6 major advantages of registering a company is what we will be focusing on in this article. The advantages of registering a company outweigh those of an unregistered company structure.

Research shows that a registered company has a significantly increased chance of the business operations succeeding than when its company not registered.

One significant proof is all the big companies in the world are registered.

This article on company registration will outline the 6 major advantages of registering a company in Zimbabwe.

Advantages of registering a company in Zimbabwe : Limited Liability

1. Limited Liability

The biggest advantage of registering a company in Zimbabwe is it offers you the owner limited liability.

The business will exist as a separate legal entity from its owners. That is, it will enjoy corporate citizenship as it were an independent individual.

This means that, if the business incurs any debts, losses or for example sells any defective product that fails to perform, you will not obligated as the owner of the business by the Zimbabwean law to satisfy any of these using your personal finances or belongings.

Just think when Kingdom Bank collapsed. The debts it left. People’s money which vanished with the bankruptcy declaration. Just imagine if it you were a shareholder and you were to pay for everything.

Advantages Of Registering A Company ; Legitimacy and brand awareness

2. Legitimacy And Brand Awareness

Think of all the biggest brands in the world or better still, in Zimbabwe. They are all registered companies. Old Mutual, Econet Wireless, Steward Bank, Delta Beverages, British American Tobacco and many others.

For a business to be successful and expansive as it were, you need to register it as a company.

It also enhances the businesses reputation and perception in the mind of the customers or any interested parties. Individuals and corporates wont view your business as a fly by night kind of business if the business is properly registered with the registrars office. They will be at ease doing business with you.

Not to say that registered companies do not fleece people. But it helps give confidence.

Advantages of registering a company in Zimbabwe : Easy to raise capital

3. Easier To Raise Capital

As a registered company in Zimbabwe, its easier to raise capital than when not registered. Whether its through loans, angel investors or any other capital raising initiative such as the selling of shares.

This is because institutions such as banks or NGO’s who support businesses or investors prefer to deal with registered companies because they know that there is a formal structure to accept their investment.

Advantages of registering a acompany : Supplier arrangements

4. Supplier Arrangements

Your business, when registered as a company qualifies to receive discounts from suppliers that are not normally offered to businesses that are not registered.

Suppliers commonly reserve wholesale rates for business owners who can show official paperwork.

In addition, if a business plans to bid for government tenders, a registered company, depending on the type of company required by the tender, is one of the major requirements.

Advantages of registering a company : Low tax liability

5. 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.

These expenses include but are not limited to transport expenses, internet expenses, stationary expenses, rent and rates, etc.

Advantages of registering a company : Business continuity

6. Business Continuity

A registered business doesn’t die with the founder. A company such as Apple whose founder, Steve Jobs, passed on continued to exist beyond the life time of the founder. In fact the company continued to thrive even more.

Companies such as Nestle, Toyota, Shell, Old Mutual and Cadbury have existed for decades and have even more, continued to grow.

That is the power of a company structure. It is easier to build structures for long term continuity if it’s a registered company structure than not.

Conclusively, registering a business can be one of the best ways of ensuring business success. Not only will it limit ones liability, but it will also make it easier to raise capital and other advantages.

If you are not sure of a company structure that is suitable for your business, follow the following links to get more insights, browse through information on Private Limited Companies or Private Business Corporation.

You can also read our article on requirements for company registration in Zimbabwe.

We hope this article helped you understand the advantages of registering a company. For further reading, this article was written by one of my favorite writers on company law .

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