DURING the course of last week, the news headlines featured the Kingston & St Andrew Council’s (“KSAC”) pronouncements regarding unregistered businesses. On May 5, 2011 the Observer reported that “Kingston Mayor Desmond McKenzie said a recent probe showed that only 3,000 of the more than 17,000 businesses operating in the Corporate Area were registered and had up-to-date trade licences.” This is an alarming level of non-compliance and is a perfect example of a rule which is honoured more in the breach. This situation also illustrates why it is good to obtain proper advice on the legal requirements for operating businesses and try to maintain compliance. Once the laws are on the books, even if they are not being enforced, the regulator always has the power to enforce and may do so at any time.

The Licences on Trades and Business Act is a 1961 piece of legislation and it is this law which requires that persons carrying on a trade or business shall obtain a trade licence. Persons carrying on the following types of trade or business are required to obtain a trade licence: retailers, merchant, general factor or wholesale dealer, auctioneer or commission agent, wharfinger, super-cargo and proprietor of newspaper. Persons holding other forms of trade licences are exempted from the requirement to obtain a licence under the Licences on Trades and Business Act. These persons include those who operate a business that requires a spirit licence, or licence

to sell agricultural produce, or a licence to operate a stall or stand in any public general market. Churches, educational institutions and other forms of charitable or community organisations are not required to obtain a

trade licence.

Applications for licences, along with payment of the relevant fees, are made in each parish at the Tax Office on April 1 each year. A separate licence is required for each branch, store or location of a business. The funds collected are for the benefit of the operation of the relevant parish council and the KSAC.

Outstanding licence fees may be collected in the same way as outstanding taxes. The Commissioner of Taxes may assess a delinquent person for fees due and outstanding for up to six years. You may be aware that enforcement may involve the tax authorities exercising their power to seize goods and chattels, including motor cars, industrial equipment, office furniture and equipment, money, bonds, other financial instruments, and stocks-in-trade. Upon distraining goods and chattels, the Commissioner of Taxes may hold them for ten days, during which period the delinquent person may redeem his goods and chattels by paying the outstanding licence fees, a five per cent (5%) commission, along with all costs associated with the proceedings, including bailiff fees. If the goods and chattels are not redeemed accordingly, the Commissioner may proceed to sell, recover all sums due from the proceeds of the sale and pay over the balance to the business operator.

There are several pieces of legislation in Jamaica which require that specified business activities are to be licensed. Thus, depending on the nature of the trade or business being carried on, other forms of registrations and licensing may be required in addition to the licence under the Licences on Trades and Business Act.

Andrea Scarlett-Lozer is an Associate at Myers, Fletcher & Gordon and is a member of the firm’s Commercial and Intellectual Property Departments. Andrea may be contacted via andrea.scarlett@mfg.com.jm or www.myersfletcher.com.