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JIS News

The Companies Office of Jamaica (COJ), formerly the Office of the Registrar of Companies (ORC), has reported a steady trend in the number of companies incorporated over the last five years.
Reports indicate that 1,355 companies were formed in 2002, a slight decrease from 1,357 in 2001; while 2004 had 1,735 companies formed, up from 1,578 in 2003 Data also indicate that 1,608 companies were registered last year. The COJ also reports that a total of 48,551 companies are currently active.
Speaking with JIS News, Deputy Chief Executive Officer at the COJ, Shellie Leon outlined that real estate, telecommunication, E-commerce and distribution were four prevalent areas in which companies were being formed.
She pointed out that the new Companies Act has aided in making the formation process easier, since individuals now only have to complete a standard form provided by the COJ, instead of drafting and submitting a document as was previously required.
Miss Leon noted that under the new Act, companies were no longer obliged to list its activities. “When you form a company, you do not have to limit it to any particular object or purpose that company can do anything,” she added.
She explained that where the previous Act stipulated that at least two persons were required to sign company documents for incorporation, the new Act allowed for “any one person to form a company”. This provision, she said, has led to the formation of several one-man companies.
Pointing out the procedures involved in the formation of a company, Legal Officer at the COJ, Camille Neil noted that under the Companies Act 2004, three documents are required to be filed: ‘Articles of Incorporation’, ‘Declaration of Compliance’, and ‘Registered Office Notice’.
The Legal Officer said that the ‘Articles of Incorporation’ sets out basic information on the company, including the company name, first directors, and secretary and gives an indication of the core business of the company.
“The ‘Declaration of Compliance’ is a document that states that you have complied with all the formalities under the Act for the formation of a company, while the ‘Registered Office Notice’ sets out the location of the registered office of that company in Jamaica,” she continued.
With reference to the types of companies, Miss Neil pointed out that the four which existed under the new Companies Act were companies limited by shares, limited by guarantee with a share capital, limited by guarantee without a share capital, and unlimited companies.
“Company limited by shares means that the liability of the members of that particular company is limited to the amount that is unpaid on the shares that person holds in the company,” she said.
She noted that the company limited by guarantee meant that, “a specific amount or a dollar amount is set out in the articles of incorporation and the liability of the member is limited to that amount so if you put $10 for the guarantee company, you are only liable to contribute $10 in the event that the company is unable to meet its debts”.
The Legal Officer explained that a non-profit organization would be set up as a company limited by guarantee and would be required to submit all three documents needed for the formation of a company.
Highlighting the difference with non-profit organizations, Miss Neil outlined that, “this type of company limits its objects and its powers to specified things, for example, the promotion of commerce, science, arts, religion or charity”.
“Such a company, after incorporation, can apply to the Minister of Commerce for a licence, which would exempt them from certain provisions of the Income Tax Act,” Miss Neil told JIS News.
In the case of unlimited companies, there is no limit on the liabilities of the member.
On the sum involved in registering a company with the COJ, Miss Neil said the approximate cost is $16,500, which include: a basic cost of $12,000, a $500 stamp charge for the Articles of Incorporation and an additional $4,000 for the filing of particulars regarding the company directors and the first company secretary.
Once the company’s foundation documents have been filed and are in order, the company is issued a Certificate of Incorporation, which marks the creation of a company and proves its existence.