Rose, Jean and Dorothy have been trading as a partnership for the last three years. However, their accountant advised them to convert to a limited company in order to reduce their tax liability. Following this advice they incorporated a company, Davies Fashions Ltd, with Rose, Jean and Dorothy as the sole directors and shareholders. They commenced trading as the new company some thirteen months ago. The company manufactures high quality fashion goods for the more mature end of the female market and deliberately targets customers who used to shop at major high street retailers but no longer do so. They pride themselves on the fact that all their products are hand-finished, using local staff, a large proportion of which are family and friends of the directors. The company secretary is Edward, who has responsibility for all compliance issues. He drew up the Memorandum and Articles of Association and registered the company at Companies House, in accordance with all statutory procedures. The company directly employs 30 staff, manufacturing specialist goods that they feel cannot be produced elsewhere at the same price. In order to keep costs down, they are using old machinery, some without guards to protect the operator from the moving parts involved in the production process. As the business has always been seen as a family business there is no union representation at the factory.The company sells some goods to retailers and some direct to the public. The company maintains records on those direct customers in a manual filing system with a view to sending a mail shot to these regular customers when sales need to be increased. Some nine months ago Jean decided that there was a gap in the market for clothes for young teenage children and the board agreed with her proposals to develop this market. Jean is delighted as this section of the market, branded under ‘Young Guns’ is developing rapidly, and the accountant is particularly happy with the improved tax position that could arise. Required What are the various taxes that would apply to limited companies in zambia

Rose, Jean and Dorothy have been trading as a partnership for the last three years. However, their accountant advised them to convert to a limited company in order to reduce their tax liability. Following this advice they incorporated a company, Davies Fashions Ltd, with Rose, Jean and Dorothy as the sole directors and shareholders. They commenced trading as the new company some thirteen months ago. The company manufactures high quality fashion goods for the more mature end of the female market and deliberately targets customers who used to shop at major high street retailers but no longer do so. They pride themselves on the fact that all their products are hand-finished, using local staff, a large proportion of which are family and friends of the directors. The company secretary is Edward, who has responsibility for all compliance issues. He drew up the Memorandum and Articles of Association and registered the company at Companies House, in accordance with all statutory procedures. The company directly employs 30 staff, manufacturing specialist goods that they feel cannot be produced elsewhere at the same price. In order to keep costs down, they are using old machinery, some without guards to protect the operator from the moving parts involved in the production process. As the business has always been seen as a family business there is no union representation at the factory.The company sells some goods to retailers and some direct to the public. The company maintains records on those direct customers in a manual filing system with a view to sending a mail shot to these regular customers when sales need to be increased. Some nine months ago Jean decided that there was a gap in the market for clothes for young teenage children and the board agreed with her proposals to develop this market. Jean is delighted as this section of the market, branded under ‘Young Guns’ is developing rapidly, and the accountant is particularly happy with the improved tax position that could arise. Required What are the various taxes that would apply to limited companies in zambia

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Rose, Jean and Dorothy have been trading as a partnership for the last three years. However, their accountant advised them to convert to a limited company in order to reduce their tax liability. Following this advice they incorporated a company, Davies Fashions Ltd, with Rose, Jean and Dorothy as the sole directors and shareholders. They commenced trading as the new company some thirteen months ago. The company manufactures high quality fashion goods for the more mature end of the female market and deliberately targets customers who used to shop at major high street retailers but no longer do so. They pride themselves on the fact that all their products are hand-finished, using local staff, a large proportion of which are family and friends of the directors. The company secretary is Edward, who has responsibility for all compliance issues. He drew up the Memorandum and Articles of Association and registered the company at Companies House, in accordance with all statutory procedures. The company directly employs 30 staff, manufacturing specialist goods that they feel cannot be produced elsewhere at the same price. In order to keep costs down, they are using old machinery, some without guards to protect the operator from the moving parts involved in the production process. As the business has always been seen as a family business there is no union representation at the factory.The company sells some goods to retailers and some direct to the public. The company maintains records on those direct customers in a manual filing system with a view to sending a mail shot to these regular customers when sales need to be increased. Some nine months ago Jean decided that there was a gap in the market for clothes for young teenage children and the board agreed with her proposals to develop this market. Jean is delighted as this section of the market, branded under ‘Young Guns’ is developing rapidly, and the accountant is particularly happy with the improved tax position that could arise.

Required

What are the various taxes that would apply to limited companies in zambia

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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