CHAPTER 388
COMPANIES ACT

Arrangement of Sections

   Section

PART I
PRELIMINARY

   1.   Short title

   2.   Interpretation

   3.   Effect of declaration in certified copy.

   4.   Application of Act to existing companies

   5.   Prohibition of large partnerships

PART II
INCORPORATION AND MODIFICATION OF COMPANIES

DIVISION 2.1—INCORPORATION

   6.   Application for incorporation

   7.   The articles of a company

   8.   Amendment of articles

   9.   Statutory declaration as to compliance with the Act

   10.   Certificates of incorporation and of share capital

   11.   Incorporation of the company

   12.   Register of companies

DIVISION 2.2—TYPES OF COMPANY

   13.   Types of company

   14.   Public companies

   15.   Repealed

   16.   Private companies

   17.   Private companies limited by shares

   18.   Repealed

   19.   Companies limited by guarantee

   20.   Unlimited companies

DIVISION 2.3—GENERAL PROVISIONS SECTION

   21.   Contractual effect of incorporation

   22.   Capacity and powers of a company

   23.   Validity of acts

   24.   Notice not presumed

   25.   No disclaimer allowed

   26.   Companies ceasing to have at least two members

   27.   No increase in a member’s liability or contribution without consent

   28.   Pre-incorporation contracts

   29.   Copies of certificate of incorporation, certificate of share capital and articles to be given to members

DIVISION 2.4—CONVERSION OF A COMPANY FROM ONE TYPE TO ANOTHER

   30.   Conversion of a private company limited by shares to company limited by guarantee

   31.   Conversion of private company limited by shares to unlimited company

   32.   Conversion of company limited by guarantee to company limited by shares or unlimited company

   33.   Conversion of unlimited company to private limited company

   34.   Conversion of public company to private company limited by shares

   35.   Conversion of private company limited by shares to public company

   36.   Method of conversion

DIVISION 2.5—THE NAME OF A COMPANY

   37.   Name of company

   38.   Reservation of name

   39.   Registration may allow company to dispense with “Limited” in its name

   40.   Change of name

   41.   Power of Registrar in relation to name

DIVISION 2.6—MISCELLANEOUS

   42.   Financial year of a company

   43.   Holding companies, subsidiaries and related companies

   44.   Registration of related bodies corporate

PART III
MEMBERSHIIP AND REGISTERS

   45.   Membership of company

   46.   Membership by company of itself or of holding company

   47.   Offence if membership of private company exceeds number specified in articles

   48.   Register of members

   49.   Inspection of register

   50.   Power of Court to rectify register

   51.   Company may keep branch register

   52.   Duties in case of securities registered in branch register

   53.   Branch registers of foreign companies kept in Zambia

   54.   No notice of trust

   55.   Register to be evidence

PART IV
SHARES AND SHARE CAPITAL

DIVISION 4.1—INTERPRETATION

   56.   Interpretation

DIVISION 4.2—ISSUE AND TRANSFER OF SHARES

   57.   Nature and transferability of shares

   58.   Numbering of shares

   59.   Redeemable shares

   60.   Capital redemption reserve

   61.   Share premium account

   62.   Variation of class rights

   63.   Return as to allotment of shares

   64.   Transfer of shares

   65.   Restrictions on transferability

   66.   Issue of share certificates

   67.   Endorsement of transfers

   68.   Share certificates as evidence

   69.   Share warrants to bearer

   70.   Transmission of shares by operation of law

   71.   Evidence of transmission of shares by operation of law

   72.   Company’s lien on shares

   73.   Rights and options to subscribe for share issue to directors, officers and employees

DIVISION 4.3—ALTERATION OF SHARE CAPITAL

   74.   Alteration of share capital

   75.   Power to return accumulated profits in reduction of paid up share capital

   76.   Special resolution for reduction of share capital

   77.   Creditors may object to reduction in capital

   78.   Order confirming reduction and powers of Court in making such order

   79.   Lodgment of order and issue of replacement certificate of share capital

   80.   Liability of members in respect of reduced shares

   81.   Offence of concealing name of creditor

DIVISION 4.4—RESTRICTIONS ON FINANCIAL ASSISTANCE

   82.   Restrictions on financial assistance in acquisition of shares

   83.   Relaxation of restrictions for private companies

DIVISION 4.5—MISCELLANEOUS

   84.   Dividends may be paid only out of profits

   85.   Exemption from property transfer tax

PART V
DEBENTURES AND CHARGES

DIVISION 5.1—DEBENTURES

   86.   Issue of debentures

   87.   Documents of title to debentures

   88.   Trustees for debenture holders

   89.   Eligibility for appointment as trustee for debenture holders

   90.   Right to copies of trust deed

   91.   Unsecured debentures to be so described

   92.   Register of debenture holders

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

   94.   Meetings of other debenture holders

   95.   Re-issue of redeemed debentures

DIVISION 5.2—CHARGES

   96.   Charge to secure fluctuating amount

   97.   Company’s register of charges

   98.   Registrar’s register of charges

   99.   Registration of charges by companies

   100.   Certificate to be issued by Registrar

   101.   Priorities

   102.   Entries of satisfaction and release of property from charge

   103.   Variation of registered charge

   104.   Registration of enforcement of security

   105.   Endorsement of registration on debentures of a series

   106.   Charges in favour of the State

DIVISION 5.3—RECEIVERS

   107.   Application of Division

   108.   Appointment of receiver by Court

   109.   Notification of appointment of receiver

   109A.   Statement of company's affairs

   109B.   Offences relating to reports

   110.   Payment of preferential creditors

   111.   Eligibility for appointment as receiver

   111A.   Remuneration of a receiver

   112.   Receivers appointed by the Court.

   113.   Receivers appointed otherwise than by the Court

   114.   Liabilities of receivers on contracts

   115.   Fact that receiver has been appointed to appear on correspondence

   116.   Statement of affairs and accounts where receiver of undertaking appointed

   117.   Accounts of receivers

   118.   Reports by receivers

   118A.   Vacation of office of receiver

PART VI
PUBLIC ISSUE OF SHARES, ETC.

DIVISION 6.1—INTERPRETATION

   119.   Meaning of “invitation to the public”

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

   121.   First publication of a prospectus

DIVISION 6.2—INVITATIONS TO THE PUBLIC AND PROSPECTUSES

   122.   Restrictions on invitations to the public to acquire shares and debentures

   123.   Prospectus required for invitations to the public to purchase share or debentures

   124.   Contents of prospectus

   125.   Expert’s consent

   126.   Registration of prospectuses

   127.   Over-subscription in debenture issue

   128.   Reference to stock exchange listing in prospectus-allotment of shares

   129.   Civil liability for misstatements or omissions in prospectus

   130.   Offence of misstatement or omission in prospectus

   131.   Stop trading order

   132.   Waiting period

   133.   Withdrawal of application after waiting period

   134.   Allotment and minimum subscription

   135.   Statement in lieu of prospectus

   136.   Prohibition of waiver and notice clauses

PART VII
MEETINGS AND RESOLUTIONS

   137.   Interpretation

   138.   Annual general meeting

   139.   Extraordinary general meetings

   140.   Class meetings

   141.   Requisition of a general meeting

   142.   Entitlement to receive notice of meetings

   143.   Length of notice for convening a meeting

   144.   Power of Court to order meeting

   145.   Place of meetings

   146.   Attendance at meetings

   147.   Conduct of meetings and voting

   148.   Chairman’s declaration as to result of a vote

   149.   Right to demand a poll

   150.   Voting on a poll

   151.   Proxies

   152.   Representation of bodies corporate and unincorporated associations at meetings

   153.   Circulation of members’ resolutions and supporting circulars

   154.   Circulation of members’ circulars

   155.   General provisions in regard to members’ circulars

   156.   Ordinary extraordinary and special resolutions

   157.   Written resolutions for private companies

   158.   Registration of copies of certain resolutions

   159.   Date of certain resolutions

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

   161.   Inspection of minute books

PART VIII
ACCOUNTS, AUDIT AND ANNUAL RETURNS

DIVISION 8.1—ACCOUNTS

   162.   Accounting records to be kept

   163.   Financial year of holding company and subsidiary

   164.   Annual accounts to be prepared after each financial year

   165.   Group accounts

   166.   Delays in preparing group accounts

   167.   Annual accounts to include amounts paid to directors

   168.   Annual accounts to include particulars of loans to officers

   169.   Director to make disclosure of loans and receipts

   170.   Balance sheet to be signed by directors

DIVISION 8.2—AUDITORS

   171.   Appointment of auditors

   172.   Qualifications of auditor

   173.   Auditors’ rights and duties and auditors’ report

   174.   Circumstances in which accounts may include the auditors’ report or directors’ report

DIVISION 8.3—THE DIRECTORS’ REPORT

   175.   Interpretation

   176.   Directors’ report to be attached to balance sheet

   177.   General matters in directors’ report

   178.   Where a company carries on more than one kind of business, attribution of turnover and profitability

   179.   Average number by the month of a company’s employees and amount, by the year, of their wages

   180.   Particulars of gifts and donations

   181.   Particulars of exports

DIVISION 8.4—PROVISION OF ACCOUNTS AND REPORTS TO MEMBERS

   182.   Circulation of annual accounts

   183.   Tabling of accounts

DIVISION 8.5—ANNUAL RETURNS

   184.   Annual return to be made to the Registrar

   185.   Annual return to be made by a public company

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

   187.   Annual return to be made by a private company

   188.   Additional certificates to be lodged by a private company

   188A.   Filing of "no change" return

   188B.   Filing of returns by company in liquidation

   189.   Offence relating to annual return

   189A.   Power to strike out name of company from register

PART IX
MANAGEMENT AND ADMINISTRATION

   190.   Registered office and postal address

   191.   Registered records office

   192.   Records and registers of a company

   193.   Inspection by members and others

   194.   Publication of name of company

   195.   Seal of company

   196.   Official seal for use abroad

   197.   Form of contracts and instruments

   198.   Bills of exchange and promissory notes

   199.   Execution of deeds abroad

   200.   Service of documents on company

   201.   Service of documents by company

   202.   Liability of company not affected by officer’s fraud or forgery

PART X
DIRECTORS AND SECRETARY

DIVISION 10.1—APPOINTMENT AND POWERS

   203.   The directors of a company

   204.   Company to have at least two directors

   205.   The secretary

   206.   Appointment of directors

   207.   Eligibility of persons to be directors

   208.   Residential requirements of directors

   209.   Director’s share qualification

   210.   Vacation of office of director

   211.   Removal of director

   212.   No directions or instructions to be given to directors by a person not eligible to be a director

   213.   Alternate directors

   214.   Managing director

   215.   Powers and duties of directors

   216.   Limitations on powers of directors

   217.   Proceedings of directors

DIVISION 10.2—INTERESTS OF DIRECTORS

   218.   Contracts in which directors are interested

   218A.   Third party declarations

   218B.   Shareholder approval for certain transaction

   219.   Prohibition of loans by companies to directors

   220.   Duties of directors in connection with sales or purchases of the company’s securities

DIVISION 10.3—PAYMENTS TO DIRECTORS

   221.   Interpretation

   222.   Payments to directors for loss of office or on transfer of undertaking

   223.   Payments to directors in connection with takeover bids

DIVISION 10.4—REGISTERS

   224.   Register of directors and secretaries

   225.   Register of shares and debentures held by or in trust for directors and secretary

   226.   Registration of particulars of directors and secretaries

DIVISION 10.5—MISCELLANEOUS

   227.   Where one director is named in letters, etc. all are to be named

   228.   Limited company may have directors with unlimited liability

   229.   Avoidance of acts in dual capacity as director and secretary

   230.   Restraining fraudulent persons from managing companies

   231.   Prohibition of assignment of offices

   232.   Validity of acts of officers

   233.   Company may not indemnify officers

PART XI
SCHEMES OF ARRANGEMENT, TAKE-OVERS AND THE PROTECTION OF MINORITIES

   234.   Power to compromise with creditors and members

   235.   Information as to compromises with creditors and members

   236.   Reconstruction and amalgamation of companies

   237.   Power to acquire shares of minority on take-over

   238.   Rights of minority on take-over

   239.   Remedy against oppression

PART XII
FOREIGN COMPANIES

   240.   Interpretation

   241.   Established place of business

   242.   Financial year of a foreign company

   243.   Application of Part to existing foreign companies

   244.   Register of foreign companies

   245.   Registration of a foreign company

   246.   External company must register if it has an established place of business

   247.   Returns required on alteration of registered particulars

   248.   Foreign company to appoint local director

   249.   Responsibilities of local directors

   250.   Service on foreign company

   251.   Annual accounts of foreign company

   252.   Keeping of accounting records by foreign company

   253.   Name of foreign company

   254.   Publication of name of foreign company

   255.   Registration of charges by foreign company

   256.   Notification of winding-up of foreign company

   257.   Winding-up of foreign company in Zambia

   258.   Cessation of business of foreign company

   259.   Penalties and disabilities

   260.   Invitations to the public relating to foreign companies

   261.   Invitations to the public relating to other external bodies corporate

PART XIII
WINDING-UP

DIVISION 13.1—GENERAL

   262.   Interpretation

   263.   Modes of winding-up

   264.   Application of repealed Act

   265.   Liability of members on winding-up

   266.   Limitation of liability

   267.   Nature of liability of a member

   268.   Liability in case of death or bankruptcy of a member

   269.   Jurisdiction to wind-up companies

DIVISION 13.2—WINDING-UP BY THE COURT

   270.   Application of Division

   271.   Persons who may petition for a company to be wound-up by the Court

   272.   Circumstances in which company may be wound-up by Court

   273.   Commencement of winding-up by Court

   274.   Payment of preliminary costs

   275.   Powers of Court on hearing petition

   276.   Power to stay or restrain proceedings against company

   277.   Avoidance of dispositions

   278.   Avoidance of attachments

   279.   Copy of order to be registered

   280.   Provisional liquidator

   281.   Stay of actions

   282.   Appointment and style of liquidators

   283.   Provisions where a person other than official receiver is appointed liquidator

   284.   Control of liquidators by official receiver

   285.   Remuneration of liquidators

   286.   Custody and vesting of company’s property

   287.   Statement of company’s affairs

   288.   Report by liquidator

   289.   Powers of liquidator

   290.   Exercise and control of liquidator’s powers

   291.   Release of liquidator and dissolution of company

   292.   Orders for release or dissolution

   293.   Dissolution of the company

   294.   Meetings to determine whether committee of inspection to be appointed

   295.   Constitution and proceedings of committee of inspection

   296.   Power to stay winding-up

   297.   Appointment of special manager

   298.   Claims of creditors and distribution of assets

   299.   Inspection of books by creditors and members

   300.   Power to summon persons connected with company

   301.   Power to order public examination

   302.   Power to arrest absconding member or officer

   303.   Powers of Court cumulative

DIVISION 13.3—VOLUNTARY WINDING-UP

   304.   Voluntary winding-up

   305.   Circumstances in which a company may be wound-up voluntarily

   306.   Commencement of voluntary winding-up

   307.   Effect of voluntary winding-up

   308.   Declaration of solvency

DIVISION 13.4— PROVISIONS APPLICABLE ONLY TO MEMBERS’ VOLUNTARY WINDING-UP

   309.   Provisions applicable only to members’ voluntary winding-up

   310.   Appointment of liquidator

   311.   Duty of liquidator to call creditors

   312.   Staying of members’ voluntary winding-up

DIVISION 13.5—PROVISIONS APPLICABLE ONLY TO CREDITORS’ VOLUNTARY WINDING-UP

   313.   Provisions applicable only to creditors’ voluntary winding-up

   314.   Meetings of creditors

   315.   Appointment of committee of inspection

   316.   Fixing of liquidator’s remuneration and vesting of directors powers in liquidator

   317.   Stay of proceedings

DIVISION 13.6—PROVISIONS APPLICABLE TO EVERY VOLUNTARY WINDING-UP

   318.   Provisions applicable to every voluntary winding-up

   319.   Distribution of property of company

   320.   Review by Court of liquidators appointment and remuneration

   321.   Powers and duties of liquidators

   322.   Power of liquidator to accept shares etc., as consideration for sale of property of company

   323.   Annual meeting of members and creditors

   324.   Final meeting and dissolution of company

   325.   When an arrangement is binding on creditors

   326.   Application to Court to have questions determined or powers exercised

   327.   Costs

   328.   Limitation on right to wind-up voluntarily

DIVISION 13.7—PROVISIONS APPLICABLE TO EVERY CYCLE OF WINDING-UP

   329.   Provisions applicable to every mode of winding-up

   330.   Meetings of creditors

   331.   Conduct of meetings of creditors

   332.   Eligibility for appointment as liquidator

   333.   Acts of liquidator valid

   334.   General provisions as to liquidators

   335.   Powers of official receiver where no committee of inspection

   336.   Appeal against decision of liquidator

   337.   Notice of appointment and address of liquidator

   338.   Liquidator’s accounts

   339.   Notification that a company is in liquidation

   340.   Books of company

   341.   Investment of surplus funds

   342.   Unclaimed assets

   343.   Expenses of winding-up where assets insufficient

   344.   Meetings to ascertain wishes of members of creditors

   345.   Proof of debts

   346.   Preferential debts

   346A.   Remuneration of liquidator

   347.   Avoidance of preference

   348.   Avoidance of floating charge

   349.   Liquidator’s rights to recover in respect of certain sales to or by company

   350.   Disclaimer of onerous property

   351.   Restriction of rights of creditor as to execution or attachment

   352.   Duties of sheriff as to goods taken in execution

   353.   Offences by officers of companies in liquidation

   354.   Inducement to be appointed liquidator

   355.   Penalty for falsification of books

   356.   Liability where proper accounts not kept

   357.   Liability for contracting debt

   358.   Power of Court to assess damages against delinquent officers

   359.   Prosecution of delinquent officer and members

   360.   Frauds by officers of companies which have gone into liquidation

DIVISION 13.8—DISSOLUTION OF DEFUNCT COMPANIES

   361.   Power of Registrar to strike defunct company off register

   362.   Power of Court to declare dissolution of company void

   363.   Registrar to act as representative of defunct company in certain events

DIVISION 13.9—WINDING-UP OF OTHER BODIES CORPORATE

   364.   Winding-up of other Zambian bodies corporate

   365.   Winding-up of other foreign bodies corporate

PART XIV
MISCELLANEOUS

DIVISION 14.1—ADMINISTRATION OF ACT

   366.   Administration of Act

   367.   Registrar

   368.   Seal

   369.   Keeping of registers and lodged documents

   370.   Registration of documents

   371.   Extension of time for lodgement

   372.   Documents to be in approved language

   372A.   Notice by Registrar

   373.   Prescribed forms

   374.   Inspection, copies and evidence

   375.   Evidentiary provisions

   376.   Enforcement of duty to make returns

   377.   Fees

   378.   Repealed

   379.   Appeal against a decision of the Registrar

   380.   Collection of information and statistics from companies

DIVISION 14.2—PENALTIES AND LIABILITIES

   381.   Penalty for false statements

   382.   Penalty for improper use of “Incorporated” or “Limited”

   383.   Civil liability for fraudulent trading

   384.   Offence of fraudulent trading

   385.   Imprisonment for failure to pay fine

   386.   Costs in actions by limited companies

   387.   Contribution between joint wrongdoers

   388.   Power to grant relief from civil liability

   389.   Exemption from liability for acts or omissions of public officers

DIVISION 14.3—TRANSITIONAL PROVISIONS

   390.   Certificates and documents made or lodged under former Act

   391.   Articles of existing companies

   392.   Minimum capital for existing companies

   393.   Registers, accounts, etc., of existing companies

   394.   Registration of charges

   395.   Directors’ reports for existing companies

   396.   Related bodies corporate of existing companies

   397.   Directors of existing companies

   398.   Bodies corporate formed outside Zambia with existing business in Zambia

DIVISION 14.4—GENERAL

   399.   Companies subject to other legislation

   400.   Regulations

   401.   Rules of Court

   402.   Repeal of former Act

      FIRST SCHEDULE

      SECOND SCHEDULE

      THIRD SCHEDULE

      FOURTH SCHEDULE

AN ACT

to provide for the formation, management, administration and winding-up of companies; to provide for the registration of charges over the undertakings or properties of companies; to provide for the registration of foreign companies doing business in Zambia; and to provide for matters connected with or incidental to the foregoing.

[12th July, 1994]

Act 26 of 1994,

Act 6 of 1995,

Act 1 of 2000,

Act 12 of 2010,

Act 24 of 2011.

PART I
PRELIMINARY

1.   Short title

This Act may be cited as the Companies Act.

2.   Interpretation

In this Act, unless the context otherwise requires—

“accounting records” includes—

      (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;

“accounts” means profit and loss accounts and balance sheets together with any statements, reports and notes attached to or intended to be read with any of those profit and loss accounts or balance sheets, but, subject to section 174, does not include the auditors’ reports or directors’ reports;

“alternate director” means an alternate director of a company referred to in section 213;

“annual accounts” means the annual accounts referred to in section 164;

“annual general meeting” means an annual general meeting of a company referred to in section138;

“annual return” means the return referred to in section 184, together with any document required by this Act to accompany the return;

“articles” means the articles of a company described in section 7;

“auditors’ report” means the report of the auditors of a company referred to in section 173;

“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 section 51;

“capital redemption reserve” means the reserve referred to in section 60;

“certificate of incorporation” means a certificate of incorporation of a company issued by the Registrar under section 10, or a replacement of such a certificate issued under this Act;

“certificate of share capital” means a certificate of share capital of a company issued by the Registrar under section 10, or a replacement of such a certificate issued under this Act;

“certified copy” means a copy of a document of a company which has endorsed thereon or annexed thereto—

      (a)   a certificate by a notary public; or

      (b)   a declaration made and signed by an officer of the company or by some person interested therein otherwise than on behalf of the company;

to the effect that it is a true and complete copy of the original, together with, in the case of an original in a language other than English, an English translation similarly certified to the effect that it is an accurate translation of the original;

“charge” means a charge created in any way and includes—

      (a)   mortgage;

      (b)   an agreement to give or execute a charge or mortgage whether on demand or otherwise; and

      (c)   until such time as the whole of the purchase price is paid, an agreement for sale and purchase of land under which the seller remains in occupation;

“class meeting” means a meeting of those members of a company who, under the articles, belong to a particular class;

“committee of inspection” means a committee of inspection appointed in the course of a winding-up under section 295 or 315;

“company” means—

      (a)   a company incorporated under this Act; or

      (b)   subject to section 4 and Division 14.3, an existing company;

“company limited by guarantee” means a company incorporated as such, being a company satisfying section 19;

“company with share capital” means a public company, a private company limited by shares or an unlimited company;

“Court” means the High Court for Zambia;

“creditors’ voluntary winding-up of” means a voluntary winding-up with respect to which no declaration of solvency was made in accordance with section 308;

“current liability”, means a liability that would in the ordinary course of events be payable within twelve months after the end of the financial year to which the accounts or group accounts concerned relate;

“debenture” means a document issued by a body corporate that evidences or acknowledges a debt of the body corporate, whether or not it constitutes a charge on property of the body corporate, in respect of money that is or may be deposited with or lent to the body corporate, other than a document of the following kinds—

      (a)   a document acknowledging a debt incurred by the body corporate in respect of money that is or may be deposited with or lent to the body corporate by a person—

      (i)   in the ordinary course of a business carried on by the person; and

      (ii)   in the ordinary course of such business of the body corporate as is not part of a business of borrowing money and providing finance;

      (b)   a document issued by a bank in the ordinary course of its banking business that evidences or acknowledges indebtedness of the bank arising in the ordinary course of that business;

      (c)   a cheque, order for the payment of money or bill of exchange;

      (d)   a document of a kind prescribed, and in the circumstances prescribed in the regulations for the purposes of this paragraph;

and includes—

      (a)   a unit of a debenture;

      (b)   debenture stock; and

      (c)   bonds and any other securities issued by a company, whether constituting a charge on the assets of the company or not;

“debenture holder” includes a debenture stockholder;

“declaration of guarantee” means a declaration of guarantee made under section 19;

“declaration of solvency” means a declaration made in accordance with section 308;

“default” means, in reference to a person who is “in default,” that the person willfully authorised or permitted an act or omission that constitutes a contravention by a body corporate of the provision of this Act in which the expression appears;

“designating number” means the number assigned to a company or foreign company by the Registrar for the purposes of identification;

“director” means a person appointed as a director of a company under section 206; and “the directors” means the directors acting collectively as described in section 203;

“director- report” means the report by the directors of a company referred to in section 176;

“document” includes—

      (a)   any paper or other material on which there is writing or printing or on which there are marks, figures, symbols or perforations having a meaning for persons qualified to interpret them;

      (b)   a disc or tape or other article, or any material, from which sounds, images, writings or messages are capable of being reproduced with or without the aid of any other article or device;

and without limiting the generality of the foregoing, includes any summons, order and other legal process and any notice;

“equity share” means a share comprised in the equity share capital of a body corporate;

“equity share capital” means the issued share capital of a body corporate, excluding any part thereof which neither as respects dividends nor as respects capital carries any right to participate beyond a specified amount in a distribution;

“executive director” means a director to whom has been delegated any of the powers of the directors to direct and administer the business and affairs of the company;

“executive officer” means a person, by whatever name called and whether or not a director of a body corporate, who is concerned, or takes part, in the management of the body corporate;

“existing company” means a body corporate which immediately prior to the commencement of this Act was a company under the former Act;

“expert” includes an engineer, valuer, accountant, assayer, and any other person whose profession or calling gives authority to a statement by the person on the subject matter concerned;

“extraordinary general meeting” means a general meeting of a company that is not an annual general meeting;

“extraordinary resolution” means an extraordinary resolution for the purposes of section 156;

“financial year”

      (a)   in relation to a company, means the financial year of the company under section 42;

      (b)   in relation to a foreign company, means the financial year of the foreign company under section 242; and

      (c)   in relation to any other body corporate, means a period in relation to which the body corporate, in conformity with the law of the place of its incorporation, produces accounts;

“former Act” means the Companies Act repealed by section 402;

“former name” does not include—

      (a)   a name changed or disused before the person bearing the name attained the age of eighteen years;

      (b)   a name changed or ceased to be used more than twenty years previously; or

      (c)   the name by which a married woman was known prior to her marriage;

“general meeting” means an annual general meeting or an extraordinary general meeting;

“general accounts” means the accounts of a group of companies referred to in section 165;

“group of companies” means a company that is a holding company together with all its subsidiaries;

“holding company” means a body corporate that is a holding company under section 43;

“invitation to the public” means an invitation described in section 119;

“limited company” means a company limited by shares or a company limited by guarantee;

“liquidator” includes a provisional liquidator;

“managing director” means the managing director of a company appointed under section 214;

“member” means a member of a company under section 45;

“members voluntary winding-up” means a voluntary winding-up with respect to which a declaration of solvency was made in accordance with section 308;

“monetary unit” means an amount of one kwacha;

“non-current liability” means a liability that is not a current liability;

“number”, in relation to shares, includes an amount of stock;

“officer” includes—

      (a)   a director, secretary or executive officer of a body corporate;

      (b)   a local director of a foreign company;

      (c)   a receiver of any part of the undertaking of a body corporate appointed under a power contained in any instrument; and

      (d)   a liquidator of a body corporate appointed by the members in a voluntary winding-up;

but does not include—

      (i)   a receiver of any part of the undertaking of a body corporate appointed by the Court;

      (ii)   a liquidator of a body corporate appointed by the Court or by the creditors of the body corporate; or

      (iii)   an auditor of a body corporate;

“official receiver” means—

      (a)   an official receiver appointed under the Bankruptcy Act; or

      (b)   an officer appointed for the purpose by the Minister, if no such official receiver is appointed;

“ordinary resolution” means an ordinary resolution for the purposes of section 156;

“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 section 17;

“profit and loss account” includes income and expenditure account, revenue account or any other account showing the results of the business of a company for a period;

“public company” means a company incorporated as such, being a company satisfying section 14;

“receiver” includes an official receiver and a receiver and manager; and any reference to a receiver of the property of a company includes a reference to a receiver of part only of that property and to a receiver only of the income arising from that property, or from part thereof;

“register of foreign companies” means the register referred to in section 244;

“register of liquidators” means the register of liquidators referred to in subsection (4) of section 132;

[Ins by s 2 of Act 24 of 2011.]

“register of receivers” means the register of receivers referred to in subsection (3) of section 111;

[Ins by s 2 of Act 24 of 2011.]

“registered accountant” means a registered accountant for the purposes of the Accountants Act;

“registered member” means a person registered as a member of a company under section 48;

“registered office” means—

      (a)   in relation to a company, the registered office of the company under section 190; and

      (b)   in relation to a foreign company, the registered office of the company under section 245;

“registered records office” means the registered records office of a company referred to in section 191;

“Registrar” means the person appointed as Registrar under section 14 of the Patents and Companies Registration Agency Act, 2010;

[Subs by s 2 of Act 12 of 2010.]

“related” means related for the purposes of section 43;

“resolution for reducing share capital” means a resolution described in section 76;

“seal” means the common seal of a company or other body corporate;

“secretary”

      (a)   in relation to a company, means a person appointed as the secretary pursuant to section 205;

      (b)   in relation to a body corporate other than a company, means a person occupying the position of secretary, by whatever name called;

“share” includes stock;

“shareholder” includes a stockholder;

“share premium account” means the share premium account referred to in section 61;

“share warrant” means a share warrant issued pursuant to section 69;

“special resolution” means a special resolution for the purposes of section 156;

“Standard Articles” means the Standard Articles in the First Schedule;

“subsidiary” means a body corporate that is a subsidiary of another body corporate for the purposes of section 43;

“unlimited company” means a company incorporated as such, being a company satisfying section 20;

“waiting period” means the period of seven days after the first publication of a prospectus which has been registered, or such longer period after that date as may be stated in the prospectus as the period before the expiration of which applications, offers, or acceptances in response to the prospectus will not be accepted or treated as binding;

“wholly owned subsidiary” means a body corporate that is the wholly owned subsidiary of another body corporate for the purposes of section 43.

3.   Effect of declaration in certified copy.

A declaration made for the purposes of paragraph (b) of the definition of certified copy in section 2 shall be deemed to be a statutory declaration.

4.   Application of Act to existing companies

Subject to this Act, this Act applies to an existing company as if it had been duly incorporated under this Act as—

      (a)   a public company, if it was a public company under the former Act;

      (b)   a private company limited by shares, if it was a private company limited by shares under the former Act; or

      (c)   a company limited by guarantee, if it was a private company limited by guarantee under the former Act.

5.   Prohibition of large partnerships

   (1) Subject to this section, an association or partnership that—

      (a)   consists of more than twenty persons; and

      (b)   is not a body corporate;

shall not carry on any business for gain by the association or partnership or individual members of the association or partnership.

   (2) Sub-section (1) shall not apply to a partnership—

      (a)   formed for the purpose of carrying on a prescribed profession or calling; and

      (b)   having not more than the number of partners prescribed for the purposes of that profession.

   (3) If an association or partnership contravenes this section, each member of the association or partnership shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units.

PART II
INCORPORATION AND MODIFICATION OF COMPANIES

DIVISION 2.1—INCORPORATION

6.   Application for incorporation

   (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 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 (2).

[S 6 subs by s 3 of Act 24 of 2011.]

7.   The articles of a company

   (1) A company may have articles regulating the conduct of the company.

   (2) The articles may contain restrictions on the business that the company may carry on.

   (3) 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.

   (4) The articles of a company may adopt the regulations of the Standard Articles, or any specified regulations thereof.

   (5) The articles of a public company or a private company limited by shares shall be deemed to have adopted the regulations of the Standard Articles except insofar as the articles exclude or modify those regulations.

   (6) The articles of a company shall be divided into paragraphs numbered consecutively.

8.   Amendment of articles

   (1) Subject to this Act, and to its articles, a company may amend its articles if it passes a special resolution approving the amendment.

   (2) If a company passes a special resolution approving the amendment of its articles, 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.

   (3) The articles 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.

   (4) If a company fails to comply with sub-section (2), the company, and each officer in default, 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.

9.   Statutory declaration as to compliance with the Act

   (1) An application for incorporation shall be accompanied by a statutory declaration that the requirements of this Act in respect of registration and of matters precedent and incidental thereto have been complied with, made by—

      (a)   a legal practitioner having a practising certificate who was engaged in the formation of the company; or

      (b)   a person named in the application as a first director or secretary of the company.

   (2) The Registrar may accept the declaration as prima facie evidence of compliance.

10.   Certificates of incorporation and of share capital

   (1) Where an application for incorporation and the documents referred to in section 6 have been duly lodged, the Registrar shall, subject to this Act, issue a certificate in the prescribed form stating that the company is, on and from the date specified in the certificate, incorporated and that the company is the type of company specified in the application for incorporation.

   (2) If the company has share capital, the Registrar shall, at the same time, issue a certificate stating—

      (a)   the amount of share capital of the company; and

      (b)   the division of the share capital into shares of a fixed amount.

   (3) The Registrar shall keep a copy of each certificate issued under this section, and this Act shall apply to the copies as if they were documents lodged with the Registrar.

11.   Incorporation of the company

On and from the date of incorporation specified in the certificate of incorporation, but subject to this Act, there shall be constituted an incorporated company by the name set out in the certificate.

12.   Register of companies

   (1) The Registrar shall maintain a register of companies in which is entered, in respect of each company—

      (a)   a chronological record of the prescribed particulars, and of any other particulars which the Registrar thinks fit, in relation to the company; and

      (b)   a record of the documents lodged under this Act in respect of the company, other than documents whose only effect is to change particulars recorded under paragraph (a).

DIVISION 2.2—TYPES OF COMPANY

13.   Types of company

A company incorporated under this Act shall be—

      (a)   a public company; or

      (b)   a private company being—

      (i)   a private company limited by shares;

      (ii)   a company limited by guarantee; or

      (iii)   an unlimited company

14.   Public companies

   (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 Part XIII, an amount not exceeding the amount, if any, unpaid on the shares held by him.

   (5) The articles 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 liability; or

      (b)   a restriction on the right to transfer shares issued to directors or other officers or employees exercising any rights or options granted under section 73, or issued in pursuance of any scheme adopted under that section; or

      (c)   a provision for the compulsory acquisition, or rights of first refusal, of shares referred to in paragraph (b), in favour of other members of the company or trustees appointed under any scheme adopted under section 73.

15.   …

[S 15 rep by s 3 of Act 12 of 2010.]

16.   Private companies

   (1) Subject to this section, the articles of a private company shall limit the number of its members to a specified number, being a number not more than fifty.

   (2) The regulations may provide that the articles of an unlimited company may, subject to any specified conditions, limit the number of its members to a number larger than fifty.

   (3) The articles of a private company shall not impose any restriction on the transferability of shares after they have been issued unless all the shareholders have agreed in writing.

   (4) For the purposes of sub-section (1)—

      (a)   joint holders of shares are counted as one person; and

      (b)   a member is not counted if he is in the employment of the company or of a related body corporate, or if he was a member while previously in the employment of the company or a related body corporate and has been a member continuously since that time.

   (5) If a private company—

      (a)   has more members than permitted by its articles; or

      (b)   invites the public to acquire shares or debentures in the company in contravention of section 122;

the Registrar may give notice to the company requiring the company to give reasons why the company should not be converted into a public company.

   (6) If, one month after the issue of the notice, the contravention concerned has not been rectified, the Court may, on the application of the Registrar, if not satisfied that the contravention was inadvertent and not likely to be repeated, order—

      (a)   that the company shall be deemed to have made an application for conversion to a public company, or conversion to a private company followed by conversion to a public company, as appropriate, and to have passed any resolutions necessary for such an application or applications in the form specified in the order; and

      (b)   that the directors, or any of them, shall be liable for the costs of the application of the Registrar and the conversion of the company.

17.   Private companies limited by shares

   (1) The articles of a private company limited by shares shall state—

      (a)   the rights, privileges, restrictions and conditions attaching to each class of shares, if there are two of 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 shares may be issued in series.

   (2) All shares shall rank equally apart from differences due to their being in different classes or series.

   (3) Where a private company limited by shares is wound-up, a member shall be liable to contribute, in accordance with Part XIII, an amount not exceeding the amount, if any, unpaid on the shares held by him.

18.   …

[S 18 rep by s 4 of Act 12 of 2010.]

19.   Companies limited by guarantee

   (1) Each subscriber to an application for incorporation as a company limited by guarantee shall sign a declaration of guarantee specifying the amount that he 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 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 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) The company 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 Part XIII, an amount not exceeding the amount specified in the declaration of guarantee made by him.

   (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 on the business so authorised or permitted; and

      (b)   each of the officers and members referred to in paragraph (a) shall be guilty of an office, and shall be liable on conviction to a fine of not more than thirty monetary units for each day on which that business is carried on.

   (8) If the company fails to comply with sub-section (4), the company, and each officer in default, 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.

20.   Unlimited companies

   (1) An unlimited company shall have share capital and its articles 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 shares may be issued in series.

   (2) All shares shall rank equally apart from differences due to their being in different classes or series.

   (3) Where an unlimited company is wound-up, a member shall be liable to contribute, in accordance with Part XIII, without limitation of liability.

DIVISION 2.3—GENERAL PROVISIONS

21.   Contractual effect of incorporation

Subject to this Act, the incorporation of a company shall have the same effect as a contract under seal between the company and its members from time to time and between those members themselves, in which they agree to form a company whose business will be conducted in accordance with the application for incorporation, the certificate of share capital from time to time, the articles of the company from time to time, and this Act.

22.   Capacity and powers of a company

   (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.

   (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.

23.   Validity of acts

No act of a company, including any transfer of property to or by a company, shall be invalid by reason only that the act or transfer is contrary to its articles or this Act.

24.   Notice not presumed

No person dealing with a company shall be affected by, or presumed to have notice or knowledge of, the contents of a document concerning the company by reason only that the document has been lodged with the Registrar or is held by the company available for inspection.

25.   No disclaimer allowed

A company or a guarantor of an obligation of the company may not assert against a person dealing with the company or with any person who has acquired rights from the company that—

      (a)   any of the articles of the company has not been complied with;

      (b)   a shareholder agreement has not been complied with;

      (c)   the persons named in the most recent annual return or notice under section 226 are not the directors of the company;

      (d)   the registered office of the company is not an office of the company;

      (e)   a person held out by a company as a director, an officer or an agent of the company has no authority to exercise the powers and perform the duties that are customary in the business of the company or usual for such a director, officer or agent;

      (f)   a document issued by any director, officer or agent of the company with actual or usual authority to issue the document is not valid or genuine; or

      (g)   the financial assistance referred to in section 83 or the sale or disposal of property referred to in section 216 was not authorised; except where that person has, or ought to have had by virtue of his position with or relationship to the company, knowledge of the fact asserted.

26.   Companies ceasing to have at least two members

   (1) If at any time the number of members of a company is reduced below two and it carries on business for more than six months without at least two members, a member or director of the company who was aware that the business was being carried on with fewer than two members shall be severally liable for the payment of all the debts and liabilities of the company incurred after the end of that period of six months. Companies ceasing to have at least two members.

   (2) The Court, in any proceeding against the member or director or on application being made to it by any person interested, may relieve the member or director either wholly or partly from liability under sub-section (1) on such terms as it thinks fit, if it is satisfied that the member or director had made reasonable efforts to prevent the business from being continued, or that it is otherwise just and reasonable to do so.

   (3) The liability imposed under sub-section (1) shall be in addition to any liability of the company.

27.   No increase in a member’s liability or contribution without consent

A member of a company shall be bound by an alteration made in the articles on a date (in this section called the “alteration date”) after the date on which he became a member only to the extent that the alteration does not require him—

      (a)   to take or subscribe for more shares than the number held by him on the alteration date;

      (b)   in any way to increase his liability as at the alteration date; or

      (c)   to contribute to the share capital of the company or otherwise to pay money to it;

unless he agrees in writing, either before or after the alteration date, to be bound thereby.

28.   Pre-incorporation contracts

   (1) If a person purports to enter into a contract not evidenced in writing in the name of or on behalf of a company before it comes into existence, the person shall be bound by the contract and entitled to the benefits thereof.

   (2) If a person purports to enter into a contract evidenced in writing in the name of or on behalf of a company before it comes into existence, the person shall be bound by the contract (in this section called “the relevant contract”) and entitled to the benefits thereof except as provided in this section.

   (3) The company may, not later than fifteen months after its incorporation, adopt the contract by an ordinary resolution, and upon the adoption, subject to sub-section (4)—

      (a)   the company shall for all purposes be bound by the contract and entitled to the benefits thereof as if the company had been in existence at the date of the contract and had been a party thereto; and

      (b)   the person who purported to act in the name of or on behalf of the company shall cease to be bound by or entitled to the benefits of the contract.

   (4) Subject to sub-section (5), whether or not the relevant contract is adopted by the company, the other party to the contract may apply to the Court for an order fixing obligations under the contract as joint or joint and several, or apportioning liability between or among the company and the person who purported to act in the name of or on behalf of the company, and upon such application the Court may make any order it thinks just and equitable.

   (5) Sub-section (4) does not apply if the relevant contract expressly provides that the person who purported to act in the name of or on behalf of the company before it came into existence shall not in any event be bound by the contract nor entitled to the benefits thereof.

29.   Copies of certificate of incorporation, certificate of share capital and articles to be given to members

   (1) A company shall supply to any member on request copies of—

      (a)   the certificate of incorporation;

      (b)   the certificate of share capital, in the case of a company with share capital; and

      (c)   The articles of the company;

within seven days after receiving payment of the sum of one monetary unit, or such lesser sum as may be prescribed by the company, for each set of copies.

   (2) A company limited by guarantee shall supply to any member on request a list of the members with the amounts guaranteed by each in the declaration of guarantee.

   (3) A copy of the articles supplied under sub-section (1) shall have endorsed on it the registered address, the postal address and the address of the registered records office of the company.

   (4) If a company fails to comply with this section, the company, and each officer in default, 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.

DIVISION 2.4—CONVERSION OF A COMPANY FROM ONE TYPE TO ANOTHER

30.   Conversion of a private company limited by shares to company limited by guarantee

   (1) A private company limited by shares may be converted into a company limited by guarantee if—

      (a)   there is no unpaid liability on any of its shares;

      (b)   all its members agree in writing to such a conversion;

      (c)   a special resolution amending the articles to satisfy section 19 is passed, if the articles do not satisfy that section; and

      (d)   each member makes a declaration of guarantee.

31.   Conversion of private company limited by shares to unlimited company

A private company limited by shares may be converted into an unlimited company if all its members agree in writing to its conversion. Conversion of private company limited by shares to unlimited company.

32.   Conversion of company limited by guarantee to company limited by shares or unlimited company

A company limited by guarantee may be converted into a company limited by shares or an unlimited company if—

      (a)   all the members agree in writing—

      (i)   to convert the company into such a company; and

      (ii)   to a share capital for the company and the division thereof into shares of fixed amounts; and

      (b)   each member agrees in writing to take up a specified number of shares.

33.   Conversion of unlimited company to private limited company

   (1) An unlimited company may be converted into a private company limited by shares or a company limited by guarantee if—

      (a)   all its members agree in writing to its conversion;

      (b)   a special resolution amending the articles to satisfy section 17 or 19, as appropriate, is passed, if the articles do not satisfy section17 and 19, as appropriate; and

      (c)   each member makes a declaration of guarantee, in the case of conversion to a company limited by guarantee.

   (2) In the case of a conversion to company limited by shares, the special resolution may—

      (a)   increase the nominal amount of the company’s share capital by increasing the nominal amount of each of its shares, subject to the condition that no part of the increased capital shall be capable of being called up except in the event and for the purposes of the company’s being wound-up; or

      (b)   provide that a specified portion of its uncalled share capital shall not be capable of being called up except in the event and for the purpose of the company’s being wound-up.

34.   Conversion of public company to private company limited by shares

A public company may be converted into a private company limited by shares if a special resolution is passed that—

      (a)   approves the conversion; and

      (b)   amends the articles to satisfy sections 16 and 17, if the company’s articles do not satisfy those sections.

35.   Conversion of private company limited by shares to public company

   (1) A private company limited by shares may be converted into a public company if a special resolution is passed that—

      (a)   approves the conversion; and

      (b)   amends the articles to satisfy section 14, if the company’s articles do not satisfy that section.

36.   Method of conversion

   (1) If the requirements of section 30, 31, 32, 33, 34, 35 (in this section called “the conversion section”) are satisfied with respect to a company, the company shall, within twenty-one days after the conversion section’s becoming satisfied, lodge with the Registrar an application in the prescribed form for conversion of the company in accordance with the resolution or agreement, together with the documents referred to in sub-section (4).

   (2) On receiving the application the Registrar shall—

      (a)   issue a replacement certificate of incorporation in the prescribed form worded to meet the circumstances of the case and stating the date of conversion of the company; and

      (b)   make such entries in such registers as he considers appropriate.

   (3) On and from the date stated in the certificate as the date of conversion.

      (a)   the company shall be converted into a company of the status sought;

      (b)   if the company is being converted from a company with share capital to a company limited by guarantee, the shares therein shall be validly surrendered and cancelled notwithstanding section 76;

      (c)   the articles of the company shall be amended in accordance with the documents lodged with the application; and

      (d)   where this Act requires different words to be the last words of the name of a company of the new status, the name of the company shall be changed accordingly.

   (4) The documents to be delivered to the Registrar are the following:

      (a)   the company’s certificate of incorporation;

      (b)   a copy of each paragraph in the articles affected by any amendment, in its amended form;

      (c)   a copy of the special resolution or written agreement by the members referred to in the conversion section;

      (d)   the declarations of guarantee by each member, if the company is being converted to a company limited by guarantee;

      (e)   a statutory declaration by a director and the secretary of the company stating—

      (i)   that the conditions of the conversion section have been complied with; and

      (ii)   that in their opinion the company is solvent;

      (f)   a certificate by the auditors of the company, made not more than three months before the date of the application, that they have investigated the affairs of the company and that the company is solvent at the date of the certificate;

      (g)   certified copies, certified by a director and the secretary of the company, of every balance sheet, profit and loss account, group accounts, directors’ report and auditors’ report sent to the members of the company in the preceding twelve months, if the company is being converted from a public company to a private company and has been incorporated as a public company for more than fifteen months.

   (5) The conversion of the company under this section shall not alter the identity of the company, nor affect any rights or obligations of the company except as mentioned in this section, nor render defective any legal proceedings by or against the company.

   (6) Where an unlimited company is converted to a limited company and is wound-up within three years after the conversion, a member of the company who was a member immediately before the conversion shall not be entitled to a limitation of liability under section 226.

   (7) If the company fails to comply with sub-section (1), the company, and each officer in default, 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.

   (8) If a director, secretary or auditor of a company makes a declaration or certificate for the purposes of sub-section (4) that in his opinion the company is solvent, without having reasonable grounds for the opinion, he shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. Division.

2.5—THE NAME OF A COMPANY

37.   Name of company

   (1) A public company shall have a name the last word of which is “PLC”.

   (2) Subject to this Division, a private company limited by shares or a company limited by guarantee shall have a name the last word of which is “Limited”.

   (3) The Registrar shall not, without the written consent of the Minister, register as the name of a company a name which in the Registrar’s opinion suggests that the company enjoys the patronage of the President.

[S 37(3) rep by s 4(a) and s 37(4) renumbered as s 37(3) by s 4(b) of Act 24 of 2011.]

   (4) The Registrar may, at the request of persons who intend to form an incorporated company, give an opinion on the acceptability of a proposed name.

[S 37(5) renumbered as s 37(4) by s 4(b) of Act 24 of 2011.]

38.   Reservation of name

   (1) A person or persons who propose to form a company may, subject to this section, reserve a name for the company by lodging with the Registrar an application in the prescribed form specifying the name proposed to be reserved (in this section called “the reserved name”).

   (2) If the reserved named is acceptable to the Registrar and the Registrar is satisfied that—

      (a)   the reserved name is a registered business name of the person or persons;

      (b)   the reserved name is the name of an unincorporated association consisting of or represented by the person or persons;

      (c)   the reserved name is a name under which the person or persons are trading or conducting business, or is such a name with minor modifications or additions; or

      (d)   the person is a body corporate other than a company and the reserved name is the name of the body corporate or that name with minor modifications or additions;

the Registrar shall register the name as reserved by the person or persons for a period of three months.

   (3) While the name is so registered—

      (a)   subject to this Act, the person or persons shall be entitled to incorporate a company under the name; and

      (b)   the Registrar shall treat the proposed name as the name of a company incorporated by the person or persons for the purposes of determining the acceptability of any other name as the name of a company.

39.   Registration may allow company to dispense with “Limited” in its name

   (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 for the purposes of this Act apart from this Part.

   (2) The Registrar may grant the permission on such conditions as he thinks fit, and those conditions shall be binding on the company and shall, if the Registrar so directs, be inserted in the articles of the company.

   (3) The Registrar may revoke the permission at any time, after giving written notice to the company of his intention to do so and considering any objections of the company.

40.   Change of name

   (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 “new name”).

   (3) The Registrar, after considering the new name, shall notify the company that—

      (a)   the new name is acceptable; or

      (b)   in the opinion of the Registrar, the new name of a company would be likely to cause confusion with the name of another company or is otherwise undesirable, and that the Registrar will not register the new name.

   (4) If the new name is acceptable, the company shall, within twenty-one days after receiving the notice of the fact, lodge with the Registrar—

      (a)   the company’s certificate of incorporation; and

      (b)   a copy of the resolution.

   (5) On receiving the documents referred to in sub-section (4), the Registrar shall enter the new name on the Register in place of the former name, and shall issue a replacement certificate of incorporation worded to meet the circumstances of the case.

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