Lesotho Company Formation & Entity Choice

Entity types, incorporation and annual compliance

Companies in Lesotho are registered by the Registrar of Companies under the Companies Act 2011, through the One-Stop Business Facilitation Centre (OBFC). The most common vehicle for business is the private company limited by shares.

• Private company — Private company limited by shares — most common form; restricts share transfers and caps members (Companies Act 2011)
• Public company — Public company limited by shares — may offer shares to the public; greater disclosure obligations (Companies Act 2011)
• Sole trader / business name — Sole proprietorship registered as a business name — taxed in the owner's hands, not a separate legal entity ((approx — confirm registering statute for business names)) (Companies Act 2011)
• Minimum share capital — No statutory minimum share capital for a private company ((approx — confirm)) (Companies Act 2011)
• Minimum shareholders / directors — At least one shareholder and one director ((approx — confirm)) (Companies Act 2011)
• Registering authority — Registrar of Companies, via the One-Stop Business Facilitation Centre (OBFC) (Companies Act 2011)
• Incorporation steps — Reserve company name; lodge incorporation application with constitution/articles, shareholder and director details at the OBFC; obtain certificate of incorporation; register for tax (TIN) and VAT if applicable; obtain a trading licence (Companies Regulations 2012)
• Incorporation timeline — Typically a few days to a couple of weeks via the OBFC one-stop process ((approx — confirm)) (Companies Act 2011)
• Registration cost — Statutory registration fees apply (modest); amount set by the Companies Regulations fee schedule ((approx — confirm current fee)) (Companies Regulations 2012)
• Annual return — Companies must file an annual return with the Registrar of Companies ((approx — confirm due date and fee)) (Companies Act 2011)
• Tax registration — Register with RSL for a Taxpayer Identification Number (TIN); register for VAT once turnover exceeds LSL 2,000,000 (Income Tax Act)
• Accounting records & financial statements — Companies must keep accounting records and prepare annual financial statements; audit may be required depending on company type/size ((approx — confirm audit thresholds)) (Companies Act 2011)