In many jurisdictions, including the British Virgin Islands (BVI), companies are required under statute to engage a locally registered agent to provide various services. A common theme among registered agents is that they act as a link between the company and the local government, enabling compliance with legal obligations within that jurisdiction, such as the payment of statutory fees, making statutory filings, retaining books and records, as well as acting as a conduit for communications such as legal documents on behalf of the company. Many US states and Canadian provinces require companies to have a locally registered agent, as do the jurisdictions of Anguilla, Belize, Bahamas, Barbados, Cayman Islands, Gibraltar, Guernsey, Isle of Man, Jersey, Mauritius, Samoa, St Kitts and Nevis, and Singapore to name a few. It’s also worth noting that in Hong Kong companies must have a local company secretary, acting as a sort of registered agent, and in Japan, while not explicitly called a registered agent, a company needs a local representative.
The involvement of a registered agent does mean that a company and its directors will be relying on a third party to handle critical communications, which may involve legal matters. For instance, the agent is responsible for receiving and forwarding official correspondence and notices on behalf of the company. This includes legal documents, tax notices, and other important communications. From an insolvency practitioner’s perspective, the registered agent is a potentially useful source of information concerning the company’s affairs and these documents could shed light on the company’s activities. In the BVI a registered agent must maintain accurate and up-todate records of the company’s beneficial owners and directors. The agent acts as a custodian of this information, ensuring that it
is accessible to relevant authorities when required. Again, where it is relevant to the process this information can help to build a wider picture. Registered agents are typically careful to act only on lawful instructions from the board of their client company in the form of resolutions. These resolutions and minutes can also help to establish corporate activity. Sources of funding to pay statutory and agent’s fees can be potentially illuminating.
The company itself has certain obligations towards the registered agent. The company must provide the agent with accurate and timely information about its operations, changes
in directors or shareholders, and any other relevant updates. All details that are valuable for any office holder to understand the company’s organisation. Additionally, a relatively new obligation on BVI companies relates to the filing of Annual Returns prepared by the company and filed
with the registered agent. Non-compliance with the requirement imposes an automatic reporting obligation on the agent to notify the BVI Financial Services Commission. If the company has complied then there should be a standardised Profit and Loss and Balance sheet to review. And if they have not complied, this can give an indication towards their potential conduct in other areas
By serving as a local representative, the agent provides a physical presence in the jurisdiction, even if the company operates elsewhere. This means a registered agent is likely to
hold a certain amount of information that may be useful in an insolvency or receivership context and, as they are resident in the jurisdiction, they must acknowledge and react to the insolvency practitioners’ legitimate interest in collecting the company-related information that they hold. However, there are also potential hurdles to consider. One of the main impediments is where a registered agent fails to grasp the impact of an insolvency process and continues to defer to its registered ‘client of record’ instead of the office holder. Where office holder appointments arise as a result of court applications, consideration should be given as to whether the company’s registered agent should be temporarily bound from engaging in communications that could adversely affect creditors. Additionally, I would add that registered agents supply their services to the client company. As with any other professional services provider, it is important to appraise that service as part of the insolvency process. Given the nature of the services provided, there is always a risk of miscommunication, delays, or even negligence on the part of the agent, which could have had serious consequences for the company.
In my experience, introducing yourself to the registered agent and explaining your role and requirements in a professional manner generally leads to an efficient and practical working relationship. When seeking information, it is important to explain the context of your request and to assist the agent’s administrators in understanding your expectations.
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