BVI companies: what are "joint shareholders"?
BVI companies: what are "joint shareholders"?
Joint shareholders are a relatively common arrangement often used in property ownership and inheritance planning scenarios. In essence two or more shareholders hold the legal title to shares together and are entitled to all the shares equally. In the event that one of the joint shareholders dies, their legal interest transfers to the remaining joint shareholders so all remaining joint shareholders are entitled to the all the shares.
This arrangement is also known as ‘Joint Tenants with rights of survivorship’ and is distinct from ‘Tenants In Common’ – joint shareholders always have an equal split of ownership of the shares (and the resulting beneficial ownership interest), whereas ‘tenants in common’ own individual parts – the split is not necessarily even.
How are joint shareholders recorded on the register of members in the BVI?:
Joint owners in a single entry (like the Register of Members) unless there is some other document such as a trust arrangement which splits the beneficial ownership.
Important things to know:
- On the death/permanent incapacitation of one joint shareholder, their shares are automatically passed to the surviving joint shareholders seamlessly. Registers of members and registers of beneficial ownership would need to be updated following the death, but there would be no need to apply for a grant of probate.
- Joint tenants should only act together, but generally only one shareholder can vote (or sign resolutions), generally in the order of the register of members and if the first named shareholder does not vote, then another joint shareholder may be allowed to do so. This can present a bit of a challenge in the event of a dispute.
- Economic rights are split evenly between the joint shareholders – any right to dividends, for example, would be an equal percentage split between all the joint shareholders.
This note does not constitute legal advice. If you are thinking of using a joint shareholding arrangement, please take your own legal advice to ensure you are fully aware of how this will operate in your specific circumstances. Where necessary, we would be delighted to introduce you to our strategic alliance partner Harneys.
