Amendments to the BVI Business Companies Act 2012: bear shares

Vast amendments to the BVI Business Companies Act 2004 were made and published in July, 2012. According to this Act bear shares must be kept by custodian who is authorized by BVI’s Commission. One of the amendments is adding the new provision in accordance with section 20 of the BVI Business Companies (Amendment) Act, 2012. This provision confirms that the custodian can not become a beneficiary owner in virtue of his function; he can only vote and execute other rights on behalf of the beneficiary owner.

Expert’s opinion

Considering the amendment, I want to note, that this novelty is a legislative confirmation for shareholders that their rights can not be transferred to the custodian. That is, no matter what the situation your rights as the beneficiary owner of the shares do not transfer to your custodian. The institute of the custodian, in turn, provides professional management of the securities for the owner. Thus, going into force this provision has taken more control under the nominal service. This is an essential measure in particular in respect of bearer shares because it allows the owner to stay confident in their legal rights to share, despite the fact that it is deposited with a special holder - custodian. The analogue of the institute of the custodian in the BVI in the Russian civil law can be considered a professional management institute of securities - depositary, which is regulated by Sec. 7 of the Federal Law "On securities market". Register your company with the help of our lawyers taking into account all the amendments to the Act!

On the basis: http://www.bvifsc.vg/

Mikhno Alexandra ( the paralegal of Moscow office of Honest & Bright)