Key Documentation
The principal corporate documents are the joint venture agreement (JVA) and the memorandum and articles of association of the BVI company (M&A). There are particular provisions of the JVA that must be in the M&A under BVI law. These provisions relate to: (i) the rights attaching to the authorised shares of the company; (ii) provisions in respect of company procedures such as notice and quorum requirements for shareholder meetings; (iii) the election of directors; and (iv) restrictions on the powers of the directors to carry on the business of the company (being items requiring super majority director approval or shareholder approval).
The M&A are a public document registered with the Registrar of Corporate Affairs of the British Virgin Islands. Sometimes shareholders’ agreements are incorporated by reference into the M&A. While the position is not free from doubt, the view exists that this reference is not effective and that the shareholders’ agreement would not be incorporated in the M&A as a consequence of such reference. Rather, to the extent that the shareholders’ agreement deals with matters that are governed by the M&A, then the provisions need to be expressly set out in the M&A.
It is important to avoid inconsistencies between the JVA and the M&A. Further, a JVA only binds the parties to the agreement, whereas the M&A binds all relevant parties.
Please click here to continue reading the article.
This article was originally published by Legal Business.