Imbert moves on unregistered, ‘dummy’ companies with new law

Senior Political Reporter

The penalty for failure to register a business will increase from a daily fine of $200 to a one-time fine of $10,000, with an additional fine of $300 for each day the offence continues, under the Miscellaneous Provisions (Global Forum) Bill 2024.

“This change is designed to enforce compliance with registration requirements—there are far too many people operating outside of the law,” Finance Minister Colm Imbert said in detailing the bill in Parliament yesterday.

Imbert piloted the 18-clause bill which makes amendments to 16 laws.

The bill is designed to meet transparency obligations according to Global Forum recommendations and standards.

Imbert said the bill introduces a series of amendments to the Companies Act aimed at clarifying definitions, tightening regulations, and enhancing compliance and enforcement.

“This will mean companies will now be held to higher standards of governance and compliance,” Imbert added.

Detailing the bill’s clauses, Imbert said provisions also introduce several changes to the Registration of Business Names law, strengthen the registration requirements for businesses, increase penalties for non-compliance and provide clearer guidelines for addressing default.

Imbert said all firms must be registered in accordance with the Companies Act’s provisions to legally do business.

“One would think that should have been the case so long ago,” he noted.

According to provisions, firms which began operating before a new Section 31A must comply with the registration requirement within three months.

Apart from an increase in the penalty for failure to register a business, also being introduced is a new penalty for late submission of documents to the Registrar General—a fine of $300 for every month or part thereof where documents are overdue.

A firm’s registration can be suspended if it fails “without reasonable cause” to submit any required return/notice/document/fees. The business can be reinstated once the issue is resolved.

Non-profit organisations that fail to notify the Registrar General or submit any documents within the specified time will attract a penalty of $300 monthly.

Also being introduced: the Attorney General will have the authority to apply to the High Court for an order of forfeiture against the NPO’s property when a deregistered NPO fails to apply to the Registrar General for reinstatement.

“This reduces the risk of money laundering and terrorist financing…and addresses the misuse—this is a real thing—of NPOs for terrorist financing,” Imbert added on related aspects.

Stiffer companies laws

On new provisions concerning the Companies Act, companies will be required to maintain a register of members that indicates whether each is a nominee shareholder. It will include details such as names, addresses, occupations, nationality or jurisdiction of the nominee.

“We need this kind of information,” Imbert said, “Far too often people hide behind ‘dummy’ names or ‘dummy’ companies, people fronting for them.”

He said information in the register must be maintained for six years after a person ceases to be a member of a company that’s been dissolved.

Another new provision makes it an offence—triggering fines and jail time—for a company or its directors who fail to comply with keeping this information for six years after a company is dissolved.

Provisions tackle another area where people “hide.” Imbert added, “In the past, the registration and identification requirements for external companies is far less than for local companies. This now requires much more detailed information from external companies.”

“Some external companies in T&T file that they’re owned by a trust somewhere else, so you don’t know who the owner is. That has to stop,” the minister added.

Other clauses address defaults by companies that fail to submit any required return, notice document or fee and give the Registrar authority to identify inconsistencies/inaccuracies in documents.

Another new provision allows the Registrar to strike a company off the register if there’s reason to believe any information provided in applications or documents is false/misleading/deceptive.

Bearer share warrants will become invalid and external companies will have to provide details about bearer shares, which Imbert said is “just a piece of paper.”

The Minister of Legal Affairs will also be responsible for the Registrar General’s Department.

Other Clauses:

* Provisions protecting citizens against misuse or unauthorised sharing of tax information in instances when a judge is asked to authorise a police officer to enter/inspect premises to get someone’s financial information or to do an investigation involving access to information. This pertains to matters following the laws of Corruption Prevention, Proceeds of Crime, Anti-Terrorism, National Insurance, and Financial Intelligence Unit.

* On Income tax, the bill provides for penalties for the unauthorised use of taxpayers’ information and providing information – to a foreign tax administration- setting conditions under which this can be shared.

* Similar provisions apply to the Petroleum Taxes Act.

* Provisions to increase the accountability of non-profit organisations’ controllers

* Provisions to the Trustee Ordinance to provide a more comprehensive definition of who is really the beneficial owner of a trust, penetrating the secrecy concerning trusts which some “hide behind”.

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