The misconception of owning a company in South Sudan

Posted: February 7, 2017 by PaanLuel Wël in Columnists, Longar Mathiec Wol

The institution in my pocket. The misconception of owning a company in South Sudan

By Longar Mathiec Wol, Nairobi, Kenya

corruption

February 7, 2017 (SSB) — The word company in any part of the world might carry the same meaning, but when it comes to south Sudan the meaning of company popularly known locally as chirka might be different for some of the reasons not known by the public but to the company owners and the country. In south Sudan people think having accompany is being rich which is completely a misconception. Company is not a money laundering machine but to legally allow you to operate.

Therefore, what exactly is the real meaning of the company from other part of the world? Well, company is a word from companion, or group of two or more people with the same idea or ideas coming together to register business name, own and run it. People sometimes call a company as enterprise or firm. But all these names have one goals and objectives, which is the delivering of goods and services to the consumers or people. Therefore, let look at the definition of the company and how people perceive the word company in south Sudan.

A company (enterprise, firm) is a legally recognized organizational entity designed to provide goods or services to consumers in exchange for money. That means you do something or render goods or services to exchange with money; not sitting and wait for government contract without having any other services you give to the public.

Organization is the sense that it is an entity with its own structure; not where you are everything, chairman of the board, chief executive officer (CEO), director, manager, cleaner and a gatemen. Structure mean everyone has been assigned some duties not one person is everything. In our country when you talk of organization what come to some people minds is non-governmental organization as the only organizations.

They perceive you, like you are talking about humanitarian organizations without knowing that even their companies, schools and many others institutions are also organizations; I wish I have enough time to discuss with you what an organization is but let us leave it for another’s discussion. The ones they run in their pockets are organizations. Let run them professionally so that people and the government benefit. Open the offices, employ the people and pay tax to government.

The government should review the public procurement policy. There is no need of awarding a contract to someone who claim to be an institution. Some people are given contract worth millions dollars while they run the whole institution themselves no employees no nothing. That is a corruption, corruption has many faces. South Sudan is the only country where employment in companies is based on friendship. They don’t recruit people based on their qualification because they don’t even advertise and you expect them to be successful.

How could you be awarded a contract worth million when you cannot even rent the office and maintain it. If someone cannot manage small office how could he/she manage millions of dollars, the tax payer’s money? The money given to him/her in contract. Am not saying you should employ the whole south Sudan, but you employ even one person in the name of manager if you give yourself all titles as you wish since you are everything, whether you are company’s president, CEO, director or whatever title; own them. But don’t take all the titles is embarrassing.

So, are the companies in south Sudan really legally recognized? May be, they might be legally recognized in book of registration but abuse by individuals who own these companies, because most of these people don’t know the different between them and the companies. They see companies as themselves and themselves as companies.

I know other people might talk of proprietorship, but really it still a company, but what is surprising most of these companies don’t even bother to use limited or unlimited, they just write the name without indicating whether it is limited, unlimited, proprietorship or partnership.

Any company that is legally recognize by the law should be independent from the owner, not to be run in the pocket, something I can call “one man institution” or “an organization in the pocket”. Company is like human being. Like the way human being has birth and death certificate is the same as company. The company is an independent entity that has its own birth and death certificate. It birth certificate is the registration certificate and it death certificate is the bankruptcy certificate that equivalent to closing certificate is the company certificate.

The company benefit the public through services, employment and the government through tax. In my country if you ask the owner of the company the date he supposed to file the tax he/she will not tell you and it will be one of the toughest question he/she ever comes a cross that day because he/she has no idea about what you are talking about. In south Sudan when you own company you employ all the family members including suckling babies listed as directors.

How do you expect such a company to make money when people who don’t know themselves leave business are given title of directors? Surely we are really joking with life. It is up to the government to review the law that govern the companies because when you register a company the directors are supposed to sign with their picture attach next to their names.

But for us when you give registrar ten thousand pounds and your five thousand pounds for registration then you have no problem. Every paper is sign without even bothering to read even if it was mean to harm, you won’t know because you don’t have time to read.

I remember one story when I one time wanted to register the company one of the people who I look up to asked me some stupid question. I was shock, do you know how he asked me? He asked me whether I am rich enough to register and maintain company. That day I wanted to lecture him but I thought I might be wasting my word. People register companies to allow them legally to operate, that is it. Nothing more. It has nothing to do with being rich or being poor.

I wonder when I see the government talking of no money I always have one question in mind; does money come alone? Because you cannot complain when there is no tax system in place, very weak revenue authority; we should accept that we fail and seek the ways of doing things correctly. When you buy anything in juba you just pay and go no receipt that mean government is losing millions of tax revenue every day.

Receipt is the one that shows, how much you paid to the vendor and how much taxes you paid to the government. I don’t know the value added tax (VAT) percentage in south Sudan, and if it exists it has never been implemented. We only know the money coming from the border of Nimule and other ingress without knowing that we have internal tax that can generate millions of pounds every months.

As mentioned in the definition above, company is a legally recognized organization or entity. The term organization might easily mess up the minds of some companies’ owners because of the term “an organization”. Therefore, there is a need for alternative definition. So, what is this alternative, according to some books, a company can also be “as an enterprise that engage in production and distribution of goods for sale in a market or rendering services for a price” and so many other definitions.

When we link all the above definitions with the understanding of some people in south Sudan, I insist on saying some, because I know some know the meaning and also for the people not to misunderstand me that I am generalizing which is not the case here.

Are those companies really engage in production or rendering of services? I guess not, since these institutions are converted from their real meaning to pride, if it was not that then what could have prevented us from having the real companies in place to give the services to the people expected of them, if that hasn’t happened then they are fake companies.

In south Sudan the meaning of the company is not what has been mentioned above, it took a difference dimension. A company according to some south Sudanese perspective is social oriented rather than being economics or business oriented. What do I mean?

When it social oriented perspective – in our country when you register the company name people think you are rich which I personally disagree with, having a company does not mean being rich. Off course other company’s owners are rich but that does not qualify anyone who register the company as being rich. I heard people talking that this person is rich he has company, on which basis that argument is valid.

That blame does not only goes to the people who pretend to be rich alone when the register the company, but it also goes to the government because the government didn’t make any awareness why they register companies and the meaning. The same government made it hard for the poor people to register the company proof the claim of the people who think the company is for the rich people true, which is completely a lie.

A company has been done to be for prestige to the extend even people who have nothing to do with the companies register the companies to only end up keeping it in the pocket. I know some of the people who registered the companies only for prestige not for any personal or public benefit. When that company is dormant it also deny the government taxes.

On the ground in the country it’s hard to find the nineteen to twenty five (19-25) year old owning a company, because a company has become social status, people who own or who registered them are perceived to be rich blocking out the young people out of business knowing that only rich people own companies.

That notion has been made true by the government when it complicate the process of registration by charging a lot of money and many legal requirements that the young people are not able to meet, that myth should immediately stop if we want south Sudan to progress.

This young people we see useless are talented and adaptive compare to the old people who are hardly adaptive in this century of technology. If we nurture their talent therefore, we will have strong work force with competitive business environment that encourages invention and innovation.

Economic oriented- I only believe in this direction because that is the reason why person or persons registered the company. You register company to legally allow you to engage in economic activities and pay tax to the government not another way around where it is use for prestige.

Therefore, for our economy to survive we need to create inclusive business environment where young people are given chance to register their companies by making the registration process simple and compete among themselves. That can only happen if the government reduces or eliminates some of those procedures’ barriers.

All the registered companies should be legally independent so that the government can benefit in term of taxing companies, employment opportunity and tax from the employees, pay as you earn (PAYE) from the company employees. The act of viewing company as prestige tools need to stop and people should know that when you register the company there is an objective that you want to achieve, either, economic or social.

The author, Longar Mathiec Wol, is a South Sudanese student at United States International University-Africa, Nairobi, Kenya, where he is pursuing Bachelor degree of Science in International Business Administration and Minoring in International Relations. He can be reached through email address: longarmaxiech@gmail.com.

 

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Comments
  1. Daniel Yuot Ajang Yuot says:

    In order to understand what is a company; read the below small paragraphs:

    A company is an entity that has a separate legal existence from its owners. The owners of the company are known as members or shareholders. Its legal status gives a company the same rights as a natural person which means that a company can incur debt, sue and be sued.

    Companies are managed by company officers who are called directors and company secretaries.

    Small business owners often use a type of company structure called a proprietary limited company, which has the words ‘Pty Ltd’ after the name. This type of company does not sell its shares to the public and has limited liability.

    Larger companies that do sell shares to the public can still limit their liability and will often have the abbreviation ‘Ltd’ after their name.

    Why have a company?

    There are a number of benefits of using a company structure to operate a business. Having its own legal entity and having a limited status means that the liability of the members or shareholders is limited and generally they will not be personally liable for the debts of the company.

    People often incorporate a company to protect their personal assets. It’s important to note that in some cases the owners (shareholders) of companies may still be liable for a company’s debts, such as when they have provided personal guarantees to borrow money.

    Another benefit of incorporating a company is that income generated by the company attracts a company tax rate, which is currently 30%(in Australia, and I don’t know what rate are you using there). This may also be a disadvantage because the company tax rate applies from the first $1 of income generated.

    As companies are legal entities in their own right, there are additional and ongoing legal obligations that company officers must comply with under the Corporations Act. Failing to comply with these laws may result in ASIC (Australian Securities Investment Commission) taking formal regulatory action against the company and/or its officers.

    Registering a company

    ASIC is responsible for registering companies. There is an initial registration fee to register a new company. Companies are required to renew their registration every year. We will notify company officers when renewal is due.
    I hope this may help your understanding of what is a company and why it is formed and so on.
    Thank you,
    Daniel Yuot Ajangdit

    Like

  2. Daniel Yuot Ajang Yuot says:

    In order to understand what is a company; read the below small paragraphs:
    According to Small business;

    A company is an entity that has a separate legal existence from its owners. The owners of the company are known as members or shareholders. Its legal status gives a company the same rights as a natural person which means that a company can incur debt, sue and be sued.

    Companies are managed by company officers who are called directors and company secretaries.

    Small business owners often use a type of company structure called a proprietary limited company, which has the words ‘Pty Ltd’ after the name. This type of company does not sell its shares to the public and has limited liability.

    Larger companies that do sell shares to the public can still limit their liability and will often have the abbreviation ‘Ltd’ after their name.

    Why have a company?

    There are a number of benefits of using a company structure to operate a business. Having its own legal entity and having a limited status means that the liability of the members or shareholders is limited and generally they will not be personally liable for the debts of the company.

    People often incorporate a company to protect their personal assets. It’s important to note that in some cases the owners (shareholders) of companies may still be liable for a company’s debts, such as when they have provided personal guarantees to borrow money.

    Another benefit of incorporating a company is that income generated by the company attracts a company tax rate, which is currently 30%(in Australia, and I don’t know the rate you are using there). This may also be a disadvantage because the company tax rate applies from the first $1 of income generated.

    As companies are legal entities in their own right, there are additional and ongoing legal obligations that company officers must comply with under the Corporations Act. Failing to comply with these laws may result in ASIC(Australian Securities Investment Commission) taking formal regulatory action against the company and/or its officers.

    Registering a company

    ASIC is responsible for registering companies. There is an initial registration fee to register a new company. Companies are required to renew their registration every year. We will notify company officers when renewal is due.
    These paragraphs (above) are from Small Business, not my own.
    Thank you,
    Daniel Yuot Ajangdit.

    Like

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