Why youth entrepreneurs should work in groups/form syndicates and
register their companies?
The spirit of entrepreneurship is well and alive in
Chitungwiza. All over the locations from St Marys to Unit O, people are engaged
in various income-generating activities, home industries, retailing, brick and Dura-wall
making and other activities that earn them a livelihood. These businessman and
women face a lot of problems chief among them being shortages of proper
operating premises, access to capital and transport costs among other problems.
Young people who are into entrepreneurship in Chitungwiza
are encouraged to work in groups or form syndicates as groups have many
advantages over operating as individuals. Some of the advantages of working in groups
are that:
·
You can share costs like rent, security,
electricity and water bills.
·
You can assist each other when more hands are
needed which reduces labour costs.
·
You can
pool money together as capital and invest
in machinery which would be unaffordable as an individual.
·
Banks are more likely to lend money to groups
rather than individuals.
However working as a group also has its disadvantages as
misunderstandings and personal differences are likely to interfere with group
dynamics. To avoid these problems- young entrepreneurs must register their
companies and turn their partnerships into shareholding with memorandum of
associations being the agreement between the partners.
This brings us to our
main point- Why young entrepreneurs must register their business with the
Ministry of industry and trade under the Companies act of
The advantages of registering your business under the
companies act are:
·
It is a requirement under Zimbabwe’s laws so you
can operate legally.
·
You become tax compliant
·
It is a prerequisite of doing business with the
government and its departments. Once you are registered as a company you can
register on departmental suppliers databases and compete for tenders from government and big
companies.
·
Easy access to capital: banks prefer to lend
money to registered companies instead of individuals or unregistered
partnerships.
I will outline below, the procedure of registering a company
under the companies act with the Department of Deeds, companies, trademarks and
Industrial designs which is found at 38 Nelson Mandela Avenue corner Angwa
street in Harare. The information I am going to share with you is contained in
a flier made by the same department which is available for free on our Information
desk.
1.
Name search- The first step in registering a
company is to come up with a name for the company. Once you have your preferred
name, your approach the companies office and have a name search conducted to
see that no other company holds the same name and to verify that your preferred name is
available .
Name
search is done on a CR21 form according to section 24 of the act. All documents
are lodged in duplicate and a fee of US$5.00 is payable
2.
After the name search, the companies office
issues a CV4 form which is a
confirmation of the reserved name.
3. Memorandum
and articles of Association- the forms can be purchased from Kingstons
Bookshops and completed. These forms are an agreement between the partners on
shareholding and company formation.
These are lodged after you have received a reserved name confirmation together
with CR6 and CR14 forms which are available at kingstons and government
printers. A minimum fee of US$100.00.
4. CR6
form states the physical address of the company
5. CR14
states the companies directors and the secretary
6. A US$20.00 fee is payable in lodging these
two forms.
7. After you have successfully completed the
above-mentioned procedures that is when you are issued with the certificate of
incorporation for US$20.00.
Total cost of
registering company is US$5 plus US$100 plus US$20 plus US$20 adds up to
US$145.00.
A presentation prepared
by Admire Mutize (Programs and Communications Manager CCDN) for CCDN”s inaugural road-show at Zengeza 2
Shopping centre on 10 March 2012.
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