Entrepreneurs wishing to close their companies or businesses will have an additional two months to do so under the Companies Office of Jamaica (COJ) COVID-19 Relief Initiative. The Agency has extended the initiative’s deadline to December 31, 2020. Previous deadlines were August 31 and October 30.
In addition to the extension, the offer will now include overseas companies. These companies will be required to submit a letter requesting closure and a statutory declaration stating that there are no assets or liabilities outstanding. The cost of filing is $6,000.
To take advantage of the relief, local companies must submit a letter requesting removal along with a statutory declaration indicating that the company has no assets or liabilities in lieu of the usual letter from an auditor or chartered accountant. This reduces the overall cost of removal to $7,500. Both overseas and local companies will not be required to bring the company up to date or pay late fees.
The auditor’s certificate represents one of the major costs to remove a company, and according to Shellie Leon, Deputy CEO & Director of Operations “the fact that there is no request for an auditor’s certificate removes a significant hurdle to closure. With the added waivers, it is in the best interest of these companies and businesses to close”.
For Business Names closures the fee will be $600. In cases where a Business has multiple outstanding renewals, the COJ will only require payment for one renewal period. If there are no outstanding periods, only the closure fee will be applicable.
“We are encouraging entities to take advantage of the opportunity as it allows them to refocus and possibly restart without the obligation of clearing late fees and law suits. It is a win for entrepreneurs, especially in this time of uncertainty,” Leon noted.
With COJ’s record indicating a 79% and 71% islandwide delinquency rate among companies and businesses, respectively; and the Small Business Association of Jamaica’s survey showing 35% of its more than 300-membership have closed their doors due to COVID-19, Leon thinks companies and businesses must begin to apply good corporate governance in an effort to avoid additional expenses. “Oftentimes, companies and businesses do not go through the formal channels of closing the business which proves to be a challenge to their business endeavours in the future as they may be barred from registering additional entities until the late fees are cleared and due diligence done to bring the entity into compliance. This can be an obstacle to taking advantage of opportunities in the future.”
Under the Registration of Business Names Act entities registered with the COJ are required to formally close by filing the appropriate documents within 6 months of ceasing operation.
However, companies that cease to operate must apply to be removed. Following the closure of a company, the name is reserved for 20 years allowing the entity to resume operation by reincorporating with the same name. A business name is not reserved once closed and can be taken by anyone.
The COJ has 67,238 companies and more than 150,000 businesses on its register.