Business owners now face jail time for letterheads, ads
September 09, 2007
Correspondence on letterheads and the placing of advertisements in the media are acts that can land a business owner in jail if they are not registered, says the Companies Office of Jamaica (COJ).
Sole proprietorships not registered with the COJ (formerly Registrar of Companies) are now prohibited from advertising and breaches can incur a fine of up to $15,000 or imprisonment not exceeding three months to the business owner.
This legislation came into effect on September 3 and is contained in the amendment to the Registration of Business Names Act.
"Even putting up a sign without being registered, you can be fined," explained COJ deputy director Shellie Leon. "That is advertising."
Leon told Sunday Finance that anybody, in any way, doing business and advertising in a name other than their true christian and surnames are liable for prosecution, if they are not duly registered with the COJ.
In the case of partnerships, all parties are obliged to become registered, as each owner would be subject to the law, according to Leon. The provision, she said, was accepted November last year.
According to Leon, the legislation was designed to protect business people, as well as third parties doing transactions with these businesses.
"It provides greater protection, proof of ownership and enable business owners to institute lawsuits," she said, adding that in many instances there was no recourse for people doing business with unregistered businesses.
"Third parties, many times, pay for a service that is not delivered and there is no recourse. In addition, operating business partners, at times, fall out with no proof under law of their obligations," Leon stated
Leon dismissed as baseless concerns from some business people that the legislation is designed to be used as a mechanism in tax gathering.
"The COJ is not a tax collection agency, she said, adding however that "people should do what is required" regarding statutory deductions.
Tax compliance, she emphasised, was not the aim of the legislation or the duty of the COJ.
"In fact, the tax office has more information on informal operators than we do," she said.
In the meantime small business operators could, in the short term, be required to present COJ registration certificates for loan applications and transactions with financial institutions.
"There are many financial institutions that are aware of the changes. They have been advised and I do believe they will implement some measures soon," said Leon.
Author: Observer Reporter
Source: Jamaica Observer
