Business law is concerned with the creation of companies, partnerships and business names and the legal relationships that exist between businesses, the public at large, and the government.
While companies are separate and distinct from their owners, partnerships and registered businesses are not.
Of course, these differences can assume massive importance for you as a business person. We will help you decide which type of business is best for you and we will help you to set it up and to run it.
A company is an entity that is separate and distinct from the individual members of which it is comprised. It can sue and be sued in its own name and its shareholders are not liable for its debts. Some advantages of forming a company are that a company does not die simply because its shareholders are dead. It exists for ever unless it is wound up or struck out by the registrar of companies. If the company owns property and its shareholders change, effectively changing the identity of the persons controlling the property no costs are incurred in transferring the legal title, as would have been the case had one individual sold the property to another.
If a company commits a crime or a tort its members or directors are not personally liable. So, if for instance, a company kept unsafe premises and an employee got seriously injured as a result, the shareholders and directors would share no part of the blame.
Likewise a company’s contracts are its own and in the event of breach the company is solely responsible to pay compensation.
Of course, there is one major disadvantage to incorporation. Once assets are transferred to the company they no longer belong to the members. So, even a controlling shareholder is not allowed to dip into the cash of the company.
Another drawback of incorporation is that there are several obligations imposed upon companies by law. Included among these is the duty to keep certain records at a specified location, called the registered office and to notify the registrar whenever the company changes the location of its registered office. Additionally a company must file an annual return with the registrar. This provides a snapshot of the shareholding structure of the company. A company must also have a company secretary whose duty it is to attend to the many administrative duties that have been placed upon companies by the legislation.
Incorporation refers to the procedure whereby a business is registered as a limited company at the Registry of Companies in Saint Lucia.
Never incorporate your business without seeking advice from a lawyer or an accountant.
Anyone who is 18 years or older, of sound mind and who is not an undischarged bankrupt can form a company.
Yes, one or more persons may incorporate a company. In your application for incorporation you must name a director, who can be you.
An incorporator must file the following documents with the Registry of Companies:
(1) Request for Name Search
(2) Articles of Incorporation
(3) Notice of Directors
(4) Notice of Address of Registered Office
(5) Statutory Declaration by a lawyer
The Request for Name Search should be filed first and the remaining documents should be filed after the registrar has approved a name for your company.
The registration fee is EC$850.00. The statutory declaration attracts stamp duty of EC$2.50. Your lawyer’s fee will be EC$2,000.
- Select 3 names for your company
- Decide where the registered office of your company will be. That is the place where your company must, by law, keep certain of its records. It is also the place where correspondence and court process should be sent.
- Decide who the director or directors will be. The directors listed at the time of incorporation hold office until the first organisational meeting of the company.
- Arrange to see a lawyer or an accountant.
Immediately after the registrar has issued the certificate of incorporation the incorporator or a director must call a meeting of the board of directors, called the first organisational meeting.
At that meeting the directors may:
- make bye-laws or rules for the administration of the company;
- adopt forms of share certificates and corporate records;
- authorise the issue of shares in the company;
- appoint officers of the company. A secretary must be appointed as it is a criminal offence to operate a company for more than a month without having a secretary in place.;
- appoint an auditor who will hold office until the first annual meeting of shareholders;
- appoint bankers and make banking arrangements; and
- transact any other business.