GIVEN the period of the year, today we relook at the topic of how businesses are registered with Patents and Registration Agency (PACRA) which is the Government institution mandated to register any business formation in the country.
PACRA formerly Patents and Registration Office (PACRO) was established under Act number 15 of 2010.
Doing business in Zambia begins with PACRA in the sense that, formal business registration is only undertaken by PACRA.
Business entrepreneurs should get acquainted with the operations of PACRA for compliance sake.
The business registration of sole proprietorship, partnership and private limited company under which SMEs register their businesses, are regulated by two pieces of legislations.
The first two are regulated under Act number 16 of 2011 while the private limited companies are regulated by Companies Act number 388 of the Laws of Zambia.
The business names Act number 16 of 2011 replaced Business Names CAP 389 Act number 29 of 1939.
However, the certificate issued under the repealed Act has been allowed to remain valid under the new Act.
The business Names Act is responsible for the birth of the sole-proprietorships and partnerships.
It is important whenever you enter any business premises to recognise what business registration is in force at that particular time, because this will help you to know what kind of a business you are dealing with.
It is the requirement for each business to display the certificate.
Sole proprietorship: To register a sole proprietorship one needs to buy Business Name Form number 111(BN Form 111) which is a form designed for individuals registering businesses.
The groceries, butcheries, tailoring shops, stationery shops, hardware shops and others hang their business of registration certificates on the walls.
If one is operating a business without this form of registration, then the business is operating illegally.
This does not imply that these forms of businesses register their businesses under soleproprietorship only.
On form number 111(BN Form 111) the applicant is required to fill in the following details.
•The proposed business name (three choices)
•The nature of a business
•The location of a business
•First and Surname of applicant
•Age and Sex
•Date of commencement of business
•Financial year end
The registration form should be filled in duplicate accompanied with K80,000 or KR80 fee which should be submitted to the Registrar of Companies.
Once the Registrar is satisfied with all the requirements, including name clearance, he/she then issues the certificate of registration as proof that a business has been legally registered. Partnership: If two or more people come up in partnership to register a partnership business, they need to obtain Business Name Form 11(BN Form 11).
Some of the details required on this form are:
•The proposed business name (three names)
•The nature of business
•The location of business
•First and Surnames of applicants
•The nationality of applicants
•Age and sex of applicants
•Date of commencement of business
The procedure and fees are the same as for sole proprietorship. Private Limited Company: Registering a Private Limited Company differs from registering both the Partnership and sole proprietorship in procedures.
The legal procedures characterise the registration of a private company which is regulated by Cap 388.
The prospective shareholders should first appoint one from among themselves to spearhead the formation of the company.
This must be either the first director or the secretary who will later become the applicant for registration.
The applicant is required to submit the first proposed company name which is subjected to the procedure of name search to establish whether it can be accepted or not through clearance procedures.
When the name is cleared the applicant is then allowed to obtain a Company Registration Form at K10,000 or KR10. If the name is rejected another one is submitted and the clearance procedures are repeated.
The company registration forms should be accompanied by the following filled forms:
•Companies Form number 2
•Companies Form number 5
•Companies Form number 11
The Companies Act requires that the declaration of compliance form number 11 be commissioned or sworn before the Commission of Oath by the person named in the Company Registration application as the first director or Secretary.
The articles of association may accompany the application, but in a case where they are not submitted, the general standard articles found in the Company Act shall apply.
The amount required in registering a private limited company depends on the nominal capital the company declares in its application as a working capital of which applicants are expected to pay 2.5 per cent of it.
Once the requirements of registering a company are fulfilled, PACRA issues successful applicant with the certificate of incorporation and a certificate of declaration of the nominal capital, which now can be displayed in the offices.