent of the company is not invalid by reason only of the fact that the common seal of the company is not affixed to the contract, agreement or instrument.

69.(1) A person who enters into a written contract in the name of or on
behalf of a company incorporated under this Act before the company comes into existence, is personally bound by the contract and is entitled to the benefits of the contract, except where

(a) the contract specifically provides otherwise; or

(b) subject to any provisions of the contract to the contrary, the company adopts the contract under subsection (2).

(2) Within a reasonable time after a company incorporated under this Act comes into existence, the company may, by any action or conduct signifying its intention to be bound thereby, adopt a written contract entered into in its name or on its behalf before it came into existence.

(3) When a company adopts a contract under subsection (2),

(a) the company is bound by, and entitled to the benefits of, the contract as if the company had been in existence at the date of the contract and had been a party to it; and

(b) subject to any provisions of the contract to the contrary, the person who acted in the name of or on behalf of the company ceases to be bound by or entitled to the benefits of the contract.

70.(1) If any contract, agreement, deed or other instrument relating to the payment of a claim or the delivering or transferring of property, whether real or personal, wherever situate, is entered into by a company incorporated under this Act and the contract, agreement, deed or other instrument designates a payee or beneficiary to receive the payment or property

(a)upon the death of a person making the designation;

(b) upon the death of another person; or

(c) upon the happening of any other event specified in the contract, agreement, deed or other instrument, then, any such payment, delivery or transfer, the rights of any payee or beneficiary, and the ownership of any property received, are not impaired or defeated by any law or rule of law governing the transfer of property by will, gift or intestacy.

(2) Subsection (1) applies to a contract, agreement, deed or other instrument referred to in that subsection notwithstanding anything to the contrary in the law of any other jurisdiction, including the law of any jurisdiction where the person making the designation referred to in subsection (1) resides or is domiciled, and notwithstanding that

(a)the designation is revocable or subject to change; or

(b) the claim or property

(i) is not yet payable or transferable, as the case may be, at the time the designation is made, or

(ii) is subject to withdrawal, collection or assignment by the person making the designation.

70A.(1) A company incorporated under this Act may create a mortgage, charge or other encumbrance over any of its assets situate in any part of the world in accordance with the law of any jurisdiction of the company's choice and the mortgage, charge or other encumbrance shall be binding on the company to the extent, and in accordance with, the requirements, of the chosen law.

(2) A company incorporated under this Act may maintain at its registered office a register of mortgages, charges and other encumbrances in which there shall be entered particulars regarding each mortgage, charge and other encumbrances as follows:
(a) the sum secured;

(b) the assets secured;

(c) the name and address of the mortgagee, chargee or other encumbrancer;

(d) the date of creation of the mortgage, charge or other encumbrance; and

(e) the date on which the particulars specified in paragraphs (a) to (d) in respect of the mortgage, charge or other encumbrance are entered in the register.

(3) In the event that an application is made to a court in the British Virgin Islands to enforce any mortgage, charge or other encumbrance created by a company incorporated under this Act and there are assets of the company which are subject to two or more mortgages, charges or other encumbrances, then, notwithstanding the provisions of any other law, priorities shall be determined in accordance with the dates of entry in the register of mortgages and charges; and, unregistered mortgages, and other encumbrances created after 1st January, 1991 shall rank after registered mortgages, charges and other encumbrances, but unregistered mortgages, charges and other encumbrances created prior to 1st January 1991 shall have priority over mortgages, charges and other encumbrances registered pursuant to this provision and shall rank in order of their creation.

71. A promissory notel of exchange shall be deemed to have been made, accepted or endorsed by a company incorporated under this Act if it is made, accepted or endorsed in the name of the company

(a) by or on behalf or on account of the company; or

(b) by a person acting under the express or implied authority of the company; and if so endorsed, the person signing the endorsement is not liable thereon.

72.(1) A company incorporated under this Act may, by an instrument in
writing, whether or not under its common seal, authorize a person, either generally or in respect of any specified matters, as its agent to act on behalf of the company and to execute contracts, agreements, deeds and other instruments on behalf of the company.

(2) A contract, agreement, deed or other instrument executed on behalf of the company by an agent appointed under subsection (1), whether or not under his seal, is binding on the company and has the same effect as if it were under the common seal of the company.

73.(1) A document requiring authentication or attestation by a company
incorporated under this Act may be signed by a director, a secretary
or by an authorized officer or agent of the company, and need not be under its common seal.

(2) If the signature of any director, officer or agent authenticating or attesting any document is verified in writing by the registered agent of a company the company is bound by the document.

74.If at any time there is no member of a company incorporated under this Act, any person doing business in the name of or on behalf of the company is personally liable for the payment of all debts of the company contracted during the time and the person may be sued therefore without joinder in the proceedings of any other person.

PART VII
MERGER, CONSOLIDATION, SALE OF ASSETS,
FORCED REDEMPTIONS, ARRANGEMENTS AND DISSENTERS.

75.In this Part,

"consolidated company" means the new company that results from the consolidation of 2 or more constituent companies;

"consolidation" means the uniting of 2 or more constituent companies into a new company;

"constituent company" means an existing company that is participating in a merger or consolidation with one or more other existing companies;

"merger" means the merging of 2 or more constituent companies into one of the constituent companies;

"parent company" means a company that owns at least 90 per cent of the outstanding shares of each class and series of shares in another company;

"subsidiary company" means a company at least 90 per cent of whose outstanding shares of each class and series of shares are owned by another company;

"surviving company" means the constituent company into which one or more other constituent companies are merged.

76.(1) Two or more companies incorporated under this Act may merge or consolidate in accordance with subsections (3) to (5).

(2) One or more companies incorporated under this Act may merge or consolidate with one or more companies incorporated under the Companies Act in accordance with subsections (3) to (5), if the surviving company or the consolidated company will satisfy the requirements prescribed for an International Business Company under section 5.

(3) The directors of each constituent company that proposes to participate in a merger or consolidation must approve a written plan of merger or consolidation containing, as the case requires,

(a) the name of each constituent company and the name of the surviving company or the consolidated company;

(b) in respect to each constituent company,

(i) the designation and number of outstanding shares of each class and series of shares, specifying each such class and series entitled to vote on the merger or consolidation, and

(ii) a specification of each such class and series, if any, entitled to vote as a class or series;

(c) the terms and conditions of the proposed merger or consolidation, including the manner and basis of converting shares in each constituent company into shares, debt obligations or other securities in the surviving company or consolidated company, or money or other property, or a combination thereof;
(d) in respect of a merger, a statement of any amendment to the Memorandum or Articles of the surviving company to be brought about by the merger; and

(e) in respect of a consolidation, everything required to be included in the Memorandum and Articles for a company incorporated under this Act, except statements as to facts not available at the time the plan of consolidation is approved by the directors.

(4) Some or all shares of the same class or series of shares in each constituent company may be converted into a particular or mixed kind of property and other shares of the class or series, or all shares of other classes or series of shares, may be converted into other property.

(5) The following apply in respect of a merger or consolidation under this section:

(a) the plan of merger or consolidation must be authorized by a resolution of members and the outstanding shares of a class or series of shares are entitled to vote on the merger or consolidation as a class or series if the Memorandum or Articles so provide or if the plan of merger or consolidation contains any provisions that, if contained in a proposed amendment to the Memorandum or Articles, would entitle the class or series to vote on the proposed amendment as a class or series;

(b) if a meeting of members is to be held, notice of the meeting, accompanied by a copy of the plan of merger or consolidation, must be given to each member, whether or not entitled to vote on the merger or consolidation;

(c) if it is proposed to obtain the written consent of members, a copy of the plan of merger or consolidation mu