In Sierra Leone, the accepted and publicly legalized forms of doing business include a limited liability company, a public limited company, a legation, and a foreign company branch. To start a business in Sierra Leone, you must first register with the Corporate Affairs Commission. Their duty is to regulate Companies from their incorporation through the life cycle of their existence and this often requires timely dissemination of accurate information and employing user-friendly processes and procedures. The Companies Act of 2009 and its subsequent amendments give the Corporate Affairs Commission its mandate to perform those functions. In this article we will cover the process of establishing and registering a business in Sierra Leone.
What are the steps to follow when setting up a business in Sierra Leone?
In order to register your business entity in Sierra Leone, these are the things you need to put together:
- The proposed name of the company/Business: Getting a name for your business is the first step in the business registration process. The name of your business should be unique and different from others.
- Nature of Business: This is the stage where you clearly define your business structure. It could either be a Sole proprietorship, a Company limited by guarantee, a Company Limited by liability, or a Partnership. When you have clearly defined the structure of your business then, you can proceed in developing your memorandum and articles of association (M & A).
- Name, Address, and Contact Telephone numbers of Directors and Shareholders: This is an important area to note when you want to set up your business. Those appointed to serve as Directors and shareholders must be able to provide valid identification and contact number. Most often it is important to have a printed colored copy of their passport (Bio Page).
- Registered Business Address: You must endeavor to provide a valid business location (address). This is in a bid for someone to locate the business easily.
- Name of Company Secretary: Every company needs a secretary and as such the name of the Company Secretary should be included. Such a person must be someone of high professional and ethical standards.
- Color Copies of passport details for directors, shareholders, and secretaries: This section is self-explanatory. All directors and shareholders must provide colored copies of their documents (Passport bio page). This is for clarity purposes.
- Submit Payment: Once all documents are in place and payment is made, the process should be complete in 2-3 days, and you will also be issued with a Tax Identification Number (TIN) and National and Social Security Insurance Trust Number (NASSIT number) using the information you submitted.
What other activities are recommended for establishing a business?
In some instance, people tend to forget that a comprehensive business plan creates the blueprint of your business operations. Running a business without a business plan can be disastrous. It is highly recommended that you have a business plan in place that covers these three main areas.:
- Financials: This section covers your financial statements for the first three years. You should have a clear sight of your financials which will include profit and loss (P&L)/Income statement, Balance sheet and cash flow statement.
- Operations: This section covers your day-to-day operational plan. Questions like staffing needs, leadership structure, opening and closing hours etc. etc. If you are sole proprietor and running the business alone, you will not need a leadership structure.
- Marketing: This section of the plan covers how you enter the market, what type of pricing strategy is employed and how you promote the business.
As important a business plan is, you are also required to follow all regulation enacted by the local or state Government. One of the requirements is to obtain the license and tax invoice number (TIN).
Licenses and Tax invoice numbers can be obtained from National Revenue Authority or the Administrator and Registrar General’s office depending on the class of the venture and its location. One may need to do further research to understand what licenses and permits are required to get the business started. Note that this paperwork is very important before you’re legally allowed to operate your business, so it is highly advisable to have a lawyer around you to guide you through the process.
What are post registration obligations?
Upon completion of registration and business is operational, one is expected to be pay the yearly tax due/tax returns to the National Revenue Authority and also payment of NASSIT for its employees every month. This by law, is the obligation of every company in order for the continuation of its operations.
Also, there is always a Corporate Social Responsibility that every company should abide by, for example getting involved in the development of the community in which they operate.
Further to the above, there is a yearly renewal of business licenses from the City council and the Corporate Affairs Commission.
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