There are several hundreds of thousands marketeers across the country and most of these operate informally, having no registered businesses. Here and there we do find cooperatives and some registered sole proprietorships and partnerships but most of the Mico businesses have elected to operate informally.
The vast majority prefer to have no formal registration. What though, could be the likely cause? There are several factors at play but mostly the majority of the players in the informal sector do not see the need and it is perceived that running a business on an informal basis is easier and is an aid in circumventing formalities that tend to make the ease of doing business an encumbrance.
It is equally true that the vast majority may not even be aware that in order to run any form of business or entity, such an entity must be registered. Business sponsors (owners) may not even know which government agencies to approach for registration and licensing, and hence making a strong case against business registration.
In this article, we will discuss the Business Registration process. One thing that should be borne in mind is that there are distinct business units in which any business can be organized. The Patents and Company Registration Agency categorizes business entities as either a business name ( Sole proprietorships and Partnerships) or as a limited company, with further qualifications as Private and, Public limited companies. Whatever the business form one opts for, there is a process for registration:
- Every business must be identified by a distinct name. This means that three names must be proposed in the order of preference and the name that fits the criterion is selected, especially if there is no other firm using that name. This means that the names must be subject to the name clearance process. This is done to avoid the confusion that might result if two or more businesses were registered using similar names. This would be misleading to the public.
- In determining the suitable names, the proposed names must not be too difficult or to long to pronounce. Also, it should not suggest any association with the President or the President’s office. The word Zambia should not be a prefix to the name, neither should it be misleading nor offensive.
- Once a name is selected, it is automatically reserved for a period of 30 days, after which the clearance expires. The interested party can apply for name reservation upon paying an appropriate fee.
- For name clearance, an application must be filed using Companies Form 1( Application for name clearance). This form can be obtained from the PACRA website or office.
Are you thinking of a business? Why though is it important to register a business?
Primarily, your business has a legal backing, and no one can trade using that name apart from yourself. Also, if your desire is to conduct your business with formal organizations and commercial entities, these institutions demand that formal documentation is provided. Another reason is that for you to pay taxes, your business must be registered for tax purposes with the Zambia Revenue Authority.
Is it an inconvenience to register a business? It may appear to be so but protecting business interests is certainly not. But what then is involved in the registration process beyond the name clearance? This question deserves a separate write up.
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