What is the risk to not reactivate my (offshore) company?

The structure of offshore companies ensure limited liability for its controlling persons and often qualify as International Business Companies. As such, the legal person is distinct and separated from the natural persons controlling the form. It follows that the controlling persons are under normal circumstances not personally responsible for acts of the company. This separation goes both ways and beneficiaries have no direct access to the assets of the company.

Companies may seize trading for several reasons. Offshore companies are struck of the registry after non-payment of the corporate annual fees. Consequently the beneficiary has no legal rights to the assets and other belongings of the company when it is not in the registry anymore. This situation may result in difficulties when the company must be active to avoid personal liability or regain access to the corporate rights.

Beneficiaries may risk losing the corporate rights and assets or being held responsible for the companies’ activities. This risk can only be calculated by the beneficiary who needs to consider various factors. A cost benefit analysis must include the potential sanctions that are heavier for natural persons than for companies.

Reactivation or reinstatement of an offshore company is a straightforward but time-consuming procedure. Costs may involve penalties and even intervention by the court, but the price of doing nothing is potentially higher.