JAMPRO and ORC to Host Major Workshop on Companies Act

With only a little more than two weeks to go before the enactment of the new Companies Act on February 1, company directors will be given an opportunity to get up to date with the full range of their new statutory obligations, through a workshop to be hosted by the Jamaica Promotions Corporation (JAMPRO) and the Office of the Registrar of Companies (ORC).
The workshop is scheduled for Thursday, January 20, at JAMPRO’s Trafalgar Road Office.
JAMPRO Company Secretary, Stacy Kong Quee, told JIS News that there were a number of obligations set out in the 300-page Act and that as such, the workshop, titled, ‘Directors’ Obligations under the new Companies Act 2004′, would speak to a number of pertinent issues. These include the standard and duty of care of directors, penalties for defaulting on duties, and the indemnification of and disqualification of directors.
Penalties, Miss. Kong Quee noted, had been brought up to date and penalties made stiffer, thereby effecting a genuine deterrent to defaulting on duties. Under the old Act, she pointed out some fines such as those of $200 and even $50, had become “laughable”.
Now under the amended Act, penalties of up to $1 million may be imposed and prison sentences of up to two years. Turning to the issue of disqualification of directors, she noted that the court was empowered to make a disqualification against someone, especially if there was evidence that they had three or more defaults in the last five years from the date of the application to court.
Directors can also be disqualified if they are bankrupt, or considered to be of ill repute, Miss Kong Quee added.
The attorney further noted that this public education measure was important as many directors, especially those acting as “shadow directors” were unaware of their statutory obligations. “Shadow directors” arose, she explained when one person wished to form a company, but because of the old legal stipulation of at least two directors for the formation of a private company, a second person would be brought on board to meet the requirement. This second person often had nothing to do with the company’s operations.
Lack of understanding of the law, she pointed out, could often mean that the “shadow director could find himself obligated in ways he never expected . especially when they’re being served for non-compliance with certain provisions and [they] know nothing of the day-to-day running of the business”. Come February 1, Miss. Kong Quee pointed out, the law would change in that regard. The minimum requirement for a private company will be one director, while the minimum for a public company will be three directors. This, she added, should serve to stimulate the business environment in Jamaica.
Indemnification is also an important area of focus, as it protects directors from legal action and costs, which may arise as a result of decisions made in the interest of the company, she noted.
Miss Kong Quee informed that while the workshop spoke specifically to directors, it was hoped that a wider range of persons would participate. These would include company shareholders, who needed to know among other things, how to ensure that no prejudicial dealings occurred.
The workshop will also be beneficial to persons considering starting a business, as they will need to know the provisions of the new Act, and the new procedures put in place by the ORC.
In addition to general members of the public, JAMPRO will also be inviting a number of persons associated with the Jamaica Manufacturers’ Association (JMA) to participate.
Workshop presenters include President of JAMPRO, Patricia Francis and high-level attorneys at the ORC. They are Chief Executive Officer, Judith Ramlogan-Chong; Deputy Chief Executive Officer, Shellie Leon and Compliance Manager, Christine Morris-Gillespie.
Hosting this workshop in collaboration with the ORC, Miss Kong Quee noted, was in keeping with JAMPRO’s mandate. “Our general mandate is trade and investment promotion and . facilitating businesses in both the productive and service sectors. [It] ties in very nicely with good corporate governance. Good corporate governance,” she stated, adding “can hardly be achieved without companies knowing what’s required of them within the framework of this new Act”.
Miss Kong Quee said the workshop promised to be enlightening and of a high quality. Each of the presenters she pointed out, were experts in their field. Persons may also register on the morning of the event at JAMPRO and anyone needing further information may contact Miss Kong Quee at 978-7755 (extension 2110).