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This article is intended to inform about the advantage of using a “Reserve Director” in the jurisdictions of the British Virgin Islands (BVI) and Belize.
As is known, these jurisdictions allow a single director and shareholder to be maintained and both roles can be executed by the same natural person. This allows absolute control of the company and total confidentiality; however, it is a fact that, in the event of the death of that person, the company would be left in an uncertain state, without being able to appoint new directors until the succession process is completed.
To avoid this possible situation that would affect the company’s operation, the authorities of these countries created the figure of a “Reserve Director”, which we will explain below.
In BVI, according to section 113 (7) of the Business Company Act and in Belize, section 104 (7) of the Companies Act, the laws allow for the appointment of a Reserve Director, who will execute functions immediately upon the death of the sole director/shareholder with the purpose of keeping the company active while the heirs of the deceased organize their succession process. To facilitate this role, the only appointment requirements are that the appointment and consent of the Reserve Director are in writing before the death of the sole director and shareholder.
By virtue of the above, and given the importance of maintaining an active company, as advisors in matters of estate planning, we are pleased to inform you that Morgan & Morgan offers the service of Reserve Director for companies for which we act as Registered Agent, and we will be able to assist you with the preparation of the documents for the appointment of such person.
It is our duty to emphasize that, although this figure allows the company to continue its business and/or activities, it does not avoid the succession process that its heirs must promote, so, if it is your wish to consider other forms of estate planning, we can suggest the option of issuing the shares in favor of a private interest foundation or a trust (Vista Trust in BVI) services that are also provided by Morgan & Morgan.
Authors: Fanny Evans and Ambar Delgado