US VIRGIN ISLANDS LAW AND PRACTICE Contributed by: Marjorie Roberts, Sean Foster, Renée Marie André, Lisa Wisehart, David Bornn, Duncan J. J. Kessler and Jessica McKenney, Marjorie Rawls Roberts PC
4.2 Relationship Between Companies and Minority Investors Altisource Asset Management Corporation (“Alti - source”) is a USVI publicly traded company and it is a case study for some of the regulations with which USVI publicly traded companies must comply. Addi - tionally, the USVI recently surveyed almost 500 busi - nesses and found that 36 of them planned to go public in the next 5 years. This could create opportunities for minor investors. There are also a number of pub - licly traded companies’ subsidiaries established in the USVI. Altisource has been a USVI publicly traded company on the NYSE American LLC. However, the corporation recently announced that it will voluntarily delist from the NYSE and deregister its common stock under the Securities Exchange Act of 1934. This decision was due, at least in part, to a noncompliance notification letter sent from the NYSE regarding the corporation’s stockholders’ equity and losses/net losses. The cor - poration’s noncompliance was due to provisions in the NYSE American Company Guide. In the announce - ment, the corporation noted that this delisting and deregistering was believed to be beneficial in free - ing up management and employees’ time from SEC requirements to focus more on management. 4.3 Disclosure and Reporting Obligations If a business entity wants to use certain tax incen - tives in the USVI, as discussed in section 9.3 Tax Mitigation Strategies, a detailed application must be submitted for review. The EDC tax incentive program application, for instance, requires disclosure of all per - sons and entities – names and addresses – owning at least 5 percent of stock or equity interest in the entity filing the application. Depending on the entity, directors and principal officers, partners or members must be disclosed, as applicable. The Director of the Economic Development Authority conducts research and investigations on submitted applications. If the entity becomes a beneficiary of the program, then it is required to file an annual report – authenticated by the beneficiary’s president, vice president or other officer or employee – listing the names and addresses of all persons owning at least 5 percent of stock or equi - table ownership in the beneficiary entity. EDC benefi - ciaries are also required to submit other documenta -
of the jurisdiction in which the FLLP was formed. An FLLP cannot be denied a statement of foreign quali - fication because of differences in law between where the FLLP was formed and the USVI. However, an FLLP may not exercise powers or engage in business that cannot be exercised or engaged in by LLPs. Title 26 section 244 lists FLLP activities that are not consid - ered transacting business in the USVI and include essentially the same activities as for FLLCs. Each form of partnership discussed above must file an annual report and pay an annual fee of USD150.00 to the Division. The last of the partnership formats for doing business is the general partnership, which is seldom used since all partners have unlimited liability. General partner - ships are formed by agreement among the partners; thus, no filings with the Division are required to form a General Partnership. Corporations and governance Another form of entity available in the USVI is the cor - poration. Corporations are formed upon filing articles of incorporation with the Division. The minimum capi - tal required for a Corporation to conduct business is USD1,000.00. Corporations must file an annual report with the Division and pay an annual franchise tax to the Division, set at a statutory minimum of USD300.00 per year. It is important to note that the USVI also imposes a 10 percent surcharge on the total USVI income tax liability of all corporations, both domestic and foreign. In terms of governance obligations and formalities, corporations are the least flexible of the entity choices available in the USVI, similar to in the US. Pursuant to the General Corporation Law of the USVI, there must be a minimum of one director for every shareholder of the corporation when there are three or fewer share - holders; otherwise, the minimum number of direc - tors is three. A minimum of three officers (president, treasurer, and secretary) is also required. The Presi - dent must be a director and the roles of president and secretary cannot be simultaneously held by the same individual.
671 CHAMBERS.COM
Powered by FlippingBook