The Companies Office of Jamaica (COJ) recently announced an amnesty programmme for outstanding Annual Returns and applications for removal of companies from the Register of Companies. The amnesty will run for just over eight (8) weeks commencing on May 4, 2015 and ending on June 30, 2015.
The Amnesty takes the form of:
- A reduction in filing fees for Annual Returns that would otherwise be payable. For-profit Companies will be allowed to file Annual Returns at a reduced cost of $3,000 each while non-profit companies be charged $1000 for each Annual Return filed. This is a reduction of 40% of the regular fee.
- A waiver of late fees for Annual Returns and the late penalty in accordance with Section 121 of the Companies Act ($100 per day up to a maximum of $10,000).
Companies that would benefit from the amnesty will include companies that are delinquent in their filings and need to be brought up to date, including those being brought up to date so that they can apply to be removed from the Register.
The announcement from the Companies Office also advises that a company wishing to be removed from the register must:
- Submit a Letter Requesting Removal signed by a majority of the directors and a Statutory Declaration indicating that the company has no assets and Liabilities (witnessed by a Justice of the Peace), and
- Pay a flat fee of $10,000.
The statutory declaration replaces the former requirement for an auditor’s certificate which was often costly and difficult to obtain especially in cases where the company was dormant. For the amnesty period, companies may be removed from the register for a flat fee of $10,000 without having to file all outstanding documents or provide an audit certificate. There will be no late fees, penalties, removal or advertising fee charged as would have been the case prior to the amnesty.
(Precedents of the Letter Requesting Removal and the Statutory Declaration are available on the COJ website at www.orcjamaica.com)
Owners of Businesses that have been delinquent in their filings may also utilize the amnesty to close or terminate the registrations for a flat fee of$2,000.00. The annual renewal fees and late fees that would otherwise be payable to the Companies Office of Jamica for the outstanding documents will be waived.
Where a company is involved in litigation (being sued) it is required to pay legal fees and the Annual Returns Amnesty will apply to the cost of filing outstanding Returns as outlined in the suit documents. When the documents outlined in the suit have been filed, the company may opt for removal Under the Removals Amnesty.
Where a suit has already been brought by the COJ in respect of outstanding returns, the company is required to pay legal fees on an increasing scale depending on the stage at which the matter is before the court, and the amnesty will still apply.
Where during the course of an application being made to restore a company to the register, the company is required to file outstanding returns as a precondition to it being restored to the register, then the returns may be filed and the reduced amnesty rate will apply.
The Registrar has indicated that as at December 2014, there were 86,994 companies on the Companies Register with 51,755 or 59.5 per cent of that number being delinquent. Similarly, up to December 2014, 125,846 Business Names had been registered by the Companies Office and of that number, 80,424 had expired, but had never been renewed or closed.
Readers will recall that the minimum business tax applies once the company is on the register and the obligation to pay the tax is not concerned with whether the company is dormant or active. Therefore, an additional benefit of the amnesty is, if companies are not operating and seek to be removed, bring them up-to-date and have them removed from the register as they will then no longer be obliged to pay the minimum business tax.
Finally the amnesty, if successful, should mean that the Register of Companies should be more of an accurate reflection of companies operating in Jamaica and see improved compliance. Remember however that it is not like a get-out-of-jail-free card in monopoly which can be kept until needed or sold; the amnesty expires on June 30, 2015 and should be taken advantage of as no one knows when another one will come along.