A Private Business Corporation (PBC) is the second most popular company structure registered in Zimbabwe. Some entrepreneurs go for PBC registration in Zimbabwe
What is a Private Business Corporation?
A Private Business Corporation (PBC) is a legal entity mostly suitable for small businesses, sole traders or individuals who operate as consultants, architects etc. It can be formed by at least one member which means it is the best business structure for sole traders.
What are the advantages of registering a PBC?
1. Its cheaper to register
Compared to a Private Limited Company (PLC), a PBC is cheaper to register. With an agent such as Companies Made Easy a PBC costs US$75.00 and a PLC costs US$130.00.
2. It has less annual statutory requirements
With a PBC you only need to declare
Requirements for registering a PBC
1. 1-5 proposed company names
2. Members information
- National identity number
3. PBC addresses
- Physical address
- Postal address
4. PBC business objectives
The business activities to be carried out by the PBC.
What is the procedure for registering a PBC?
How much does it cost to register a PBC?
Registering a PBC also means that there are some Companies Registry statutory annual filings. There is only 1 filing with a PBC i.e. declaration that annual general meeting was held.
PBC Declaration that Annual General Meeting was held
The PBC declaration that annual general meeting was held is an annual filing requirement that that was introduced in 2019 as part of the new legislations brought in through the Companies and Other Business Entities Act (Chapter 24:32). Its purpose is to confirm that a PBC is continuing its operation.
The declaration can be filed via a company registration agent such as Companies Made Easy.
PBC registration in Zimbabwe frequently asked questions
How much does it cost to register a PBC in Zimbabwe?
Does a PBC pay tax in Zimbabwe?
Yes a PBC pays tax. The tax brackets for a PBC are the same with those of any other company structure in Zimbabwe. Once you register a PBC, you are required to register with the Zimbabwe Revenue Authority (ZIMRA) within 30 days of starting to trade and you will be issued a tax clearance. You will then be liable to pay income tax in form of QPD’s, Pay As You Earn (PAYE) and value added tax (VAT) once you reach the VAT threshold.
Does a PBC have limited liability?
Yes a PBC has limited liability.
Does a PBC have a board of directors?
No, a PBC doesn’t have a board of directors. Rather it has members. PBC members are both the owners and are also responsible for the day to day running of the PBC.
How is a PBC taxed?
A PBC is taxed the same way as any other company in Zimbabwe. A PBC is liable for Income tax, VAT and if it has any employees, it should remit PAYE to ZIMRA on behalf of its employees.
The bottom line
By registering a PBC, you are taking a big step towards transforming your business idea into a very real, thriving business enterprise. To do that, you’ll admittedly need to take on a few legal responsibilities. But once you get the hang of it, your reporting requirements and legal obligations as a private business corporation owner are actually pretty straightforward.
At the end of the day, registering a PBC will offer both you and your business some much-needed protection. You will worry less about finances and more about getting out there and making your new business work.
If you have any questions, please leave them in the comments section below.