A Jamaica Limited Liability Company (LLC) is governed by the Companies Act of 2004. The LLC has a perpetual life like a corporation. Its members enjoy limited liability as their legal exposure is limited to the amount owed on outstanding shares. In essence, the LLC is a cross between a corporation and a partnership.
Foreigners can form LLC’s and own all the shares.
Background
Jamaica is an island nation located in the Caribbean Sea.
Its political system is described as a unitary parliamentary constitutional monarchy with England’s Queen Elizabeth II as its monarch. In 1962, Jamaica gained its independence from Great Britain after 307 years of British rule. English is its official language.
Benefits
A Jamaica Limited Liability Company (LLC) can take advantage of the following benefits:
• 100% Ownership by Foreigners: LLC’s can have all of their shares owned by foreigners.
• Privacy: The names of the shareholders are never part of any public records.
• No Minimum Capital: There is no minimum authorized capital.
• Limited Liability: Shareholders’ liabilities are limited to the amount owed on their share capital contributions.
• One Shareholder/One Director: Only one shareholder and one director are required which means the sole shareholder can also be the only director for more control.
• English: After 300 years of British rule, Jamaica’s official language is English.
Jamaica Limited Liability Company (LLC) Name
Inquiries can be made with the Companies Office of Jamaica (COJ) regarding the availability of a proposed company name. A name reservation process is available with reservations up to 90 days. Name reservation allows the LLC to enter into pre-incorporation contracts knowing the company name is reserved.
The COJ maintains the right to reject any proposed company name if it causes confusion with another company’s name already registered. In addition, company names implying the involvement with a licensed business such as a pharmacy, medical, or engineering necessitates the company to become licensed.
The LLC must include the word “Limited” at the end of its company name if it is limited by guarantee or shares. Otherwise, the abbreviation of “LLC” can be used.
Registration
A business registration form along with the Articles of Incorporation must be filed with the Registrar of Companies office.
The business registration form automatically registers a new business with the following government agencies: Taxpayer Registration Number (TRN), National Insurance Scheme (NIS), and General Consumption Tax (GCT).
In addition, the Articles of Incorporation shall include:
• The company’s name;
• Local registered address;
• If the company has a share capital, a description of the shares classes, and maximum number of shares authorized for issuance;
• Any restriction on the transfer of shares;
• Maximum number of directors; and
• Restrictions on the types of business activities.
Failure to register a company makes it illegal to advertise, subjects the business to be closed, subject the company to lawsuits, and the company is unable to seek legal remedies.
It may take up to 9 business days to receive an approval from the Registrar.
Limited Liability
Shareholders’ liabilities are limited to their contributions to the share capital. If the company is sued in a court of law and must pay damages, the shareholders’ personal assets will not be subject to legal exposure. This is known as the ability to create a “ring fence” around the company to protect the personal assets of its shareholders.
The LLC is a separate legal entity from its shareholders. The LLC can own properties in its own name and sue or be sued as a separate legal structure. In addition, the LLC continues to exist after its shareholders retire or die.
Shareholders
The LLC must have a minimum of one shareholder who can be a resident and citizen of any country.
Shareholders can be natural persons or corporations.
Directors
A minimum of one director is required who can be of any nationality and residing anywhere. Directors can be natural persons or corporations.
The Registrar of Companies must be notified of the names of the LLC’s directors and any changes of the directors within 14 days from the change.
LLC’s are managed by their directors who create a board of directors (if more than one director). Directors are empowered to manage the day to day operations of the LLC. Directors must act in the best interests of the LLC and protect the investments from willful or negligent management. The board of directors may appoint officers such as a president, treasurer, and must appoint a secretary to handle daily functions and duties.
Certain matters require the approval by the shareholders who pass resolutions regarding company policy.
Minimum Capital
There is no requirement for a minimum authorized capital. The minimum paid up share capital is $1 USD.
Registered Office and Registered Agent
LLC’s must maintain a local registered office address. Required statutory records and accounting records must be kept at the registered office at all times.
A local registered agent is not required.
Secretary
Every LLC must appoint a company secretary.
Auditor and Accounting
LLC’s must appoint a registered local auditor. An annual audit is required.
In addition, annual financial statements are required.
Taxes
Every LLC must obtain a tax registration certificate even if taxes will not be owed.
Since 2013, the corporate tax rate for an un-regulated company is 25% and for a regulated company is 33%. Most LLC’s conduct business in un-regulated industries subjecting them to the 25% corporate tax rate.
Public Records
The records of the Registrar are public allowing members of the public to access them for information about companies. However, the names of the LLC’s shareholders are not part of the public records. The names of the directors are part of the public records.
Time for Formation
It can take up to 10 business days to complete the formation and registration process for a LLC.
Conclusion
A Jamaica Limited Liability Company (LLC) can take advantage of the following benefits: 100% foreign owners; limited liability, privacy, no minimum capital, one shareholder and one director who can be the same person, and English as the official language.
