Why companies need to re-register

18

By Tsitsi Matope

MASERU — The Companies Registry, which falls under the Ministry of Trade, Industry, Cooperatives and Marketing, is in the process of updating its records while also making efforts to ensure its registration, licensing and marketing services are activated online before the end of this year.
Part of the records update includes re-registering companies registered more than four decades ago.
This week, the Registrar of Companies, who is also Director of the One-Stop Business Facilitation Centre, Tlohelang Peter Aumane, spoke to the Lesotho Times (LT) about these and other developments taking place in his department.

LT: The re-registration of companies…what date have you set as the deadline?

Aumane: We made a call in July last year that all companies that registered as far back as 1967 when the old Companies Act came into effect, should be re-registered. The deadline for this exercise is July this year.

LT: Could you explain the importance of this exercise and why companies need to comply?

Aumane: We had to undertake this exercise because we suspect there are quite a number of registered companies that are no longer operational.
That concerns us because it gives a false impression about the economy of the country.
However, we do suspect that many companies registered back then are no longer operating or the shareholding structure has changed.
The first thing that raised our eyebrows was that many companies do not file their annual reports and financial statements as required under the Companies Act.
We would like to understand whether this could be because they are no longer in operation or it’s just a non-compliance issue. Importantly, we would like to know the number of active companies and be able to update our register.
We need to have a clean, credible and reliable register; this would enable and facilitate the verification process by various stakeholders who might include banks, potential investors and the general public.

LT: How many companies are currently on the national register and can you tell how many are operational?

Aumane: At the moment, we have 25 000 registered companies. This current re-registration exercise is going to help us know the exact number of active companies.
We estimate that up to 19 000 companies have not been complying with our requirements.
We are faced with a challenge when it comes to ensuring all the companies comply. However, we are making efforts to recruit a Compliance Manager who will lead company inspections and ensure companies are also reminded of their obligation.

LT: Since you started this exercise, how many companies have re-registered and what will happen to those that might, for whatever reason, decide not to comply?

Aumane: Currently, 640 companies have re-registered. We started well because a significant number of company-owners and legal representatives have already complied.
This also includes some companies that have not been filing their annual reports over the recent years.
We could have fined them M5 per day but we have said we are starting afresh and would want to start on good talking terms with all companies.
Those that will not comply will be publicised and expectations will be that those that they owe, including the Lesotho Revenue Authority, will come forward.
This will also help resolve any other credible issues that could be affected if certain companies are de-registered.
We are going to follow the whole process as outlined in the legislation before companies are struck off the register. Their names will also be available to the new companies that will be registered.

LT: One of your mandates is to register companies within a few days.
What is the logic in this when, already, there are many companies not operational mainly due to economic reasons?

Aumane: It is good when people are ambitious enough to want to start their own companies. It is a process that the government eased and made inexpensive to allow more new players in business.
The government eased requirements such as the shareholding requirements, which now say even individuals can start companies.
Since the beginning of this year, we have registered 653 new companies. What we need to work on is to ensure the sustainability of those companies by introducing short courses on how to run your business according to the Companies Act and also on corporate governance.
We are, therefore, going to train various stakeholders and strengthen public awareness about the need, importance and benefits of complying with the corporate legal provisions.
This will also encourage and promote proper conduct among company directors, secretaries and other employees. Currently, we are seeing a disturbing trend where operations are done haphazardly without understanding what the law requires or appreciating the importance of following certain procedures such as keeping the share register.

LT: What is your department doing about it?

Aumane: It is important that we ensure the spirit of entrepreneurship we are stimulating leads to the creation of sustainable companies or else we risk becoming the region’s laughing stock.
Together with the United Nations Development Programme (UNDP), we have developed a module and brochures that capture the salient points. However, we wish for more collaboration in this area.

LT: What is your position on foreign companies that would like to invest in Lesotho?

Aumane: They are welcome. However, I feel Lesotho can benefit more if well-established foreign companies can partner with local businesses. This can be one way of empowering indigenous businesses.

LT: What is the current trend in terms of shareholding and foreign investment?

Aumane: We are seeing some foreign companies that had local shareholding resorting to single holding because nothing binds them to empower locals.
Perhaps it is high time we have a policy or legislation that encourages empowerment of locals.

LT: You have been talking earlier on, of your plans to activate your company registration and licensing services online. How big is this project?

Aumane: Well, this is a big project in the sense that we are the first country in Africa to have such an advanced online system.
With the financial aid and technical support from the Government of New Zealand, this system will enable online registration of companies and the application of traders’ and manufacturing licenses.
The applicants would get immediate feedback. We expect the system to be up and running by November this year.

LT: And those not online?

Aumane: They can still come and apply manually. They can also make use of the soon-to-be-established client computer facility where they can check names of companies and reserve names of their choice.

LT: This is your second anniversary since the company registration and licensing started operating from the One Stop Business Facilitation Centre. What are the successes and challenges?

Aumane: We did experience a setback when we could not roll-out the One Stop Business Facilitation Centre in Maputsoe as planned last year.
We are still working on it. What we need at the moment is for all stakeholders to understand the One Stop Facility principles, which are customer-centric, simplification of processes, impartiality, proactive and where we are not proactive, listening to the client and reacting accordingly.
Resistance to some reforms and also the inability to support new ways of doing things can affect our service-delivery.
On the other hand, it is important that we have a motivated workforce for us to collectively operate efficiently.
However, we are also happy to note that we have successfully managed to sustain the three-day timeframe set for company registration.
We also continue striving to enhance our operations and look forward to the introduction of new innovations that would further simplify our processes.

Share.

About Author

Lesotho's widely read newspaper, published every Thursday and distributed throughout the country and in some parts of South Africa. Contact us today: News: editor@lestimes.co.ls Advertising: marketing@lestimes.co.ls Telephone: +266 2231 5356

Comments are closed.

Twitter Auto Publish Powered By : XYZScripts.com