A company is defined as a legal entity formed by a group of individuals to engage in and operate a business. A company may be organised in various ways for tax and financial liability purposes depending on the laws of the country. It is important to register a company on order to formalise its running and avoid paying hefty penalties. Registering a company has its perks such as being able to bid for tenders in the public sector and easier access to loans. A company is a legal entity that can sue or be sued.
TYPES OF COMPANIES
The type of company that one registers depends on the amount and source of capital available amongst other factors. The types of companies are as follows:-
1. Private Business Corporation
Such a company is meant to cater to the smaller companies with a few members. Such a company is suitable for sole traders. The members of such a company are actively involved in the day to day running of the business. An advantage of registering such a business is that the company can start operating as soon as it is registered unlike a public company.
2. Private Limited Company
This is a company which if formally registered, with a requirement of directorship. You can have a minimum of two (2) directors and a maximum of twenty (20), who must have attained the age of majority. This company has a separate legal persona from its directors, and is capable of entering into contracts, suing and being sued. There are tax and financial obligations that are expected from this entity.
3. Public Company
Such a company is suitable for a medium to large enterprise as it has no limit to the number of members. It is open to being listed on the Stock Exchange for trading, and members of the public may also invest in its shares.
4. Company Limited by Guarantee
Such a company is created for charitable purposes. The liability of members of such company boils down to the amounts that they had promised to contribute upon the dissolution of the company.
5. Co-operative Company
Where one produces or markets agricultural produce and or livestock they should register such a company. Such a company regulates the number of shares that one can own. An example of such is Seedco and Farm and City amongst others.
6. REGISTRATION PROCEDURE
The first step is to choose whether you want to register a public or a private enterprise. First of all you fill in and file your CR21 form. A party registering a public company must file such form in duplicate. This form is used to do a name search to see that the company name that you have provided has not been used by any other company. The applicant in this case must provide at least four possible names for the company. Once such name search is done, a CRV4 form is issued from the Registrar’s office (Registrar of Companies) rejecting or confirming the company name. Upon receipt of such form the applicant may now go ahead and draft their Memorandum and Articles of association in duplicate alongside their CR14 AND CR6 forms outlining the directorship and physical address of such respectively. The registrar when noting everything to be in order will issue a certificate of incorporation. The author highlights that all documentation submitted to the Registrar’s office must be submitted in duplicate. When registering a private business corporation applicant must fill and file a PBC1 form in duplicate for a name search and a CV4 form is issued. The form will highlight whether the company name proffered was accepted or rejected. Applicant must file PBC2 in duplicate which sets out the business address members and contributions amongst other factors and CV4 form in duplicate which outlines the approved name with the Registrar’s office. In the event that the Registrar does not have any queries the company is registered.
