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Member of Parliament of North Central St. Andrew, Karl Samuda has called for more expeditious removal of inoperative companies from the register of the Office of the Registrar of Companies (ORC).
Mr. Samuda, who was speaking in the House of Representatives on Tuesday (Sept. 20), argued that the move would enable business-ready companies, wishing to use a name that is owned by a defunct company, to do so. “I think there is need to clean up that bank of inactive companies in a more aggressive manner,” he stated.
He was speaking on a motion raised by Commerce, Science and Technology Minister, Phillip Paulwell, seeking approval for the Companies’ Rules Resolution 2005.
Minister Paulwell, in his reply, said it was agreed that companies that were not doing business should be removed as quickly as possible from the register. He noted that the new law provided adequately for this decision and it should be insisted that the measures were put into effect to ensure greater efficacy of the new Companies Act.
In the meantime, the rules that were brought before the House concerned the naming of companies and sought to clarify that where names have been proposed that are identical to that of an existing company, or where they are similar or too close or infringed on registered trademarks, they will not be permitted.
Furthermore, names deemed to be offensive, outrageous and found to contravene government’s policy on security issues among other matters, will not be allowed. The rules also addressed the matter of the use of the word ‘Limited’ and prohibit the registration of a company whose name does not end with the word Limited unless special approval has been granted by the Minister.
Minister Paulwell said that where misleading names were concerned, such companies would not be registered. In addition, the use of certain words for example those that suggest a connection with the crown or members of the royal family and those that refer to a particular nationality, will not be permissible without justification. Names that refer to a profession will also be dealt with.
Minister Paulwell said the rules would not provoke controversy and were in anticipation of regulations that would follow from the new Companies Act.
Mr. Samuda, in agreeing, noted that the matter was not a controversial one as in fact, many of the rules that were brought were already in existence with very minor changes if any at all.
The Companies Act (2004), which was passed by both houses last March among other things, exempts certain small private companies from the requirement of conducting annual audits in recognition of the onerous costs, which annual audits may entail and also permits a company to raise financing through redeemable shares.
The Bill also makes provisions for extensive rules to be made with regard to the preparation of balance sheet and profit and loss accounts and setting out the required formats in relation thereto.
In addition the Bill, which contains 396 clauses, expressly provides that redundancy payments owed to company employees on winding-up constitute preferential debts, regardless of whether the payment falls due before or after the appointment of a receiver.