What is a private Limited Company?
A private limited company, or LTD, is a type of privately held small business enterprise (or SME). This type of business entity limits owner liability to their shares. This means that, all liabilities the business incures do not directly fall on the shoulders of the directors or its shareholders and all the profits the business makes, are shared in proportion to the number of shares each particular shareholder holds in the company.
What is the other name for a private Limited Company?
The other name for a private limited company in Zambia is, local company. So, do not get confused when you see that name on PACRA website during registration of your private limited company.
What are the features of a private Limted Company?
- All debts and liabilities the business incures do not directly fall on the shoulders of its shareholders as the business is considered to be a separate entity from its owners or directors
- All the profits the business makes are shared in proportional to the number of shares each particular shareholder holds
- It requires a minimum of two sharesholders/directors to setup and a maximum of 50 shareholders at most
- The business has a stand-alone TPIN (Tax Payer’s Identification Number) in the company name
- Decisions are made corporately as a board of directors and not as an individual
- You can open a business account with any commercial bank under the private companies’ category of businesses
- You can register your business as GRZ supplier or contractor with Zambia Public Procurement Authority – ZPPA and bid online for GRZ tenders related to your businesss undertaking
- You can register your business National Council for Construction – NCC if your business is in the construction sector and confidently bid for GRZ construction projects online on the on the ZPPA website using the e-GP sytem
- You are able to handle contracts and tenders of K1m or more depending on your company capacity & experinces
- You can sale shares privately but not publicly on LuSe (Lusaka Stock Exchange
What the requirements for registering a private Limited Compnay?
- Applicants must be 18 years and above
- Applicants must be of a sound mind
- Photocopies of NRCs or passports for all shareholders
- Trading place (it can your home address, rented shop or office space)
- Application for name clearance – the name you would like to give your business (you will be required to suggest a minmum of 3 names as you apply for name clearance, list them in order of priority)
- A minimum of K15, 000.00 share capital
- Completed and signed form 3 for name clearance and form 2 for registration of the business entity
- Articles of association – it’s recommended to use standard articles of association provided by PACRA
What are the fees involved in registering a private Limited Company?
- Name clearance fee – K90.00
- Business name registration – K1000.00
- Modes of registration – Online (https://www.pacra.org.zm & https://zamportal.gov.zm) or physically walking into a PACRA service centre near you
- Duration – up to two weeks or less depending on the number of applications received PACRA
- ZRA TPIN/tax registration – free (https://www.zra.org.zm/)
- ZPPA registration – K300/year (https://www.zppa.org.zm/)
- NCC registration – K1500 express (done within a week) or K750 normal (done within a month)
What are your obligations after your private Limited Company is registered?
- You are required to be paying annual return to PACRA every after 1 year a few days after the exact day your business name was registered or any other date of your choice at K200.00 per year
- You should be submitting your tax returns to ZRA monthly
- You should be renewing your ZPPA registration consistently
- For those in construction, you should be renewing your NCC registration consistently as well
Who can register a private Limited Company?
- Any group of people who wish to go into business together
- Those who intend tp venture into mining & mineral processing business
- Those who intend to venture into manufacturing business
- Those who intend to venture into large scale agro – processing business, etc.