A private limited company is a type of business entity that operates under private ownership. These companies may issue stock and have shareholders, but their shares typically do not trade on public exchanges. This in turn helps to avoid the strict filing requirements that public companies must comply with.
One key advantage of a P.L.C is protecting the personal assets of the owners from the company’s debts and liabilities. The owners are held accountable for the company’s debts up to the amount of money they invested in the company.
Here are some steps to follow on opening a private limited company.
- Issuance of a New Taxpayer Identification Number Certificate
This is the first and crucial step in the business license process. To obtain a Taxpayer Identification Number (TIN), fill, sign, and submit a duly completed TIN registration application form. Gather the following documents:
- -A copy of the Memorandum of association of the company
- -A copy of the Articles of association of the company
- -An authenticated certificate of the memorandum of association by the country of origin (for non-resident companies)
- -Proclamation, agreement document authenticated by the proper Ministry
- -Trade name registration certificate
- -Partnership agreement of partnership
- -Power of attorney registered and authenticated delegation certificate if registration is submitted by a representative
- -Legal identity card, local or international driving license, birth certificate, Ethiopian or foreign passport, work permit (for foreigners)
- -General manager’s appointment letter and personal TIN card copy
- -One passport-size photograph
- -Original and copy of valid residential/workplace ID; or recent passport or driving license.
- Initial Unique Name Registration
Register a unique name for your company. Pay the appropriate amount and fill the necessary form at the closest service center. You may have three optional trade names. The uniqueness of the name will be verified, and you will obtain a trade name certificate.
- Business Document Authentication
After obtaining your company name from the Trade Bureau, you can authenticate your documents. Bring the company name and Regulation and Establishment Act 1.
- Commercial Registration
This is a prerequisite for a business license to start a business. Fill the New Trade Business Registration/Editing/Renew/Canceling Service giving form, give the TIN Certificate copy, show the Rent Agreement, give a Copy of Passport or renewed ID, show the authorized Memorandum of understanding, show the authorized Establishment, give the TIN Certificate Copy, give Manager ID and Photo, show the rent agreement, make payment.
- Apply for Trade/Business License
Finally, apply for your Trade/Business License. Show the initial registration, show the business Registration, choose the business sector, make payment, and get the Business Trade License.
Remember, the process might take some time depending on the number of members of the shareholders. Be prepared to provide all necessary documentation and meet any requirements set by the government authorities.
