THE Government could rake in millions of dollars after the enactment of a new law that requires all registered companies in Zimbabwe to re-register.
All existing companies which were registered before February 22, 2020, are required to re-register with the Registrar of Companies within a period of 12 months according to the new Companies and Other Business Act [Chapter 24:31].
The new Act which came into effect in the first quarter of 2020 gave companies up to March 2021 to complete the new registration process or risk being struck off Companies Register.
Deputy finance minister, Clemence Chiduwa, confirmed the development but referred further questions to the justice and industry ministries.
“Yes, I can confirm that that the new Companies Act requires all companies to re-register, but I cannot comment on that because the registration of companies falls under the ministry of justice and their operations fall under the industry ministry. So those are the rightful ministries to comment on that matter,” Chiduwa told NewZimbabwe.com.
However, Justice Minister Ziyambi Ziyambi could not be reached for comment as his mobile phone went unanswered while efforts to get a comment from Industry Minister Sekai Nzenza were also fruitless as her mobile was not reachable.
According to the new Companies Act, the latest regulations seek to curb shortcomings in the manual registration process through the introduction of electronic registration.
The re-registration exercise is said to be an administrative process aimed at establishing a new and updated register of companies so that inactive companies do not appear on the updated companies register.
Although the E-Government initiative is aimed at achieving quicker, simpler, and more transparent turnaround processes, it is primarily targeted at improving the ease of doing business in Zimbabwe.
However, the new process has led to serious congestion as company owners rush to beat the deadline and maintain the smooth flow of their operations.
The chaotic situation was reportedly exacerbated recently when the Registrar of Companies’ Office ran out of a special paper needed to print Certificates of Incorporation.
One businessman who spoke on condition of anonymity said although the new Act seeks to promote computerization of the Registrar of Companies’ Office and promote decentralized and quick company registrations, a lot needs to be done.
“I have frequented this office for more than two months now trying to register my new company, but the chaos here is pathetic. To worsen the matter, I was told that they have run out of paper to print Certificates of Incorporation. That shows poor planning. How is it that they start a new thing without adequate resources?
“To be frank the Act requires commitment for it to become effective as it is already evident the implementing office is struggling with the new requirements just a few weeks since its inception.
“The Companies’ Office must, therefore, be adequately capacitated to meet the requirements of the new law and players seeking company registration,” he said.
The new Act repeals the old Companies Act, which was crafted on April 1, 1952, and incorporated provisions of the Private Business Corporations (PBC), encouraging small to medium enterprises to register and be recognized as players in the market.
However, the previous Act had over the years been overtaken by constitutional, technological, economical, and other changes.
The new Act will also empower the Registrar of Companies to strike off defunct business entities from the register. It also stipulates that shelf or shell companies that do not file returns on the anniversary of their incorporation shall be removed from the register.