Sole Proprietor vs Partnership; Which one to operate/register in Jamaica?

Business Registration in Jamaica
Operating a Sole Proprietor vs Partnership

By: Kmar Henry
       CEO of BIZcare Consultation & Accounting Firm



 Operating a business within Jamaica can be a mammoth task as taxes and recognition may seem like a mountain to climb. However, the backlash of starting a profitable business is still highly possible as resent reports shown by Robots Digital Agency ranks Jamaica as the 5th most viable place in the world to do business. Thus, this therefore proves that if the right things are done, the possibility of starting a legacy can still be maintained. Which this in mind, much questions have always been asked about the similarities, advantages, disadvantages, pros and cons of operating/registering a Sole Proprietor vs operating a Partnership Business as it relates to taxes and other benefits. Below I will try to distinguish a few.

SOLE PROPRIETOR
PROS

  •  Only one person is deemed liable to pay or account for all taxes. These are Income Tax, NIS, NHT & Ed-Tax. Please be advised that you only pay INCOME taxes if you make a profit over the Threshold for 2018 of $1,500,096.00. However, you will still be liable to pay all other taxes regardless unless a loss was made.
  •  You are required only to filed a S04 & SO4A yearly to account for these taxes along with a monthly SO1 (employee taxes) & GCT if you are making over the GCT threshold of $3,000,000.00 a year.
  • You are not required to file and pay a yearly Company Registration fee with the Companies Office of Jamaica (Only a renewal fee of $2,500.00 every three (3) years).
  •  A LOSS only affects the one sole person that operates the business.
  • You only pay a Registration fee of $2500.00 to the Companies Office of Jamaica.


CONS

  • If the Sole Proprietor dies the business may become obsolete or mismanaged.
  • All taxes are paid and deemed the responsibility of the Sole Proprietor.
  • A Renewal Fee of $2500.00 should be paid every three (3) years to the Companies Office of Jamaica.
  • If you operate and make over the Minimum Business Tax threshold figure of $5,000,000.00, you will be required to pay an annual Business Tax figure of $60,000.00 per year.



PARTNERSHIP
PROS

  • Both Partners will account for equal profits or losses unless otherwise stated in contract.
  • Each partner will pay taxes on the basis of ONLY when a profit is made.
  • You are not required to file and pay a yearly Company Registration fee with the Companies Office of Jamaica.
  • You only pay a Registration fee of $2500.00 for 2-5 partners or $5000.00 for 6/more to the Companies Office of Jamaica.
  • If in any case that one partner or owner dies the business will/can still be in operation effectively by the other partner.



CONS

  •  A Renewal Fee of $2500.00 should be paid every three (3) years to the Companies Office of Jamaica.
  • Along with the filing of an IT03, both partners will be required to file and submit a S04 to declare ALL other income (s) being made. And also SO1 and GCT taxes will be required to be filed on a monthly basis.
  •  The threshold is applied only to the Individuals and not the business.
  •  The business will be liable to pay Minimum Business Tax ($60,000.00) if revenues are being earned over $5,000,000.00.



There are other payments that must be paid to the Tax Administration as related towards Trade License, Spirit License(If operating a bar or selling liquor) etc. However, the aspects listed above will prove pivotal. To register your business you will need to contact the Companies Register of Jamaica, Taxes are paid and dealt with at the Tax Administration of Jamaica. 

If you need more information or clarification, feel free to visit our Facebook Page (DM) or call or whatsApp us at 1 (876) 545-6928. Do remember at BIZcare "Your Business is our Priority". We offer the services of:
  1. Business Registration
  2. Tax Filing
  3. GCT Filing
  4. Payroll Services
  5. Consultation Services
And Others.

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References: Information received, compared and analyzed based on data shown on the websites of the Tax Office and Companies Offices of Jamaica.



Other related ARTICLES:

   

Tax Measures  that you must KNOW           Ten (10) Things that you MUST 
Before Starting your Small Business          Record when running your Small
in Jamaica                                                                                  Business



BIZcare Consultation & Accounting Firm is a consulting agency that operates within the small parish of Clarendon in the beautiful land of Jamaica. We are geared towards educating the minds of upcoming entrepreneurs of the important aspects that must be considered before starting their businesses. Hence, why we operate under the slogan 'Your Business is OUR Priority' and tagline 'Helping Small Businesses & Individuals to better Organise their Business Functions.'


Location: Jamaica

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