Small businesses are the backbone of Botswana’s economy, making up a significant portion of employment and entrepreneurial activity across the country. With the passing of the Companies (Amendment) Act of 2025, many small business owners are wondering: What does this mean for me?
Here’s a breakdown of how the amendment affects small and medium-sized enterprises (SMEs) and what steps they need to take to stay compliant and competitive in the new regulatory environment.
Companies (Amendment) Act, 2025
The Companies (Amendment) Act, 2025 is a legislative update to Botswana’s principal company law. It introduces a range of new requirements affecting company incorporation, governance, disclosures, record-keeping, and compliance timelines
How the Companies (Amendment) Act of 2025 Impacts Small Businesses
1. Mandatory Company Constitutions
Before: Many small businesses operated without a formal constitution, relying instead on default provisions under the Act.
Now: Every company must adopt a constitution in the format outlined in the new First Schedule.
Impact: SMEs need to understand their rights and obligations as enshrined in a constitution. This change will encourage better internal governance but may require legal support to draft or adopt compliant documents.
2. Financial Statement Filing for Private Companies
Before: Small businesses that qualified as exempt private companies were not required to file financials.
Now: Exempt private companies must file simplified financial statements. Non-exempt SMEs (assets > P5M or turnover > P10M) must file audited financials.
Impact: Even smaller entities now face compliance costs and administrative burdens. However, this may improve access to finance as formal financial records build credibility with banks and investors.
3. Licensing of Company Secretaries
New Rule: Every company must appoint a licensed company secretary within 24 months of the law’s commencement.
Impact: Small companies that previously appointed unlicensed administrators or handled secretarial duties informally must now upgrade their compliance processes. This creates opportunities for outsourcing to service providers like Brimco.
4. Beneficial Ownership Record-Keeping
Requirement: All companies must maintain and update a register of beneficial owners.
Impact: This transparency requirement helps prevent misuse of corporate entities but introduces a new record-keeping duty for SMEs. The 10-day reporting window demands prompt administrative action.
5. Nominee Disclosures
New Obligation: Nominee directors and shareholders must disclose their nominator to the Registrar and competent authorities.
Impact: For small businesses using proxy shareholders or informal directorships, this removes anonymity and enforces accountability.
6. Risk of Trading While Deregistered
Offence Introduced: Companies that continue operating after deregistration will now face legal penalties.
Impact: SMEs must stay on top of annual returns and compliance to avoid being struck off. Once removed, restoration is only allowed within limited circumstances.
Final Thoughts: What Should SMEs Do Now?
- Review Company Documentation: Ensure your company has a constitution and that it aligns with your structure and goals.
- Track Financials: Set up proper bookkeeping if you haven’t already.
- Get Licensed Support: Appoint or contract a licensed company secretary.
- Update Ownership Registers: Keep track of beneficial owners and submit changes within 10 days.
- Stay Compliant: Avoid penalties by staying proactive with filings.
How Brimco Can Help
We know compliance can feel overwhelming for small businesses. That’s why Brimco offers digital tools to help you:
- Get a company constitution
- Maintain digital beneficial ownership registers
- File annual returns and financial statements
Partner with Brimco
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