So you have installed a new image on your VirtualBox, Congratulations, its actually a great tool.
Now, you will always be facing the same error – always for the same reason – Vbox client is not set, and thus the clipboard bidirectional use is not working.

Once the settings in VirtualBox is set, and bidirectional copy / Drag and Drop are checked, Go to the virtual machine terminal and paste the following:

VBoxClient -all

This will create the following error message:

meni@meni-ubuntu20:~$ VBoxClient -all

Command 'VBoxClient' not found, but can be installed with

sudo apt install virtualbox-guest-x11 # version 6.1.10-dfsg-1~ubuntu1.20.04.1, or
sudo apt install virtualbox-guest-x11-hwe # version 6.1.10-dfsg-1~ubuntu1.20.04.1

The first one worked for me:

sudo apt install virtualbox-guest-x11

Once installed just call the Clipboard:

sudo VBoxClient --clipboard

Enjoy copy pasting :)