-Nigel Hughes schools Chartered accountant on registration of foreign company

WHILE branches of foreign companies are required by law to have registered agents and offices in a country, most overseas firms usually nominate their attorneys in a country within which they have interests as their registered agents.
This is according to prominent Attorney Nigel Hughes, who was at the time responding to comments made by Chartered Accountant and Attorney Christopher Ram in a Kaietuer News article published on Sunday.

The article in question carried the headline, “Major oil companies operating in Guyana did not even bother to incorporate domestic branch—but all of its subsidiaries stand to get big benefits—Ram.”
Ram was referring to American oil giant ExxonMobil’s subsidiary Esso Exploration and Production Guyana Limited (EEPGL) and its affiliates, Hess Guyana Exploration Limited and CNOOC Nexen Petroleum Guyana Limited.

The newspaper quoted Ram as saying that “It is also worth noting that none of these three entities have incorporated a domestic company and each has its registered office at the same address – 62, Hadfield and Cross Streets, the same address as Hughes, Fields and Stoby, Attorneys-at-Law.”

Hughes via social media platform, Facebook, said perhaps it has escaped the attention of Ram, the expert quoted by the newspaper, that all branches of external companies are required by law to have registered agents and offices in country.
Hughes said that the content of the article appears to disclose some degree of confusion, or perhaps miscomprehension about the difference between the registration of a branch of an external company and the incorporation of a subsidiary which the newspaper referred to in its article as a “domestic company”.

He said additional difficulty appears to have been encountered in relation to the requirements of the law for incorporation of an entity which the newspaper described as “domestic branch”.
Hughes explained that a branch office is not a separate legal entity from the parent company or corporation.

He said it is the presence of the parent within the jurisdiction, the process of registration ensures the legal presence of the parent in Guyana.
Hughes noted that it is the most direct and proximate legal presence of the external company on these shores.

Incorporation of a company, he said, is effected by the incorporation of a separate and distinct legal entity known as a limited liability company in Guyana.
He said this applies where a subsidiary is incorporated, adding that subsidiaries are not necessarily wholly owned by their parent and the laws make no such requirement.
The prominent attorney noted that the concept of “incorporation of a domestic branch” referred to in the article appears to have confused the direct presence of the parent company, by registration of the parent as an external company as against the incorporation of a subsidiary of the parent.

“The law does not contemplate or consider the incorporation of a branch, domestic or otherwise,” he said, adding that there is nothing ambiguous about the reasoning.
“It’s either a mammal or a reptile. It cannot be both,” Hughes noted.