TODAY, we revisit the issue of separating business from personal matter from another angle.
As I always say, mixing personal matters with business stands out as a major problem that most Small and Medium Enterprises (SMEs) in this country and elsewhere face.
The failure by most SMEs to separate business affairs from what they do as individuals in their day-to-day personal lives has resulted in most small businesses going under.
Firstly, I  would like to give a brief about how most SMEs register their businesses in this country hoping that this is not the reason most SMEs don’t separate their business from personal matters.
A visit to the Patent and Company Registration Agency (PACRA), will review that most SMEs register their businesses under three categories namely sole proprietorship, partnership or private limited companies.
Individual businesses which are registered under sole proprietorships and those registered for two or more than two people called partnerships, are registered from PACRA under business names and are very easy to form as there are no legal complexities involved.
However, private limited companies under which most SMEs register their businesses require legal attention as they go through some rigorous legal steps when being formed.
When a business is registered as either sole proprietorship or partnership,  it  is viewed as not separate from the people who formulated it (the business owners).
But a business formed as a private company is an incorporated business under the Laws of Zambia and is viewed as a complete separate entity from the persons who formed it.
This is so because once a private company is born, it stands on its own as a legal person and functions as a natural person in that it can sue or be sued among other attributes.
Although businesses which are registered under sole proprietorships and partnerships are viewed and considered as not separate from the business owners, accounting functions suggest that running of such businesses must duly be separated from personal matters.
As already alluded to in my introductory remarks, small business owners are faced with problems of not separating personal matters from the business itself.
For example, when I entered a certain grocery shop and asked the worker what she understood by separating business from personal matters, she showed ignorance but having read her mind, I asked her what challenges the business she was running on behalf of the owner was facing.
She narrated to me that business stocks don’t grow because the owner takes away the money and uses it for other things leaving small amounts for orders.
The above narrated story is one of the commonest features among businesses run by individuals.
A friend of mine who is now late once asked me if constructing a personal house using business money can be termed as part of business investments.
I told him that it cannot be part of the business investments because that is mixing personal matters with business thereby, suffocating the business growth by withdrawing money from it prematurely.
Business owners are seen buying personal items such as cookers, refrigerators and cars for family use using the business money thereby inhibiting growth of their businesses.
Although it is not illegal to withdraw money or goods from businesses such as sole proprietorships or partnerships for personal use, this will definitely affect that undertaking.
This is because the money is supposed to be re-invested in business growth, to augment chances of a business registering growth.
The good part for private limited companies is that it is illegal for the shareholders to withdraw money or goods without following the laid down legal procedures as outlined in the articles of association.
Fortunately, the company can even take its shareholders to court for stealing from it as it functions just like a natural person.
Therefore, entrepreneurs should understand the importance of separating personal matters from the businesses they run and they should know exactly the time their business can reward them, as business owners.
Above all, what is even more important is to prepare business accounts to show whether the business has made profits or not and make informed decisions whether to get money from it or not.
Most small businesses in this country have gone under because of the failure of separating personal matters from the businesses they run.
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