A
Accounting Period
The period of time covered in a Company Tax Return. Companies must pay income tax on all taxable income from that period. It will normally begin when trading starts. An accounting period cannot be longer than 12 months but it can be shorter.
Accounting Standards
The legal standards that companies statutory accounts must meet.
Active
The term applied to a company that is trading and ‘active’ for income tax purposes.
Allotment of Shares
This is the process of issuing (creating) more shares in a private limited company after it has been incorporated.
Annual Accounts
A statutory report detailing the financial activity of a company during its most recent 12-month financial year.
Annual Return
All limited companies must send an annual return to the Companies Registry at least once every 12 months to verify its registered details and update certain changes that may have taken place since the date of company registration or the date of the previous return.
Articles of association
Sometimes referred to as ‘articles of agreement’, this is a mandatory legal document that forms the constitution of a company. The articles outline the internal structure of a company, the rules it must adhere to, how it should be managed, and the rights and duties of directors and shareholders. ‘Model Articles’ are the most common.
Audit
An independent review of a company’s annual accounts, carried out by an accountant or auditor. The purpose is to ensure the financial statements are true and fair, prepared in accordance with the Companies and Other Business Entities Act, and meet the required accounting standards.
Auditor’s Report
An independent review given to the shareholders of a company that reports on the truth and fairness of the annual accounts submitted by the company directors.
Authorised Share Capital
A provision contained in the Companies and Other Business Entities Act that requires a limited company to restrict the total value of its issued shares to an authorised amount.
B
Balance sheet
A financial statement forming part of a company’s annual accounts. It should state all assets it owns and all liabilities it owes at a given point in time, as well as anything owing to the company. Shareholders, investors and creditors use balance sheets to review a company’s worth. Auditors will analyse the balance sheet as part of an audit of the annual accounts.
Board of directors
The collective term for the directors of a private limited company. When certain activities or issues require attention, the directors will hold a board meeting to discuss these matters and pass resolutions.
Board meeting
A meeting attended by some or all members of a company’s board of directors and any other permitted individuals.
Brand
The identity of a product, image or promise that is unique to a particular company. A brand is created to promote a company or product, make it stand out from its competitors, foster positive associations with consumers through clear messages and consistent delivery, and ultimately cultivate user loyalty.
Branding
The process of developing and maintaining a brand.
Brand equity
The value of a brand as perceived by consumers.
Branding strategy
A long-term plan defining the way in which a brand will be successfully communicated and delivered to consumers.
Business activity
This refers to any form of trading carried out by a company, such as: buying and selling goods, promoting the business, renting premises, accruing interest, managing investments, employing staff, providing services, and receiving income from any other source. A company that is actively trading is liable for income tax.
Business partner number
A unique ten-digit number issued by ZIMRA to all new companies upon registering for tax obligations. Used to identify individual companies for tax purposes. BP numbers can be found on any official documentation received from ZIMRA.
C
Certificate of Incorporation
A certificate issued to companies upon its incorporation. It serves as conclusive evidence of its legal existence under the Companies and Other Business Entities Act.
Certificate of Incorporation on Change of Name
See Certificate of Name Change
Certificate of Name Change
Also known as a Certificate of Incorporation on Change of Name, this is an official document issued by the Companies Registry to any company that changes its name after incorporation.
Chairman
A person appointed to preside over board meetings.
Company addresses
- Physical address – Mandatory. The official address of a private limited company. It will be displayed on the public record.
- Postal address – Mandatory.
- Email address – Mandatory
Companies and Other Business Entities Act (Chapter 24:32)
Primary legislation applying to companies and private business corporations
Company director
A person appointed to manage a company at the discretion of its owners. All private limited companies must have at least two directors who are natural persons aged 16 years or above. Directors are required to lawfully and conscientiously run a company for the benefit of its owners in accordance with the Companies and Other Business Entities Act and the articles of association.
Company documents
Official documents received after company registration, consisting of: Certificate of Incorporation, the Memorandum and articles of association, CR 6 and CR 5.
Company registration
The process of legally incorporating a company or Private Business Corporation with the Companies Registry. Registering a company allows it to exist as a distinct legal entity that is separate from its owners and responsible for its own debts.
Companies registry
The Registrar of Companies in Zimbabwe, and an executive agency of the Government. To be legally incorporated and permitted to operate as a company or private business corporation, a company must be registered with the Companies Registry in Zimbabwe
Company incorporation
See Company Registration
Company limited by guarantee
A distinct legal entity and a type of company structure normally registered by non-profit organisations and charities. It must be owned by at least one guarantor and managed by at least one director. The personal liability of the guarantors is limited to the amounts of their guarantees, which must be paid if the company is unable to pay its bills.
Company limited by shares
A distinct legal entity that is ideal for those who want to make and distribute profit, enhance their credibility and status, and restrict the personal liability of the owners. It must be owned by at least one shareholder and managed by at least one director. The personal liability of the shareholders is limited to the value of their shares.
Company name
A unique name chosen during the incorporation process. The Companies Registry displays all company names on public record. No two names may be the same or ‘too similar’.
Company officers
A collective term for directors and secretaries. Company officers are appointed to lawfully run and manage a company by and on behalf of its owners.
Company register
The statutory records held by a private limited company at its registered office. The register should contain all relevant details about a company, its officers and members, its share capital, and all other required statutory information. It must be made available for inspection.
Company registration
See Company Formation
Company Registration Number (CRN)
Is a unique number issued to all new companies upon incorporation. A CRN is used to identify a company and it will be displayed on the Certificate of Incorporation and all company registration documents, the public register of companies, and all statutory correspondence from the Companies Registry.
Company shareholder
The persons owning all or part of a private limited company through the purchase or acquisition of shares. The liability of shareholders is limited to the amount of shares they own. Shareholders may also be directors.
Company seal
A hand-held tool used to print or emboss a company’s name or logo on a document. It is a modern-day version of a red wax seal of authentication.
Company secretary
A person or firm appointed to assist a company director with his or her duties and responsibilities.
Company stationery
This term refers to all documents and material produced by a company such as: letterheads, compliments slips, invoices, receipts, order forms, emails, websites, online material, information leaflets and booklets, catalogues, and visual advertisements. Companies are legally required to display their name and other statutory information clearly and consistently on all forms of stationery.
Company Tax Return
A requirement of any company that is actively trading and liable for income tax.
Corporate director
A company or firm appointed as a director of another company. A corporate director will nominate an ‘authorised person’ to act on its behalf. To appoint a corporate director, at least one other director must be a natural person (human).
Corporate secretary
A company or firm appointed as the secretary of another company.
Corporate shareholder
A company or firm that owns shares in another company.
CRN
See Company Registration Number