77_Companies Bill (25th January 2013 )

8/18/2019 77_Companies Bill (25th January 2013 )

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THE COMPANIES BILL, 2013

_____________________

MEMORANDUM

The objects of this Act are to –

(a) promote the development of the economy by encouraging

entrepreneurship and enterprise efficiency and creating

flexibility and simplicity in the formation and maintenance of

companies;

(b) encourage transparency and high standards of corporate

governance by providing for the functions and obligations of

company secretaries and directors;

(c) provide for the incorporation, categorization, management and

administration of different types of companies;

(d) provide for mergers, amalgamations, and takeovers;

(e) provide for the registration of foreign companies doing business

in Zambia;

(f) provide for co-operatives to operate under the style of companies

and be registered;

(g) provide for the colour coding of certificates of incorporation of

Zambian companies and of the registration certificates of foreign

companies;(h) incorporate financial reporting provisions;

(i) provide for the responsibilities of public companies;

(j) provide for the start up and functioning of small companies;

(k) repeal and replace the Companies Act, 1994; and


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(l) provide for matters connected with or incidental to the foregoing.

Mumba Malila

ATTORNEY - GENERAL


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ARRANGEMENT OF SECTIONS

TABLE OF CONTENTS

Section

PART I

PRELIMINARY

1. Short title

2. Application

3.

Interpretation

PART II

REGISTRATION AND INCORPORATION

4. Incorporation of company

5. Essential requirements

6.

Articles of association and amendments

7. Signing and adoption of articles of association

8. Effect of articles of association

9. Adoption of new articles of association

10. Registration and certificate of incorporation

11. Certificate to be evidence of incorporation

12. Legal status of registered company

13. Register and other records

PART III

TYPES OF COMPANIES AND REQUIREMENTS


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14. Type of Companies

15. Categories of companies

16. Public companies

17. Private companies limited by shares

18. Companies limited by guarantee

19. Unlimited companies

20. Statutory regulated company.

21. Conversion of company limited by shares to company

limited by guarantee.

22. Requirements for converting company

23. Conversion of limited company into unlimited company

24. Conversion of unlimited company into limited

company

25. Associated bodies corporate

26. Colour coding

PART IV

COMPANY NAME

27. Abbreviation of limited company

28. Dispensation of ―Limited‖ in company name

29. Revocation of dispensation of ―Limited‖ by Registrar.

30. Reservation of company name

31. Application for name and reservation of name

32. Change of company name

33. Date of effect of change of name


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34. Company to ensure name is correctly stated

35. Company incorrectly stated

36. Effect of change of name on public notices

PART V

CAPACITY, POWERS AND VALIDITY OF ACTS

37. Capacity, powers and rights

38. Dealings between company and other persons

39.

No presumption of knowledge of articles of association

PART VI

DE-REGISTRATION OF COMPANY

40. Power of registrar to de-register company.

41. Property of deregistered company

42.

Registrar to represent defunct company

43. Continuation of liability of directors, shareholders and others

44. Power of court to declare dissolution of company void

PART VII

ADMINISTRATION AND MANAGEMENT OF A COMPANY

45. Registered office

46. Changing registered office

47. Records kept at company‘s registered office

48. Inspection of records


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49. Seal of company

50. Official seal for use abroad

51. Form of contracts and instruments registered

52. Bills of exchange

53. Execution of deeds abroad

54. Service of documents on company

55. Service of documents by company

56. Liability of company occasioned by agent

PART VIISECRETARY AND DIRECTORS

57. Company Secretary

58. Duties of company secretary

59. Body corporate or partnership may be appointed company

secretary

60. Management of company

61. Limitations on powers of directors

62. Shareholder to be member of the Board

63.

Delegating powers of company

64. Board Committe

65. Shareholder to be member of Board

66. Residential requirements of directors

67. Qualifications of director


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68. Consent in writing before appointment as director

69. Starting to hold office as director

70. Court may appoint Directors

71. No directions or instructions to be given to directors by person not

eligible to be director

72. Alternate directors

73. Request to increase number of directors

74. Removal from office of director

75. Vacancy in office of director

76.

Notice of change of Directors

77. Resignation by director

78. Replacing company‘s majority shareholder who dies

79. Non accumulation of duties

80. Disclosure of replacement of directors

81. Duty of directors to act in good faith and in best interest of

company

82.

Exercise of powers in relation to employees

83. Directors to comply with Act and articles

84. Reckless trading

85. General duties of director

86. Risk Management

87. Fiduciary duty of directors

88. Duty to promote success of company

89. Duty to exercise independent judgment

90. Duty to exercise reasonable care, skill and diligence

91. Duty to avoid conflict of interest

92. Meaning of interest


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93. Duty not to accept third party benefits

94. Directors duty of care

95. Use of information and advice

96. Transaction requiring approval by company

97. Transaction in which a director has a personal interest

98. Disclosure of interest of director

99. Transaction in which member of the board of directors has

interest to be void

100. Effect of voiding transaction

101.

Non voting by directors interested in transaction

102. Disclosure of information

103. Disclosure of interest in shares issued by company

104. Obligation of member of the board of directors to

disclose acquisition or disposal of shares

105. Restrictions applicable to members of the board of

directors regarding disposal of shares

106.

Liability for amount equivalent to fair value of shares or

debentures

107. Exception for companies dealing with securities

108. Proceedings of board of directors

109. Remuneration and other benefits for member of

board of directors and executives

110. Decisions that board of directors may approve instead of

meeting of shareholders

111. Transactions by a company with regard to issuing a

guarantee or loan

112. Rights of share holders


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128. Shareholder approval for issue of shares

129. Pre-emptive rights

130. Consideration for issue of shares

131. Consideration to be decided by board

132. Exceptions to section 137

133. Consideration in relation to issue of options

convertible securities

134. Consent to issue shares

135. Time of issue of shares

136.

Board may authorise distributions

137. Dividends

138. Shares in lieu of dividends

139. Recovery of distributions

140. Reduction of shareholder liability and distribution

141. Company may acquire its own shares

142. Acquisition of company‘s own shares

143.

Board may make offer to acquire shares

144. Special offers to acquire shares

145. Disclosure document

146. Stock exchange acquisition subject to prior notice

to shareholders

147. Disclosure document for stock exchange acquisitions

148. Stock exchange acquisitions not subject to prior notice

to shareholders

149. Cancellation of shares repurchased

150. Enforceability of contract to repurchase shares

151. Company may hold its own shares


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152. Rights and obligations of shares company holds

in itself suspended

153. Reissue of shares company holds in itself

154. Redeemable shares

155. Redemption at option of company

156. Company shall satisfy solvency test

157. Special redemption of shares

158. Disclosure document

159. Cancellation of shares redeemed

160.

Redemption at option of shareholder

161. Redemption on fixed date

162. Financial assistance

163. Company shall satisfy solvency test for financial assistance

164. Special financial assistance

165. Disclosure document for special financial assistance

166. Financial assistance not exceeding five percent of

shareholders‘ funds

167. Enforceability of transactions

168. Subsidiary may not hold shares in holding company

169. Statement of shareholders rights

170. Transfer of shares

171. Transfer of shares by operation of law

172. Company to maintain share register

173. Place of share register

174. Evidence of legal title to shares

175. Director‘s duty to supervise share register

176. Power of court to rectify register


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177. Trusts not to be entered on register

178. Personal representative shall be registered

179. Assignee of bankrupt shall be registered

180. Share certificates

181. Perpetual debentures

182. Power to reissue redeemed debentures

183. Specific performance of contracts to subscribe for

debentures

PART X

PUBLIC ISSUE OF SHARES

184. Interpretation

185. Offer of sale deemed to be made by the company

186. First publication of prospectus

187. Invitations to the public and prospectuses

188.

Prospectus required for invitations to the

public to purchase share or debentures

189. Contents of prospectus

190. Experts consent

191. Registration of prospectus

192. Over subscription in debenture issue

193. Reference to stock exchange listing prospectus-allotment

194. Civil liability for misstatements or omissions in

prospectus

195. Offence of misstatement or omission in prospectus

196. Stop trading order


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197. Waiting period

198. Withdraw of application after waiting period

199. Allotment and minimum

200. Statement in lieu of prospectus

201. Prohibition of waiver and notice

PART XI

SHAREHOLDERS AND THEIR RIGHTS AND OBLIGATIONS

202.

Shareholder

203. Liability of shareholders

204. Liability of former shareholders

205. Additional provisions relating to liability of shareholders

and former shareholders

206. Liability for calls

207. Shareholders not required to acquire shares by alteration

to articles

208. Liability of personal representative

209. Liability of assignee

210. Exercise of powers reserved to shareholder

211. Exercise of powers by ordinary resolution

212. Powers exercised by special resolution

213.

Unanimous assent to certain types of action214. Company to satisfy solvency test

215. Management review by shareholders

216. Shareholder shall require company to purchase shares

217. Notice requiring purchase


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218. Price for shares to be purchased by company

determined

219. Prices for shares referred to arbitration if shareholder

objects price

220. Interest payable on outstanding payments

221. Timing of transfer of shares

222. Purchase of shares by third party

223. Court may grant exemption

224. Court may grant exemption if company insolvent

225.

Classes and interest groups

226. Alteration of shareholder rights

227. Shareholder may require company to purchase shares

228. Actions not invalid

229. Annual general meeting and extraordinary general

meetings

230. Business to be transacted at annual general meeting

231.

Non approval of financial statements at annual

general meeting

232. Special meetings of shareholders

PART XII

MEETINGS AND RESOLUTIONS

233. Resolution in lieu of meeting

234. Annual General Meeting

235. Extra Ordinary General Meetings

236. Class Meetings

237. Requisition of a general meeting


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238. Entitlement to receive notice of meetings

239. Length of notice for convening a meeting

240. Power of court to order meeting

241. Place of meetings

242. Attendance at meetings

243. Conduct of meetings and voting

244. Chairman‘s declaration as to result of a vote

245. Right to demand a poll

246. Voting on a poll

247.

Proxies

248. Representation of bodies corporate and unincorporated

associations at meetings

249. Circulation of members‘ resolutions and supporting circulars

250. Circulation of members‘ circulars

251. General provisions in regard to members‘ circulars

252. Ordinary, extraordinary and special resolutions

253.

Written resolution for private companies

254. Registration of copies of certain resolutions

255. Date of certain resolutions

256. Minutes of proceedings of meetings of company and of creditors

257. Inspection of minute books

258. Shareholders entitled to receive distributions, attend meetings,

and exercise rights

PART XIII

DEBENTURES AND CHARGES


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259. Issue of debentures

260. Documents of title to debentures

261. Assignees for debenture holders

262. Eligibility for appointment as assignee for debenture holders

263. Right to copies of trust deed

264. Unsecured debentures to be so described

265. Register of debenture holders

266. Meetings of holders of debentures secured by a trust deed

267. Meeting of other debenture holders

268.

Re-issue of redeemed debentures

269. Charge to secure fluctuating amount

270. Company‘s register of chargers

271. Registrar‘ s register of charges

272. Registration of charges by companies

273. Certificate to be issued by Registrar

274. Priorities

275.

Entries of satisfaction and release of property from

charge

276. Variation of registered charge

277. Registration of enforcement of security by mortgagee

278. Endorsement of registration on debentures

PART XIV

ENFORCEMENT

279. Meaning of an ―entitled person‖, ―former shareholder‖ etc

280. Restraining Order


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281. Filing a claim on behalf of company

282. Filing claim by shareholders

283. Shareholder‘s rights

284. Approving decisions made

PART XV

ACCOUNTING RECORDS AND AUDIT

285. Accounting records

286.

Place accounting records to be kept

287. Appointment of auditors

288. Auditor‘s resignation

289. Auditor‘s fees and expenses

290. Auditing firm

291. Signing of auditor‘s report

292. Qualifications of auditors

293.

Automatic reappointment of auditor

294. Auditor not wanting to be reappointed

295. Payment to auditor who resigns or completes duties

296. Replacement of auditor

297. Auditor to avoid conflict of interest

298. Auditor‘s report

299. Access to information

300. Auditor‘s attendance at meeting of shareholders

301. Furnishing auditor‘s report

302. Small private companies

303. Appointment of auditor for small private company


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304. Financial statement preparation

305. Standards for financial statement preparation

306. Obligation to provide consolidated financial statement

307. Profit and loss statement when company becomes a subsidiary

308. Date for financial statement of subsidiary company

309. Annual return to be made to the Registrar

310. Annual return to be made by a public company

311. Documents to be annexed to annual return of a public company

312. Offence relating to annual return

313.

Notice of adopted date to be given to Registrar

314. Date of financial statement of subsidiary company

315. Date of group financial statements

316. Financial statements of company and financial statements of

group of companies

317. Content of financial statements

318. Content of consolidated financial statement

319.

Obligation to prepare annual report

320. Sending copy of annual report to company‘s shareholders

321. Content of annual report

322. Inspection of company‘s documents by shareholders

323. Records to be made available for inspection

324. Manner of inspection

325. Commencement of Inspection

PART XVI

AMALGAMATION

326. Amalgamation


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327. Amalgamation proposal

328. Amalgamation resolution

329. Documents forwarded to shareholders of

amalgamating company

330. Procedures before amalgamation

331. Approving amalgamation proposal

332. Filing notice of amalgamation

333. Registration of amalgamation proposal

334. Certificate of amalgamation

335.

Effect of certificate of amalgamation

336. Removing amalgamating companies from register

337. Property, rights, powers and privileges of amalgamated

companies

338. Liabilities and obligations of amalgamated companies

339. Enforcement of court ruling by new company

340. Opposing amalgamation

341.

Respecting provisions of amalgamation proposal

PART XVII

FOREIGN COMPANY

342. Definition of foreign company

343. Registration of foreign company

344. Foreign company that shall not be registered

345. Filing notice of change of companies authorised agent

346. Deadline for replacement of authorised agent


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347. Change in Particulars

348. Filing of court order with Registrar

349. Balance Sheet

350. Obligation of foreign company to comply with requirements

applicable to local companies

351. Obligation to comply with International Accounting Standards

352. Foreign company to file notice of particulars of its business in

Zambia with balance sheet

353. Branch registers

354.

Notice of place where register is kept

355. Notice of any change in register

356. Certificate primacie evidence of registration

357. Financial requirements before certificate is issued

358. Cessation of business in Zambia

359. De-registration of foreign company

360. Registration of foreign company and continuation of business

361.

Prohibition to conduct business in certain sectors

362. Funds invested by foreign company

363. Prohibition against borrowing initial investment

PART XVIII

DORMANT COMPANIES

364. Definition of dormant company

365. A company which may be registered as dormant company

366. Banking or insurance companies prohibited from self declaration

as dormant


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367. Notice by dormant company

368. Notice by company which ceases to be dormant

369. Exemption for dormant company

PART XIX ADMINISTRATION OF THE ACT

370. Administration of Act

371. Establishment of companies office

372.

Powers of registrar373. Appointment of officers

374. Seal of the Agency

375. Register of companies

376. Inspection of register

377. Registrar to furnish information from register on request

378. Immunity of officers regarding official acts

379.

Registration of documents

380. Extension of time

381. Documents to be approved in English

382. Prescribed forms

383. Evidentiary provisions

384. Inspection of records

385. Waiver of fees

386.

Appeal against decision of registrar

387. Collection of information and statistics from companies

388. Oaths and affirmations

389. Evidence of entries and documents

390. Power of registrar to award costs


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391. Proceedings before the registrar

392. Loss or destruction of certificate

393. Reference to High Court by Registrar

394. Registrar to appear in legal proceedings

395. Costs of the registrar

396. Regulations

PART XX

MISCELLANEOUS PROVISIONS

397. Electronic transactions

PART XXI

OFFENCES AND PENALTIES

398. Failure to comply with this Act

399.

Failure to keep books

400. Failure to provide documents

401. False or misleading notice Cap 87

402. Knowingly furnishing false document Cap 87

403. Fraudulent use or destruction of property Cap 87

404. Falsification of records Cap 87

405. Using fraudulent document Cap 87

406. Carrying on business fraudulently

407. Penalties for carrying on business fraudulently

408. Persons prohibited from managing companiesCap 87

409. Other offences Cap 87


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410. Liability of Directors and management

411. General penalty

412. Non compliant company excluded from incentives Act No. of 9

2006, Act No. 11 of 2006, Cap 323

413. Penalty for false statements

414. Penalty for improper use of ‗incorporated‘ or ‗Limited‘

415. Civil liability for fraudulent trading

416. Offence of fraudulent trading

417. Imprisonment for failure to pay fine

418.

Costs in action of limited companies

419. Contribution between joint wrongdoers

420. Power to grant relief from civil liability

421. Exemption from liability for actions or omissions

422. Falsification of entries in register

423. Altering of documents

424. Deceiving or influencing the registrar or an officer

425.

Witness giving false evidence

426. Aiding and abetting

427. False representation about Companies Office

428. Penalties

429. Rules of Court

PART XXII

TRANSITIONAL PROVISIONS

430. Registration of charges


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431. Companies subject to other legislation

Effect of this Act on those persons holding office at

commencement of Act

432. Act made under Cap 388 to continue

433. Effect of the existing companies‘ articles of association and

resolutions of shareholders at the commencement of Act

434. Effect of the repeal of Cap 388 on judicial proceedings, etc

435. Register, fund and account under Cap 388

436. Company registration

437.

Fee, charge or sum paid or unpaid

438. Approval of acts and resolutions

439. Continuing the winding up process cap. 388

440. Repeal of Cap 388

441. Repeal of inconsistent provisions Cap. 397


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A BILL

ENTITLED

An Act to provide for the incorporation,

categorization, management and administration of

different types of companies; to provide for modern

day practices in company law such as mergers,

acquisitions, amalgamations and restructuring; to

provide for the registration of foreign companies

doing business in Zambia; to provide for co-

operatives to operate under the style of companies

and be registered; to provide for the colour coding of

certificates of incorporation of Zambian companies

and of the registration certificates of foreign

companies; to incorporate corporate governance and

financial reporting provisions and provide for the

functions and obligations of a company secretary and

a director; to provide for the responsibilities of public

companies; to provide for the start up and

functioning of small companies; to repeal and

replace the Companies Act, 1994; and to provide for

matters connected with or incidental to the foregoing.


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ENACTED by the Parliament of Zambia

PART I

PRELIMINARY

1. (1) This Act may be cited as the

Companies Act, 2013.

(2) This Act shall come into

operation when the Insolvency Act, 2013 comes

into operation.

2. (1) Notwithstanding subsection (2), this

Act shall not apply to a corporate body established or

registered under the provisions of any other law, in

respect of any business carried on by it under the

name by which it is so established or registered.

(2) Notwithstanding any other law, this Act

shall apply to co-operatives, co-operative unions and

trusts for purposes of registration and incorporation.

(3) This Act shall be administered by the

Agency.

3. In this Act, unless the context otherwise

requires -

―Agency‖ means the Patents and Companies

Registration Agency established under the

Patents and Companies Registration Act;

Short title and

commencement

Application

and

administration

of Act

Interpretation

Act No. 15 of 2010

Enactment


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―accounts‖ means the financial statements of a

company together with accompanying notes,

but does not include the auditors‘ report or

annual report of the company;

―accountant‖ means a person qualified in the theory

and practice of accountancy, an auditor, tax

consultant and tax adviser registered under the

Accountants Act;

―accounting records‖ include –

(a)

invoices, receipts, orders for the

payment of money, bills of

exchange, cheques, promissory

notes, vouchers and other

documents of prime entry; and

(b) such working papers and other

documents as are necessary to

explain the methods and

calculations by which the accounts

are made up;

―accounting period‖ means the period in respect of

which the financial statements of a company or

other body corporate are made up, whether

that period is a year or not;

―address‖ means a place where an individual or

company is located and in the case of the

address of -

(a) an individual person, means the full

Act No. 13 of

2008


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address of the place where that

person usually lives; and

(b) a company, means its registered

office or its principal place of

business;

―agency deed‖ means a deed executed by a company

or a debenture holder's representative in

relation to the issue of debentures and a

supplementary document, resolution or scheme

of arrangement modifying the terms of the deed

and a deed substituted for it;

―annual accounts‖ the annual financial statements of

a company that gives a true and fair view of the

financial performance, financial position and

cash flows of the company; and includes

consolidated financial statements for a group

that gives a true and fair view of the group‘s

financial performance, financial position and

cash flows;

―annual general meeting‖ means an annual general

meeting of the shareholders of a company,

required under this Act;

―annual report‖ means an annual report of the

affairs of a company required to be prepared

under this Act;

"annual return" means the return referred to in

section three-hundred and nine, together with


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any document required by this Act to

accompany the return;

―approved valuer‖ means a technical or professional

who is a lawfully registered expert under any

other law and includes -

(a) a qualified auditor;

(b) an urban engineer;

(c) a qualified architect;

(d)

a qualified inspector;

(e) a land surveyor; and

(f) any other person registered or

designated as such under any law;

―arrangement‖ means the re-organization of the

share capital of a company by the consolidation

of shares of different classes, by the division of

shares into shares of different classes or by

other methods intended to change the shares;

―articles‖ means the articles of association of a

company provided for under section six;

―auditor‖ means a person holding a practicing

certificate or a firm registered under the

Accountants Act and appointed to perform any

auditing functions;

―auditor‘s report‖ means the report of the auditors of

a company referred to in section two hundred

Act No. 13 of 2008


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and ninety one.

―board of directors‖ means –

(a) persons appointed or nominated as

directors of a company who number not

less than the required quorum acting

together as a board; or

(b) if the company has at the time only one

director, that director;

"body corporate" means a company or corporation

incorporated under or by virtue of the laws of

Zambia or of any other country, other than a

corporation sole;

"book" includes accounts, deed, writing, register,

document, accounting record, and any clear

record of information, however compiled and

whether recorded or stored in written or printed

form or by electronic or photographic process or

otherwise;

"branch register" means a branch register of a

company established under this Act;

―certified true copy‖ means -

(a) a copy or extract of a document,

certified in such a manner as may

be approved by the Registrar to be a

true and complete copy of the

original, or extract of the document;

(b) in relation to a translation of a


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document in a language other than

English, a document certified in

such a manner as may be approved

by the Registrar to be a correct and

accurate translation of the original

document into English;

―citizen‖ means a citizen of Zambia;

―citizen empowerment company ‖ has the meaning

assigned to it under section 5 of this Act ;

―citizen owned company‖ has the meaning assigned

to it under section 5 of this Act ;

―class‖ means a class of shares having attached to

the shares the same rights, privileges,

limitations and conditions;

―company‖ means a business enterprise incorporated

under this Act;

―company‘s book‖ includes any account, deed,

writing or document and any other record of

information however compiled, recorded in or

stored belonging to a company;

―company limited by guarantee‖ means a company

formed on the principle of having the liability of

its members limited by its constitution to such

amount as the members may respectively

undertake to contribute to the assets of the

company in the event of it being wound up;

―company limited by shares‖ means a company in

Act No. 9 of

2006

Act No. 9 of

2006


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which the liability of a shareholder is limited to

the amount unpaid on subscribed shares;

―compromise‖ has the meaning assigned to the term

under the Insolvency Act, 2013;

―co-operative‖ has the meaning assigned to the term

under the Co-operative Societies Act;

―corporation‖ means a body corporate, including a

foreign company or any other body corporate

in or outside Zambia that is registered under

this Act to do business in Zambia;

―court‖ means the High Court for Zambia; ;

―creditor‖ means a person who, in a liquidation, is

entitled to claim that a debt is owing to that

person by a company;

―debenture‖ has the same meaning assigned to it


―director‖ means a person appointed as a member of

the board of directors under Part VII, or an

alternate director, by whatever name

designated;

―dividends‖ means a number or quantity of money to

be divided among shareholders;

―entitled person‖ means a shareholder or any other

person who is recognised under a company‘s

articles as enjoying a shareholder‘s rights and

obligations;

―extraordinary general meeting‖ means a general


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meeting of a company that is not an annual

general meeting;

―extraordinary resolution‖ means a resolution passed

by a majority of at least seventy-five percent of

the votes cast by such shareholders, as being

entitled so to do, vote in person or by proxy at a

meeting duly convened and held;

―financial institution‖ has the meaning assigned to

‗ financial service providers‘ under the Banking

and Financial Services Act;

‗‘foreigner owned company‘‘ means assigned to it

under section 5 of this Act;

―group of companies‖ means a group comprising a

holding company and its subsidiaries;

―holding company‖ means a company that –

(a) controls the composition of the board of

another company;

(b) is in a position to exercise, or control

the exercise of, more than one-half the

maximum number of votes that can be

exercised at a meeting of another

company;

(c) holds more than one-half of the issued

shares of another company, other than

shares that carry no right to participate

beyond a specified amount in a

Cap.387


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distribution of either profits or capital;

or

(d) is entitled to receive more than one-half of

every dividend paid on shares issued by

another company, other than shares that

carry no right to participate beyond a

specified amount in a distribution of either

profits or capital;

―indictable offence‖ means an offence which, if

committed by an adult, is triable on indictment;

―initial investment‖ means the amount required to

start a business venture and excludes working

capital;

―insolvency test‖ has the meaning assigned to it


―insurance broker‖ has the same meaning assigned to

that term under the insurance Act;

―insurance business‖ has the meaning assigned to

the term under the Insurance Act;

―interest register‖ means the register into which the

interest, of a director or shareholder, regarding

any business of a company is recorded;

―international financial reporting standards‖ means

principle based standards, adopted by the

International Accounting Standards Board,

that provide a global framework on how

companies should prepare and disclose their

Act No. 27 of

1997

Act No. 27 of

1997


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35

financial statements;

―international standards on auditing‖ means

auditing standards, issued by the International

Auditing Standards Board, that members are

expected to follow in the conduct of audits of

financial statements;

―limited company‖ means a company limited by

guarantee or a company limited by shares;

"liquidator" has the meaning assigned to it in the

Insolvency Act, 2013;

―meeting‖ means an annual general meeting,

extraordinary general meeting or special

meeting;

―member‖ means a shareholder or stockholder of a

company or a subscriber to a company limited

by guarantee;

―nominee‖ means a person entitled to exercise a

right only in accordance with instructions given

by another person;

―non-executive director‖ means a director who is not

involved in the day to day management of a

company;

―officer‖ includes-

(a) a director, company secretary or

executive officer of a company;

(b) a local director of a foreign

company;

Act No. of

2012


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―ordinary resolution‖ means a resolution passed by a

simple majority of votes cast by such

shareholders as, being entitled so to do, vote in

person or by proxy at a meeting duly convened

and held;

―person concerned‖ means -

(a) a person who is or has been

employed by a company as a

director, banker, accountant,

advocate or legal practitioner,

Registrar or otherwise;

(b) a person who, or in relation to

whom, there are reasonable grounds

for suspecting that the person -

(i) has in the person‘s possession

any property of a company;

(ii)

is indebted to a company;

(iii) is able to give information

concerning the promotion,

formation, management,

dealings, affairs or property of

a company;

―pre-emptive rights‖ means shares issued or

proposed to be issued by a company that

rank or would rank as to voting or

distribution rights, or both, equally with or

prior to shares already issued by the


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company which may be offered, for a

reasonable period, for acquisition to the

holders of the shares already issued in a

manner and on terms that would, if

accepted, maintain the existing voting or

distribution rights, or both, of those holders;

―prescribed" means prescribed in the regulations

made under this Act;

"private company" means a private company limited

by shares, a company limited by guarantee or

an unlimited company;

"private company limited by shares" means a

company incorporated as such, being a

company satisfying any provision under this

Act;

―property‖ means property of every kind whethertangible or intangible, real or personal,

corporeal or incorporeal and includes all rights,

in relation to property whatever their nature;

―prospectus‖ means a notice, circular, advertisement

or request inviting applications or offers from

the public to subscribe for or purchase, a share

in, or debenture of, a company or proposed

company;

―receiver‖ has the same meaning assigned to it in the

Insolvency Act, 2013;

"registered accountant" means an accountant

Act No. 13

of 2008

Act No. of

2012


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registered under the Accountants Act;

―register‖ means the register of companies kept at

the Agency under this Act;

―registered‖ means lodged with the Registrar and

entered in the register;

―Registrar‖ means the person appointed as Registrar

under the Patents and Companies Registration

Agency Act;

‗ related entity of a director‘ means a company or

corporation in which the director and any relative or

relatives of the director between them hold,

themselves or through nominees, voting interests

that exceed fifty percent;

―repealed Act‖ means the Companies Act Chapter

388 of the Laws of Zambia;

"seal" means the common seal of a company or other

body corporate;

―secured creditor‖ has the meaning assigned to the

term under the Insolvency, 2013;

―security‖ includes -

(a) a mortgage;

(b) a given property or part of it;

(c) a deposit of a share or debenture

certificate;

(d) a lien consisting of shares or

Act No. 15 of

2010

Act No. of

2012


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debentures;

(e) a lien over a motor vehicle;

(f) a lien over industrial materials;

(g) an agreement to give a charge;

but does not include the following:

(a) a hire-purchase agreement and

rentals;

(b) rent charges; and

(c) annuities granted or reserved out of

land;

―shareholder‖ means a person whose name -

(a) is entered in the share register as

the holder for the time being of one

or more shares in a company; or

(b) appears in a request for company

registration at the time of a

company‘s incorporation and who is

regarded as a shareholder until the

person‘s name is entered in the

share register; or

(c) is to be entered in the share register

under an amalgamation proposal

and is regarded as a shareholder in

an amalgamated company until the

person‘s name is entered in the

share certificate;

―shares‖ includes stock;


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―share register‖ means the register referred to under

section one hundred and seventy two.

―small private company‖ means any company whose

total investment, excluding land and buildings,

annual turnover and the number of persons

employed by the enterprise, does not exceed the

numerical value prescribed;

―statutory regulatory Act‖ means the Co-operative

Societies Act, the Land (Perpetual Succession)

Act, the Banking and Financial Services Act or

the Insurance Act, as the case may be;

―special meeting‖ means a meeting called in

accordance with section two hundred and thirty

to considered any matter provided under this

Act;

―special resolution‖ means a resolution approved by

at least seventy - five per cent of the votes of

the shareholders, as being entitled so to do,

vote in person or by proxy at a meeting duly

convened as a meeting at which the resolution

will be moved as a special resolution and duly

held, or such higher majority percentage as the

articles of association may require;

―subsidiary‖ means a company that is a subsidiary

to a holding company;

―trust‖ means an arrangement in which a personCap. 186

Act No. 20

of 1998

Cap.387

Act No. of


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transfers property to one or more assignees

who will hold such property for the benefit of

one or more persons and which is regulated

under the Lands (Perpetual Succession) Act;

―unlimited company‖ means a company formed on

the principle of having no limit placed on the

liability of its shareholders.

PART II

REGISTRATION AND INCORPORATION

4. (1) Subject to this Act, two or more persons

associated for any purpose may incorporate a

company by subscribing their names to an

application for incorporation in the prescribed

manner and form upon payment of the prescribed

fee.

(2) Subject to subsection (3), an individual

shall not subscribe to an application for

incorporation if the person —

(a) is under eighteen years of age;

(b) is an undischarged bankrupt under the laws

of Zambia;

(c) subject to an order by the court, is an

undischarged bankrupt under the laws of

another country;

(d) is of unsound mind and has been declared

Incorporation

of company


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to be so by the court or a court of competent

jurisdiction of another country; or

(e) has, in the last five years prior to the

application, been convicted of an offence

involving fraud or dishonesty in Zambia or

elsewhere.

(3) The incorporation of a company shall not be

invalid by reason only that an individual or

individuals subscribed to the application for

incorporation in contravention of subsection

5. (1) Every company shall -

(a) have a name;

(b) have an address;

(c) have a main business objective;

(d) be limited by shares or guarantee or

have unlimited liability for the

obligations of the company;

(e) have two or more directors; and,

(g) Every company shall have a nominal

Capital or guaranteed amount

which shall not be less than the

prescribed minimum.

(2) The minister shall prescribe the

minimum issued share capital or

guaranteed amount.

Essential

requirements

Content of

memorandum of

association

Articles of

association and

amendments


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6. (1) A company shall have articles

regulating the conduct of the company.

(2) The articles of association may contain

restrictions on the business that the company may

carry on.

3) A company shall not carry on any business

or exercise any power that it is restricted by its

articles from carrying on or exercising, nor exercise

any of its powers in a manner contrary to its

articles.

(4) Where a provision in the articles is

inconsistent with this Act or any other written law,

the provision is invalid to the extent of the

inconsistency.

(5) A company may adopt the provisions of

standard articles set out in the Schedule.

(6) The articles of association of a public

company or a private company limited by shares

shall be deemed to have adopted the provisions of

the standard articles set out in the Schedule, except

insofar as the articles exclude or modify those

provisions.

(7) The articles of association shall be divided

into paragraphs numbered consecutively.

(8) Subject to this Act, and to its articles, a

company may amend its articles of association if it

passes a special resolution approving the


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amendment.

(9) If a company passes a special resolution

approving the amendment of its articles of

association, it shall within twenty-one days after the

date of the resolution lodge a copy of the resolution

with the Registrar together with a copy of each

paragraph of the articles affected by the

amendment, in its amended form.

(10) The articles of association have effect in

their amended form on and from the day of their

lodgment with the Registrar or such later date as

may be specified in the resolution.

(11) If a company fails to comply with

subsection (9), the company, and each officer in

default, commits an offence, and shall be liable on

conviction to a fine not exceeding forty thousand

penalty units for each day that the failure continues.

7. The articles of association of a company

shall be signed by persons who shall constitute the

first members of the company.

8. (1) The articles of association of a

company shall have the effect of a contract -

(a) between the company and each

member or shareholder; and

(b) between or amongst the members

Effect of

articles ofassociation

Signing andadoption of

articles of

association


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(d) the names of the directors.

(3) The Registrar shall keep a record of such

other details as may be prescribed, including charges

on a company‘s assets and any offences committed

by a company, its shareholders or directors.

PART III

TYPES OF COMPANIES AND REQUIREMENTS

14. There shall be the following types of

companies:

(a) a company limited by shares;

(b) a company limited by guarantee;

(c) an unlimited company.

15. (1) Every company shall be

incorporated under one of the following categories:

(a) a public company;

(b) a private company, being-

(i) a company limited byshares;

(ii) a company limited byguarantee; or

(iii) an unlimited company;

(c) a statutory regulated company,

being a-

(i) a cooperative;

(ii) a trust;

Categories of

companies

Types of

companies


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(iii) a bank;

(iv) a financial institution;

(v) a insurance business;

(vi) a insurance broker; or

(vii) such other company as may

be prescribed under an under

an Act of Parliament.

(2) A company incorporated under this Act may be

sub categorized as a-

(a)

citizen empowerment company where twenty-five to fifty percent of company equity is owned

by citizens.

(b) citizen owned company where at least fifty

percent of company equity is owned by citizens

(c) citizen participatory company where five to

twenty-five of company equity is owned by

citizens.

(d) foreign-owned company where over fifty

percent of company equity is owned by

foreigners.

(3) Notwithstanding section four, an unlimited

company shall not be a public company.

(4). A foreign company or foreigner owned

company shall be disqualified from

incorporation if, when registered, will fall

under the category of micro or small

enterprise.

Public

companies

Prohibition on

micro and small

foreign

companies and

foreign owned

com anies


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16. (1) A public company shall have share

capital.

(2) The articles of a public company shall state -

(a) the rights, privileges, restrictions

and conditions attaching to each

class of shares, if there are two or

more classes; and

(b) the authority given to the directors

to determine the number of shares

in, the designation of, and the rights,

privileges, restrictions and

conditions attaching to, each series

in a class of shares, if the class of

shares may be issued in series.

(3) All shares shall rank equally apart from

differences due to their being in different classes or

series.

(4) Where a public company is wound-up, a

member shall be liable to contribute, in accordance

with Insolvency Act 2012, an amount not exceeding

the amount, if any, unpaid on the shares held by

him.

(5) The articles of association of a public

company shall not impose any restriction on the right

to transfer any shares of the company other than -

(a) a restriction on the right to transfer

any shares on which there is unpaid

Act No. of

2012


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series.



series.

(3) Where a private company limited by shares

is wound-up, a member shall be liable to contribute,

in accordance with the Insolvency Act, an amount not

exceeding the amount, if any, unpaid on the shares

held by that member.

18. (1) Each subscriber to an application for

incorporation as a company limited by guarantee

shall sign a declaration of guarantee specifying the

amount that the subscriber undertakes to contribute

to the assets of the company in the event of its being

wound-up.

(2) Each subscriber to the application for

incorporation shall, on the incorporation of the

company, be a member of the company.

(3) Subject to any additional requirements

imposed by the articles of the company-

(a) a person shall become a member of the

company, on approval by a special

resolution of the company, by signing a

declaration of guarantee and delivering

it to the company; and

(b) a person shall cease to be a member on

Companieslimited by

guarantee

Act No.

2012


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delivering to the company a signed

notice in writing to that effect.

(4) Within seven days after a person becomes

a member or ceases to be a member of the company,

the company shall lodge with the Registrar a notice in

the prescribed form, together with, in the case of a

person's becoming a member, the declaration of

guarantee by the person.

(5) A company limited by guarantee shall not

carry on business for the purpose of making profits

for its members or for anyone concerned in its

promotion or management.

(6) Where a company limited by guarantee is

wound-up, a member shall be liable to contribute, in

accordance with the Insolvency Act, an amount not

exceeding the amount specified in the declaration of

guarantee made by the member.

(7) If the company carries on business for the

purpose of making profits for its members or for

anyone concerned in its promotion or management-

(a) those officers and members of the

company who willfully authorise or

permit the business to be carried on

for that purpose shall be jointly and

severally liable for the payment and

discharge of all debts and liabilities

of the company incurred in carrying

Act No. of

2012


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on the business so authorised or

permitted; and

(b) each of the officers and members

referred to in paragraph (a) commits

an office, and shall be liable on

conviction to a fine of not more than

one hundred thousand penalty units

for each day on which that business

is carried on.

(8) If the company fails to comply with


default, commits an offence, and shall be liable, on

conviction, to a fine not exceeding thirty thousand


19. (1) An unlimited company shall have

share capital and its articles of association shall state

-

(a) the rights, privileges, restrictions and

conditions attaching to each class of

shares, if there are two or more

classes; and

(b) the authority given to the directors to

determine the number of shares in, the

designation of, and the rights,

privileges, restrictions and conditions

attaching to each series, if a class of

Unlimited

companies


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shares may be issued in series.



series.

(3) Where an unlimited company is wound-up, a

member shall be liable to contribute, in accordance

with the Insolvency Act, without limitation of liability.

20. (1) A statutory regulated company

shall be registered and incorporated in accordance

with this Act and regulated under the relevant law.

(2) The requirements applicable to companies

shall apply mutatis mutandis to statutory regulated

companies.

21. (1) A company limited by shares may be

converted to a company limited by guarantee by a

special resolution where –

(a) there is no unpaid share;

(b) all its members agree in writing to

the conversion and to the voluntary

surrender of the company for

cancellation of all the shares held by

them immediately before the

conversion; and

(c) new articles of association

appropriate to a company limited by

Act No. of

2012

Statutory

regulatedcompany

Conversion of

companylimited by

shares to

companylimited by

guarantee


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guarantee are filed.

(2) The new articles of association of the

company limited by guarantee shall be filed to the

Registrar for registration.

22. The conversion of a company shall –

(a) take effect on the issue of the

certificate;

(b) operate so that all shares are

deemed to have been validly

surrendered and cancelled;

(c) have effect so that every member

who has not agreed to contribute to

the share capital of the company

shall cease to be a member;

(d) not affect any right or obligation of

the company except as otherwise

provided in this section or render

defective any proceedings by or

against the company.

23. A limited company may convert to an

unlimited company by passing a special resolution to

that effect and by making any necessary

amendments to its articles and filing with the

Registrar a copy of the resolution.

Requirement for

converting

company

Conversion of

limited

company intounlimited

company


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24. An unlimited company may convert to an

limited company by passing a unanimous resolution

to that effect and filing with the Registrar a copy of

the resolution.

25. (1) A body corporate shall be

considered as associated if one is a subsidiary of the

other or both are subsidiaries of the same body

corporate.

(2) A company shall be considered as

associated if one is a subsidiary of the other or both

are subsidiaries of the same body corporate.

26. (1) The various companies and their

certificates of incorporation, or certificates of

registration, in the case of a foreign company

incorporated outside Zambia, shall be colour

coded.

(2) The Minister may make regulations

providing for the colour coding of companies.

PART IV

COMPANY NAME

27. Where the liability of the shareholders of a

company is limited, the registered name of the

company shall end with the word "Limited" or the

Abbreviation of

Limited

Company

Associated

bodies

corporate

Conversion ofunlimited

company into

limited company

Colour coding


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abbreviation "Ltd".

28. (1) The Registrar may, on the

application of a company limited by guarantee, grant

the company written permission to omit the word

"Limited" from its name.

(2) The Registrar may grant the permission

on such conditions as the Registrar thinks fit, and

those conditions shall be binding on the company.

(3) The Registrar may make a decision to

dispense with the word "Limited" from its name for a

company which is already registered if the Registrar

is satisfied that the company is or becomes a

company limited by guarantee.

(4) On incorporation a company limited by

guarantee shall enjoy all the privileges of a limited

company, and be subject to all its obligations, except

those of using the abbreviation "Ltd" as part of its

name.

29. (1) The Registrar may revoke a decision

made under section twenty-eight, where the reasons

for the dispensation cease to be valid.

(2) Where a revocation of a decision is made

by the Registrar the revocation shall take effect on

Registrar may

allow company to

dispense with

"Limited" in its

name

Revocation of

dispensation of

“Limited”.


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such date as the Registrar shall determine.

30. The Registrar shall register a company or

a change of the name of a company where the name

has been cleared and granted by the Registrar.

31 . (1) The Registrar may refuse to reserve or

register a proposed name of a company where it

appears to the Registrar that the name, if registered,

is likely to cause confusion with a well known name;

or the registration is sought to prevent another

person who is legitimately entitled to use the name

from using the name; or the registration of the name

is otherwise undesirable or not in the public interest;

and the Registrar may direct the Company to change

its name in accordance with this Division.

(2) The Registrar shall, where the Registrar

refuses to register a proposed name of a company,

notify the applicant of the reasons for the refusal

within seven days of the decision. The Registrar may,

where a company does not change its name after

receiving a direction under subsection

(1), within fifty days or such longer period as

the Registrar may allow, in writing, register the

designating number of the company, together with

the word "Limited" or "PLC" if required by section

thirty seven, as the name of the company, and shall

issue a new certificate of incorporation for the

Reservation

of company

name

Application forname and

reservation of

name


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company worded to meet the circumstances of the

case

A change of name under subsection (1) shall not

affect any rights or obligations of the company nor

render defective any legal proceedings that could

have been continued or commenced against it by its

former name, and any such legal proceedings may be

continued or commenced against it by its new name.

(5) Where the Registrar directs a company to

change its name, compensation shall not be payable

in respect of the name ordered to be changed.

(6) In this section, "well known name" means a

name associated generally with a company, whether

within or outside the Republic, and in respect of

which confusion is likely to arise if registered by

another company, other than the company generally

known by that name.

32. (1) A company may pass a special resolution to

change its name.

(2) Within twenty-one days after the date of the

resolution, the company shall notify the Registrar in

the prescribed form that the company intends to

change its name to the name specified in the

resolution in this section called the

Change of name


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relates.

(8) A change of name by a company shall not

affect any rights or obligations of the company nor

render defective any legal proceedings that could

have been continued or commenced against it by its

former name, and any such legal proceedings may be

continued or commenced against it by its new name.

33. The change of name of a company shall

take effect from the date contained in the certificate

of incorporation.

34. (1) A company shall ensure that its

name is clearly stated -

(a) in every written communication sent

by, or on behalf of the company;

and

(b) on every document issued or signed

by or on behalf of the company and

which evidences or creates a legal

obligation of the company.





penalty units.

Date of effect of

change of name


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35. Where the name of a company is

incorrectly stated in a document which evidences or

creates a legal obligation of the company and a

person issues or signs the document by or on behalf

of the company, every person who issues or signs the

document is liable to the same extent as the

company unless the person who issues or signs the

document proves that the person in whose favour the

obligation was incurred was aware at the time the

document was issued or signed that the obligation

was incurred by the company.

36. Where, within a period of twelve months

prior to a company‘s release of any public notice the

name of the company changes, the company shall

ensure that the notice, that is published in a

newspaper of general circulation or in the Gazette,

states -

(a) that the name of the company has

changed;

(b) the specific date or month in which

it changed; and

(c) the former name or names of the

company.




A company name

incorrectly stated

Effect of

change of

company name

on public

notices issued


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PART V

CAPACITY, POWERS AND VALIDITY OF ACTS

37. (1) A company shall have, subject to this Act

and to such limitations as are

inherent in its corporate nature, the capacity,

rights, powers and privileges of an individual.

(2) A company shall have the capacity to carry

on its business and exercise its powers in any

jurisdiction outside Zambia to the extent that

the laws of Zambia and of that jurisdiction

permit.

38. (1) A company or a guarantor of an

obligation of a company shall not disadvantage a

person dealing with the company or with a person

who has signed a contract or received rights or

interests from the company based on the fact that -

(a) the provisions of this Act, the

articles of association and the

internal rules and regulations of the

company, have not been complied

with; or

(b) a person named as a director or

employee of the company in the

Capacity, powersand rights of

Company

Dealings betweencompany and

other persons


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most recent notice received by

the Registrar -

(i) is not a director or employee of

a company;

(ii) is not duly appointed; or

(iii) does not have authority to

exercise powers usually

performed by a director or

employee of a company.

(2) A person appointed by a company as a

director, employee, or nominee of the company with

special authority granted by the owners of that

company to exercise those powers held by persons in

those posts may exercise those powers.

(3) A document issued on behalf of a

company by a director, employee, or nominee of a

company with actual or usual authority to issue the

document is valid or genuine.

(4) Notwithstanding subsection (3), a

document may be opposed or become invalid where

the person has, or ought to have, by virtue of the

person‘s position in a company , knowledge of the

matters referred to in this section or that the

documents used are forged documents.

(6) Subsection (1) shall apply even though a

person referred to in subsections (2) to (4) acts


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fraudulently or forges a document that appears to

have been signed on behalf of a company, unless the

person dealing with the company or with a person

who has acquired property, rights, or interests from

the company has actual knowledge of the fraud or

forgery.

39. A person shall not be affected by, or be

deemed to have notice or knowledge of the contents

of the articles of association of, or any other

document relating to, a company merely because

the articles of association or the document are -

(a) registered ; or

(b) are available for inspection at an

office of the company.

PART VI

DE-REGISTRATION OF COMPANY

40. (1) Where:

(a) a company has not filed annual returns in

accordance with this Act, or

(b) the Registrar has reasonable cause to

believe that the company is not carrying on business

or is not in operation,

the Registrar may send to the company by

registered post a letter to that effect and also stating

Power of Registrar

to strike company

off register

No presumption

of knowledge of

article of

association


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director or shareholder of the company or any other

person in respect of any act or omission that takes

place before the company is removed from the

register and that liability continues and may be

enforced as if the company has not been removed

from the register.

44. (1) Where a company has been dissolved

under this Act, the court may at any time within two

years after the date of dissolution, on application by

the reveiver or liquidator of the company or by any

other person who appears to the court to be

interested, make an order upon such terms as the

court thinks fit declaring the dissolution to have been

void, and thereupon such proceedings may be taken

as might have been taken if the company had not

been dissolved, except that, for the purposes of any

period of limitation, time shall not be deemed to run

during the period between the dissolution and the

date of the order, or of such other date as the order

specifies.

(2) The court may by the order give such

directions and make such provisions as it thinks just

for placing the company and all other persons in the

same position as nearly as may be as if the company

had never been dissolved.

(3) The person on whose application the order

Power of court to

declare dissolution

of company void


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is made shall, within seven days after the making of

the order or such further time as the court may

allow, lodge with the Registrar and with the official

receiver a copy of the order, and the Registrar shall

thereupon cause notice thereof to be published in the

Gazette or otherwise as the court may direct.

(4) If the person fails to comply with subsection

(3), he shall be guilty of an offence, and shall be

liable on conviction to a fine not exceeding three

monetary units for each day that the failure

continues.

(5) An application in the prescribed form and

upon payment of the prescribed fees may be made by

a former director to the registrar to restore to the

register a company that has been struck off the

register under section fourty provided that the

Registrar may not restore the company to the register

if:

(a) the application has been made after the end

of the period of five years from the date of

dissolution;

(b) there has not been payment of all

outstanding fees including penalties due at the date

of dissolution

Application for

administrativerestoration to

the register


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PART VII

ADMINISTRATION AND MANAGEMENT OF A COMPANY

45. (1) Every company shall have a

registered office in Zambia to which all

communications and notices may be addressed and

which shall constitute the address for service, of legal

proceedings, on the company.

(2) Every company shall display, in a

conspicuous place at the registered office, the

company‘s certificate of incorporation.

46. (1) The Board of directors of a company

may, at any time, change the registered office of the

company.

(2) The change of the registered office shall

be notified to the Registrar in the prescribed form

within 15 days of such change.

(3) The change of the registered office shall

take effect on the date contained in the notice.

47. A company shall keep the following

records at its registered office:

(a) articles of association;

(b) minutes of all meetings and

resolutions of shareholders within

Changing

registered office

Records kept at

company’s

registered office

Registered

office


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the last five years;

(c) an interests register;

(d) minutes of all meetings and

resolutions of directors and

directors committees within the last

five years;

(e) the full names and addresses of the

current directors;

(f) copies of all written communications

to all shareholders or all holders of

the same class of shares during the

last ten years, including annual

reports;

(g) copies of all financial statements for

the last ten years completed

accounting periods;

(h)

the accounting records for the last

five years;

(i) the shares register; and

(j) the copies of instruments creating

or evidencing charges required to be

registered under this Act.

(k) Any other document or record as the

Minister may prescribe

48. Every shareholder and director shall be

entitled, on giving reasonable notice, to inspect the


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records of the company, without charge and at a

reasonable time.

49. (1) A company shall have a common seal

bearing its name and the words "common seal"

thereon in legible Roman letters.

(2) The common seal shall not be used except

with the authority of a resolution of the directors of a

committee of the directors specifically empowered to

authorise the affixing of the seal.

50. (1) A company may, subject to its articles,

have for use in any place outside Zambia an official

seal, which shall be a facsimile of the common seal of

the company with the addition on its face of the

name of the places where it is to be used.

(2) Every document to which an official seal is

duly affixed shall bind the company as if it had been

sealed with the common seal of the company.

(3) The company may, by writing under its

common seal, authorise any agent appointed for that

purpose to affix the official seal to any document to

which the company is a party in that place.

(4) Any person dealing with such an agent in

reliance on the writing conferring the authority shall

be entitled to assume that the authority of the agent

continues during the period, if any, specified in the

writing or, if no period is therein specified, until that

person has actual notice of the revocation or

Seal of companyoffice

Official seal for

use abroad


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determination of the authority.

(5) The person affixing any such official seal

shall, by writing under his hand, certify on the

document to which the seal is affixed the date onwhich and the place at which it is affixed.

51. (1) Any contract or instrument which, if

entered into by a person other than a body corporate,

would not be required to be under seal may be

entered into or executed without seal on behalf of a

company by the secretary, a director, or any persongenerally or specifically authorised by the directors to

do so.

(2) Any document purporting to be a document

under the seal of a company, or issued on behalf of

the company, shall be received in evidence and shall

be presumed to be duly executed or issued.

52. A bill of exchange or promissory note

shall be deemed to have been made, accepted or

endorsed on behalf of a company if made, accepted

or endorsed in the name of, or by or on behalf or on

account of, the company by any person acting under

its authority, express or implied.

53. (1) A company may, by writing under itscommon seal, empower any person, either generally

or in respect of any specified matters, as its attorney,

to execute deeds on its behalf in any place outside

Zambia.

Form of

contracts andinstruments

registered

office

Bills of

exchange and

promissory notes

Execution of

deeds abroad


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(2) A deed signed by such an attorney on

behalf of the company and under his seal shall bind

the company and have the same effect as if is were

under its common seal of the company.

54. (1) A document may be served on a

company by-

(a) leaving it at the registered office of the

company; or

(b) personal service on a director orsecretary.

(2) A document sent by post to the registered

postal address of the company shall be deemed to

have been served on the company if it is proved, by a

receipt issued or otherwise, that the document, or a

post office notification of the document, was delivered

to the registered postal address.

(3) Nothing in the section shall affect any

provision in this Act relating to the service of any

document, or detract from the power of any court to

direct how service shall be effected of any document

relating to legal proceedings before the court.

55. (1) For the purposes of this Act, adocument may be served by a company on any

member, debenture holder, director or secretary of

the company-

(a) personally;

(b) by sending it by registered post in a

Service ofdocuments on

company

Service ofdocuments by

company


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prepaid letter addressed to him at his registered

postal address or at any other address supplied by

him to the company for the giving of notices to him;

or(c) by leaving it for him at his registered

address with some person apparently over the age of

eighteen years.

(2) A document may be served by a company

on the joint holders of any share of debenture of the

company by serving it on the joint holder named first

in the register of members of debenture holders in

respect of the share of debenture.(3) A document may be served by a company

on the person upon whom the ownership of any

share or debenture has devolved by reason of his

being a legal personal representative, receiver, or

trustee in bankruptcy of a member of debenture

holder-

(a) personally;

(b) by sending it by registered post in aprepaid letter addressed to him at a postal address

notified by him to the company;

(c) by serving it in any manner in which it

might have been served if the death, receivership or

bankruptcy had not occurred, if the company has not

received notice of a postal address for the person; or

(d) by leaving it for him at a place theaddress of which has been notified by him to the

company, with some person apparently over the age

of eighteen years.

(4) Where a document is sent by registered

post, service shall be deemed to be effected by

properly addressing, prepaying and posting a letter


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containing the document and to have been effected at

the expiration of seven days or, if it is sent to an

address outside Zambia, twenty-one days, after the

letter containing the same is posted.(5) For the purposes of subsection (4), where a

letter is sent to an address outside Zambia, it shall

be despatched by airmail.

56. Where a company would be liable for the

acts of any officer or agent, the company shall be

liable notwithstanding that the officer or agent has

acted fraudulently or forged a document purportingto be sealed by or signed on behalf of the company.

PART VIIISECRETARY AND DIRECTORS

Division 8.1 - Company Secretary

57. (1) Every company shall appoint a

company secretary.

(2) The persons named in the application for

incorporation as the first company secretary or joint

company secretary‘s of a company shall, on the

incorporation of the company, be deemed to have

been appointed as such for a term of one year.

(3) A public company shall appoint a person

knowledgeable or experienced in relevant laws as a

company secretary.

(4) Unless the articles provide otherwise, the

Company

secretary

Liability of

company notaffected by


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company secretary, other than the first company

secretary, shall be appointed by the directors for such

a term as they think fit.

(5) A company secretary shall be appointed

on such remuneration and other conditions as the

directors think fit, and may be removed by them,

subject to the company secretary‘s right to claim

damages from the company if removed in breach of

contract.

(6)