Operating a social enterprise is no walk in the park
QUESTION: Hello Yaneek, I am a huge fan of yours and really appreciate how you help young people to understand starting a business. I have always had a dream of being a social entrepreneur where I can give back to students who are in need and help them to learn other skills outside of what is in the school. I don’t want to talk too much about the details in case someone steals my ideas but in short, my mother loves the concept and says it is a good idea and that she will help me to register, but I don’t know where to start. Can you please tell me how to register as a charity? Businesswise: Your first homework assignment, which I suggest you undertake before registering, is to read the Charities Act of 2013, which is the law specifically governing charities in Jamaica. This will help you understand the legal definition of a charity as well as the designated purpose to which it must adhere so you can determine whether the entity you envisioned (and all the activities you intend to pursue) fall within the realm of a charity.
The act also gives insight into the magnitude of the powers of the State in monitoring, examining, investigating and even auditing registered charities to ensure they are compliant with the statute. There are also serious penalties for non-compliance, which I want you to review with your mother so you both understand the personal responsibility and liabilities you will face in undertaking the registration and operation of a charity in Jamaica.
Fortunately, the document is a relatively short read, at fewer than 50 pages, and can be found online at https://japarliament.gov.jm. An important point to note is that while the Charities Act of 2013 is the primary law governing charities, it is not the only statute to which you will be subject. If you are hiring people you will be subject to several employment laws; if you are erecting signage you will have to adhere to regulations of your municipality; and depending on the type of education and training you are offering, you may be subject to the Education Act. I’ve just named a few statutes. There will likely be many more that apply.
The reality is that operating any enterprise, including a social enterprise, is no walk in the park. It’s complex and costly. Aside from your core functions you will have many other state-imposed administrative responsibilities which take time, money, resources and sometimes even specific expertise to fully interpret and implement to ensure compliance. Therefore, you must carefully consider your capacity before starting this journey.
I contacted the Companies Office of Jamaica (COJ) regarding the mechanics of registering a charity and below are the steps they outlined:
1. CONDUCT A NAME SEARCH
Before you can register your charitable organisation, you need to ensure that the name you are thinking of is available. You can do a name search on the website of the COJ. If the name is available, it will be reserved for two days at no charge. If you want to reserve it for 90 days, you can pay J$3,000.
You will be required to register your enterprise as a Company Limited by Guarantee Without Share Capital at the COJ. The cost to register is $24,500 and the processing time is four working days. Express service is available at an additional cost.
You must complete the Articles of Incorporation (Form 1B) and pay the requisite Stamp Duty.
You then complete the Business Registration Form (BRF1)/ Superform.
3. CHARITABLE ORGANISATION REGISTRATION
Note that the COJ does not process applications to be a registered charity. This is done by the Department of Cooperatives and Friendly Societies (DCFS) after you have registered at the COJ. To register a charity you must submit the following to the DCFS located at 2 Musgrave Avenue, Kingston 10:
A completed application form (found online at www.dcfs.gov.jm) Certificate of Registration/ Certificate of Incorporation Your entity’s Tax Registration Number (TRN)
A completed Fit and Proper Questionnaire along with certified passport-sized pictures for all the directors
Prior year audited financial statement or current unaudited financials (if applicable)
IIIIIThe DCFS will then process your application and if approved you will be issued with an official certificate. That certificate will be valid for two years and thereafter it must be renewed by submitting an application for renewal with your company registration documents, TRN, new fit and proper questionnaires and audited financial statements.
Good luck!
One love.
Yaneek Page is an entrepreneur and trainer in entrepreneurship & workforce innovation.
IShe’s also the creator & executive producer of The Innovators and Let’s Make Peace TV series. Email: info@yaneekpage.com Twitter: @yaneekpage, Website: www.yaneekpage.com