Frequently Asked Questions

Frequently Asked Questions

We have put together a thorough list of frequently Asked Questions covering all elements of Company Registration and much more.

The Essentials

What is company registration

Company registration is the process of incorporating a company with the Companies Registry either as a Private Limited Company (PLC), Private Business Corporation (PBC) or any other type of company structure as stated in the Companies and Other Business Entities Act (24:32).

What is the Companies Registry?

The Companies Registry is the government department responsible for the incorporation of companies in Zimbabwe. It is mandatory that companies register with the Companies Registry and as such any change henceforth will be on their records.

What is a Private Limited Company?

A private limited company is a lawful body produced by its incorporation with the Companies Registry. A company Private Limited Company is without doubt one of the most standard sorts of business in Zimbabwe.

What is a Private Business Corporation?

A private business corporation is…

What types of companies does Register Your Company register?

Register Your Company registers Private Limited Companies, Private Business Corporations, Companies Limited by Guarantee, Foreign Companies and Partnerships/Syndicates/ Joint Ventures/Consortium/Clubs & Unregistered Associations.

What is a certificate of incorporation?

The Certificate of Incorporation is the primary record which demonstrates a company exists and has been enrolled under the Companies and Other Business Entities Act (32:24). It shows the company name, company number, certificate number, city where the company was registered, date of incorporation and the signature of the registrar of companies.

This record is often needed by financial institutions when opening up a company financial account.

What is an appropriate company name?

An inappropriate name is one that is:

  1. is identical to that under which another company or private business corporation is already registered under this Act, or which is so similar to any such name as to be likely to deceive; or
  2. is likely to mislead the public; or
  3. is blasphemous or indecent or likely to cause offence to any person or class of persons; or
  4. suggests patronage of the Government or some other authority or organisation unless the consent thereof has been obtained; or
  5.  is undesirable for any other reason

Directors

What is a company director?

 Directors are people appointed by the shareholders for the day to day running of the company.

Who can be a company director?

Just about anybody can be a director given they are over 16 years old, have not been declared bankrupt and are not lawfully excluded from being a director.

How many directors a required to register a Private Limited Company?

The Companies and Other Entities Act requires at least 2 directors and the maximum is 50.

Do I need to be in Zimbabwe to be a company director?

 No, you do not need to be a Zimbabwean individual to be a director of a private limited company. However, there is need for at least 1 to be ordinarily a resident of Zimbabwe.

Can a company be a director in a Private Limited Company?

A company cannot be a company director in a Private Limited Company.

Can a shareholder be company be a director in a Private Limited Company?

Yes, a shareholder can also be a director. They are permitted to.

Share and Shareholders

What is a shareholder?

A shareholder is an individual or entity that owns the shares of a company. Basically they are the owners of a compay.

What are shares?

Shares are systems of possession. The portion of possession relies on the variety of shares provided. So, as an example: if a firm has 2 shares of equivalent worth, each share stands for 50 % possession; 4 shares of equivalent worth stand for 25 % possession, and more etc.

Addresses

Company Registration

Annual Returns

What is an annual return?

An annual return is a picture of a business’s present signed up information on the Annual Return day. An Annual Return ought to not be confused with a tax return.

What information is shown on an annual retun?

An annual return shows the following information:

  1. Company name
  2. Number and class of shares in a company
  3. Number and class of shares taken up
  4. Directors
  5. Auditors
  6. Secretary
  7. etc

When do I need to file an annual return?

It is a lawful need to submit your Annual Return to the Companies Registry within 30 days of the anniversary of the business’s incorporation or from the last submission of the last annual return.

What happens if I submit an annual return late?

There are automated fines for the late submitting of an Annual Return. Also, failing to submit a Annual Return on schedule is a criminal misdemeanour and also the firm might be prosecuted and the supervisors might experience a fine or be invalidated from their duty. Failing to supply a Annual Return will certainly most likely lead to the Companies Registry taking actions to strike off the business.

Tax

Should my company pay tax?

Yes, your company should be accountable for tax on any type of tax earnings it produces.

Should I register with the Zimbabwe Revenue Authority (ZIMRA) for tax?

Yes you need to register for tax with Zimra. The Zimbabwean law requires that you register for tax with ZIMRA within 30 days of starting to trade.

You also can’t open a bank account if you dont have a tax clearance and also you will be levied witholding tax which may be costly. Some business will not even consider doing business with a company without a tax clearance.

What are the requirements for registering with the Zimbabwe Revenue Authority (ZIMRA) for tax?

  • Certified copies of company papers.
  • Certified copies of directors’ IDs.
  • Proof of residence for every director (attach affidavit if proof is not in director’s name).
  • Directors’ email addresses and phone numbers.
  • Current bank statement of the company.
  • Current personal bank statement of one of the directors.

How much of Income Tax should I pay?

Currently income tax is 24.5% of profits.

When is my Income Tax due?

Income tax is paid in quuarters as follows;

 

QPD

Due Date

(on or before)

Installment Due

(as a % of the annual tax payable)

1st QPD 25th March 10%
2nd QPD 25th June 25%
3rd QPD 25th September 30%
4th QPD 20th December 35%

Value Added Tax (VAT)

What is Value Added Tax (VAT)?

Value added tax is a flat tax levied on an item. It is included to the sales of products and also services and is deliberately put on the customer bill. It is normally billed on many company purchases in Zimbabwe; however, it could likewise have an effect on products imported from various other nations.

Do I register my business with Value Added Tax (VAT)?

You would need to register for value added tax if the turnover of your company for the previous twelve month has actually surpassed the present VAT threshold of US$6 000. Voluntary VAT enrollment is likewise recommended if you anticipate your turn over to go beyond the limit quantity in the present year.

Can I do a voluntary Value Added Tax (VAT) registration?

Yes, you can voluntarilly register with VAT if you anticipate your turnover to surpass the VAT threshold. By doing this, you might conserve a large amount of time that could or else be lost on transforming costs as well as accountancy systems.

What are the benefits of  Value Added Tax (VAT) registration?

VAT registration has a couple of benefits. A firm can enhance its cash flow by asking for VAT on sales and also asserting it back on acquisitions. A VAT number is additionally useful when taking into consideration working with bigger businesses – it could give your business the look of being bigger than it is, which would really attract various other businesses as well as organisations. Lots of companies mandate that any type of company they collaborate with will certainly need a VAT selection.

After registering for Value Added Tax (VAT) should I start demanding VAT on items and services?

You need to begin billing VAT on any service or product you offer from the day you sign up for VAT with ZIMRA, not the day you obtain your certification.

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