Longtime head of the Barbados Small Business Association (SBA), Senator Dr Lynette Holder believes that the latest change to the Corporate Act will make life a lot easier for sole proprietorships seeking to incorporate their businesses.
Speaking in the Senate Chamber during debate on the Corporate (Miscellaneous Provisions) Bill 2021 on Wednesday, Senator Holder stated that many of the small businesses in Barbados are sole proprietorships, and the incorporation process in its previous form was a costly exercise.
“Of the 3 000 loans distributed so far by the Trust Loan Fund, over 90 per cent have gone to sole proprietorships, and the Small Business Association’s membership database shows that 60 per cent of our members are sole proprietorships. Now after registering their trading name, when we want to help them get to the next phase of incorporation, one of the major stumbling blocks is the cost of it, which is between $2 500 and $3 000 in legal fees.
“However, in reality, the only role the lawyer played based on how the Act is written was to verify that the person seeking to incorporate the business was of a sound mind. With this new amendment, we are removing that clause so the sole proprietor no longer has to get a lawyer to verify that he or she is of sound mind and can just send their documents through to the Registrar.”
She noted that incorporation was an important step for businesses to take since it “limits the liabilities of the company in that it establishes the company as a separate entity from the individual in charge of it, so the owner can now put measures in place such as a governance structure to help the business to grow.”
Senator Holder noted that Barbados was currently ranked 102nd out of 190 countries when it came to ease of starting business ventures.
“In the CARICOM region, Jamaica is number 6, St Lucia is number 69, Trinidad and Tobago is number 79 and Grenada is ranked 89th on that list. We believe this amendment is a step in the right direction for Barbados,” she said. (DH)