Corporate-Owned Property Fraud in Jamaica: When Company Assets Are Sold Without Shareholder Authority

• Company-owned property in Jamaica can only be sold by persons with proper board authority.
• A director who sells company property without board approval may be personally liable for the loss.
• Buyers should require a certified board resolution authorising the sale before completing.
• Company records can be verified through the Companies Office of Jamaica at companiesoffice.gov.jm.
• Forged company seals and board minutes have been used to facilitate fraudulent corporate property sales.

In Jamaica, a significant portion of commercial and investment property is held in the name of registered companies rather than individuals. This arrangement offers tax and liability advantages but also creates an additional layer of authority verification that is required in any property transaction. A company can only act through its authorised officers, and the authority of those officers to sell or encumber company property is defined by the Companies Act (Jamaica), the company’s articles of incorporation, and any resolutions of the board of directors. A director who claims to have authority to sell company property but has not been properly authorised to do so is acting without legal authority, and any transaction they complete is vulnerable to challenge by the company or its shareholders.

Corporate property fraud schemes include: a sole director of a company who sells property owned by the company to a connected party at below market value, without disclosing the transaction to other shareholders or minority investors; the production of forged board minutes and company resolutions purporting to authorise a sale that was never approved; and the use of a company whose registered details have been altered at the Companies Office — through a change of director registration — to create the appearance of authorisation for a transaction the original owners would not have approved. The use of a forged company seal on transfer documents has been identified in a number of reported fraud cases.

Buyer Due Diligence for Corporate Sellers

Buyers purchasing property from a corporate vendor should require production of a certified true copy of the board resolution authorising the sale and the common seal of the company. They should verify the identity and authority of the directors by checking the company’s current registered information at the Companies Office of Jamaica at companiesoffice.gov.jm, and should confirm that the persons signing on behalf of the company match the currently registered directors. Any discrepancy between the persons representing the company and its registered directors should be investigated before completion.

Follow Jamaica Homes on Youtube @jamaicahomes and Instagram @jamaica_homes and on Facebook @jamaicahomesnews Send us a message or email us at onlinefeedback@jamaica-homes.com or editor@jamaica-homes.com