Defining Directorship: 'De Facto' Directors And The BVI Business Company

Section 2 of the BVI Business Companies Act ("the BCA") defines a "director" to include a person occupying or acting in the position of director by whatever name called. For practical purposes, this definition is identical to section 250 of the UK Companies Act, 2006 which defines a director as "any person occupying the position of a director, by whatever name called". Difficult questions often arise in connection with BVI companies where the directors formally appointed are corporate directors provided by fiduciary service providers, while the directors of the corporate directors in turn may also be professional directors.

The effect of section 250 of the UK Companies Act, and the test to be applied in determining whether a person is a de facto director, was recently considered by the English Court of Appeal in Smithton Ltd v Guy Naggar & Others [2014] EWCA Civ. 939 [2014] WLR (D) 306. Given the similarity in wording of the UK and BVI Acts in this respect, this case is persuasive authority in the BVI and provides useful guidance for those dealing with BVI companies about who is to be treated as a director and in what circumstances.

In determining whether a person is a "director" within the above statutory definition, the English Court of Appeal in Smithton suggests that the question to be asked is whether his or its acts are of the quality of directorial acts, tested against the usual split of powers between...