Filling the Void on the Death of a Sole Shareholder/Director

It is not unusual for a BVI company to have a single shareholder and a single director. It is not uncommon for that shareholder and director to be an individual, and for that individual to be both the shareholder and director. Although a counsel of perfection would suggest that in such circumstances, the sole shareholder/director would take steps to nominate a reserve director  to act in his place as director in case of his death, more often than not no reserve director is nominated and, on the death of the individual, the company is left without either shareholders or directors. In circumstances where the company acts as a pure holding vehicle, holding shares or real estate which require no active management, it is often sufficient for the deceased's estate to await a grant of BVI probate or letters of administration or the resealing of a foreign grant, which may take some months, before taking steps to have the executors or administrators registered as members of the company. However, if the company is a trading company, or holds assets the nature of which requires ongoing management or which require urgent steps to be taken to preserve their value, its operations and future existence may be in jeopardy in the absence of an immediate solution.

In such circumstances, the usual course in the BVI has been to apply for an emergency, limited grant of representation. The BVI Court has a general jurisdiction to make a limited grant of administration in order to preserve a deceased's assets within the jurisdiction without waiting until those persons entitled to a full grant apply – a grant ad colligenda bona: see BVIHPB 93 of 2011 In the Estate of Liao Yo Chang (deceased) per Joseph-Olivetti J at paragraph 11. However, recent English cases raise a further possibility, as yet untested in the BVI, which may provide an alternative route.

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BRITISH VIRGIN ISLANDS
Rosalind NicholsonPartnerT +1 284 852 2237rosalind.nicholson@walkersglobal.com

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