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2 BVI Cases Explore Scope Of Proper Purpose Test

Law360 (January 4, 2019, 1:27 PM EST) -- Section 121 of the British Virgin Islands Business Companies Act requires that a director "exercise his powers as a director for a proper purpose ..." In this provision, the act has codified the "proper purpose test," the rule of equity which long predates the act, which requires that a fiduciary entrusted with a power must exercise that power only for the purpose for which it was conferred and not for any other purpose.

This is the same rule which is now embodied in section 171(b) of the English Companies Act 2006. A BVI company is materially the same in its structure...

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