Private Limited Company is a popular incorporated business form in Ethiopia that can be established by a minimum of 2 and maximum of 50 persons. We give a brief account of what one needs to do to start a PLC in Addis Ababa. We focus on Addis Ababa, as the bulk of commercial activity in Ethiopia is done here.
STEP 1: Preparing memorandum of association and articles of Association
Prepare a memorandum of association (MOA) and articles of association (AOA). This can be done in Amharic or English. One can get samples from the Ministry of Trade and Industry, Ethiopian Investment Commission or from the business centers located around the Documents Authentication and Registration Office. Please try to find out where your office will be located so that you can include the right address in the documents. If you have not yet leased an office, state in the MOA and AOA that your head office will be in _____ (e.g. Addis Ababa). You will be required to furnish a lease contract when you apply for a tax identification number (TIN).
STEP 2: Checking the proposed name of the PLC
Take the draft copies of the memorandum of association and articles of association to the Ministry of Trade and Regional Integration or Ethiopian Investment Commission, as appropriate. They have an office on the ground floor of their building where they can check names. The proposed name as shown on the documents will be checked and if it’s not taken, you will be given a letter addressed to the Documents Authentication and Registration Office and another copy addressed to Ministry of Revenues. If it’s taken, you will be advised to change it.
STEP 3: Process at the Documents Authentication and Registration Office or Ministry of Trade and Regional Integration or Ethiopian Investment Commission.
You can find the documents authentication and registration offices at the Ministry of Trade and Regional Integration or Ethiopian Investment Commission. These organs have a one-stop service that includes the document authentication and registration office.
Nonetheless, the Main office is located on the second floor of Chelelek ALSAM Tower (the twin tower of the building where Ethiopian Commodity Exchange is located). It’s a one minute drive from Mexico Square on the way to Lideta. There are also other branches of the office whose address can be found at the website of the Document Authentication and Registration Office.
You will submit the draft copies at one of the aforementioned offices. You can get more information from there too. You will be sent to the appropriate desk and at this desk, the officer will go through your drafts. The drafts will either be approved or you will be asked to correct them. Finally, if the officer is satisfied with your documents and all the shareholders are present with their ids or passports, you will be asked to sign the paper. (You have to have copies of your VALID identity cards and passports along with the documents - expired ID’s or passports are not acceptable). Then you will be asked to pay. After payment, you have your PLC!
COST: The total cost you have to pay for the name checking is Br. Twenty Seven (ETB 27.00) and Br. Five hundred and fifty two (ETB 552) at the Documents Authentication and Registration Office. Of course, you may have to pay some money at the business centers and the copy shops. That may take anything between Br. 10 to Br. 200.
You can mention as many types of business as possible in the documents as your intended areas of business. You may not immediately get registration and license for these businesses. You can get registration and license for the types of businesses you want to engage immediately (provided you have fulfilled the requirements). For further info on business registration and license regulation and procedures, pls check this page.
STEP 4: Application for a Tax Identification Number
Once you have signed and authenticated the MOA and AOA, you are required to apply for and obtain a tax identification number. As indicated earlier, the tax authority has an office at Ministry of Trade and Industry/Ethiopian Investment Commission. Alternatively, you can apply in one of the branches of the tax authority (check the Ministry of Revenues website for the addresses of the branches).
STEP 5: Fill an Application form for Commercial Registration of the PLC
Once you have obtained the tax identification number certificate, you can file an application form for commercial registration of a PLC with the Ministry of Trade and Industry or Ethiopian Investment Commission, as appropriate. Usually, you will be required the following documents:
- Two photographs of the general manager;
- Authenticated memorandum and articles of association;
- Tax identification number;
- Minutes of the shareholder’s meetings (this minutes should clearly indicate that the shareholder’s have agreed to form the PLC);
- Lease contract (this may not be necessary if the title deed of the business office is under your name); and
- If the application is being filled by an agent, an authenticated power of attorney.