Comparison of Company Types

Sole Trader or Partnership Private Limited Public Limited

Proprietorship Company Company
Ease of Straight Forward Fairly straight More complex Same as the PVT
Formation forward not requiring LTD companies
much paperwork documentation but with
such as Articles additional
of Association for documentation
the directors and
Memorandum of
Association
Describing
nature of
Business and
liabilities
Size/ Number of Small and Single Small to medium Small to very Very large with
owners ownership. size with 2 to 20 large business. many
Gomba partners. Usually Can have a single shareholders.
Transport, formed by a owner. Evolves from Pvt
Zonkizizwe Store. group of Depending on Ltd companies
professionals the articles of that are mature
such as association. with respect to
Engineers, trading smoothly
Accountants, and profitably for
Architects, and more than 10
Lawyers. years. Delta,
Makhandeni and AFDIS, Dunlop,
Musoro Meikles Group,
Associates Astra Holdings,
Econet Wireless
Capital Difficult to raise Partners come Starting capital is About $1million
starting capital. together and fairly low say required. This
Funded from source funds about $20 000 can be sourced
own pocket, through personal Funds usually from individual
personal coffers, means as in the sourced from shareholders,
family or own sole trader. bank. Can be a banks and other
savings etc. single owner companies. Can
with 100% share be raised any
ownership. time to expand
trading. Shares
are regularly
traded at the
Zimbabwe Stock
Exchange (ZSE)
Liabilities Not limited. Not limited the Limited to the Limited to the
There is no partners have to business not the company not the
separation pay from individual shareholders’
between the personal coffers owners. Debts private property.
owner of the (Nowadays the are met by the
business and professionals, company assets.
his/her private such as Lawyers
property. If Coghlan and
owner has to pay Welsh, have
creditors-those formed PLLP
he/she owes Privately limited
money –he/she Liability
has to do it from Partnership
personal funds. companies.
At worst he/she These are not yet
has to sell off popular)
some personal
items to raise
funds to pay off
debts
Management Decision making Decision making Is run by a board Is run by a board
/Control is a one person is as in the sole
of directors who of directors who
process. Owner trader but now are Executive are Executive
can decide what done in and Non- and Non-
to do, how to use partnership Executive. Executive.
his/her profits. according to Usually Financial Usually Financial
When to rest or their share in Director FD and Director FD and
work, who to business as Managing Managing
employ or fire described by a Director MD are Director MD are
(within the legal deed of the executive. the executive
framework of partnership Non-executive employees
course!) etc. agreement. are seasoned without major
business shareholding in
executives, the company.
economists, etc. The chairman is
from outside the normally a major
organisation. shareholder and
Example the late is the ultimate
Eric Bloch was decision maker.
involved in Strive Masiyiwa
several Econet Wireless
companies
Dissolution Insolvency; death Insolvency; death Insolvency. Insolvency.
of owner; Or any of one of the Otherwise Shareholding is
decision by partners. Or any difficult. A lot of very flexible. Any
owner to wind decision by any legal member of the
up trading for of the partners connotations public can buy
 whatever reason. to wind up otherwise a shares or sell
operations. shareholder can them as they see
When the pull out by selling fit. Winding up
company is shares to business is
dissolved the another almost
shares are shareholder impossible
divided among within or to a except in the
the partners. third party. case of
Winding up insolvency but it
business also still takes a while
legally difficult to pay off
involves shareholders.
Kingdom Bank
case, many
shareholders are
still to be paid
some 3 years
down the line.
The laws make it
very difficult for a
public company
to wind up.

Other companies Non-Governmental organisations which fall under Non-Profit have not
been included in this list. These include Social Clubs and Associations.

Formation of a company in Zimbabwe

Companies Act 24:03
Name search
Form C.R. 21 is filled in with a suggestion of 6 company names with a $5 payment. This is
lodged with the Registrar of Companies Tredgold Building in Bulawayo. Names must not be
offensive or nearly confusing with existing ones eg EcoNett for a fishing company will not be
allowed.
There is a two week waiting period if successful go to second stage

Company Registration
Fill in C.R. 6 and C.R. 14 forms and Submission of Memorandum and Articles of Association
and $250
C.R. 6 notifies the Registrar about the company’s physical and postal addresses or changes
thereof
C.R. 14 notifies the Registrar about the Directorship and Principal Officers or changes
thereof of the company

Memorandum of Association
States describes the company Name and nature of business. The type of liability the starting
share capital and the shareholders details and share in the company among other details

Articles of Association
A two page document with the directors requesting to be formed into a company. The
directors’ names addresses and occupations are included and signed before a witness
After 2 weeks the company is registered a certificate of incorporation with the company
number and name together with stamped CR 6 and CR 14 documents are given to the
owners.
Onus is on the owners to take the documents to ZIMRA for tax clearance