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Starting A Business In Jamaica

By: Phillippa
Saturday, June 30, 2012
Starting A Business In Jamaica

Starting a business can be complex and overwhelming, particularly for those new to entrepreneurship. It is no easy task. To improve the likelihood of success in your venture, take a systematic approach starting with idea generation and validation and incorporating legal compliance. Registering your business is one of the most essential steps to get your business off to the right start.

To get your business registered in Jamaica, the Companies Office of Jamaica is the legal entity responsible for implementing this function.

There are two basic structures to choose from:

  1. A Company - a commercial enterprise registered or incorporated under the Companies Act. A company can be either be Non Profit (Charity, Club, NGO etc) or Profit Generating.
  2. A Business - a sole trader or partnership registered under the Business Names Act. Before registering a business, the owner(s) must decide on a name. This should be unique to the entity and therefore, it is recommended that a business or company name search should be done. This can be accessed on the Office of Companies Registrar’s website.

Your obligation varies according to whether you are a company, business or industrial and provident society. Some persons are not aware of the distinction between a company and a business. A business is either a sole trader (single owner) or a partnership (between two or more individuals), while a company acts as a separate entity.

The major differences are as follows:

  • A company is a legal person, though artificial in nature, separate from its members whereas a business does not have a separate legal identity from its members. In the case of a business therefore, there is no separate existence distinct from its members.
  • A company may be registered with the liability of the members limited by the amount of their unpaid share capital or by guarantee whereas the personal property of the owners of the business may be used to set off any claims made in a court of law. The owners of the business are liable for the contractual liabilities and obligations of the business. 
  • A company has perpetual succession meaning that a change in the membership does not affect the existence of the company whereas a business does not enjoy this perpetual succession. For example, in the case of a partnership, which is one form of business registration, a change in the membership affects the partnership.

For the formation of a company, three documents must be submitted. These are:

  1. The Articles of Incorporation, which sets out among other things, the core business of the company and the internal rules governing the company.

  2. Declaration of Compliance stating that the requirements of the Act were adhered to in forming the company 

  3. Registered office notice which states the legal address of the company For the registration of a business, the completion of a standard form is all that is required, along with owner(s) government identification, tax registration number, and a proof of address.

The property of the business is either owned by one person where it is a sole proprietorship or jointly by the partners where it is a partnership. The property owned by the company belongs to the company and not the members.

The directors of a company are responsible for the management of the company and the members of the company are not involved in the management of the business whereas the owners of a business are in fact in most cases the managers of the business. 

A company may create floating charges over its assets whereas a business cannot. The owners of the business may however create charges over assets such as land, vehicles and equipment. 

A business may be closed by notice in writing to the Companies Office of Jamaica whereas a company, which has assets or liabilities, must be wound up in accordance with the Companies Act. Where a company has no assets or liabilities it must be removed in accordance with the Companies Act. 

The Companies Act prohibits the registration of any two companies with the same name thereby protecting a company’s name whereas there is no similar provision in the Registration of Business Names Act. 

A company can sue and be sued in its own name whereas a business cannot do this. 

A company is registered under the Companies Act whereas a business is registered under the Registration of Business Names Act. Companies must register under the Companies Act whereas not all persons operating a business need register under the Registration of Business Names Act. 

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