Bipa to consult more before phasing out CCs

Namibia’s plans to phase out the registration of close corporations (CCs) are not final yet.

Business and Intellectual Properrty Authority (Bipa) spokesperson Ockert Jansen on Friday told Desert Radio’s ‘Talking Business’ the plan still requires wide consultation.

He said the decision to phase out close corporations are among a raft of measures to improve the country’s ease of doing business and to improve attracting investors both locally and internationally.

“We have been consulting with all stakeholders, and we continue to do this to make sure we engage as widely as possible.

This process started in 2019, and we have engaged as many organisations as possible in trying to make sure we cater for everyone who will be affected by this, “ he said.

“The envisaged law is not a Bipa or government issue, but should be seen in the light of improving business in Namibia. We will make sure everyone’s views are catered for and that the law will not phase out CCs completely,” he said.

Businesses operating as CCs would be able to continue in their current form, but new businesses would be affected.
Jansen said the process would not be costly.

“It currently costs an average of N$250 to register a company, and this is aside from the consultancy or legal fees involved.

I am not saying these processes are not necessary, but we will make sure it will not take more money from business owners than is neccesary,” he said.

Currently CCs constitute about 85,8% of all business entities in the country.

Legally the proposed reforms of the Close Corporations Act and Companies Act would prohibit potential entrepreneurs from registering new CCs, forcing them to set up closely held companies under the Companies Act.

While closely held companies offer certain advantages in terms of limited liability protection and access to a broader range of funding options, they are perceived by some as more complex and costly to set up and maintain.

Namibia Local Business Association (Naloba) vice president Kanu Amadhila told Desert Radio the government is under pressure from multilateral institutions to avoid being grey-listed, and as a result is rushing legislation that is not properly understood.

“The bulk of our members are CC holders and can be illiterate to some of these proposed changes which our government is pressured to make.

“We hope the government comes up with a law that improves the way we do business and does not make it difficult for our people. I also am not sure if our members were well consulted on this issue, “ he said.

Amadhila said while the proposed law could have advantages, the high cost of doing business in the country needs to be considered.

The proposed reforms, set to be finalised by the end of November, have ignited heated debate among business owners and aspiring entrepreneurs alike.