ST.

ANDREW HIGH SCHOOL FOR GIRLS

GRADE 10

Regulatory Practices Instituted by Governments

A business is not considered a legal entity if it is not registered as business in the country where
it operates. All persons desirous of starting a business must first be registered with the
government agency authorized to carry out registration of business in their country.

A sole trader only needs to register his business by meeting the requirements outlined for sole
traders by the registering office and filling out the required documents.

Partnerships are also registered by the completion of a registration document. The names of all
the partners must be listed on the document. Partners in a business are advised to draft a Deed of
Partnership. This document sets out all the rules that govern the partnership and will thus help to
prevent conflict among partners.

The formation of public and private limited liability companies involves the preparation of a
number of documents.

The Companies Act contains the laws relating to companies. To comply with certain
requirements which were laid down by the Companies Act, the promoters of the company must
present the following documents:

1. The Memorandum of Association – this document governs the company’s relationship with
the outside world. It contains:

(a) The name of the company

(b) The address of the registered office

(c) The objectives of the A statement of limited liability to members

(d) The amount of capital to be raised by the selling of shares and the types of shares to be issued

(e) The number of shares to be taken by the directors

(f) Statement of intent to form a limited liability

2. Articles of Association – this document contains the internal rules and regulations which
govern the company. It contains:

(a) The rights and obligations of the directors

(b) The procedures for calling an annual general meeting

(c) Procedures for electing directors

(d) The borrowing powers of the company

In order to effectively register a company, the Memorandum and Articles of Association must be
prepared by a lawyer or any person named in the articles as a director or company secretary and
sent to the companies registering office.

3. Statutory Declaration – this document states that the promoters of the company have complied
with the Companies Act. It is a signed statement from each director certifying their willingness
to serve.

4. Certificate of Incorporation – Once all three documents above have been submitted and the
Registrar of Companies is satisfied that all is in order, it will enter the name of the company on
the register, and issue a certificate of incorporation. The certificate of incorporation is proof that
all requirements of the Companies Act have been complied with. The certificate of incorporation
establishes the firm as a legal body.

5. The Incorporated Company – A company always means an incorporated company. If a

company is not incorporated, it is really a large partnership. Every business that has more than
fifty shareholders must be registered as an incorporated company. The advantage of
incorporation is that each member’s liability is limited. At this stage it is only the private limited
company that may begin trading.

6. The Prospectus – The public limited liability company must first publish its prospects inviting
the public to subscribe for shares. This may be a publication in the newspaper or in another
public media. The prospectus will contain information on the assets, liabilities and profit levels
of the company.

7. Certificate of Trading – Once the public limited liability company has collected the total
amount of share capital stated in the memorandum, the company will then be issued with a
Certificate of Trading. This will allow the company to start trading.

8. Corporation tax must be paid

9. Employees’ N.I.S and income tax must be paid
10. Licenses and health certificates are needed for selling alcohol or food respectively
11. Professionals (lawyers, doctors, architects, engineers etc.) must register with their
professional bodies and must be controlled/governed by their rules

Local, Regional and Global Rules for Conducting Business

Each business has the following general procedures:

1. Decide on the ownership structure/type of business.

2. Register with the office of the Registrar of Companies. Once the business is registered the
government can monitor its activities and also provide guidance and assistance.

3. Provide necessary documentation along with a fee to the Registrar in order to be

registered. Examples of these are listed below.

i. Sole traders complete relevant forms, provide certified identification.

ii. Partnerships do the same and also submit information on the different names, nationalities and
other business operations of each partner, along with the address of all locations used in the
partnership.

iii. Obtain necessary licenses for example, alcohol, import).

iv. Taxation (cooperatives are exempt from most taxes and stamp duties; sole traders and
partners pay 35% income tax while corporations pay 33.3% income tax).

v. Different countries have different restrictions on the level of share ownership for corporations
and cooperatives (for example, maximum share membership in a cooperative held by one person
may be 20%).

vi. Registration with the general Consumption Tax Office

vii. Registration with National Insurance Scheme

Regular Business Legislation in Different Countries

1. Labour laws and regulations – persons should not be paid below minimum wage.

2. Businesses that come in contact with food in any way should ensure that all employees obtain
a food handler’s permit.

3. Income tax – should be paid over to government by every organisation.

4. Consumption tax – General Consumption Tax (tax charged on the purchase of goods 16.5%).

5. Customs and excise – customs (tax charged on goods that are imported example motor
vehicles) and excise (tax on goods manufactured in a country example tobacco and
alcohol).

6. Zoning legislations – where one should locate their business example factories should not be
close to schools and hospitals.
7. Property assessment taxes – tax charged on land.

8. Consumer protection measures such as the sale Of Goods Act; Ombudsman; weights measures
and Prices Commission; Metrication Board; Health and Food Safety laws; Bureau of
Standards.

Research and make notations on the following for assignment:

9. Factories act 10. Intellectual property rights

Regional

• How would CARICOM and CSME affect the operation of one’s business

• Some countries may have bi-lateral agreements which may affect the business
environment

Global

How will globalization affect the business environment

• Now that the world is being viewed as one large market, the traditional ways/rules
applying to business are now changing e.g.

1. no more preferential treatment

2. increase in requirements in areas such as labeling of goods showing ingredients,

nutritional value and calories etc.

4. greater rules relating to environment protection