As an entrepreneur in Zimbabwe looking to start a business, one of the first key decisions is choosing the right legal structure. The legal structure will impact aspects like ownership, liability, taxation, and more. Here is an overview of the main options available in Zimbabwe and the steps to set up a company.
LEGAL STRUCTURES FOR BUSINESSES IN ZIMBABWE
The two most common legal structures for businesses in Zimbabwe are:
- Private Limited Company (PLC) - A PLC is a separate legal entity from its owners. It is suitable for medium to large businesses and must have 2-50 shareholders. Shareholders have limited liability, only being responsible for company debts up to the value of their shares.
- Private Business Corporation (PBC) - A PBC provides limited liability protection to its owners, but is less common than PLCs. It is often used by small to medium enterprises, sole proprietors, accountancy firms or consultants. A PBC needs at least one director who must be a Zimbabwe resident.
Other less common structures that may be available include sole proprietorships, partnerships, and franchises. The PLC and PBC structures are usually the preferred options for most businesses.
STEPS TO SET UP A PRIVATE LIMITED COMPANY IN ZIMBABWE
To register a PLC in Zimbabwe, follow these steps:
- Select a unique company name - Provide 3-5 proposed names to the registrar, in order of preference.
- Prepare the registration documents - This includes the Memorandum and Articles of Association, CR5 form with company addresses, and CR6 form with director and company secretary details. Use the standard templates or consult a professional.
- Submit the application - File the documents with the Registrar of Companies in Harare or Bulawayo, along with the applicable fees. This can be done online at www.zimeservices.pfms.gov.zw or in person.
- Obtain certificate of incorporation - Upon approval, the Registrar will issue the certificate of incorporation to legally recognize the company.
Some key requirements to note:
- At least one director must be a Zimbabwe resident
- The company secretary must be 16+ years old and a Zimbabwe resident
- You need a physical address in Zimbabwe to register the company
After incorporation, the company must also register with the Zimbabwe Revenue Authority (ZIMRA) within 30 days to handle its tax obligations.
While the process is fairly straightforward, it can help to work with a professional consultant registered with the Deeds, Companies and Intellectual Property department to ensure all requirements are properly met. With the right planning and execution, you’ll have your Zimbabwe company up and running in no time.