A new Companies Act comes into force on Tuesday, July 3, 2007.
According to the revamped Companies Regulations, 2007, application to register a company will now cost P300, as opposed to P240 that was charged under the old Companies Act. Application to reserve a name will now cost P20, up by P8 from P12.
And there are other arrays of fees to be levied that were previously not in place. For instance, a Certificate of Incorporation is now priced at P60 while, in the past, the Certificate or Form 3 was covered under the P240 that was charged when one applied for company registration.
Under the new Act, Memorandum and Articles of Association have been removed. Instead, the companies will now be guided by a constitution, which, according to the Act, is not mandatory. Registration of a notice of adoption of a constitution will not be for free either; that will cost P300 and alteration or revocation of such would attract a P200 charge. On average, to have a fully fledged domestic company, it will cost about P740 while, in the past, it cost about P252.
Registration of an external company will now cost a whopping P4 500 while registration and continuation of a foreign company in the country is P6 000. Official response to the amendments has been that the new system is simpler and would enhance efficiency. From the rankings of the Organisation for Economic Cooperation and Development (OECD) countries, Botswana was last year ranked 48th in Africa on countries that are easier to do business in. On the issue of starting a business, the World Bank noted that it takes 108 days (about twice the average on the continent) and 10.6 percent of the average annual income to open a business in Botswana.
This involves the length of time, the number of procedures and the cost as a percentage of gross national income (GNI) per capita faced by entrepreneurs looking to get going. The World Bank annually ranks economies around the world on their ease of doing business, and measures business regulation and the protection of property rights and their effect on businesses, especially the Small and Medium Enterprises.