It’s the season of giving: What you should know about Charitable Organizations

If you are thinking of establishing a charity, or have already started one and considering registration, this week we are looking on the process and requirements under the Charities Act (2013).

The Act defines a charitable organisation as:

Continue reading It’s the season of giving: What you should know about Charitable Organizations

Part 2: Starting A Partnership

This week we continue our series on starting a business in Jamaica by examining PARTNERSHIPS. A partnership is two or more persons carrying on a business in common with a view to profit. When choosing partners, ensure that they are persons who are trustworthy and will act in the best interest of his/ her fellow partner(s).

The Partnership agreement:

The signing of a partnership agreement is crucial as it will provide guidelines for the firm. This agreement should clearly identify partners’ rights, duties and responsibilities and address matters such as retirement and succession policies. In this agreement, partners should indicate the type of partnership.

Types of partners include:

  1. General partners – these are most common,
  2. Salary partners – they have no share in the firm as an equity partner but is still held out as a partner and so can still be liable.
  3. Dormant or sleeping partners – takes no active part in the management of the business
  4. Corporate partners – a registered company can be a partner once there is nothing in express or implied terms that preclude membership.

To register a partnership, you must submit The Business Registration Form (BRF 1) to the Companies Office of Jamaica and the registration fee is $2,500 for 2 to 5 partners and $5,000 for 6 to 20 partners.

Advantages of a partnership over a company:

  1. Absence of formalities- the formation and dissolution of a partnership is simpler.
  2. Lower cost for registration and privacy of financial matters
  3. No requirement to file annual returns

Disadvantages of a partnership over a company:

  1. The major disadvantage is that there is no separate legal entity that can be sued and held liable for the debts and losses of the partners.
  2. As with a sole trader, partners are personally liable, to their last dollar, jointly and severely, for all partnership debts, losses, & damage arising from a wrongful act or omission of any partner acting in the ordinary course of the business of the firm.

About Author:

Abi-Gaye White-Thomas B.A., LL.B (Hons)
Attorney-at-Law
Manchester, Jamaica

Tel: (876)964-4046
Whatsapp: (876)827-8050
Email: law@balcostics.com

Starting A Business: Sole Trader and Registration of Business Name

According to the World Bank Doing Business Report for 2018, Jamaica is ranked number 5 in the World for ease of starting a business. The Companies Office of Jamaica should be commended for continuously improving its procedure.  Over the next few weeks we will examine the various legal structures and factors influencing Entrepreneurs’ choice of registration.

Registering a business as a sole trader is the easiest form of registration in Jamaica. The Registration of Business Act stipulated in section 3(1) that this registration is for any individual or firm buying or selling goods from an established address or any individual or firm offering services from an established address in a name other than its/their own, for example: Joan Pitters offering services in her name need not be registered. However, Joan Pitters operating as Joan’s Meat or Joan Pitters & Associates must be registered. A business name will not be registered if it is identical or too close to the name of an existing trader, individual or firm registered under the Business Names or Companies Act 2004.

There are both advantages and disadvantages of registering a sole trader.

Advantages:

  1. Absence of formalities in the organisation of the business
  2. Absence of regulation, lower cost ($2,500jmd) and privacy
  3. No requirement to file annual returns

Disadvantages:

  1. Personal liability for all debts incurred. Because the sole proprietorship is in essence the proprietor, there is no distinction in law between so called business assets and personal assets. Likewise, there is no distinction between business debts and personal debts.
  2. Limited options for financing opportunities- the organisational structure of the sole proprietorship provides no mechanism by which other investors may participate in the business. Therefore, one cannot sell shares to raise capital for the business. The only source of financing other than him/herself would be through bank loans or grants.

The Business Registration Form (BRF1) otherwise called the “Super Form” is used for registration. If you are unsure about the best legal structure for your business, contact an Attorney-at-Law for guidance. Registration of your business is imperative to operate legally within the jurisdiction.

About Author:

Abi-Gaye White-Thomas B.A., LL.B (Hons)
Attorney-at-Law
Manchester, Jamaica

Tel: (876)964-4046
Whatsapp: (876)827-8050
Email: law@balcostics.com