Comentary - A bill to amend the companies act
February 27, 2009
The current Companies Act came into force February 1, 2004. One of the deficiencies of the 2004 Act is that companies formed under the repealed Companies Act of 1965, called 'existing companies', are not legally able to amend their memorandum of association and articles of association.
This problem is compounded by the fact that there are no provisions in the 2004 Act that permit existing companies to make the transition to the new 2004 regime and thereby enjoy several undeniably desirable modern developments in company law.
As a result, when the 2004 Act came into force, existing companies faced the double dilemma of not being able to amend their constitutive documents as well as not being able to legally transition to the new regime offered by the 2004 Act.
Existing companies have been caught in this startling position for over five years and continuing. The 2004 Act is, therefore, in urgent need of amendment even while Parliament devotes itself to what it considers to be more deserving business of the nation.
In the meanwhile, as commerce must go on, the Companies Office has permitted existing companies to 'adopt' articles of incorporation using a procedure that has no sanction under the Act.
Practical solution
'Adopted articles of incorporation' are articles that the Registrar of Companies permits existing companies to file in order to make the transition to the new company law regime. After the 'adoption' the articles of existing companies may be amended in the same manner as the articles of companies formed under the new Act.
Using this practical solution offered by the Companies Office, many private, public listed and unlisted existing companies have in fact 'adopted' articles of incorporation to respond to the needs of commercial enterprise in this modern competitive environment....
Author: Janet E. Morrison
Source: Jamaica Gleaner
