We conclude our series by reviewing the procedures required when incorporating a company. The registration of a company is fairly intricate and requires meticulous attention to details.
Reservation of Company Name
Once you have decided on what you will name your company, it is advisable to reserve said name. The reservation of the name will establish that the name is appropriate and available for use. It also protects the name from being used by others during the 90 days it has been reserved. The fee is $500 for the Name Search and $3000.00 for the Name Reservation. Upon completion of the process, you will be issued with a letter advising that the name is reserved for a period of Ninety days.
Determine the Type of Company to Incorporate
Let’s examine the types of company you can incorporate in Jamaica. Section 3(2) of the Companies Act (2004), states the three types of companies that can be formed:
- “a company limited by shares” – having the liability of its members limited by the articles to the amount, if any, unpaid on the shares respectively held by them
- “a company limited by guarantee” – having the liability of its members limited by the articles to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of it being wound up
- “an unlimited company” – not having any limit on the liability of its members
Submission of Documents
The Articles of Incorporation (Forms 1A or 1B) along with the Business Registration Form are required with necessary certifications and government issued identification. Form 1A is used for Companies Making Profit while the Form 1B is for Non-Profit Companies (Churches, Charities, Foundations. Service Clubs etc.). The cost to register the company is $24,500 which includes the stamp duty fee.
Pros of registering a Company:
- Liability of members limited to the extent of the unpaid shares (as some shares which are issued are partly paid)
- There is greater opportunity for raising capital by way of Investments e.g. Venture Capital or Angel Investors
- Perpetual Succession – company has perpetual succession unless it is wound up. The company doesn’t die with the owners.
- Company can sue and be sued in its own name
Cons of registering a Company:
- Loss of control: This is more so for public companies
- Less Privacy: There are more statutory obligations like filing annual returns and accounts etc.
Abi-Gaye White-Thomas B.A., LL.B (Hons)