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The Scheme of Arrangement (“Scheme”) has been a feature of English law since the mid-19th century and has been in its current form since 1908. Its effectiveness and adaptability are recognised in the fact that the UK model has been adopted in legislation around the world and, as such, is a tested tool, familiar to corporations globally. The Scheme has been a feature of British Virgin Islands law since 2006 and has extended the range of options available to companies under the BVI Business Companies Act 2004 (the “BCA”), already known for its flexibility and utility. Perhaps because of the stage of the economic cycle at which it was introduced, the principal use of Schemes in the BVI to date has been in the context of corporate insolvencies. The invaluable role which Schemes can play in restructuring debt is well documented. The use to which Schemes may be put to use by BVI companies other than in insolvency is perhaps less well-known and is worth highlighting. This short article is written with that aim.
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Schemes: Flexibility and Familiarity