Upon successfully registering a company in Zimbabwe, several benefits and opportunities are available for the registered company. The benefits are outlined below.
Limited Liability
Registering a company in Zimbabwe gives the company limited liability. This is to mean that the business will be operating as a separate legal entity from its owners. In the event that the owner of the company has debts, its creditors will not be able to attach properties in the name of the company. Similarly when your company is not registered there is potentially unlimited personal liability for the debts of the business. For example, your private residence will be face the risk of fulfilling the debts of the business.
Low tax liability
Depending on how much revenue the business generates, a registered company pays less tax than a sole trader arrangement. In Zimbabwe, current tax rates for companies and small to medium enterprises (SME's) is lower than the highest tax rate for an individual. Sole traders pay taxes on the additional income received from the business but are however not able to take advantage of tax deductions that are available to registered companies incurred in running the company.
Business continuity
When the owner of a business dies, the company continues to be in existence. It is easier to build structures for long term continuity for a registered company than one than is not. This also comes as an easier way to continue to raise capital for other different adventures through the incomes from your registered company.
Protection of your company name
The laws of Zimbabwe will safeguard your company name once it has been registered with the Companies Registry. This prevents the use of your company name by another company, thereby defending your brand against instances of brand infringement or imitation.
Legitimacy and brand awareness
Registering a company places it on the map for easier recognition. In the long run as the company brand grows, its reputation and perception in the minds of customers is enhanced by the mere fact that is registered under the laws of Zimbabwe.
Further, 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 to raise capital
A registered company can raise money at any moment by issuing shares, whereas unregistered enterprises typically have to raise money out of their own pockets. Both current owners and new investors may be offered the new shares. It can be possible to acquire a loan if the company plans to borrow money from a bank without the need for the directors to provide a personal guarantee or charge over their homes.
In conclusion, one of the best ways to make sure a business is successful is to register it. Not only will it limit liability but there will be other benefits such as faster capital raising.
