Are you planning on registering a business in Zimbabwe and are wondering what form of incorporation your soon to be registered company should take? Maybe you are just researching on the PBC and would like to know more about it. Specifically you may be asking ‘What are the advantages of a PBC (Private Business Corporation)?’ This article seeks to help you with that objective.
Zimbabwean law has two provisions for the registration of a business or company. The first and more common form of business incorporation is the Private Limited Company (PLC). The second and lesser known (but rising in popularity) form of company registration is the Private Business Corporation.
A Private Business Corporation has certain advantages and disadvantages. We are calling them advantages/disadvantages but they may not necessarily be advantages or disadvantages depending on your particular circumstances. So in that case they are more of features.
To view a summary comparison of the two forms of company incorporation please check the link below:
Differences between PBC and PLC
Advantages of a PBC (Private Business Corporation)
- Easy and cheaper to establish and to operate.
- The life of the Private Business Corporation is perpetual.
- Members have limited liability.
- Transfer of ownership is easy.
- Fewer legal requirements than a private company.
- No need for audits.
- Allows one to register as a sole trader.
- A Private Business Corporation does not pay annual returns at the Registrar of Companies. No longer applicable under the new Act, PBCs now pay an annual fee.
- Can employ an unlimited number of employees.
- A PBC is not limited in terms of how much revenue it can make.
Disadvantages of a PBC (Private Business Corporation)
- The number of members/ shareholders/ owners are limited to 20 natural persons.
- Only individuals (i.e. natural persons) can be shareholders. This means you cannot have organisations as shareholders.
- Not as popular as the Private Limited Company.
- Not accepted everywhere, some organisations and tenders do not accept PBCs.
Key Features of Private Business Corporations
- A Private Business Corporation (PBC) is a legal entity.
- Audited financial statements are not required for Private Business Corporations.
- Meetings are not compulsory and can be held on an ad hoc basis.
- Private Business Corporations (PBCs) can become shareholders in other companies.
- The shareholders or owners of a Private Business Corporation are called members.
- All members may take part in the management of the Private Business Corporation.
- The members/ shareholders/ owners of a PBC are not personally liable for the debts of a Private Business Corporation.
- The legal procedures for the registration and administration of a Private Business Corporation are kept relatively simple.
A PBC can be converted to a Private Company Later On.
- Yes. For example, a Private Business Corporation may have grown substantially and in order to expand even further, an injection of additional capital by way of shareholders may be envisaged.
- Or, the PBC may find itself competing with large companies (PLCs) and believe that they too should become a PLC to “even the playing field” in the eyes of their market / customers. Accordingly, they decide to convert their PBC to a registered company.
Members of Private Business Corporations (PBC)
- The members of Private Business Corporations (PBC) are the registered “owners” and are listed as part of the registration process.
- Any changes in respect of the members of the Private Business Corporations (PBC) must be notified to the Department of Companies & Intellectual Property (DCIP).
- Non Zimbabweans may be members of a Private Business Corporation (PBC), provided that they have at least one Zimbabwean as a member.
- A Private Business Corporation may have a minimum of one member and a maximum of 20 members. However there are no limitations in respect of the number of employees in a Private Business Corporation.
- If a member of a Private Business Corporation (PBC) is under 21, the registration document must be signed by a parent or guardian on their behalf.
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Hie can a PBC have a bank account and inquire tax clearance, in the event that the company have clients requesting for a tax clearence.
Definitely it can.
how much is the tax clearance and or to acquire a vendor number
Hi Rutendo,
Tax clearance is $150 including ZIMRA registration and letter for opening a company bank account.
Can a microfinance firm be registered as a PBC
Hi Pro.
This is not possible unfortunately
Should i submit returns when i start trading.
A PBC does not submit annual returns Tonderai
Hi, so in drafting the memorandum and articles of association of a PBC, one does not need to include subjects on meetings.
Hi Mudavose, a PBC does not have memorandum and articles of association. Those are applicable only to a PLC
I’m a Zimbabwean working in Ripublic Of South Africa willing to register PBC company I got one or questions 1 I don’t have proof of residents of my country can I register a company with my outside proof of residents? 2 After the PBC company is registered what do you get as a confimation that the company has been registered? 3 Can I open a company Account with PBC company?4 Can you export or import with a PBC company?Thank you
Hi Jabulani. I will be glad to assist you.
1. Proof of residence is not needed when registering a company.
2. You get a certificate of incorporation as proof of registration.
3. Yes you can open a bank account with a PBC.
4. Yes you can import or export with a PBC.
You mean it is possible for us abroad to register our PBCs without even setting foot in Zimbabwe? It is difficult for some of us to travel back home just to register an entity.
That is true Pishon. You can register a company in Zimbabwe without any need to be in Zimbabwe
can a PBC be upgraded to a PLC and if so what are the conditions
Yes it can. There are no conditions, just your decision to upgrade.
Why call the move from PBC to PLC an “upgrade”?
Hi Ray,
That is because the PLC is the standard when it comes to business incorporation. The PBC is a stripped version mainly meant to help entrepreneurs formalise their operations. As a result, a PBC does not have many features like the separation of shareholders from directors, allocation of shares, etc.
So yes, converting from a PBC to a PLC is an upgrade.
Hie. Can a PBC be a shareholder in a Pvt Ltd Co?
Hi Lisa. Yes, a PBC can be a shareholder in a private limited company
Can a PLC be converted to a PBC if it is operating at a loss every time?
Hi Juniors. A PLC can be converted to a PBC, the reason for converting isn’t important for purposes of the conversion.
Hi hw much a you looking at to convert my company to PBC?
You will need to get in touch with us privately for that. The price is dependent on whether your company is up to date on payments of annual returns and other factors.
thx
Hi I want to register as a pbc but I have a question 1.in the event a pbc is applying for asset finance or loan do financial institutions take them seriously or they only take PLC as serious businesses,? 2.can a pbc apply for a loan and be granted ?
How Trevor. The answer to both questions is yes. A PBC is a corporate, after all PBC stands for private business corporation
Hi one more Question who plays the role of an accounting officer for a pbc where can I find them?
We provide you with an accounting officer if you register through us
What is the role of the accounting officer?
The accounting officer is needed for registration purposes. Afterwards you can appoint your own accountant to do your company accounts
I’m coming so that also means you help with the legal persona I would appreciate if you further explain what that means
Thats ok Trevor. Seeing that this is now beyond the subject of this post i would suggest that you direct your questions either to our email or Whatsapp on 0772957786. One of our consultants will respond to your questions
Hi. Does a PBC pay tax.
Hi T’bose. Yes, a PBC pays tax. The law is the same for a PBC as it is for a PLC
Hie. I would like to change the name of my previously registered company. 1. Is it possible 2. How much will it cost me 3. How long will it take 4. What are the procedures
Hi Bee. The process of changing a name is quite complicated. You need to first reserve a new name, advertise in the Government gazette and at least one local paper. Our recommendation is to simply register a new company as it is so much more cheaper and faster.
Is the sole trader personally liable to company debts
That would be correct in a sole trader scenario
Can a pbc apply for tenders
Yes it can Setty, although this is mostly dependent on whether the tender issuer will accept a PBC
Is a PBC limited to one type of business or you can have a range of businesses you can do?
Hi Mushapps. You can list three or four types of businesses to focus on with a PBC.
I am currently resident in South Africa and wish to start a PBC in Zimbabwe with a South African business partner. What are the requirements.
Hi Allison. The requirements are as set out on https://www.companyregistrations.co.zw/requirements-for-company-registration.
If i register a PBC, doing a particular business i.e mining and if later on i want to venture into something else different from the one was pursuing earlier ie service station. Do you have to register for another PBC?
Hi Richman. You don’t necessarily need to register a new one. You can add the new venture to your current PBC.
How do I add new venture onto the PBC and wat are the costs?
Hi Farie. You simply find a consultant like us to do it for you.
Sasha
What is the maximum number of ventures in a PBC?
Hi Sasha,
There is no set number as such but the PBC papers have quite some limited space that will allow about 3 or 4 separate ventures to be listed.
Okay thanks.What if you register before u engage in an business activity.What will state in the object clause if there is such a clause.
The objects are actually needed. You cannot register a company without them. If you don’t have anything specific you can put general trading.
So if u put general trade does it mean u can do almost anything,since your line of business is not specified?
That is true Kudakwashe
Thank you very much.Will get in touch when ready.
Thank you very much Angel and Walt and everyone who asked a question. Some light has been shed for me.
I would like to know if a PBC can also register for Tenders at the SPB?
Hi Gus. A PBC can register with the State Procurement Board for vendor number and tenders.
Does a pbc with one director need a company resolution letter to open a bank account? If it has one director?
Hi Reej. You can approach the bank you want to open an account with for an answer to this one.
Hello guys,I want to register a company from scratch.with regards to PBC and PLC do I require tax clearance?
After registering either one of the two and I go for a while without using it do I need to get tax clearance and if so how?
Hi BT. Tax clearance is simply a document that proves that your position with regards to tax payments is satisfactory. It’s not mandatory but paying taxes is
Hi, after completion of the registration process, is there any required time period when the company is expected to start trading.
Hi Trust. There is no required time period, you start operating whenever you are ready
Thank you!
I want to venture into a vehicle sales agent and a clearing agent a vehicle sales company abroad.Can I register for both
Hi Abraham. That is possible, you can register both in the same company.
Thank you very much Angel & Walt for the work you are doing which is fostering entrepreneurship in Zimbabwe. I have a question; what is the registration process for a ‘holding’ company? For someone who would like to form a group of companies under the same brand (e.g. Richard Branson’s Virgin), how must they go through the registration process from the onset i.e. from starting the first company of the group?
Hi Kudakwashe,
You are most welcome. About your question, a holding company is a parent company with subsidiary companies under it. So technically a company cannot be a holdings company until it becomes a parent. So the procedure is to register at least 1 subsidiary first and then register the holding company. The holding company can be either a PBC or a PLC but the subsidiaries have to be PLCs
hi can a pbc get a vendor number
Hi Tapiwa, yes it can
I want to open a construction business what a requirement im a south African
Hi Godfrey, please find the requirements on https://www.companyregistrations.co.zw/#requirements. In addition these requirements you will also need at least one Zimbabwean as part of your directors.
Good day , l understand that you said PBC do not submit returns so, whats their obligation to Zimra so that they can renew or have a Tax clearance
Hi Mandla,
PBCs do not submit annual returns at the Registrar but they do pay tax and associated returns at ZIMRA just like any other company
Hi. Can I register a security company from a pbc
That is possible Chris
I stumbled upon this and it’s been extremely helpful. I have a plc now for 15 years..which i did by myself without doing any research and would like to register another company.. I’m researching now and thanks for all the info and to all who asked questions.
Hi can a PBC have some subsidiaries
Hi Simba, yes it can
What is a vendor number and how do i get it
Hi Tatenda. A vendor number is a number that you are given by the State Procurement Board that enables you to supply the government. You get it from the State Procurement Board
How much is a vendor number
We do not do vendor numbers ourselves unfortunately
As a sole trader how does one pay tax.
Hi Ken, you first register with ZIMRA to get a BP number. Afterwards you simply calculate your tax dues and submit these to ZIMRA
Can l register a PBC with one name and do multiple businesses, like farming, mining and transport.
That is possible Patric
Will l pay any duty to ZIMRA if l want to bring into the country machinery and trucks for use on the registered BPC, in response to government call that people in diaspora should invest in the county.
Yes you will. For more info kindly consult ZIMRA or a customs expert
Hi,what documentation comes wit a pbc, e.g cr14 and so on, do i get all that a pvt ltd gets
Hi Bleix.
A PBC comes with a certificate of incorporation only.
Which papers do I have to obtain if I am registered here in Zimbabwe and want to operate in SA
I’m not sure about this one since the requirements would be South African. It might be best to consult their department responsible for company registrations for advice.
Wow! So informative. I want to register my pbc and will be in touch as soon as l am ready.
Hi there. Is my PBC allowed to start operating without registering with zimra to get the BP number and tax records?
Hi Rodney. That should be possible. Although according to the law you are required to pay taxes and the only way to do so is by registering with ZIMRA.
Does the government recognize a PBC?. Can government do business with PBCs eg, to be on the government supply list or tendering.
Hi Kamucheka. It’s the government that established the law for the PBC and also registers it. So yes, the government recognizes the PBC. Tenders are different issue altogether, it’s up to whoever is issuing the tender to decide if they will accept a PBC.
Where can i find your offices in Harare
We are in Suite 107, 1st Floor, Gelfand House. Corner 1st Street & Speke Ave, Harare
Would there be any extra requirements while registering as foreigners except having at least 1 Zimbabwean?
That is the only requirement Moh
Can I change the name of a registered PBC
Yes you can Shinky, although we recommend just registering a new one.
Can a PBC have other subsidiaries operating under it with different names,(more like a group of companies)
That is possible Edwin provided the subsidiaries are not PBCs
Do you also provide services for registering(NON PROGITSBLES) NGOs & TRUSTS
Sorry Andrew but we currently do not offer this service
THIS IS A VERY INFORMATIVE PLATFORM.
MUCH IMPRESSED..!!
I want to start an online store as PBC. If I don’t have a business address how can I register?
Hi Paul,
You can even use a home address
Afternoon
If I register a PBC with the intention of starting operating it later, say 12 months later, at what point do I register with ZIMRA for tax? Can I register with ZIMRA only when I start operating or when I register the PBC?
Hi Nokuthula,
You register with ZIMRA when you start operating.