Zimbabwe is one of the first choices for companies looking to expand their commercial activities into Africa. It is renowned for its skilled workforce, infrastructure and natural resources. The first step to succeed in Zimbabwe is getting company registration right from the start, avoiding costly delays.
What is Company Registration in Zimbabwe?
Company registration is the process of incorporating (registering) a business in Zimbabwe either as a Private Limited Company (PLC), Private Business Corporation (PLC) or any other business entity as stated in the Companies and Other Business Entities Act (Chapter 24:31). When a company is incorporated, the business becomes a separate legal entity; separate from its owners. The business becomes an individual ‘person’ in the eyes of the law. Essentially, this means that the company is completely separate from its owners in terms of finances, liabilities, contractual agreements, and ownership of property and assets.
Do I have to register a company?
Strictly speaking, you don’t have to register a company to operate a business in Zimbabwe. However, they are many opportunities that you might miss out on as unregistered. Some of the opportunities you might miss out on are as follows:
- Limited liability: When your business is registered, your personal and business finances will be treated as separate. This means that your personal assets cannot be seized to repay debts owed by your business and you cannot be held responsible for the debts. This is different when your business is not registered where there is potentially unlimited personal liability (e.g. your private residence at risk) for the debts of the business.
- Tax benefits: Unregistered businesses operated by sole traders pay PAYE tax while companies pay income tax. Income tax is generally lower than PAYE.
- Credibility: A registered company suggests that the business has permanence and is committed to effective and responsible management. This gives customers and suppliers a sense of confidence and many companies, especially larger businesses and the government, will not do business with a business that’s not registered.
- Easier and more options to raise capital: Sole traders or unregistered businesses generally have to raise capital from their own pockets, whereas a registered company can raise capital at any time by issuing shares. The new shares can be offered to existing shareholders or new investors. If the company is going to borrow money from a bank it may be possible to secure the loan without the need for the directors to give a personal guarantee/charge over their house.
- Protection of your company name: Once your company name is registered with the Companies Registry, it is legally protected by the laws of Zimbabwe. This means that your business name can’t be used by another business, which helps to protect your brand from incidents like brand copying or imitation.
- Easy transfer of ownership
Types of companies
They are quite a number of companies but the two most popular companies you can register in Zimbabwe are a Private Limited Company and a Private Business Corporation.
Private Limited Company (PLC)
A Private Limited Company is the most common company structure in Zimbabwe. It has limited liability which means shareholders are only responsible for the companies debts up to the number of shares they own in the company. A Private Limited Company requires at least 2 directors and a maximum of 50 and also limits the number of shareholders to 50.
Private Business Corporation
A Private Business Corporation is the best alternative to a Private Limited Company. This company structure is usually adopted by small companies and those individuals who want to operate as consultants. Instead of having shareholders and directors, it has members. The member’s financial liability is restricted to the amount of money they invest when forming the company.
Requirements for company registration in Zimbabwe
There are 4 requirements when registering a company in Zimbabwe
- Company name – should not be similar to an is already registered company, or which is so similar to any such name as to be likely to deceive, is likely to mislead the public, is blasphemous or indecent or likely to cause offence to any person or class of persons, suggests patronage of the Government or some other authority or organisation unless the consent thereof has been obtained, is undesirable for any other reason.
- Director’s information – Name(s) and surname as shown on government issued identity documents, national identity number/passport number, official address and any former names. This information is shown on the CR 6.
- Shareholders information – name(s) and surname as shown on government issued identity documents and official address. This information is shown on the Memorandum and Articles of Association.
- Company objectives. These are the commercial activities the company intends to carry out. A company can have as many company objectives as they require.
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Procedure for company registration in Zimbabwe
There are five important steps to the initial company registration procedure in Zimbabwe which include:
- Name Search and reservation
With us, this can be done within 24 working hours with the approved name being reserved for up to 3 weeks from the application date. You can however further reserve the company name if it has expired.
- Appointment of company directors
This is done through the CR 6 form (former CR 14) and is usually prepared by your consultant. A director should be above the legal age of 16 years, and at least one being ordinarily a resident of Zimbabwe. The individual must also not have been previously disqualified from acting as a director or bankrupt.
- Appointment of company secretary(s)
This is also done through the CR 6 form (former CR 14). A company secretary should be above the legal age of 16 years, and ordinarily a resident of Zimbabwe. The individual must also not have been previously disqualified from acting as a company secretary.
- Registering of company addresses
This is done through the CR 6 (former CR 6). The addresses should be a physical address which should be a Zimbabwean address, postal address and email address.
- Company incorporation
The official company registration documents are submitted at the Companies Registry for incorporation. This is done only through a registered consultant, registered with the Deeds, Companies and Intellectual Property (DCIP). After successful submission of the registration documents at the Companies Registry, the company is incorporated.
Documents you receive after registering a company in Zimbabwe
The company documents you will receive will differ with the type of company you choose.
For a Private Business Corporation you will receive the following documents:
- Certificate of incorporation – a legal document issued by the Registrar of Companies showing that your company has been incorporated.
- CR 28
For a Private Business Corporation you will receive the following documents:
- Certificate of incorporation
- CR 5 (Former CR 6) – List of company addresses
- CR 6 (Former CR 14) – List of company directors
- Memorandum of Association – a legal statement signed by all initial shareholders or agreeing to form the company. It also shows the businesses objectives.
- Articles of association – written rules about running the company agreed by the shareholders or guarantors, directors and the company secretary
Company registration prices in Zimbabwe
Our company registration prices range from US$70.00 for a Private Business Corporation and from US$150 to US$280 for a Private Limited Company depending on the company registration package you choose.
The law requires that a company registers with the Zimbabwe Revenue Authority (ZIMRA) within 30 days of starting to trade. Once you register, you will be issued a tax clearance.
Trade name registration
After registering your company, you may wish not trade with your official company name for different reasons. You can use an assumed name popularly known as a trade name. However, since the introduction of the Companies and Other Business Entities Act (Chapter 24:32) all trade should also be registered.
Corporate matters after company registration in Zimbabwe
After company registration, the company is required to hold its first board meeting to document or resolve initial corporate secretarial matters, including:
- Opening a bank account (subject to fulfilling the bank’s compliance requirements)
- Appointment of a chairperson
- Details of the registration of the company, the company addresses and initial directors
- Disclosure by the directors of any interest in contracts of the company
- Appointment of the company’s auditors
- Appointment of the company’s bankers
- Deciding on the company’s accounting reference date
- Details of the company’s initial share capital and the register of members
- Details of the company’s beneficial owners
- Registering with the Zimbabwe Revenue Authority (ZIMRA), payroll etc.
- Other items of pressing interest to the company
- Arrangements for the next meeting
It’s a legal requirement to record who is present and what is discussed in the meeting. Once formally written up, this record will become the minutes of the first directors’ meeting. When you register a company with us we will give you a free template of minutes for the first directors’ meeting. Although you’ll need to tailor our initial meeting minute template to match the contents of your first board meeting, you’ll get a good idea of the type of things that need to be included in the minutes.
Key authorities and legislation to be aware of
The main corporate legislation in Zimbabwe is contained in the Companies and Other Business Entities Act (Chapter 24:31). The company should also be aware of the following local authorities when doing business in Zimbabwe.
- Zimbabwe Revenue Authority (ZIMRA)
- Local (City) Councils
- National Social Security Authority (NSAA)
- National Employment Council (NEC)
Set up for success
Zimbabwe might be facing economic challenges. However, it is one of the easiest countries to set up a business. Better still, it helps to work with a trusted partner that has in-depth knowledge of Zimbabwe’s regulations to help smooth out your company registration process whilst you focus on your business.
Talk to us
Numeri can help you navigate all corporate secretarial hurdles. Whether you are registering a company in Zimbabwe or something else, Numeri has a team of experts with extensive local knowledge covering Business Establishment, corporate secretarial, tax compliance, advisory and other regulatory requirements.
Want to know more about our services? Contact us today.