Registering your company in Zimbabwe gives you a couple of options. However, they are two different types of company structures you will probably get to choose from, a Private Limited Company (PLC) or Private Business Corporation (PBC).
What is a Company?
The Companies Act definition states, “A company is a company incorporated under the current Act (Companies and Other Business Entities Act, Chapter 24:31), or a repealed law.” This definition doesn’t really tell us out what a company is.
In general, you can think of a company virtually as a legal person. It’s a legal entity representing one or more people joined together to achieve specific objectives.
What is a PBC?
A corporation is a company, large or groups, authorized by law to act as a single entity. Therefore, a Private Business Corporation (PBC) is a company. Below are some notable qualities of a PBC.
- Meant for small to medium enterprises (SMEs)
- Cheaper to register than a PLC
- Can have a minimum of one member and a maximum of twenty members.
- Ideal choice if you wish to start your company alone or as a sole trader.
- Only natural persons in their own right can be members.
- Each member contributes to the PBC’s assets, cash or kind towards its formation.
- Members shall also be responsible for all administrative duties otherwise taken by directors and secretary in the case of a PLC.
- On registration, the PBC is issued a Certificate of Incorporation.
- Member liability is limited to their contributions in the PBC and personal assets are protected.
- Requires a certified Accounting Officer to whom the PBC will submit annual financial statements. His or her duties will include reviewing these financial statements.
- Requires annual form submission declaring continuance of operation to the registrar of companies
- Regular changes can be made in regards to the members or members interests, accounting officer, business address or business name.
- You can convert to a Private Limited Company (PLC) at any time.
What is a PLC?
Limited companies are corporate structures whereby the liability of shareholders is limited to the capital they originally invested. They are treated as separate legal entities from their owners. Let’s go through some of the notable qualities of a PLC.
- Can accommodate both small, medium and large enterprises but its better suited for medium and large.
- More expensive to register than a PBC.
- Can have one to fifty members (shareholders).
- On formation, total number of shares in the company should be highlighted.
- On formation, each subscriber should take at-least one share.
- Shareholder can be a natural person, company, association, any corporate body, a partnership or a minor.
- Requires the submission or memorandum and articles of association.
- Offers limited liability to its members (shareholders)
- Issued with a Certificate of Incorporation, registered CR5, CR6 and Memorandum and Articles of association on registration.
- Shareholders may, or may not be the same as the directors and secretary.
- Shareholder act as owners, directors and secretary are employees responsible for all administrative duties.
- Can have an Auditor
- Submit a summary report of the company (Annual Returns) every year to the registrar of companies.
- You can change the structure of the company at any time as long as your Annual Returns are up to date.
Conclusion
Hope this article has given you a brief understanding on the differences between a PBC and PLC. Which one should you choose? That’s up to you. How do you see your company, what are your expectations for the future, which industry, or what business are you into? A lot of factors contribute to this decision.
If you want our expect advise, get in touch, or use the Whats App button below. You can register your company with us today.
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