The Private Sector Development Association (PSDA) has hailed the Patent and Company Registration Authority (PACRA) for deregistering companies that have failed to meet the deadline to file their annual returns.
PSDA Chairperson Yusuf Dodia said the deregistration of over 1, 500 companies is a positive move that will help clean out bogus companies in the country.
Mr Dodia has since called on PACRA to carry out the deregistration exercise once every ten years in order to ensure that companies that only companies that are active are allowed to operate.
He told ZANIS in an interview in Lusaka today that a company that is inactive is a problem to a country’s economy as it may paint a wrong picture of the nation’s economic standing.
The PSDA Chairperson stated that having companies that are dormant results in the Company Registration Authority having wrong information about companies that are actively involved in business and may mislead the nation on its economic standing as they are not contributing positively to the economic growth of the country.
Mr Dodia also advised companies to comply with the law and file their annual returns to avoid being deregistered.
He noted that companies that fail to comply with the law risk putting their image in jeopardy where business transactions are concerned.
He said it is imperative that companies keep a good name in their business history for them to have successful business transactions.
Mr Dodia further urged PACRA to be a facilitating institution and not act as a policing institution whose sole purpose was to close down companies.
He said it is important for PACRA to recognise that every time a company closes, there is employment that is lost and less revenue for the government.
Mr Dodia said PACRA should only close down companies when it was absolutely necessary to do so.
However, a Lusaka based Economist Trevor Simumba told ZANIS in a separate interview in Lusaka today that the deregistration of 1, 500 companies by PACRA will impact negatively on the growth of the private sector and the country’s economy.
Mr Simumba said the deregistration of the companies will have a negative impact on the level of economic activity, generation of government revenue and creation of employment in the country.
PACRA recently deregistered over 1, 500 companies for failure to submit annual returns to the authority.
The over 1, 500 companies that were deregistered failed to meet the deadline the Company’s Registration Authority had set for them to file their annual returns.