The BVI High Court (the Court) has recently been grappling with the issue of eligibility of those claimants who apply for company restorations under the transitional provisions of the BVI Business Companies Act (BCA) on the basis that they are members of the company by virtue of holding bearer shares.
In the case of Mustafa v Registrar, Harneys brought restoration claims on behalf of two sisters who claimed to be “members” of two dissolved companies. The question was “whether the holder of disabled bearer shares has locus standi to bring a claim for restoration of a company to the Register of Companies as a member of the company”. At the hearing, the Registrar’s main argument was that the Claimants were not members of the companies – a member being defined in the BCA as a shareholder and a shareholder being a person whose name is entered in the register of members. The Registrar therefore contended that the Claimants had no locus standi to make the claims. It was held that the BCA contemplates two categories of shareholders – registered shareholders and bearer share holders – this point bolstered by the provision of subsections 41(1) of the BCA. It was further held that the disabling effect on bearer shares did not mean that the person was not the owner of or shareholder/member in the company but rather that the person could not receive any benefit or exercise any right attached to his/her shares while they were disabled. Although the Court’s order for restoration was carefully couched in terms which tied its decision to allow the restorations in the particular circumstances of the claims, there is now obvious scope for these types of bearer share restorations.