Generally speaking a Private Business Corporation (PBC) is a “lighter version” of a Private Limited Company (PLC) in terms of administration demands and the ease of incorporating. Government of Zimbabwe introduced PBCs through the PBC Act Chapter 24:11 meant to target the informal sector with the aim of formalising their business ventures and possibly collect revenues from them. As a result, PBCs are easier and cheaper to incorporate and carry almost the same benefits as a PLC. As outlined in the table below there are a few differences between PBC and PLC but for most entrepreneurs, you will find that starting off with a PBC and later upgrading it to a PLC would be the best way. The beauty is you can get to keep the name of the company in the process. Entrepreneurs typically upgrade to PLC for purposes of raising new capital and separating shareholders from the board of directors, which is something that a fully incorporated company can do.

The major differences and similarities between a PBC and PLC are as follows:

  Private Business Corporation Private Limited Company 
 DIFFERENCES
1 A minimum of one member is required with a maximum of 20 A minimum of two members (directors) and a maximum of 50
2 Only natural persons can be members (shareholders) Natural persons, trusts, partnerships or companies can be shareholders
3 No annual returns Annual returns required advising registrar of capital, directors and secretary
4 The core business of the business has to be disclosed The company can operate any business in its memorandum and articles of association
5 Cheap to register More expensive to register
 SIMILARITIES
1 Liability limited to contributed capital
2 Can register with ZIMRA and obtain tax clearance
3 Can open bank account
4 Has a separate legal persona from its owners
5 Has perpetual succession

If you need more information on company formation or assistance with company registration please get in touch with Tanaka on landline 08677 130 017, cell 0732 469 712 or email tanaka@smezim.com