Government plans to re-register businesses in the country amid speculation that the move is meant to raise funds for the Peter Mutharika administration’s zero aid budget.
If re-registration of all the above companies is carried out, government is expected to earn approximately K700 million.
The speculation is heightened by the fact that in 2010, among other things, government phased out passports and introduced new ones at a time when former president the late Bingu wa Mutharika’s government introduced zero deficit budget.
But Ministry of Justice and Constitutional Affairs spokesperson Apoche Itimu has dismissed suggestions that the aim of the re-registration exercise is to raise more money for the budget.
She said: “The process of re-registering all business entities follows the finalisation of the Malawi Business Registration System [MBRS], which aims at automating the manual registration process and modernising it by providing facilities such as online searches and online registration.”
Principal assistant registrar general Chifwayi Chirambo said according to Section 24 of the Business Registration Act (Act No. 12 of 2012), when read with Government Notice Number 10 dated May 24 2013, all business registrations expired in November 2013 and all entities needed to re-register in compliance with this legal provision.
However, he said, delays in the finalisation of the system have resulted in delayed implementation of the re-registration exercise.
There are three categories of business entities: trusteeships, business names and limited liability companies.
There are currently approximately 7 000 trusteeships, 176 000 business names and 15 000 limited liability companies. The first category is charged K1 000, the second K2 000 and the third a minimum of K25 990 depending on share capital. External companies are charged K20 000.
Chirambo said in the past, once one registered a business, there was no need to re-register.
However, he said the new Business Registration Act has changed the regulatory framework by requiring businesses, which register as sole proprietorships and partnerships, to renew their registration every three years.
President of the Indigenous Businesses Association of Malawi (Ibam), Mike Mlombwa, said in an interview on Wednesday there was no need to call for re-registration because most companies are already known.
Said Mlombwa: “Why do you have to call business entities that are already known nationwide to come and re-register? We suspect it is because the fees might be raised, which will further suffocate local businesses.” n