Nowadays, it is normal to simply abandon a company if it is no longer needed. Moreover, now that we all face a global Coronavirus crisis, everyone tries to optimize costs. What can threaten such a business practice if we talk about quitting offshore businesses?
First of all, it should be noted that any “sleeping” company, where activities are no longer conducted, reports are not submitted, which is simply abandoned and not liquidated in accordance with the law, is still subject to offenses and continues to accumulate sanctions. Its former CEOs and founders may be held liable for violations committed during the exercise of their powers.
In a non-resident field, everything looks a little different and outwardly much more harmless. For example, in the British Virgin Islands, there is an automatic procedure for deleting an offshore company from the registry (Strike Off). This procedure is automatically activated, for example, if there is no payment of mandatory government taxes or services of a registered agent.
All this does not lead to the liquidation of a legal entity! Moreover, any person interested in the restoration of such a company is able to restore it. To do this, such a person will only need to pay the accumulated amount of debt, as well as all the penalties and fines (as a rule, they do not exceed one or two thousand dollars). It should be especially noted that the company is being restored to its previous organizational structure and with the previous beneficiary.
One should not particularly dwell on the fact that the person who restored such a company has every opportunity to use it and use the name of the former beneficiary for his fraudulent purposes.
It should be noted that local agents / lawyers involved in the registration / restoration of offshore companies are strictly forbidden to transfer the restored companies to anyone without the real orders of the restored beneficiary. Such actions will be unlawful and will entail the revocation of the agent’s license.
At the same time, one should not discount the ingenuity and the trivial falsification of the signatures of fraud raiders, which will be opposed to the good faith of the local agent.
Accordingly, if you want to save a couple of thousand dollars on the banal liquidation of a non-resident company, you should ensure that some shady guy would not be able to get complete information about all the company’s transactions for the entire period of its existence, to lawsuits and criminal prosecution, because all this can be used in quite illegal schemes.
That’s why we advise you to forget about abandoning your offshore business and proceed to its legal liquidation. It might seem harder to do, but we assure you it’s the only right way to avoid problems that, otherwise, might reach you in ten years from now, when you’ll not be as prepared to face them.
