You may have heard that in accordance with the BVI Business Companies Act, a BVI Company needs to keep Financial Records and underlying documentation. But what does that mean exactly?
In this article we are touching upon par. 98 of the BVI Business Companies Act ‘Records and underlying documentation’.
The BVI Business Companies Act states that the Company needs to keep at the office of its Registered Agent (RA) or at such other place or places, within or outside the Virgin Islands, as the directors may determine, the records and underlying documentation of the company for a period of 5 years from the date of the completion of the transaction they relate to.
The records and underlying documentation of the company shall be in such form which is sufficient for someone to understand the Company’s transactions and enable them to determine the financial position of the company with reasonable accuracy.
If the Financial Records are kept outside of the BVI, then the company will need to inform its Registered Agent on the address where the Financial Records are kept, as well as the name of the person who keeps such records (i.e. record keeper). Same goes if such an address changes, i.e. the RA will need to be notified.
Please note that whenever required to do so, the BVI Financial Services Commission or any other competent authority in the British Virgin Islands acting pursuant to the exercise of a power under an enactment, the registered agent shall request from the company, records and underlying documentation in respect of the company.
In terms of penalties, as per the BVI Business Companies Act, ‘a person who contravenes this section commits an offence and is liable on summary conviction to a fine of $50,000.’
The Records must be kept in written form and can be kept either wholly or partly as electronic records complying with the requirements of the Electronic Transactions Act.
Conclusion: The BVI Business Companies Act requires all companies to keep financial records to support their transactions for a period of 5 years from the date of the transaction. Such transactions can be invoices, agreements, contracts, bank statements, broker statements etc. In that respect, please ensure that such records are always kept at the record keeping address you have provided your RA with (documents can also be kept electronically).
Please contact us for more information on how we can assist you with this requirement.