The law requires business operators to register the name of their concerns with the Office of the Registrar of Companies/Companies Office of Jamaica, located at Grenada Way, New Kingston. Amendments to the Business Names Act in 2006 mandates the registration of business names by companies and has introduced higher fines for breaches. They also prohibit unregistered businesses from carrying out any form of advertising. - File
Here are some of the major legal developments impacting businesses in 2006:
The Companies (Amendments) Bill 2006 will permit companies formed under the old Companies Act to transition to the new Companies Act regime by filing Articles of Continuance.
In the filing of Articles of Continuance a company may adopt the power to buy back its own shares and to insure its directors which are features of the new act.
However, in so doing, they will be obliged to file all outstanding statutory documents to make them fully compliant.
If a company does not file Articles of Continuance, the penalty may be a matter of controversy because the company will not be able to pay dividends. This in effect punishes the shareholder for the default of the directors and officers of the company.
The form of Articles of Incorporation is not prescribed by the bill. It is hoped that exercise will not take another two years.
Regulations under the Companies Act 2004 were passed on March 13, dealing with the naming of a company. The regulations basically restate the law that no company is to be registered with a name that is 'undesirable'. To avoid confusion, a name should also not resemble that of an existing company, except in limited circumstances.
For the protection of property rights, the regulations also provide that a company's name must not infringe a registered trademark, and, in protection of the general public, it should not mislead by referring to a profession or 'business' in its name which it is not licensed to carry on such as 'medicine', 'banking', 'insurance' or 'engineering'.
An Insolvency Legislation Revision Committee, chaired by Keith Cooper, the Trustee in Bankruptcy, has been appointed by the Minister of Justice, Senator A.J. Nicholson, to make recom-mendations to modernise our personal and corporate insolvency law.
The committee started the review exercise in April with a mandate to recommend a single modern regime that covers both personal and corporate insolvency based on a philosophy of rehabilitation and counseling of individuals and corporate shelter and rescue or rehabilitation for corporations.
The report is expected to be delivered to the minister in the course of next year.
The Property (Rights of Spouses) Act came into effect on April 1 and has introduced the 'Equal Share Rule' between spouses. Note that a spouse includes a single man and woman co-habiting for five or more years.
A spouse can now apply to the court for an order for sale to prevent the property being diminished in value by the other spouse's activities such as carrying on business activities in the matrimonial home in breach of restrictive covenants, or failing to maintain the matrimonial home so as to preserve it value or to pay property taxes.
The Court will take both monetary and non-monetary contributions of each spouse into account in determining respective interests in matrimonial property thus removing a difficulty many wives face.
Financial institutions are now required to obtain the consent of both spouses in any transaction concerning the family home. However, they are protected as any court order in favour of a spouse is subject to an earlier mortgage or charge or to the rights under an instrument signed before the date of the order.
The Electronic Transactions Act 2006 is expected to be the first in a series of regulatory measures being introduced to promote the development of the legal and business infrastructure necessary to facilitate electronic commerce. The act establishes rules regarding the application of legal requirements to electronic transactions, facilitates the electronic filing of documents with Government agencies and statutory bodies and paves the way for the establishment of a certifying authority which will authenticate electronic signatures.
Cyber crime legislation is also expected to be introduced in order to further enhance public confidence in the safety of electronic transactions.
Amendments to the Business Names Act were approved by Parliament with some controversy.
These amendments are expected to have significant implications for the business community as they require the registration of business names by companies and introduce higher fines for breaches. They also prohibit unregistered businesses from carrying out any form of advertising.
There have been concerns that these increased requirements will create hardship for small business operators.
However, the Government has stated that in a modern economy it is imperative to have adequate regulations for the business sector.
Negotiations of the Economic Partnership Agreement (EPA) between Caricom and the European Union which started in 2004 are ongoing, with discussions in several areas including market access, services and investment, intellectual property rights and legal and institutional issues. The EPA, once completed, is expected to be a trade agreement with significant focus on economic development.
The World Trade Organisation Doha Round and Free Trade Area of the Americas (FTAA) negotiations remain suspended and it is difficult to say whether or when these negotiations will be restarted.
With the future uncertain, Caricom countries have started to focus their attention on possible bilateral agreements with major trading partners including the United States, Canada and MERCOSUR.
On March 30, 2006 regulations were passed under the Pensions (Superannuation Funds and Retirement Schemes) Act 2004. They govern, amongst other things, registration of trustees, plans and schemes, the licensing of administrators and investment managers, governance and investments and impose well needed reporting requirements. September 29 was fixed by the Financial Services Commission (FSC) as the deadline for compliance by the industry but that has met with partial success given the several changes introduced by the act.
The process continues as the FSC and the Ministry of Finance and Planning began consultations with industry participants for phase two of the reform process which is intended to deal with, most significantly, portability of pensions from one place of employment to another.
Civil Procedure: On September 18, the Civil Procedure Amendment Rules 2006 introduced notable changes to civil procedure practice.
The new rules introduce automatic referral to mediation of matters being dealt with by the Civil Division of the Supreme Court.
It is hoped that this will improve the pace of litigation, promote early and fair resolution of disputes, reduce the cost of litigation and, among other things, improve access to justice and clear away the tremendous back-log of cases, which delays trials unduly.
Paper Divorce: Most innovative of all, however, is the introduction of 'paper divorces'. It will no longer be necessary to appear in court to dissolve a marriage.
Foreign currency trading and the Securities Act: In March, a cease and desist order under the Securities Act was issued by the Financial Services Commission against Olint Corporation Limited and its principal David Smith.
It raised questions as to whether carrying on the business of dealing in securities or providing investment advice included trading in foreign currencies, a licence for which neither Olint not its principal held.
An appeal was filed against the order.
On a separate application the court granted a stay of execution of the cease and desist order (meaning that current activities of OLINT could continue) pending the hearing of the appeal but on condition that no new members be permitted to join the club until the hearing or until further order.
That appeal is set for hearing on March 26, 2007.
Defamation: The October 11 House of Lords decision of Muhammed Abdul Latif Jameel & Others v Wall Street Journal Europe Sprl further developed the common law in relation to defamation.
In this landmark case the Law Lords found in favour of the Wall Street Journal Europe newspaper which had reported that certain businesses owned by Jameel, a Saudi billionaire businessman were being monitored by the government for involvement in funding terrorism. The court unanimously held that journalists who "behaved fairly and responsibly in gathering and publishing the information" on matters in the public interest, but were unable to later prove the truth of their allegations are not liable for libel.
While not binding in the Caribbean, this ruling is highly persuasive and may be applied by local courts if the issue is tested.
It has been considered by the media as a victory for freedom of the press.
Bahia Principe Permit: In another landmark decision this year, a judge of the Supreme Court granted an application for judicial review of the issue of an environmental permit to the developers of the Bahia Principe Hotel at Pear Tree Bottom in Runaway Bay, making several important declarations on the flawed process by which the regulatory agencies had handled the hotel's application for a permit. However, construction of the hotel was allowed to continue primarily on the ground that the developers were not made parties to the original application, and, once they were allowed to intervene, they were able to show that they would be prejudiced by an order to cease construction.
The decision has nevertheless been hailed by environmentalists in Jamaica and throughout the region for its recognition of the importance of environmental impact in the development process.
The Judicature (Resident Magistrate) (Rate of Interest on Judgment Debts) Order 2006 of June 22 reduced the rate of interest payable on judgment debts from 12 per cent per annum to 6.0 per cent where the judgment debt is denominated in Jamaican dollars, and 3.0 per cent when denominated in foreign currency.
Prepared by the law firm DunnCox Attorneys-at-Law, 48 Duke Street, Kingston.
