JIS News

When the new Companies Act becomes effective in January 2005, operators of mutual fund companies will be able to register their businesses in Jamaica, thereby putting an end to the onerous process of registering their operations overseas.
Under the existing company law, Mutual Fund companies are to be registered overseas, as the 1965 Act does not allow for the incorporation of these companies locally.
With the new Act however, such companies will now be incorporated at the Office of the Registrar of Companies (ORC) and registered with the Financial Services Commission (FSC) before they commence trading as mutual fund companies in Jamaica.
Attorney-at-law and Business Registration Manager at the ORC, Trudy-Ann Bartley Thompson, said the new provision sought to make it “easier for overseas and local investors to set up this type of business (mutual fund companies) here”. She was addressing lawyers at a seminar hosted by the Bar Association of Jamaica at the Shaw Park Hotel in Ocho Rios recently.
According to Mrs. Bartley Thompson, the Act defined a mutual fund company as “a company having a share capital and incorporated for the purpose of investing the monies of its members for their mutual benefit.”
She pointed out that the ORC was already making arrangements to facilitate the incorporation of mutual fund companies in Jamaica. Explaining, she added that whilst these companies were deemed as public companies, they have certain exemptions. As such, a new type of incorporation document is being developed by the ORC, specifically for this type of operation.
Addressing other changes to the incorporation procedure for other types of companies, the Business Registration Manager said the new Act now required that public companies have a minimum paid up capital of $500,000. That is, the allotted share capital of the company should not be less than the authorised minimum of $500,000.
According to Mrs. Bartley Thompson, the new provision is aimed at improving corporate governance and to hold persons to a higher standard of accountability. She said that shareholders, who lend money to the company, could now be better assured of the security of their investment.
In fact, the Act further provides that in order for a public company to do business or exercise borrowing powers, it must apply to the ORC for a certificate, which indicates that the Registrar is satisfied that the value of the company’s allotted share capital was not less than the authorised minimum.
Mrs. Bartley Thompson went on to say that only the Commerce Minister would have the power to vary the authorised minimum.
Pointing to other changes to the incorporation procedures under the new Act, the ORC Manager told the attorneys that only two documents were now required to start a company and not three as was the case under the old law. This provision makes for a simpler formation process. The two documents are the Articles of Incorporation and the Declaration of Compliance.
The Articles of Incorporation must state the name of the company; the location of the registered office; the number of company directors; the maximum number of shares, if any that the company is authorised to issue and the classes of those shares (for example, ordinary and preference shares) and restrictions on any business that the company may carry on.
The Declaration of Compliance is a pronouncement by someone involved in the incorporation of the company that all the provisions of the Companies Act have been adhered to and is sworn to in the presence of a Justice of the Peace or a Notary Public.

Skip to content