One of the realities that come with the distinction of being the world’s premier jurisdiction of choice for corporate domicile is that there will always be a high demand for the liquidation/ dissolution of companies.
For a voluntary liquidation, the process is fairly simple and easy as outlined below.
1. The directors make a Declaration of Solvency in the approved form which confirms that, in their opinion, the company is and will continue to be able to discharge, pay or provide for its debts as they fall due; and the value of the company’s assets equals or exceeds its liabilities. A recent statement of assets and liabilities should accompany and support the declaration.
2. The directors should prepare a Liquidation Plan for approval which specifies the following:
- The reasons for the liquidation
- Estimated time required to liquidate the company
- Whether the liquidator is authorized to carry on the business if he determines that to do so is necessary or in the best interests of the creditors or members of the company.
- The name and address of each individual to be appointed as liquidator and the remuneration proposed to be paid to each liquidator
- Whether the liquidator is required to send to all members a statement of account prepared or caused to be prepared by the liquidator in respect of his actions or transactions.
3. Once the Plan has been approved by a Resolution of the Directors, it must then be authorized by a Resolution of the Shareholders. It is required that the liquidation plan be sent to all shareholders (regardless of voting rights) regardless of whether such resolution is to be passed in a general meeting or in writing.
After being formally appointed, the liquidator has strict time frames to undertake the liquidation process for example within 14 days of the commencement of the liquidation the following documents must be filed at the Registry of Corporate Affairs:
- A notice of his appointment in the approved form;
- The executed declaration of solvency made by the directors, and
- A copy of the liquidation plan and
Within 30 days of commencement of the liquidation, the liquidator must advertise notice of his appointment in the BVI Gazette, a local newspaper and if the company has been active internationally in any country where it has conducted significant business.
Here you can also get brief details on the insolvent liquidation procedure which is more complex but can be done on a voluntary basis or through the courts.