About Private Limited Companies

What is a Private Limited Company

A Private Limited Company is a type of business structure in Zimbabwe that is owned by shareholders and has limited liability. You should register a Private Limited Company if you are planning to make a profit and distribute it to the shareholders.

This is the most popular type of company registered in Zimbabwe and it is owned by at least one shareholder and managed by at least two directors.

This type of company is suitable for start-ups, small and medium-sized businesses.

Why would I want a Private Limited Company

There are a number of reasons why you might want to register a Private Limited Company. Some of the benefits include:

• Limited liability: Shareholders in a private limited company have limited liability for the debts of the company. This means that your personal assets are protected if the company goes bankrupt.
• Tax efficiency: Private limited companies are often more tax efficient than other business structures, such as sole traders or unregistered businesses.
• Flexible management: Private limited companies offer more flexible management options than other business structures. For example, you can have a board of directors, or you can manage the company yourself.
• Increased credibility: A private limited company can give your business a more professional image. This can be helpful when you are trying to attract customers or investors.

Key features:

• Can be owned by one or more people.
• Is managed by at least one person or more (directors).
• Personal liability of shareholders is limited to the number of their shares.
• Company enjoys limited status which is more appealing to clients, investors and lenders.
• Company can sell shares to raise capital.
• A tax-efficient way to run a profit-making business.
• Shareholders can keep all company profits for their personal use.

Legal requirements:

• Must be registered with Companies Registry.
• Minimum of one shareholder who hold shares in the company and have the right to receive profits and vote on key decisions.
• Minimum of one director aged 16 or above and a maximum of 50 directors who are responsible for managing the company companmy and ensuring that it complies with the law.
• Company physical address must be a Zimbabwean address.
• A memorandum of association must be created – this is a document that states the company’s objects (aims), and what will be done.
• An articles of association must be adopted – this is a governing document that sets out the rules for how the company is run including the rights and responsibilities of the shareholders and directors.
• Director is responsible for delivering a number of statutory reports to the Companies Registry and ZIMRA every year and notifying Companies Registry when any company details change.
• Surplus income can only be taken out of the company as a director’s salary, shareholders’ dividends, a director’s loan or reimbursement of expenses.

Additional information

Company Formations will supply all Private Limited Company registration documentation including the supply of memorandum and articles. You will receive the documents as hard copies.

Company Formations’ packages.