You often hear about the importance of business or company registration. In Zimbabwe, countless people are now offering company registration services. To some degree, people may think it’s just a way to make quick money. While there is money to be made from offering such services, it’s important not to downplay the significance of company registration. Registering a company or business is important for numerous reasons. Today, we will focus on laying out those reasons in this article. Hopefully, by the end of this article, you will make the decision to register your business or company if you haven’t already.
The Benefit of Limited Liability
When discussing the importance of business registration, this is undoubtedly the first reason. Interestingly, some people don’t fully appreciate this benefit. When you register a company or business, it assumes limited liability. In simple terms, this means that the company or business assumes the identity of a separate legal entity. As a result, you, as the owner(s), are treated as separate legal entities from the business. For example, if the business or company incurs debts, your personal belongings cannot be seized to clear the debt. Essentially, registering a company or business protects your personal assets, properties, or finances.
Legitimate and Authentic Look
Registering a business or company gives it a legitimate and authentic appearance. Many people have missed out on significant business opportunities simply because they were unregistered. There are countless scenarios where being registered is a deciding factor. “Is your business registered?” That question can determine whether you are considered for certain lucrative business deals, particularly with government departments or large corporations. This is because being a registered company or business earns trust. From clients to various stakeholders, being considered legitimate and authentic is crucial.
Capital and Contract Prospects
A registered business or company has exponentially easier access to capital. This can be from individuals, financial institutions, or investment firms. Being a registered business increases your chances of obtaining capital. The great thing is that you can access capital without involving your personal belongings. The same applies to being considered for or winning contracts. There are business contracts or partnerships you will only secure if your company or business is registered.
Securing and Protecting Your Business Name
Though it may seem trivial to some, this is an important aspect. The name you give your business or company is extremely important. Your business or company name plays a central role in branding. That’s why you should never take naming your business or company lightly. Therefore, securing and protecting that name becomes crucial. Registering your business or company provides that security and protection. During the company or business registration process, there is a name search to ensure uniqueness. You have to provide more than one name for consideration. This process emphasizes the importance given to a business or company name. Careful attention is given to ensuring that your business or company name is exclusively yours. Once you have registered your business or company, no one can use the name without facing legal consequences.
Room to Enjoy Tax Benefits
This is an area where some people have misconceptions. Many think that by registering a business or company, they will end up paying more in taxes. I know several individuals who have chosen to stay unregistered because they fear excessive taxation from ZIMRA (Zimbabwe Revenue Authority). However, the interesting thing is that once registered, you will not necessarily pay more in taxes. In fact, unregistered sole traders often end up paying more taxes. Company taxation is based on the profits the business makes, whereas the sole proprietor gets taxed on total income. Additionally, dividends paid out are not subject to Pay As You Earn (PAYE) taxation but a lower dividend tax. These are just a few examples. There may be special circumstances that qualify your registered company for tax holidays or reductions. The bottom line is that as a registered company, you can keep most of what you earn.
Affordability of Business or Company Registration
Many people think that registering a business or company is costly. For some reason, that’s the impression quite a number of people have. However, that is mostly a misconception. I understand that the perceived cost of something is relative. However, when compared to the benefits, it becomes easy to categorize the cost as high or low. In this discussion, we have seen all the benefits that company or business registration brings. Now let’s factor in the cost element. The cost of registering your business or company in Zimbabwe varies depending on the service provider or agent you work with.
Be that as it may, it is typically the case that you can register your company for as little as US$60. The price variations depend on various factors and how a particular service provider operates. There are people that offer a US$180 company registration package. Why? Because for that package, your company gets registered, and all the paperwork is done within 1 day. There are also US$60 packages, but the process will take 3 to 5 working days. The bottom line is that company registration is quite affordable. You can choose packages that suit your budget.
These six reasons capture why it is imperative that you register your business or company. As a Zimbabwean citizen, I can assure you that the requirements are hassle-free. You can get your business or company registered before the week ends. It’s high time you take the step and enjoy the benefits.
