At least 2,600 local companies face removal from the list of legally recognised business entities in the country unless they seek re-registration with the Rwanda Development Board (RDB) within the next two months.

The Registrar of Companies says the firms didn’t re-register with RDB as required by the company law of 2009. The Registrar of Companies’ conclusion is that the listed firms have probably ceased operations as all active companies have complied with the requirement.

Many of the companies which face removal from the register are SMEs involved in almost all business areas, from construction and manufacturing to security and IT services.

If a company is removed from the registry, it ceases to have legal personality and is not able to conduct any transaction in the name of that company anywhere in the country.

Without a certainty, de-registration would greatly affect not only the owners but also human capital and country in general. A company that is rendered out of operation in such a manner could close shop and affect everyone associated with it. At a time the country is pushing to create 200,000 jobs annually, this is undesirable situation.

It is incumbent upon business owners to ensure that their entities operate legally. And in case a business folded for one reason or another it should follow the standard procedure of liquidation or winding up.

It is critical that businesses, especially SMEs, run their operations professionally if they are to make it in the business world. The culture of running informal business operations should be discouraged as it benefits no one in the long-term, including the owners.

That will benefit both the business enterprises and country in general.

Also, RDB should work aggressively with Private Sector Federation to reach out to the enterprises that are operating illegally and find out what could be stopping them from re-registering and see how things can be worked out.

There should be a win-win solution for everyone.