Introduction
1. Most companies and business name owners will soon be required to re-register at the Companies Office[1]. Official sources expect this measure to be announced in the fourth quarter of this year. Companies and businesses which do not re-register will apparently be de-registered altogether.
2. These requirements, part of the Companies (Budget Amendment) Act 2019 enacted last month, are apparently aimed at ensuring that the current Companies Office “digital transformation” process gets a clean start. The severe consequences of threatened de-registration appear not to have been thought through – but the important thing is not to put your company or business at risk of that uncertainty.
3. No re-registration dates or processes have been announced yet. However companies, in particular, should prepare for this process now by ensuring that they are fully compliant with current registration requirements. We offer some tips at paragraph 14 below.
Companies Register
4. Most company owners understand the registration process that results in the formation of a Fiji company or the registration in Fiji of foreign companies – that is, companies incorporated offshore but registered in Fiji because they do business here.
Business Names Register
5. Less well understood is the Business Names register. Business names are trading names used by sole traders (eg a restaurant owned by Josefa Bloggs called “Jo’s Takeaways”) or companies (eg Singh’s Traders Limited trading as “Singh’s Bargain Store”) which are not their legal names. Owners of business names are required to register them so that people dealing with them know the legal entity behind them.
“Digital transformation”
6. The Fiji Government has begun its long-overdue “digital transformation” with last month’s launch of the “Business Hub” Facility https://mobile.digital.gov.fj/Eservices/Index. The facility allows for online reservation of company names and registration of business names and companies. So far these processes have worked reasonably well[2]. The online search and lodgement functions are not yet up and running. These are promised later in the year.
Re-registration of companies
7. The law will require the majority of Fiji companies and all foreign companies to apply for re-registration before the prescribed deadline[3]. The process and timelines will be set out in Regulations (not yet issued). If it is a Fiji private company it must register using the notation “Pte Limited”. Companies will need to re-submit their Articles of Association and other details that are presumably required to give the Fiji Companies Office the required “clean” data for its new electronic database.
8. Fiji companies that fail to re-register (or which are refused registration – see below) will be deemed “de-registered”. In that case (under existing de-registration provisions) their assets and liabilities become the property of the Registrar of Companies(!)[4]. This will create interesting – and no doubt unforeseen – consequences for Fiji companies which, through oversight or otherwise, fail to re-register. De-registered companies can apply to the Registrar (or the High Court) to be reinstated, in which case (if successful) they are restored to their property.
9. Foreign companies that fail to re-register will also be deemed to be “de-registered.”
Registrar’s “refusal” to re-register
10. The new law provides that the Registrar of Companies may refuse to re-register a company applying for re-registration. No criteria for refusal are given. Presumably the Registrar can refuse to register a company that is non-compliant or whose registration application is incomplete. In that case, de-registration follows.
Re-registration of business names
11. There will be a similar process for re-registration of business names. However, unlike for companies, the regulations will also require continuous renewals of business names at specified intervals (not yet announced). At the moment a business name, once registered, endures until a business owner files a notice saying the name is no longer used. Many owners ignore the latter requirement, with the result that the Register is clogged with names that have not been used for decades. The continuous re-registration requirement is presumably seen as a means of “cleaning up” to avoid this.
12. A business name not re-registered as required will also be deemed “struck off”. That means that any business owner who continues to trade under that name will be in breach of the business names rules.
Fees
13. No details are available of what re-registration charges will be imposed.
What should you do now?
14. These are the measures we advise company and business name owners to take now, in readiness for the re-registration process:
Companies
(a) check to see that your annual registration fee payments are up to date
(b) ensure in the case of a private company that your company has passed a special resolution changing its name to incorporate the word “Pte”[5]
(c) ensure you have an up to date set of Articles of Association of the company
(d) check that your filings of financial statements, or pro forma financial statements, are compliant with the Companies Act 2015.
An amnesty applies for non-compliance with certain notification requirements under the Act.
Business name owners
(e) check to ensure that any business names under which you are currently trading are registered
(f) check to ensure that, if you do have any business names registered, that they are registered under your correct (corporate or individual) name.
Conclusion
15. Overall the re-registration requirements are imposed for the right reasons – to ensure that the relevant registries will be accurate when they become digital. However past history tells us that the re-registration process is unlikely to be fully thought through or made easy – so it is wise to prepare well ahead.
Contact Glenis Yee, Janice Fong or Jesline Singh for further information on this Alert.
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[1] Companies and businesses registered after a certain date (yet to be specified) do not need to re-register.
[2] It currently takes about 10 working days to process reservation and registration applications, which is about the same time as over-the-counter paper applications.
[3] There will be a process to allow for an extension of time but nothing is clear until Regulations are issued.
[4] if they hold property on trust that property becomes the property of the Government.
[5] There is some confusion – caused by the wording of the Act and the administrative approach of the Companies Registry – about this process, but a special resolution is ultimately the only way in which the company’s name can be legally changed.
Disclaimer
The information and opinions in this Legal Alert are for general information purposes only. They are not intended as specific legal or other professional advice and should not be relied upon or treated as a substitute for specific advice. Munro Leys can accept no responsibility for any loss arising from reliance on the general information contained in this Legal Alert.