Essential Steps to Start your Business
Many persons since the start of the COVID-19 pandemic have considered new or other business ventures. For many persons, the very thought might be a bit daunting, especially after interacting with one or more government entities, or after hearing the horror stories of those in the past who might have. This issue is compounded further if you are a professional with not so great business acumen or formal training.
There is light at the end of the tunnel, as the road might not be so treacherous if you do a bit of research and are advised of what the requirements are. No doubt, there might be a few forms and legal documentation that you will need to complete including those from Tax Administration Jamaica (TAJ) et cetera. Making sure that your company is compliant with the legal requirements can make executing your core business activities as seamless as possible given the environment.
Register your business
In Jamaica, it is unlawful to start a business without first registering the business, unless you are involved in the buying and selling of livestock, and certain other exemptions such as operating a market stall and so on. If you aren’t involved in animal husbandry or selling cattle or plying your ware on a cart, then it might be prudent to formalize your activities. Having a formal business operation will garner a level of trust and respect from customers. This is so because, it says to them that effort and planning went into your business. It also says that your practice is unlikely to be untoward and you operate above board.
Your business name will appear on the Companies Office of Jamaica’s (COJ) website days after registering. You can register your business under a trading name. This means that you can use your name followed by a business name, for example if your name is John Astute-Busipro and you are in the business of fashion designing or even graphics design, you could opt to use a Trading As (T/A) name such as J-Designs; thus the name John Astute-Busipro T/A J-Designs. You must note however, that with this kind of sole proprietorship you are liable personally for debts or liabilities that the business will incur. Hence, if the business goes ‘belly up’ or someone sues the business they are in essence suing you; and your car and house might be at risk.
You might be familiar with seeing business names with ‘Limited’ or ‘Ltd’ at the end. These business types are those that protect you from personal liability under most circumstances. So, if the business should fail or incur debts, then those liabilities are confined to be set off against the assets of the business. Therefore, your personal assets such as your car and house will not be at risk. The income generated from this business might count as a part of your personal income if you pay yourself a salary or are actively involved in the running of the business. You have several types of businesses that are limited depending on your interest and scope. The myriad of business options include:
• Limited Liability Company
• Private company limited by shares
• Public company limited by shares
• Sole proprietorships
• Partnerships general
• Partnerships limited
• Companies limited by guarantee (with or without share capital)
The Companies Office of Jamaica (COJ) has a wide range of resources on their websites and they have, over the years, made the process easier and quicker. The forms have also been amalgamated into a “Super Form” for ease of use. The form will require information on the directors, registered office, secretary, National Housing Trust (NHT), National Insurance Scheme (NIS), Heart Trust, General Consumption Tax (GCT), Tax Compliance Certificate (TCC), and Taxpayer Registration Number (TRN). The Super Form allows new businesses to complete a single form as a one-stop registration for the Business name, TCC, TRN, GCT, NIS, and NHT. This eliminates the need to go to the individual entities to obtain these. There exist several persons and businesses that will undertake to complete the forms and register your business for you at competitive fees.
Registering your Business Name
Having decided on the structure of your business, and an idea of the name, you would need to visit the Companies Office of Jamaica and do a name search to ensure that the business name isn’t already taken. Once you have done so, you may proceed to register your business or reserve the name for up to 90 days. This is particularly useful if you have pre-registration contracts to execute or you want to get feedback or a feel of the utility of the name prior to registration. Do be cognizant, however, that there are rules governing how the names can be used and what names are acceptable. For instance, the name cannot be immoral or have an international affiliation if, in fact, it has no international presence. If the name is easily confused with another registered company’s name then the COJ has the right to refuse to register the said name.
Ensure to have a Tax Compliance Certificate (TCC) and Taxpayer Registration Number (TRN)
Registered businesses are obligated to pay their taxes. A TCC shows the world that your statutory payments are up to date and that you are compliant with your liability payments. A TCC is required for importers submitting an import entry and for making bids on Government projects. Upon registration of your business at COJ, they will issue a TCC and a TRN along with the business registration documents. You will also need to register at Tax Administration Jamaica (TAJ) with respect to collecting Income Tax, Education Tax, and General Consumption Tax.
Permits and Licenses
Depending on the field you are in, you may need to obtain a license or permit. It is always good to check with your local governing body to ensure you are compliant with their licensing regime. It is always good to visit their website or to give the respective government entity a call to get further information on the application requirements.
Jamaicans are hesitant when it comes to obtaining insurance, as it can be viewed as expansive. But, insurance coverage might prove useful and is sometimes required, depending on the field that you are in and the risk factors. You will have to consider if you will offer health or general liability insurance and/or product liability insurance as part of your employee benefits package. Another important factor to consider is property insurance. The fact is, we are prone to natural disasters and should the unforeseen occur, and you suffer property loss or damage, having insurance will, for a yearly premium, protect against these possibilities.
It is advisable to keep your business income separate from your personal income. If your business is a limited liability company, then that means it has a separate legal personality. That is, it is distinct from you (you are a person in law and so is the business). Open an account or two in the business name once you expect to start collecting funds from clients and other businesses. The choice for a bank will depend on their service offerings and what convenience you want as well as the cost for such services. Most banks will have information on their websites that you want to peruse before making a choice. Some will invariably have options suited for a wide range of businesses including small businesses and start-ups. They may even offer lower fees for new and small businesses with tailored units and departments that are tasked to deal with business customers. You will need to provide your business registration documents and TCC along with other required documentation to facilitate opening an account for the business.