(ii)   a copy of the order has been lodged with the Registrar.

   (7) Where an extraordinary resolution agreeing to a compromise or arrangement has been passed at a meeting convened pursuant to this section, the company or any person who was entitled to vote at the meeting may apply to the Court for approval of the compromise or arrangement.

   (8) At the hearing by the Court of the application for approval of the compromise or arrangement, any member or creditor of the company claiming to be affected thereby shall be entitled to be represented and to object.

   (9) The Court may prescribe such terms as it thinks fit as a condition of its approval, including a condition that any member shall have the right to require the company to purchase his shares at a price fixed by the Court or to be determined in a manner provided in the order, and, in that case, for the reduction of the company’s capital accordingly.

   (10) Where an order is made approving the compromise or arrangement—

      (a)   the company shall lodge a copy with the Registrar within twenty-one days after the making of the order; and

      (b)   a copy of the order shall be annexed to or incorporated in every copy of the articles issued after the order has been made.

   (11) Where an order under this section has the effect of altering the share capital of the company, the Registrar, on lodgement of the copy of the order, shall issue a replacement certificate of share capital for the company, worded to meet the circumstances of the case.

   (12) If the company fails to comply with paragraph (a) of sub-section (10), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues.

   (13) If the company issues a copy of the articles that fails to comply with paragraph (b) of sub-section (10), 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 in respect of each copy issued.

 

235.   Information as to compromises with creditors and members

   (1) In this section, “arrangement” has the same meaning as in section 234.

   (2) Where a meeting of creditors or any class of creditors or of members or any class of members is convened under section 234 the company shall prepare a statement explaining the effect of the compromise or arrangement and in particular stating any material interests of the directors in the company or a related body corporate, whether as directors or as members or as creditors of the company or otherwise, and the effect thereon of the compromise or arrangement, in so far as it is different from the effect on the like interests of other persons.

   (3) Where the compromise or arrangement affects the rights of debenture holders of the company, the statement shall give the same explanation as respects the debenture holders of the company or any trustees of any instrument for securing the issue of the debentures as it is required to give as respects the company’s directors.

   (4) A copy of the statement shall be sent to every creditor or member with the notice of the meeting.

   (5) Every notice of the meeting given by advertisement shall include either a copy of the statement or notice of the way in which the members or creditors entitled to attend the meeting may obtain copies of the statement.

   (6) Where notice of the meeting is given by advertisement, the company shall supply a copy of the statement, free of charge, to any creditor or member who applies in the way indicated in the advertisement.

   (7) If the 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 five hundred monetary units.

   (8) It shall be a defence to a prosecution under sub-section (7) to show that failure was due to the refusal of any other person to supply the necessary particulars as to his interests in the company or a related body corporate.

   (9) A person who is director of the company or a trustee for debenture holders of the company shall give notice to the company of such matters relating to himself as may be necessary for the purposes of this section, and a person who fails to do so shall be guilty of an offence, and shall be liable on conviction to a fine of five hundred monetary units.

 

236.   Reconstruction and amalgamation of companies

   (1) Where an application is made to the Court under section 234 to approve a compromise or arrangement referred to in that section, and it is shown to the Court that- Reconstruction and amalgamation of companies

      (a)   the compromise or arrangement has been proposed for the purposes of or in connection with a scheme for—

      (i)   the reconstruction of any company or companies; or

      (ii)   the amalgamation of any two or more companies; and

      (b)   under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme (in this section referred to as “the transferor company”) is to be transferred to another company (in this section referred to as “the transferee company”);

the Court may, either by the order approving the compromise or arrangement or by a subsequent order, provide for all or any of the following-

      (i)   the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of the transferor company;

      (ii)   the allotment or appropriation by the transferee company of any shares, debentures, policies or other like interests in the transferor company which under the compromise or arrangement are to be allotted or appropriated by the transferor company to or for any person;

      (iii)   the continuation by or against the transferee company of any legal proceedings pending by or against the transferor company;

      (iv)   the dissolution, without winding-up, of the transferor company;

      (v)   the provision to be made for any persons who, within such time and in such manner as the Court directs, dissent from the compromise or arrangement;

      (vi)   such incidental, consequential and supplementary matters as are necessary to secure that the reconstruction or amalgamation is fully and effectively carried out.

   (2) Where an order under this section provides for the transfer of property or liabilities—

      (a)   the property shall, by virtue of the order, be transferred to and vest in the transferee company and shall, if the order so directs, be freed from any charge which is under the compromise or arrangement to cease to have effect; and

      (b)   the liabilities shall, by virtue of the order, be transferred to and become the liabilities of, the transferee company.

   (3) Where an order is made under this section, every company in relation to which the order is made shall cause a copy thereof to be lodged with the Registrar within fifteen days after the making of the order.

   (4) If a company fails to comply with sub-section (3), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues.

   (5) In this section—

      (a)   “property” includes property rights and powers of every description; and

      (b)   “liabilities” includes duties of every description;

notwithstanding that such rights, powers or duties are of such a character that under the common law they could not be assigned or performed vicariously.

 

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

   (1) This section shall apply where body corporate, whether a company within the meaning of this Act or not, (in this section referred to as “the transferee company”), has made an offer to the holders of shares in a company (in this section referred to as “the transferor company”) and each of the following conditions is satisfied:—

      (a)   the offer by the transferee company is made to the holders of the whole of the shares in the transferor company, other than those already held by the transferee company or any of its related companies or by nominees for the transferee company or any of its related companies;

      (b)   the consideration for the acquisition or a substantial part thereof is either- (i) the allotment of shares in the transferee company; or

      (ii)   the allotment of shares in the transferee company or, at the option of the holders, a payment of cash;

      (c)   the same terms are offered to all the holders of the shares to whom the offer is made or, where there are different classes of shares, to all the holders of shares of the same class;

      (d)   the notice of the offer sent to the shareholders included-

      (i)    a description of the effect of this section;

      (ii)   a statement that, if paragraph (e) is satisfied, the transferee company intends to take advantage of this section; and

      (iii)   a statement that the shareholder may apply to the Court under sub-section (3);

      (e)   within four months after the making of the offer it has been accepted in respect of sufficient shares in each class to make up, together with any shares held by the transferee company, nine-tenths of the shares of that class.

   (2) If this section applies, the transferee company may, within the period of two months beginning when sub-section (1) is satisfied, give to each shareholder who has not accepted the offer in respect of all his shares a notice stating—

      (a)   that it desires to acquire his shares;

      (b)   that if no action is taken by the shareholder, the shares will be compulsorily acquired under this section;

      (c)   the alternative that will apply unless the shareholder directs otherwise, if the offer consists of alternatives.

   (3) A copy of the notice referred to in sub-section (2) shall be sent to the transferor company.

   (4) At any time within the period beginning when the offer is made and ending three months after sub-section (1) is satisfied, the shareholder may apply to the Court for an order that—

      (a)   the shares may not be compulsorily acquired under this section; or

      (b)   the terms of the offer applying to the shareholder in respect of the shares, or of the shares of a particular class, shall be varied as specified by the Court;

and the Court may make such an order.

   (5) Where the Court makes an order that the terms of the offer shall be varied, then, unless the Court orders otherwise, the transferee company shall give notice of the varied terms to all other holders of shares of the same class and to all former holders of shares of the same class who accepted the original offer, and at any time within two months after receiving the notice—

      (a)   a holder of shares of that class shall be entitled to accept either the original offer or the offer as varied by the Court; and

      (b)   a former holder of shares of that class who accepted the original offer shall be entitled to require the transferee company to pay or transfer to him any additional consideration to which he would have been entitled, had his shares been acquired under the offer as varied by the Court.

   (6) If a shareholder has not accepted the offer by the end of the acquisition day, the transferee company shall, unless the Court has directed otherwise, within seven days after that day send to the transferor company an instrument of transfer of the shares of that shareholder executed—

      (a)   on behalf of the shareholder by a person appointed by the transferee company; and

      (b)   on its own behalf by the transferee company;

and transfer to the transferor company the consideration (whether shares, cash or any other consideration) payable by the transferee company for the shares, and the transferor company shall thereupon register the transferee company as the holder of those shares.

   (7) For the purposes of this section, the acquisition day is the day—

      (a)   three months after the day on which sub-section (1) is satisfied: or

      (b)   on which the last of any applications under sub-section (4) is disposed of;

whichever is the later.

   (8) Any sums received by the transferor company under sub-section (6) shall be paid into a separate bank account and any such sums and all shares or other consideration so received shall be held by the transferor company in trust for the several persons entitled to them.

 

238.   Rights of minority on take-over

   (1) Where—

      (a)   an offer is made to the shareholders of a company (in this section called “the transferor company”) or any of them for the purchase of their shares;

      (b)   in pursuance of the offer, shares in the transferor company are transferred to another body corporate (referred to in this section as “the transferee company”), whether the body corporate is a company within the meaning of this Act or not; and

      (c)   after the transfer of shares, the transferee company holds more than three-fourths of the shares in the transferor company or in a class of those shares;

then—

      (i)   the transferee company shall within one month after the date of the transfer, unless after a previous transfer it has already complied with this requirement, give notice of that fact to the holders of the remaining shares or of the remaining shares of that class, as the case may be; and

      (ii)   any such holder may, within three months after the giving to him of the notice require the transferee company to acquire all or any of his shares.

   (2) For the purposes of sub-section (1), where a share is transferred to or held by—

      (a)   a body corporate related to the transferee company; or

      (b)   a nominee of the transferee company or of a body corporate related to the transferee company; the share shall be deemed to be transferred to or held by the transferee company.

   (3) Where a shareholder under sub-section (1) requires the transferee company to acquire any shares, the transferee company shall be entitled and bound to acquire those shares on the terms of the offer or on such other terms as may be agreed or as the Court, on the application of either the transferee company or the shareholder, thinks fit to order.

 

239.   Remedy against oppression

   (1) In this section, “oppressive” means—

      (i)   oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members of a company; or

      (ii)   contrary to the interests of the members as a whole;

whether in the capacity of the member or members concerned as a member or members of the company, or otherwise.

   (2) The Court may, on the application of a member of a company, make an order or orders under this section if it is of the opinion—

      (a)   that the affairs of the company are being conducted, or the powers of the directors are being exercised, in a manner that is oppressive; or

      (b)   that—

      (i)   some act or omission, or proposed act or omission, by or on behalf of the company has been done or is threatened; or

      (ii)   some resolution of the members, or any class of them, has been passed or is proposed;

which was or would be oppressive;

for the purpose of remedying the situation of the member or members concerned.

   (3) Subject to this section, an order or orders under this section may include, but is not limited to, one or more of the following;

      (a)   an order directing or prohibiting any act or cancelling or varying any transaction or resolution;

      (b)   an order regulating the conduct of the company’s affairs in the future;

      (c)   an order for the purchase of the shares of any members of the company by other members or by the company itself and, in the case of a purchase by the company itself, for the reduction of the company’s capital accordingly;

      (d)   an order that the company be wound-up;

      (e)   an order appointing a receiver of property of the company.

   (4) Where an order under this section makes any alteration to the company’s share capital or articles then, notwithstanding anything in any other provision of this Act but subject to any provisions of the order, the company shall not without the leave of the Court make any further alteration to the share capital or articles inconsistent with the order.

   (5) Where an order is made under this section that a company be wound-up, Part XIII shall apply to the winding-up, with any necessary modifications, as if the order had been made upon an application duly filed by the company for a winding-up by the Court.

   (6) A copy of any order under this section altering the company’s share capital or articles shall be lodged by the company with the Registrar within fifteen days after the making of the order.

   (7) Where the order alters the company’s share capital, the Registrar, on the lodgement of the order, shall issue a replacement certificate of share capital for the company, worded to meet the circumstances of the case.

   (8) A person who contravenes an order under this section that is applicable to the person shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding one thousand monetary units or to imprisonment for a period not exceeding twelve months, or to both.

   (9) If the company fails to comply with sub-section (6), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues.

PART XII
FOREIGN COMPANIES

 

240.   Interpretation

   (1) In this Part, unless the context otherwise requires—

“documentary agent” means a person appointed as a documentary agent of a foreign company for the purposes of section 245;

“established place of business” means a place of business of a foreign company that is an established place of business under section 241;

“existing foreign company” means a body corporate incorporated outside Zambia which immediately before the commencement of this Act was registered as a foreign company under the former Act;

“foreign company” means—

      (a)   a body corporate formed outside Zambia that has registered under this Part; or

      (b)   an existing foreign company, subject to section 243;

“local director” means a local director of a foreign company appointed under section 248;

“registered principal office” means the office of a foreign company registered under section 245 as its principal place of business.

 

241.   Established place of business

   (1) For the purposes of this Part, and subject to this section, a body corporate formed outside Zambia has an “established place of business” if it has any of the following in Zambia;

      (a)   a branch or management office;

      (b)   an office for the registration of transfer of shares;

      (c)   a factory or mine; or

      (d)   any other fixed place of business.

   (2) An agency in Zambia of a body corporate formed outside Zambia in which the agent—

      (a)   does not have, or does not habitually exercise, a general authority to negotiate and conclude contracts on behalf of the body corporate; and

      (b)   does not maintain a stock of merchandise belonging to that body corporate from which he regularly fills orders on its behalf;

is not an established place of business of the body corporate for the purpose of this Part.

   (3) If a body corporate formed outside Zambia carries on business dealings in Zambia through a broker or general commission agent acting in the ordinary course of his business as such, the office of the broker or agent is not an established place of business of the body corporate for the purposes of this Part.

   (4) If a body corporate formed outside Zambia has a subsidiary which is incorporated in Zambia or has an established place of business in Zambia, then—

      (a)   an office of the subsidiary; or

      (b)   an established place of business of the subsidiary;

shall not be regarded for that reason only as an established place of business of the body corporate.

 

242.   Financial year of a foreign company

   (1) For the purposes of this Act, the “financial year” of a foreign company is the period, whether or not a period of one year, that begins on one accounting date of the company and ends on the day before the next.

   (2) The first “accounting date” of a foreign company is—

      (a)   the date of its registration as a foreign company; or

      (b)   the date on which it first had an established place of business;

whichever is earlier.

   (3) Subject to this section, the subsequent accounting dates of a foreign company are—

      (a)   the date specified in the application for its registration as the date on which the second financial year of the company will begin, and anniversaries of that date, if the application for registration specified such a date; or

      (b)   the anniversaries of the date of its incorporation, if the application for registration did not specify such a date.

   (4) A foreign company may change an accounting date by lodging a notice of the change in the prescribed form with the Registrar, provided that the change does not result in a financial year’s being longer than fifteen months.

   (5) Where a foreign company changes an accounting date under this section, the subsequent accounting dates of the company are unless changed under this section, the anniversaries of that date.

 

243.   Application of Part to existing foreign companies

   (1) Subject to this Act, this Act applies to an existing foreign company as if -

      (a)   it had been duly registered under this Act as a foreign company; and

      (b)   any document that, in accordance with the former Act, was duly lodged by it with the Registrar, or duly registered by the Registrar, had been duly lodged or registered under this Act.

 

244.   Register of foreign companies

The Registrar shall maintain a register of foreign companies for the purposes of this Part.

 

245.   Registration of a foreign company

   (1) A body corporate formed outside Zambia (in this section called an “external company”) may register under this section as a foreign company by lodging with the Registrar the application for registration and the other documents required to accompany it under this section.

   (2) The application shall be in the prescribed form and contain the following particulars relating to the company:

      (a)   its name;

      (b)   the nature of its business or businesses or other main objects;

      (c)   the relevant particulars of each of one or more individuals resident in Zambia, or bodies corporate incorporated in Zambia, authorised to accept on behalf of the company service of process or any notice required to be served on the company (in this Part called “documentary agents”);

      (d)   the relevant particulars of the persons who are to be local directors of the company, specifying which is to be the local Chairman;

      (e)   if the company has shares, the number and nominal value, if any, of its authorised and issued shares, and the amount paid thereon, distinguishing between the amounts paid and payable in cash and the amounts paid and payable otherwise than in cash;

      (f)   the address of the company’s registered or principal office in the country of its incorporation;

      (g)   subject to sub-section (5), the physical address of an office in Zambia to be its registered office;

      (h)   a postal address in Zambia.

   (3) The application may also specify a date, being a date, not more than fifteen months after

the date of lodgement of the application, on which the second financial year of the company will begin.

   (4) The application shall be accompanied by—

      (a)   a certified copy of the charter, statutes, regulations, memorandum and articles, or other instrument constituting, or defining the constitution of, the company;

      (b)   in relation to each documentary agent and local director, a statement signed by him accepting appointment as such; and

      (c)   the particulars and documents referred to in sub-section (2) of section 99 relating to any charge on any property in Zambia acquired by the company more than fourteen days before the lodgement of the application, of, if there are no such charges, a statement in the prescribed form to that effect.

   (5) If an external company has not set up or acquired an established place of business when it lodges an application for registration as a foreign company, it shall do so within twenty-eight days after the lodgement.

   (6) For the purposes of this section, the relevant particulars of a person are the following:

      (a)   in the case of an individual—

      (i)   his present forenames or surname;

      (ii)   any former forename or surname;

      (iii)   his residential and postal address;

      (iv)   his business occupation (if any);

      (b)   in the case of a body corporate—

      (i)   its name and, if a company, its designating number;

      (ii)   its registered office; and

      (iii)   its registered postal address.

 

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

   (1) If a body corporate formed outside Zambia sets up or acquires an established place of business in Zambia, it shall, within twenty-eight days after so doing, apply for registration as a foreign company under section 245.

   (2) If a body corporate fails to comply with sub-section (1), the body corporate, and any officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues.

 

247.   Returns required on alteration of registered particulars

   (1) If any alteration is made in the charter, statutes, regulations, memorandum and articles, or other instrument relating to a foreign company referred to in paragraph (4) (a) of section 245 the company shall, within two months after the date on which that alteration takes effect, lodge with the Registrar a notice in the prescribed form giving details of the alteration.

   (2) If any alteration is made in any of the particulars contained in the application referred to in sub-section (2) of section 245 the company shall, in accordance with this section, lodge with the Registrar a notice in the prescribed form giving details of the alteration.

   (3) In the case of any alteration in any of the particulars referred to in paragraphs (a), (b), (e) or (f) of sub-section (2) of section 245 the notice required by sub-section (2) shall be lodged within two months after the date of effect of the alteration.

   (4) In the case of any alteration in any of the particulars referred to in subparagraphs (c), (d), (g) or (h) of sub-section (2) of section 245 the notice required by sub-section (2) shall be lodged within twenty-eight days after the date of the alteration.

   (5) Where the particulars lodged pursuant to this section include the name of a person appointed as a documentary agent or as a local director or manager, the notice shall be accompanied by a consent signed by the person to act in that capacity.

 

248.   Foreign companyto appoint local director

   (1) A foreign company shall have at all times at least one individual, in this Act referred to as a “local director”, empowered and authorized to conduct and manage all the affairs, properties, business an other operations of the company in Zambia.

   (2) A local director of the company shall be resident in Zambia, and if the company has more than one local director, at least one of them shall be a resident of Zambia.

   (3) A contravention of subsection (2) which continues for more than two months shall constitute grounds for winding-up of the company by the court on the application of the Registrar.

   (4) A company which intends to decrease the number of its local directors shall notify the Registrar in writing.

   (5) A company shall designate the director referred to in subsection (1), as the local chairperson.

   (6) A company shall not appoint as a local director, a person who, under Part X, is not qualified to be a director of a company incorporated under this Act.

[S 248 subs by s 21 of Act 24 of 2011.]

 

249.   Responsibilities of local directors

   (1) If a person registered as a local director of a foreign company does an act ostensibly on behalf of the company in the course of carrying on the business of the company in Zambia, the act shall bind the company unless—

      (a)   the local director has no authority so to act; and

      (b)   the person with whom he is dealing has actual knowledge of the absence of authority, or, having regard to his position with, or relationship to, the company, ought to know of the absence of authority.

   (2) The company shall, in all trade circulars and business correspondence on or in which the company’s name appears, and which are despatched by or on behalf of the company—

      (a)   in Zambia, whether to persons in Zambia or not;

      (b)   outside Zambia exclusively to persons in Zambia; or

      (c)   exclusively for the purposes of the company’s operations in Zambia;

state in legible Roman characters in respect of each local director—

      (i)   his forenames or the initials thereof and his surname; and

      (ii)   any former forename or surname.

   (3) The Registrar may, if in his opinion special circumstances exist which justify it, by notice published in the Gazette, and subject to any conditions specified in the notice, exempt the company from the requirements of sub-section (2).

   (4) The company shall maintain a register of its local directors, to be kept at its registered office or the office notified to the Registrar for the purposes of section 252, and section two hundred and twenty-four shall apply to the register with the necessary modifications.

 

250.   Service on foreign company

   (1) A document may be served on a foreign company by—

      (a)   leaving it at an address registered as the address of a documentary agent of the company;

      (b)   personal service on a documentary agent of a company, if the agent is an individual;

      (c)   service in accordance with this Act on the documentary agent, if the documentary agent is a company;

      (d)   leaving it at the registered office of the company, if the company has no registered documentary agent, or no registered address for such an agent;

      (e)   personal service on a local director;

      (f)   leaving it at the registered office or principal place of business of the company in the country of its incorporation; or

      (g)   personal service on a director or secretary of a company in the country of its incorporation.

   (2) A document sent by registered or other receipted post to the address registered as the postal address of a documentary agent 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) Service in accordance with sub-section (1), other than paragraph (d), shall continue to be effective in relation to the company for a period of two years after the company ceases to be registered as a foreign company.

   (4) Nothing in this section shall derogate from the power of any Court to direct how service shall be affected of any document relating to legal proceedings before the Court.

 

251.   Annual accounts of foreign company

   (1) A foreign company shall, within three months after the end of each financial year of the company, lodge with the Registrar annual accounts and an auditors’ report corresponding as nearly as practicable with the annual accounts and auditors’ report in relation to the operations and assets in Zambia of the company that would be required under Part VIII if those operations and assets were the whole operations and assets of a public company incorporated under this Act.

   (2) For the purposes of sub-section (1), the foreign company shall appoint an auditor or auditors.

   (3) An auditor of a foreign company shall be—

      (a)   a registered accountant having a practice certificate issued by the Zambia Institute of Certified Accountants under the Accountants Act, 1982; or

      (b)   a firm of such registered accountants.

   (4) If the foreign company is required under its articles or other provisions of the constitution regulating its conduct, or under the laws of the country in which it is incorporated, to circulate annual accounts to its members or lay them before its members in general meeting, the company shall, within twenty-eight days after complying with those requirements, lodge with the Registrar a certified copy of the accounts together with, if the accounts are in a language other than English, a certified translation of them into English.

   (5) In the profit and loss account in the accounts referred to in sub-section (1), the company may make such apportionments and add such notes and explanations as are, in its opinion, necessary or desirable in order to give a true and fair view of the profit or loss on its operations in Zambia, and for this purpose may debit a reasonable rate of interest on capital employed in Zambia.

   (6) In relation to the accounts and reports referred to in sub-section (1), the Registrar may, on the application or with the consent of the local directors of the company, modify, in relation to the company, any of the requirements of this section or Part VIII to suit the circumstances of the company, provided that the accounts and reports give a true and fairview of the profit or loss on the operations of the company, and of the state of affairs of the company, in Zambia.

 

252.   Keeping of accounting records by foreign company

   (1) A foreign company shall—

      (a)   keep such accounting records as correctly record and explain the transactions of the company relating to its operations and assets in Zambia (including any transactions as trustee) and the financial position of the company in relation to those operations and assets; and

      (b)   keep its accounting records in such a manner as will enable—

      (i)   the preparation from time to time of true and fair accounts of those operations and assets of the company; and

      (ii)   those accounts of the company to be conveniently and properly audited in accordance with this Part.

   (2) The company shall retain the accounting records for a period of ten years after the completion of the transactions to which they relate.

   (3) The company shall keep at its registered office, or at another office notified to the Register in writing, such statements and records with respect to the matters dealt with in its accounting records as would enable the company to prepare true and fair accounts together with any documents required by this Part to be attached to the accounts.

   (4) The accounting records of the company shall be kept in writing or in any form that enables the accounting records to be readily accessible and readily convertible into writing.

   (5) The accounting records of the company shall be kept in English, unless the use of another language is approved in writing by the Registrar.

   (6) The company shall make its accounting records available in writing at all reasonable times for inspection without charge by the local directors and auditors of the company and by the Registrar or his delegate.

   (7) If the company fails to comply with this section—

      (a)   the Registrar may apply for an order that the company be wound-up in accordance with section257; and

      (b)   the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two thousand monetary units or to a term of imprisonment not exceeding two years, or to both.

   (8) The Registrar may, if he considers that the special circumstances of the company justify it, exempt the company, generally or in respect of any particular financial year, from any of the provisions of this section.

 

253.   Name of foreign company

   (1) Subject to this section, the name of a foreign company in Zambia shall be—

      (a)   the name of the company in the country of its incorporation, if that name is in English; or

      (b)   the name of the company in the country of its incorporation or a translation thereof, as the company chooses, if that name is in Roman characters in a language other than English;

      (c)   a translation or transliteration of the name of the company in the country of its incorporation, as the company chooses, if that name is not in Roman characters.

   (2) The Registrar may, on the application of the foreign company, whether before or after registration of the company, permit the company to have a different name in Zambia.

   (3) If, in the opinion of the Registrar, whether formed before or after the registration of a foreign company, the name of the foreign company is likely to cause confusion with the name of another body corporate or is otherwise undesirable, the Registrar may direct that the foreign company shall adopt another name for use in Zambia, being a name approved by the Registrar.

   (4) If the Registrar makes a direction under sub-section (3) in the case of a body corporate applying for registration as a foreign company, he shall not register the body corporate until it adopts such a new name.

   (5) If the Registrar makes a direction under sub-section (3) in the case of a foreign company already registered, and it does not adopt such a name within forty-two days after the issue of the direction, he shall register the designating number of the company, together with the words “Foreign Company”, as the name of the company.

   (6) A change of name under this section, or the use of a name different from the name used by the foreign company in the country of its incorporation shall not affect any rights or obligations of the company, or render defective any legal proceedings instituted or to be instituted by or against the company, and any legal proceedings may be continued or commenced by or against the company by its new name that might have been continued or commenced by or against the company by its former name.

 

254.   Publication of name of foreign company

   (1) Section 194 shall apply to a foreign company as if its name included at the end—

      (a)   the words “incorporated in “followed by the country of its incorporation; and

      (b)   the words “with limited liability”, if the liability of the members is limited;

but shall not apply in relation to business correspondence of the company dispatched outside Zambia.

 

255.   Registration of charges by foreign company

Section 99 shall apply in relation to a foreign company as if—

      (a)   a reference to a company were a reference to the foreign company;

      (b)   a reference to a charge were a reference to a charge over property of the company situated in Zambia; and

      (c)   a reference to the acquisition of property by the company included a reference to the acquisition of property before it registration as a foreign company.

 

256.   Notification of winding-up of foreign company

   (1) Where, in the case of a foreign company—

      (a)   a winding-up order is made by a Court of the country of its incorporation;

      (b)   a resolution is passed or other appropriate proceedings are taken in that country to lead to the voluntary winding-up of the company; or

      (c)   the company is dissolved or otherwise has ceased to exist according to the law of the country of its incorporation;

the company, or, if the company is dissolved, the documentary agents and local directors of the company, shall lodge a notice thereof with the Registrar within twenty-eight days after the event.

   (2) Where an event referred to in paragraph (a) or (b) of sub-section (1) has occurred, the company shall cause a statement to appear in legible Roman characters on every invoice, order or business letter thereafter issued in Zambia by or on behalf of the company, being a document on or in which the company’s name appears, to the effect that the company is being wound-up in the country of its incorporation.

   (3) A person who carries on, or purports to carry on, in Zambia business on behalf of a foreign company after the date on which it was dissolved or otherwise ceased to exist in the country of its incorporation shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding thirty monetary units for each day that he carries on or purports to carry on the business.

   (4) Nothing in this action shall derogate from the provisions of section 257.

 

257.   Winding-up of foreign company in Zambia

   (1) The undertaking in Zambia of a foreign company may be wound-up in accordance with this section whether or not the company has been dissolved or has otherwise ceased to exist according to the law of the country of its incorporation.

   (2) For the purposes of a winding-up under this section, the foreign company shall be treated as if it were a company incorporated in Zambia whose whole operations and assets were the operations and assets in Zambia of the foreign company.

   (3) Subject to this section, Part XIII shall apply, with any necessary modifications, to the winding-up of a foreign company.

   (4) A foreign company may be wound-up by the Court on the following grounds in addition to those referred to in section 272;

      (a)   if it is in the course of being wound-up, voluntarily or otherwise, in the country of its incorporation;

   (b)   if it is dissolved in the country of its incorporation or has ceased to carry on business in Zambia, or is carrying on business for the purposes only of winding-up its affairs;

      (c)   if the Court is of the opinion that the company is being operated in Zambia for any unlawful purpose.

   (5) The Court may, in the winding-up order or on subsequent application by the liquidator, direct that all transactions in Zambia by or with the foreign company shall be deemed to be or have been validly done notwithstanding that they occurred after the date when the company was dissolved or otherwise ceased to exist according to the law of the country of its incorporation, and may make the order on such terms and conditions as it deems fit.

 

258.   Cessation of business of foreign company

   (1) If a foreign company ceases to have an established place of business in Zambia, it shall, within twenty-eight days after so ceasing, lodge a notice of that fact in the prescribed form with the Registrar.

   (2) The Registrar shall register the notice and the company shall, subject to this section, thereupon cease to be registered as a foreign company.

   (3) The company shall maintain a documentary agent, and continue to notify the Registrar of the particulars of its documentary agents, for a period of two years after lodging the notice of its ceasing to have an established place of business.

   (4) Where the Registrar has reason to believe that a foreign company has ceased to have an established place of business in Zambia, he shall serve a notice on the company of that fact and stating the effect of sub-section (5).

   (5) If, at the end of three months after the giving of a notice under sub-section (4), the Registrar is not satisfied that the foreign company is maintaining an established place of business in Zambia, the company shall be deemed to have lodged a notice under sub-section (1) on that day.

   (6) Any person who, while a body corporate was registered as foreign company, would have had the right to inspect a document or register held by the Registrar in relation to the company, shall have the right to do so during the period of two years following the lodging of a notice by the company under sub-section (1).

 

259.   Penalties and disabilities

   (1) If a foreign company fails to comply with any of the obligations imposed upon it by this Part, the foreign company and any officer or documentary agent in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units.

   (2) If a local director or a documentary agent of a foreign company willfully fails to comply with any of the obligations imposed upon him by this Part, the local director or documentary agent shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units.

   (3) sub-sections (1) and (2) shall not apply in respect of any act or omission which constitutes an offence under another provision of this Part, or of this Act as applied by this Part.

   (4) Subject to this section, if a foreign company fails to lodge with the Registrar any document required by this Part to be so lodged, the rights of the foreign company under or arising out of or incidental to any contract made in Zambia while the failure continues shall not be enforceable by action or other legal proceedings.

   (5) A Court may, on the application of a foreign company to which sub-section (4) applies and if it is satisfied that it is just and equitable to do so, grant relief, either generally or on conditions, from any disability imposed by sub-section (4).

   (6) Nothing in this section shall prejudice the rights of any other parties against the foreign company in respect of a contract referred to in sub-section (4).

   (7) If another party commences an action or proceedings against a foreign company to which sub-section (4) applies, this section shall not preclude the foreign company from enforcing in the action or proceedings by way of counter-claim, set-off or otherwise, such rights as it may have against the party in respect of that contract.

 

260.   Invitations to the public relating to foreign companies

   (1) Part VI shall apply in relation to foreign companies, with the necessary modifications, as if a foreign company were a public company.

   (2) At the request of a foreign company, the Registrar may, if he thinks fit, waive or modify the provisions of Part VI in relation to the company.

   (3) Any prospectus registered by a foreign company for the purposes of an invitation to the public to acquire shares or debentures shall, in addition to complying with Part VI and subject to any modifications made under sub-section (2), also contain particulars of—

      (a)   the instrument constituting or defining the constitution of the company;

      (b)   the law, or provisions having the force of law, by or under which the incorporation of the company was effected;

      (c)   an address in Zambia where copies of the foregoing, or, if the same are in a language other than English, certified translations thereof, can be inspected;

      (d)   the date on which and the country in which the company was incorporated; and

      (e)   whether the liability of the members is limited.

   (4) A breach of sub-section (3) shall be deemed to be a breach of section 130.

 

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

   (1) In this section, “non-Zambian company” means any body corporate formed or proposed to be formed outside Zambia, other than a foreign company.

   (2) Part VI shall apply, with the necessary modifications, in relation a non-Zambian company as if it were a public company.

   (3) At the request of a non-Zambian company, the Registrar may, if he thinks fit, waive or modify the provisions of Part VI in relation to the company.

   (4) Any prospectus registered by a non-Zambian company for the purposes of an invitation to the public to acquire shares or debentures shall, in addition to complying with Part VI and subject to any modifications made under sub-section (2), also contain particulars of—

      (a)   the instrument constituting or defining the constitution of the company;

      (b)   the law, or provisions having the force of law, by or under which the incorporation of the company was effected;

      (c)   an address in Zambia where copies of the foregoing, or, if the same are in a language other than English, certified translations thereof, can be inspected;

      (d)   the date on which and the country in which the company was incorporated; and

      (e)   whether the liability of the members is limited.

   (5) A breach of sub-section (4) shall be deemed to be a breach of section 130.

PART XIII
WINDING-UP

 

DIVISION 13.1—GENERAL

 

262.   Interpretation

For the purposes of this Part, a reference to a member of a company includes, unless the context otherwise requires, a reference to a person claiming or alleged to be liable to contribute to the assets of the company in a winding up, for the purpose of any proceedings for determining, and of all proceedings prior to the final determination of, the persons who are so liable (including the presentation of a winding-up petition).

 

263.   Modes of winding-up

   (1) The winding-up of a company under this Part shall be—

      (a)   a winding-up by the Court; or

      (b)   a voluntary winding-up, being—

      (i)   a members’ voluntary winding-up; or

      (ii)   a creditors’ voluntary winding-up.

 

264.   Application of repealed Act

The provisions of this Act relating to the winding-up of a company shall not apply in relation to a winding-up that was commenced before the commencement of this Act, and such a winding-up shall be continued as if this Act had not been passed.

 

265.   Liability of members on winding-up

   (1) This section shall apply only in the case of a company limited by guarantee, an unlimited company and a company having shares which are not fully paid up.

   (2) When a company is wound-up, every member at the time of the commencement of the winding-up shall, subject to section 266, be liable to contribute to the assets of the company an amount sufficient for payment of its debts and liabilities and the costs, charges and expenses of the winding-up and for the adjustment of the rights of the members among themselves.

   (3) A sum due to any member in his capacity as a member by way of dividends or otherwise—

      (a)   shall not be regarded as a debt of the company payable to that member in a case of competition between himself and any other creditor not a member; and

      (b)   may be taken into account for the purpose of the final adjustment of the rights of the members among themselves.

 

266.   Limitation of liability

   (1) In the case of a public company or a private company limited by shares, section265 shall not require from any member a contribution exceeding the amount, if any, unpaid on the shares in respect of which he is liable as a member.

   (2) In the case of a company limited by guarantee, section 265 shall not require from any member a contribution exceeding the amount that he undertook, in the declaration of guarantee, to contribute to the assets of the company in the event of its being wound-up.

 

267.   Nature of liability of a member

The liability of a member shall create a debt in the nature of a specially accruing debt due from him at the time when his liability commenced, but payable at the times when calls are made for enforcing the liability.

 

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

   (1) If a member dies, whether before or after he has been placed on the list of those liable to contribute to the assets of the company, his personal representatives shall be so liable in due course of administration and, if they fail to pay any money ordered to be paid by them, proceedings may be taken for administering the estate of the deceased member and for compelling payment therefrom of the money due.

   (2) If a member becomes bankrupt, either before or after he has been placed on the list of those liable to contribute to the assets of the company—

      (a)   his trustee in bankruptcy shall represent him for all the purposes of the winding-up, and shall be liable to contribute accordingly; and

      (b)   there may be proved against the estate of the bankrupt the estimated value of his liability to future calls as well as to calls already made.

 

269.   Jurisdiction to wind-up companies

   (1) The Court shall have jurisdiction to wind-up, in accordance with this Act—

      (a)   a body corporate incorporated in Zambia;

      (b)   a body corporate incorporated in a foreign country and-

      (i)    registered as a foreign company; or

      (ii)   having any business or undertaking or assets in Zambia.

 

DIVISION 13.2—WINDING-UP BY THE COURT

 

270.   Application of Division

This Division shall apply in the case of the winding-up of a company by the Court.

 

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

   (1) Subject to this section, a company may be wound-up by the Court on the petition of—

      (a)   the company;

      (b)   any creditor, including a contingent or prospective creditor, of the company;

      (c)   a member;

      (d)   any person who is the personal representative of a deceased member;

      (e)   the trustee in bankruptcy of a bankrupt member;

      (f)   any liquidator of the company appointed in a voluntary liquidation; or

      (g)   the Registrar.

   (2) In the case of a public company or a private company limited by shares, a member shall not be entitled to present a winding-up petition unless his shares, or some of them—

      (a)   were originally allotted to him;

      (b)   have been held by him, and registered in his name for at least six months; or

      (c)   have devolved on him by operation of law.

   (3) The Court shall not hear a winding-up petition presented by a contingent or prospective creditor until—

      (a)   such security for costs has been given as the Court thinks reasonable; and

      (b)   A prima facie case for winding-up has been established to the satisfaction of the Court.

   (4) Where a company is being wound-up voluntarily, the Court shall not make a winding-up order unless it is satisfied that the voluntary winding-up cannot be continued with due respect to the interests of the creditors or members.

 

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

   (1) The Court may order the winding-up of a company on the petition of a person other than the Registrar if—

      (a)   the company has by special resolution resolved that it be wound-up by the Court;

      (b)   the company does not commence its business within twelve months after its incorporation or suspends its business for twelve months;

      (c)   the company is unable to pay its debts;

      (d)   the period, if any, fixed for the duration of the company by the articles expires of the event, if any, occurs on the occurrence of which the articles provide that the company is to be dissolved;

      (e)   the number of members is reduced below two; or

      (f)   in the opinion of the Court, it is just and equitable that the company should be wound- up.

   (2) The Court may order the winding-up of a company on the petition of the Registrar on the grounds specified in paragraph (b), (d), (e or f) of sub-section (1) or on the ground that the company has persistently failed to comply with any of the provisions of this Act.

   (3) For the purposes of this section, a company is unable to pay its debts if—

      (a)   there is due from the company to any creditor (including a creditor by assignment) an amount exceeding fifty monetary units, and—

      (i)   the creditor has, more than twenty-one days previously, served on the company a written demand under his hand requiring the company to pay the amount so due; and

      (ii)   the company has failed to pay the sum or to secure or compound it to the reasonable satisfaction of the creditor;

      (b)   execution or other process issued on a judgment, decree or order of any Court in favour of a creditor of the company is returned unsatisfied in whole or in part; or

      (c)   the company is unable to pay its debts as they fall due.

   (4) In determining whether a company is unable to pay its debts, the Court shall take into account the contingent and prospective liabilities of the company.

 

273.   Commencement of winding-up by Court

   (1) Where, before the presentation of the petition for the winding-up of a company by the Court, a resolution has been passed by the company for voluntary winding-up, the winding-up of the company shall be deemed to have commenced at the time of the passing of the resolution, and, unless the Court otherwise directs, all proceedings taken in the voluntary winding-up shall be deemed to have been validly taken.

   (2) In any other case the winding-up shall be deemed to have commenced at the time of the presentation of the petition for the winding-up of the company by the Court.

 

274.   Payment of preliminary costs

   (1) The person, other than the company itself or the liquidator thereof, on whose petition a winding-up order is made shall at his own cost prosecute all proceedings in the winding-up until a liquidator has been appointed.

   (2) The liquidator shall, unless the Court orders otherwise, reimburse to the petitioner, out of the assets of the company, the taxed costs incurred by the petitioner in any such proceedings.

   (3) Where any winding-up order is made upon the petition of the company or the liquidator thereof, the costs incurred shall, subject to any order of the Court, be paid out of the assets of the company in like manner as if they were the costs of any other petitioner.

 

275.   Powers of Court on hearing petition

   (1) On hearing a winding-up petition, the Court may—

      (a)   dismiss it with or without costs;

      (b)   adjourn the hearing conditionally or unconditionally; or

      (c)   make any interim order or other order that it thinks fit;

but the Court shall not refuse to make a winding-up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets or that the company has no assets or, in the case of a petition by a member, that there will be no assets available for distribution amongst the members.

   (2) The Court may, on the petition’s coming on for hearing or at any time on the application of the petitioner, the company, or any person who has given notice that he intends to appear on the hearing of the petition—

      (a)   direct that any notices be given or any steps taken before or after the hearing of the petition;

      (b)   dispense with any notices being given or steps being taken which are required by or under this Act, or by any prior order of the Court;

      (c)   direct that oral evidence be taken on the petition or any matter relating thereto;

      (d)   direct a speedy hearing or trial of the petition or any issue or matter;

      (e)   allow the petition to be amended or withdrawn; and

      (f)   give such directions as to the proceedings as the Court thinks fit.

   (3) Where the petition is presented by members on the ground that it is just and equitable that the company should be wound-up, and the Court is of opinion that—

      (a)   the petitioners are entitled to relief either by winding-up the company or by some other means; and

      (b)   in the absence of any other remedy, it would be just and equitable that the company should be wound-up; the Court shall make a winding-up order unless it is also of the opinion both that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound-up instead of pursuing that other remedy.

 

276.   Power to stay or restrain proceedings against company

At any time after the presentation of a winding-up petition and before a winding-up order has been made, the company or the creditor or member may, where any action or proceeding against the company is pending, apply to the Court to stay or restrain further proceedings in the action or proceeding, and the Court may stay or restrain the proceedings accordingly on such terms as it thinks fit.

 

277.   Avoidance of dispositions

Any disposition of the property of the company including things in action, and any transfer of shares or alteration in the status of the members of the company made after the commencement of winding-up by the Court shall be void unless the Court otherwise orders.

 

278.   Avoidance of attachments

Any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of a winding-up by the Court shall be void.

 

279.   Copy of order to be registered

   (1) Within fifteen days after the making of a winding-up order the petitioner shall—

      (a)   lodge a copy of the order with the Registrar;

      (b)   cause a copy to be served upon the secretary of the company or upon such other person or in such manner as the Court directs;

      (c)   deliver a copy to the official receiver, if the official receiver has not been appointed as liquidator or if no liquidator has been appointed; and

      (d)   deliver a copy to the liquidator (if any) with a statement that the requirements of this sub-section have been complied with.

   (2) Within fifteen days after receiving a copy of a winding-up order under sub-section (1), the Registrar shall cause a notice of the making of the order to be published in the Gazette.

   (3) If the petitioner fails to comply with sub-section (1), 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.

 

280.   Provisional liquidator

   (1) The Court may appoint the official receiver or any other person to be liquidator provisionally at any time after the presentation of a winding-up petition and before the making of a winding-up order.

   (2) The provisional liquidator shall have and may exercise all the functions and powers of a liquidator subject to such limitations and restrictions as may be prescribed, or as the Court specifies in the order appointing him.

 

281.   Stay of actions

When a winding-up order has been made or a provisional liquidator has been appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court may impose.

 

282.   Appointment and style of liquidators

   (1) The Court may in the winding-up order appoint a liquidator, or may give directions as to the appointment of a liquidator, by the members or creditors of a company or otherwise as it thinks fit.

   (2) If the order makes no direction as to the liquidator, the official receiver shall be the liquidator of the company.

   (3) Where a provisional liquidator has been appointed before the making of the winding-up order, he shall continue to act as such until he or another person becomes liquidator and is capable of acting as such.

   (4) Where no provisional liquidator has been appointed before the making of the winding-up order, the official receiver shall become the provisional liquidator and shall continue to act as such until he or another person becomes liquidator and is capable of acting as such.

   (5) The official receiver shall be the liquidator during any vacancy or at any time when there is no liquidator capable of acting.

   (6) Any vacancy in the office of the liquidator appointed by the Court may be filled by the Court.

   (7) A liquidator appointed by the Court may resign or on cause shown be removed by the Court.

   (8) A liquidator shall be described, where a person other than the official receiver is liquidator, by the style of “the liquidator” or where the official receiver is liquidator, by the style of “the official receiver and liquidator”, of the particular company in respect of which he is appointed, and not by his individual name.

   (9) If more than one liquidator is appointed by the Court, the Court shall declare whether anything by this Act required or authorised to be done by the liquidator is to be done by all or any one or more of the persons appointed.

   (10) The Registrar shall, where a liquidator is appointed under subsection (1) or is released under section 291, cause the name, business address and details of appointment or release of the liquidator to be notified in the Gazette for public information.

[S 282(10) ins by s 22 of Act 24 of 2011.]

 

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

   (1) If a person other than the official receiver is appointed liquidator in the winding-up of a company by the Court, that person—

      (a)   shall not be capable of acting as liquidator until he has lodged a notice of his appointment with the Registrar and given such security as may be directed by the Court, or by the official receiver, to the satisfaction of the official receiver; and

      (b)   shall give the official receiver such information and such access to and facilities for inspecting the books and documents of the company, and generally such aid as may be requisite for enabling the official receiver to perform his duties under this Act.

   (2) Paragraph (a) of sub-section (1) shall not apply in the case of a provisional liquidator unless the Court so orders.

 

284.   Control of liquidators by official receiver

   (1) Where, in the winding-up of a company by the Court, a person other than the official receiver is the liquidator, the official receiver shall take cognizance of his conduct and if the liquidator does not faithfully perform his duties and duly observe all the respect to the performance of his duties, or if any complaint is made to the official receiver by any creditor or member in regard thereto, the official receiver shall inquire into the matter, and take such action as he thinks fit.

   (2) The official receiver may at any time require any liquidator of a company which is being wound-up by the Court to answer any inquiry in relation to any winding-up in which he is engaged, and may apply to the Court to examine him or any other person on oath concerning the winding-up.

   (3) An official receiver may—

      (a)   direct an investigation to be made of the books and vouchers of a liquidator;

      (b)   recommend the prosecution of a liquidator, where the official receiver reasonably believes that the liquidator has committed an offence under this Act; or

      (c)   recommend the disqualification of a person from carrying out the functions of a liquidator.

[S 284(3) subs by s 23 of Act 24 of 2011.]

 

285.   Remuneration of liquidators

   (1) Subject to section 346A, a liquidator, other than the official receiver, shall be entitled to receive such salary or remuneration by way of commission or otherwise as is determined—

      (a)   by agreement between the liquidator and the committee of inspection, if any;

      (b)   by an extraordinary resolution passed at a meeting of creditor convened by the liquidator by a notice to each creditor to which was attached a statement of all receipts and expenditure by the liquidator and the amount of remuneration sought by the liquidator, failing an agreement or where there is no committee of inspection; or

      (c)   by the court, failing a determination under paragraph (a) or (b).

[S 285(1) subs by s 24 of Act 24 of 2011.]

   (2) Where the salary or remuneration of a liquidator is determined under paragraph (a) of sub-section (1), the Court may, on the application of one or more members whose shareholdings represent in total not less than five per centum of the issued capital of the company (or who, in the case of a company having no share capital, constitute not less than five per centum of the members), confirm or vary the determination.

   (3) Where the salary or remuneration of a liquidator is determined under paragraph (b) of sub-section (1), the Court may, on the application of the liquidator or one or more members as described in sub-section (2), confirm or vary the determination.

   (4) Subject to any order of the Court, the official receiver when acting as a liquidator or provisional liquidator of a company shall be entitled to receive such remuneration by way of commission or otherwise as may be prescribed.

 

286.   Custody and vesting of company’s property

   (1) Where a winding-up order has been made or a provisional liquidator has been appointed, the liquidator or provisional liquidator shall take into his custody or under his control all the property and things in action to which the company is or appears to be entitled.

   (2) The Court may, on the application of the liquidator, by order direct that all or any part of the property of whatsoever description belonging to the company or held by trustees on its behalf shall vest in the liquidator, and thereupon the property to which the order relates shall vest accordingly and the liquidator may, after giving such indemnity, if any, as the Court directs, bring or defend any action or other legal proceedings which relates to that property or which it is necessary to bring or defend for the purpose of effectually winding-up the company and recovering its property.

   (3) Where an order is made under this section, the liquidator of a company in relation to which the order is made shall within fifteen days after the making of the order—

      (a)   lodge a copy of the order with the Registrar; and

      (b)   in the case of property vested in the liquidator in respect of the transfer of which any written law provides for registration, deliver a copy of the order to the proper officer of the appropriate authority for the registration of the transfer, together with a written application to the officer for the registration of the order.

   (4) A liquidator who fails to comply with sub-section (3) 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) No vesting order referred to in this section shall have any effect or operation in transferring or otherwise vesting any such property as is referred to in paragraph (b) of sub-section (3) until delivered to the appropriate authority as required by the written law.

 

287.   Statement of company’s affairs

   (1) Unless the Court directs otherwise, the company shall, within three months of the appointment of a liquidator, prepare and submit to the liquidator a statement as to the affairs of the company as at the date of the winding-up order showing—

[S 287(1) am by s 25 of Act 24 of 2011.]

      (a)   the particulars of its assets, debts and liabilities;

      (b)   the names and addresses of its creditors;

      (c)   the securities held by each of the creditors;

      (d)   the dates when the securities were respectively given; and

      (e)   such further information as may be prescribed or as the liquidator requires.

   (2) The statement shall be verified by the statutory declaration of—

      (a)   at least one director as at the date of the winding-up order or;

      (b)   the secretary of the company at that date.

   (3) The liquidator, subject to the direction of the Court, may by notice in writing, require a person—

      (a)   who is, or was within two years before the date of the winding-up order, an officer of the company; or

      (b)   who took part in the formation of the company, if the company was formed less than two years before the date of the winding-up order;

to verify, by statutory declaration, such parts of the statement as he is in a position to verify.

   (4) The liquidator may serve a notice on a person under sub-section (3) either personally or by sending it by post to the address of that person last known to the liquidator.

   (5) A person required to verify the statement shall, within fourteen days after receiving the notice or within such extended time as the liquidator or the Court for special reasons specifies, submit a statutory declaration verifying those matters in the statement which he is in a position to verify and specifying any matters in the statement which in his opinion are incorrect.

   (6) Within seven days after receiving the statement or any statutory declaration under sub-section (3), the liquidator shall cause copies to be—

      (a)   filed with the Court;

      (b)   lodged with the Registrar; and

      (c)   delivered to the official receiver, if the official receiver is not the liquidator.

   (7) Any person required under this section to verify the statement may be allowed, and be paid out of the assets of the company, such costs and expenses incurred in and relating to doing so as the liquidator considers reasonable, subject to an appeal to the Court.

   (8) If a 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 five hundred monetary units.

   (9) A person who fails to comply with sub-section (5) shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two hundred and fifty monetary units or to imprisonment for a period not exceeding three months, or to both.

   (10) A statement made under this section may be used as evidence in any proceedings against any person making it.

   (11) A liquidator who fails to comply with sub-section (6) shall be guilty of an offence, and shall be liable to a fine of three monetary units for each day that the failure continues.

 

288.   Report by liquidator

   (1) A liquidator shall, not later than six months or such longer period as the court may allow after receipt of the statement of company affairs, submit to the court, the Registrar, the official receiver, the holder of the charge by virtue of which the liquidator was appointed and to any trustees for secured creditors of the company and, so far as the liquidator is aware of their address, a report on the state of affairs with respect to the property in liquidation, including—

      (a)   the amount of capital issued, subscribed and paid up and the estimated amount of assets and liabilities;

      (b)   the cause of the failure of the company, if it has failed;

      (c)   whether, in the opinion of the liquidator, further inquiry is desirable as to any matter relating to the promotion, formation or failure of the company or the conduct of its business;

      (d)   particulars of assets comprising the property in liquidation;

      (e)   particulars of the debts and liabilities to be satisfied from the property in liquidation;

      (f)   the names and addresses of the creditors with an interest in the property in liquidation;

      (g)   particulars of any encumbrance over the property in liquidation held by any creditor including the date on which it was created;

      (h)   particulars of any default by the grantor in making relevant information available;

      (i)   the events leading up to the liquidator’s appointment, so far as the liquidator is aware of them;

      (j)   the disposal or proposed disposal, by the liquidator, of any property of the company and the carrying on or proposed carrying on, by the liquidator, of any business of the company;

      (k)   the amount of the principal and interest payable to preferential creditors;

      (l)   the amount, if any, likely to be available for the payment of other creditors; and

      (m)   such other information as may be prescribed.

[S 288(1) subs by s 26(a) of Act 24 of 2011.]

   (2) The liquidator may also make further reports stating—

      (a)   the manner in which the company was formed;

      (b)   whether in his opinion any fraud has been committed or any material fact has been concealed—

      (i)   by any person in its promotion or formation; or

      (ii)   by any officer in relation to the company since its formation;

      (c)   whether any officer of the company has contravened or failed to comply with any of the provisions of this Act; and

      (d)   any other matter which in his opinion it is desirable to bring to the notice of the Court.

   (3) The Registrar may, where a liquidator—

      (a)   does not submit a report under subsection (1), issue a reminder to the liquidator to submit the report within fourteen days of the receipt of the reminder; or

      (b)   does not comply with the notice issued by the Registrar under paragraph (a), cause the liquidator to be disqualified from acting as a liquidator by removing the liquidator from the register of liquidators.

[S 288(3) ins by s 26(b) of Act 24 of 2011.]

 

289.   Powers of liquidator

   (1) The liquidator may, during the four weeks following the date of the winding-up order, carry on the business of the company so far as is necessary for the satisfactory winding-up thereof.

   (2) The liquidator may, with the authority either of the Court or of the committee of inspection—

      (a)   carry on the business of the company, so far as is necessary for the beneficial winding- up thereof, after the four weeks following the date of the winding-up order;

      (b)   pay any class of creditors in full, subject to section 346;

      (c)   make any compromise or arrangement with creditors, persons claiming to be creditors, or persons having or alleging themselves to have any claim against the company, whether present or future, certain or contingent, ascertained or sounding only in damages or whereby the company may be rendered liable;

      (d)   compromise any debts and liabilities capable of resulting in debts and any claims of any kind, whether present or future, certain or contingent, ascertained or sounding only in damages, that subsist or are supposed to subsist between the company on the one hand and a member, a debtor or person apprehending liability on the other;

      (e)   make agreements on all questions in any way relating to or affecting the assets or the winding-up of the company; and

      (f)   take any security for the discharge of any such debt, liability or claim, and give a complete discharge in respect thereof.

   (3) For the purpose of winding-up the affairs of the company and distributing its assets the liquidator may—

      (a)   bring or defend any action or other legal proceeding in the name and on behalf of the company;

      (b)   compromise any debt due to the company, other than a debt due from a member, where the amount claimed by the company to be due to it does not exceed fifty monetary units;

      (c)   sell the real and personal property and things in action of the company by public auction, public tender or private contract either by transferring the whole thereof to any person or company or selling the same in parcels;

      (d)   execute, in the name and on behalf of the company, all deeds, receipts and other documents, and for that purpose use when necessary the company’s seal;

      (e)   prove, rank and claim in the bankruptcy of any member or debtor for any balance against his estate, and receive dividends in the bankruptcy in respect of that balance as a separate debt due from the bankrupt and rateably with the other separate creditors;

      (f)   draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of the company with the same effect with respect to the liability of the company as if the bill or note had been drawn, accepted, made or endorsed by or on behalf of the company in the course of its business;

      (g)   raise on the security of the assets of the company any money necessary;

      (h)   take out letters of administration of the estate of any deceased member or debtor, and do any act necessary for obtaining payment of any money due from a member or debtor or his estate which cannot be conveniently done in the name of the company, in which case, for the purposes of enabling the liquidator to take out the letters of administration or recover the money, the money due shall be deemed due to the liquidator himself;

      (i)   appoint a legal practitioner to assist him in his duties;

      (j)   appoint an agent to do any business which the liquidator is unable to do himself;

      (k)   give notice of the winding-up in any jurisdiction where the company does business; and

      (l)   do all such other things as are necessary for winding-up the affairs of the company and distributing its assets.

   (4) The exercise by the liquidator of the powers conferred by this section shall be subject to the control of the Court, and any creditor or member may apply to the Court with respect to any exercise or proposed exercise of any of these powers.

 

290.   Exercise and control of liquidator’s powers

   (1) Subject to this Act, the liquidator shall, in the administration of the assets of the company and in the distribution thereof among its creditors, have regard to any directions given by resolution of the creditors or members at any general meeting or by the committee of inspection, and any directions so given by the creditors or members shall in case of conflict override any directions given by the committee of inspection.

   (2) The liquidator may summon general meetings of the creditors or members for the purpose of ascertaining their wishes, and he shall summon meetings at such times as the creditors or members by resolution direct or whenever requested in writing to do so by—

      (a)   members whose shareholdings represent in total not less than one twentieth of the issued capital of the company, in the case of a company with share capital;

      (b)   not fewer than one tenth of the members, in the case of a company limited by guarantees; or

      (c)   creditors representing in the aggregate not less than one twentieth of the value of the creditors of the company.

   (3) The liquidator may apply to the Court for directions in relation to any particular matter arising under the winding-up.

   (4) Subject to this Act, the liquidator shall use his own discretion in the management of the affairs and property of the company and the distribution of its assets.

 

291.   Release of liquidator and dissolution of company

When the liquidator—

      (a)   has realised all the property of the company or so much thereof as can in his opinion be realised without needlessly protracting the liquidation, and has distributed a final dividend, if any, to the creditors and adjusted the rights of the members among themselves and made a final return, if any, to the members; or

      (b)   has resigned or has been removed from his office;

he may apply to the Court for an order—

      (i)   that he be released; or

      (ii)   that he be released and that the company be dissolved.

 

292.   Orders for release or dissolution

   (1) In deciding whether to grant an application under section 291, the Court—

      (a)   may cause a report on the accounts of a liquidator (not being the official receiver) to be prepared by the official receiver or by an auditor appointed by the Court; and

      (b)   shall take into consideration-

      (i)    the report;

      (ii)   any objection which is made against the release of the liquidator by the official receiver, auditor or any creditor or member or other person interested; and

      (iii)   whether the liquidator has complied with all the requirements of the Court.

   (2) If the Court does not grant the release of a liquidator, the Court may, on the application of any creditor or member or person interested, if it thinks it just and equitable, make an order that the liquidator shall be liable to the person or persons concerned for any damages caused to them by any act or omission, or specified acts or omissions, the liquidator may have done or made contrary to his duty.

   (3) An order of the Court releasing the liquidator shall discharge him from all liability in respect of any act done or default made by him in the administration of the affairs of the company or otherwise in relation to his conduct as liquidator, but any such order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact.

   (4) Where the liquidator has not previously resigned or been removed, his release shall operate as a removal from office.

   (5) Where the Court has made—

      (a)   an order that the liquidator be released; or

      (b)   an order that the liquidator be released and that the company be dissolved;

a copy of the order shall within twenty-one days after the making thereof be lodged by the liquidator—

      (i)   with the Registrar; and

      (ii)   with the official receiver, of the liquidator.

   (6) A liquidator who fails to comply with sub-section (5) 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.

 

293.   Dissolution of the company

Where the Court has made an order that the company be dissolved, the Registrar shall, upon lodgement with him of a copy of the order, strike the name of the company off the register and notify the same in the Gazette, and the company shall thereupon be dissolved as at the date of the publication of the notice in the Gazette.

 

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

   (1) The liquidator may, and if requested by any creditor or member shall, summon separate meetings of the creditors and members for the purpose of—

      (a)   determining whether or not the creditors or members require a committee of inspection to act with the liquidator;

      (b)   appointed members of the committee, if a committee is required.

   (2) If there is a difference between the determinations of the meetings of the creditors and members, the Court shall decide the matter and make such order as it thinks fit.

 

295.   Constitution and proceedings of committee of inspection

   (1) The committee of inspection shall consist of creditors and members of the company or persons holding—

      (a)   general powers of attorney from creditors or members; or

      (b)   special authorities from creditors or members authorising the persons named therein to act on such a committee;

and shall be appointed by the meetings of creditors and members in such proportions as are agreed or, if there is no agreement, as are determined by the Court.

   (2) The committee shall meet at such times and places as they from time to time decide, and the liquidator or any member of the committee may also call a meeting of the committee as he thinks necessary.

   (3) The committee may act by a majority of members present at a meeting, but shall not act unless a majority of the committee is present.

   (4) A member of the committee may resign by notice in writing signed by him and delivered to the liquidator.

   (5) If a member of the committee—

      (a)   becomes bankrupt;

      (b)   assigns his estate for the benefit of his creditors or makes an arrangement with his creditors pursuant to any written law relating to bankruptcy; or

      (c)   is absent from five consecutive meetings of the committee without the prior leave or subsequent consent of a majority of those members who together with himself represent the creditors or members, as the case may be;

his office shall thereupon become vacant.

   (6) A member of the committee may be removed by an ordinary resolution at a meeting of creditors, if he represents creditors, or of members, if he represents members, of which meeting seven days’ notice in writing has been given stating the object of the meeting.

   (7) A vacancy in the committee may be filled by the appointment by the committee of the same or another creditor or member or person holding a general power or special authority as referred to in sub-section (1).

   (8) The liquidator may at any time of his own motion, and shall within seven days after the request in writing of a creditor or member, summon a meeting of creditors or of members, as the case requires, to consider any appointment made under sub-section (7), and the meeting may—

      (a)   confirm the appointment; or

      (b)   revoke the appointment and make another appointment.

   (9) The continuing members of the committee, if not fewer than two, may act notwithstanding any vacancy in the committee.

 

296.   Power to stay winding-up

   (1) At any time after an order for winding-up has been made, the Court may, on the application of the liquidator or of any creditor or member and if it is satisfied that all proceedings in relation to the winding-up ought to be stayed, make an order staying the proceedings either altogether or for a specified time on such terms and conditions as the Court thinks fit.

   (2) On any such application the Court may, before making an order, require the liquidator to furnish a report with respect to any facts or matters which are in his opinion relevant.

   (3) A copy of an order made under this section shall be lodged by the company with—

      (a)   the Registrar, and

      (b)   the official receiver;

within twenty-one days after the making of the order.

   (4) If the company fails to comply with sub-section (3), the company, and each officer in default, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues.

 

297.   Appointment of special manager

   (1) The liquidator may, if satisfied that the nature of the estate or business of the company, or the interests of the creditors or members generally, require the appointment of a special manager of the estate or business of the company other than himself, request the Court to appoint a special manager of the estate or business to act during such time as the Court directs with such powers, including any of the powers of a receiver or receiver and manager, as are entrusted to him by the Court.

   (2) The special manager—

      (a)   shall give such security and account in such a manner as the Court directs;

      (b)   shall receive such remuneration as is fixed by the Court;

      (c)   may at any time resign after giving not less than one month’s notice in writing to the liquidator of his intention to resign; and

      (d)   may, on cause shown, be removed by the Court.

 

298.   Claims of creditors and distribution of assets

   (1) The Court may fix a date on or before which creditors are to prove their debts or claims and after which they will be excluded from the benefit of any distribution made.

   (2) The Court shall adjust the rights of the members among themselves and distribute any surplus among the persons entitled thereto.

   (3) The Court may, in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the costs, charges and expenses incurred in the winding-up in such order of priority as the Court thinks fit.

 

299.   Inspection of books by creditors and members

The Court may, at any time after making a winding-up order, make any order for inspection of the books and papers of the company by creditors and members that the Court thinks fit, and any books and papers in the possession of the company may be inspected by creditors or members in accordance with the order.

 

300.   Power to summon persons connected with company

   (1) The Court may summon before it any officer of the company or person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or any person whom the Court thinks capable of giving information concerning the promotion, formation, trade, dealings, affairs or property of the company.

   (2) The Court may examine the officer or person on oath concerning the matters referred to in sub-section (1) either orally or on written interrogatories and may reduce his answers to writing and require him to sign them.

   (3) Any writing so signed may be used in evidence in any legal proceedings against the officer or person.

   (4) The Court may require him to produce any books and papers in his custody or power relating to the company, but, if he claims any lien on books or papers, the production shall be without prejudice to that lien, and the Court shall have jurisdiction to determine all questions relating to that lien.

   (5) An examination under this section may, if the Court so directs, be held before the Registrar of the High Court.

   (6) Any person summoned for examination under this section may at his own cost employ a legal practitioner who shall be at liberty to put to him such questions as the Court thinks just for the purpose of enabling him to explain or qualify any answers given by him.

   (7) If any person so summoned, after being tendered a reasonable sum for his expenses, refuses to come before the Court at the time appointed, not having a lawful excuse made known to the Court at the time of its sitting and allowed by it, the Court may cause him to be apprehended and brought before the Court for examination.

 

301.   Power to order public examination

   (1) Where the liquidator has made a report stating that, in his opinion—

      (a)   a fraud has been committed;

      (b)   any material fact has been suppressed or concealed by any person in the promotion or formation of the company or by any officer in relation to the company since its formation; or

      (c)   any officer of the company has failed to act honestly or diligently or has been guilty of any impropriety or recklessness in relation to the affairs of the company;

the Court may, after consideration of the report, direct that—

      (i)   the person or officer;

      (ii)   any other person who was previously an officer of the company, or who is known or suspected to have in his possession any property of the company or is supposed to be indebted to the company; or

      (iii)   any person whom the Court thinks capable of giving information concerning the promotion, formation, trade, dealings, affairs or property of the company;

shall attend before the Court on a day appointed and be publicly examined as to the promotion or formation or the conduct of the business of the company, and, in the case of an officer or former officer, as to his conduct and dealings as an officer thereof.

   (2) The liquidator and any creditor or member may take part in the examination either personally or by a legal practitioner.

   (3) The Court may put or allow to be put such questions to the person examined as the Court thinks fit.

   (4) The person examined shall be examined on oath and shall answer all such questions as the Court puts or allows to be put to him.

   (5) If a person directed to attend before the Court under this section applies to the Court to be exculpated from any charges made or suggested against him, the liquidator shall appear on the hearing of the application and call the attention of the Court to any matters which appear to him to be relevant, and if the Court, after hearing any evidence given or witnesses called by the liquidator, grants the application, the Court may allow the applicant such costs as it thinks just.

   (6) A person ordered to be examined under this section—

      (a)   shall before his examination be furnished with a copy of the liquidator’s report; and

      (b)   may at his own cost engage a legal practitioner, who shall be at liberty to put to him or any other person giving evidence such questions as the Court thinks just.

   (7) Notes of the examination—

      (a)   shall be reduced to writing;

      (b)   shall be read over to or by and signed by the person examined;

      (c)   may thereafter be used in evidence in any legal proceedings against him; and

      (d)   shall at all reasonable times, be open to the inspection of any creditor or member.

   (8) The Court may, if it thinks fit, adjourn the examination from time to time.

   (9) An examination under this section may, if the Court so directs, be held before the Registrar of the High Court.

   (10) For the purposes of this section, “officer” includes a banker, legal practitioner or auditor of the company.

 

302.   Power to arrest absconding member or officer

   (1) The Court, at any time before or after the making of a winding-up order, on proof of probable cause for believing that a member or officer or former member or officer of the company is about to—

      (a)   quit Zambia;

      (b)   otherwise to abscond; or

      (c)   remove or conceal any of his property for the purpose of evading payment of any money due to the company or of avoiding examination respecting the affairs of the company;

may cause the member, officer or former member or officer to be arrested and his books and papers and movable personal property to be seized and him and them to be kept safely until such time as the Court orders.

   (2) For the purposes of this section, “officer” includes a banker, legal practitioner or auditor of the company.

 

303.   Powers of Court cumulative

Any powers by this Act conferred on the Court shall be in addition to and not in derogation of any power of instituting proceedings against any member or debtor of a company or the estate of any member or debtor for the recovery of any debt or other sum.

 

DIVISION 13.3—VOLUNTARY WINDING-UP

 

304.   Voluntary winding-up

This Division shall apply to every voluntary winding-up of a company.

 

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

   (1) A company may be wound-up voluntarily if the company so resolves.

   (2) The resolution shall be a special resolution unless the period, if any, fixed by the articles for the duration of the company has expired or the event, if any, has occurred, on the occurrence of which the articles provide that the company is to be dissolved.

   (3) Upon the passing of a resolution for voluntary winding-up, the company shall within seven days thereafter lodge a copy of the resolution with the Registrar, and the Registrar shall within seven days after the lodgement cause notice thereof to be published in the Gazette.

   (4) If the company fails to comply with sub-section (3), 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.

 

306.   Commencement of voluntary winding-up

For the purposes of this Act, a voluntary winding-up commences at the time of the passing of the resolution for voluntary winding-up.

 

307.   Effect of voluntary winding-up

   (1) The company shall from the commencement of the winding-up cease to carry on its business, except so far as in the opinion of the liquidator is required for the beneficial winding- up thereof, but the corporate state and corporate powers of the company shall continue until it is dissolved.

   (2) Any transfer of shares, not being a transfer made to or with the sanction of the liquidator, and any alteration in the status of the members after the commencement of the winding-up, shall be void.

 

308.   Declaration of solvency

   (1) Where it is proposed to wind-up a company voluntarily, the directors of the company may, before the date on which notices of the meeting at which the resolution for the winding- up of the company is to be proposed are sent out, at a meeting of directors make a written declaration to the effect that they have made a full inquiry into the affairs of the company, and have formed the opinion that the company will be able to pay its debts and liabilities in full within a period specified in the declaration, being a period of not more than twelve months after the commencement of the winding-up.

   (2) There shall be attached to the declaration a statement of affairs of the company showing-

      (a)   the assets of the company, and the total amount expected to be realised therefrom;

      (b)   the liabilities of the company; and

      (c)   the estimated expenses of winding-up, made up to the latest practicable date before the making of the declaration.

   (3) The declaration shall have no effect for the purposes of this Act unless—

      (a)   it is made at the meeting of directors referred to in sub-section (1);

      (b)   it is made less than five weeks before the passing of the resolution for voluntary winding-up; and

      (c)   it is lodged with the Registrar on or before the date on which the notices of the meeting at which the resolution for the winding-up of the company is to be proposed are sent out.

   (4) A director who makes a declaration under this section without having reasonable grounds for the opinion that the company will be able to pay its debts in full within the period stated in the declaration shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units or to imprisonment for a period not exceeding six months, or to both.

   (5) If the company is wound-up in pursuance of a resolution for voluntary winding-up passed within a period of five weeks after the making of the declaration, but its debts are not paid or provided for in full within the period stated in the declaration, it shall be presumed that the director did not have reasonable grounds for his opinion.

 

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

 

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

This Division shall apply to a members’ voluntary winding-up of a company.

 

310.   Appointment of liquidator

   (1) After the commencement of the winding-up of the company, the company shall by ordinary resolution appoint one or more liquidators for the purposes of winding-up the affairs and distributing the assets of the company, and may fix the remuneration to be paid to him or them.

   (2) On the appointment of the liquidator, all the powers of the directors shall cease except so far as the liquidator, or the company by ordinary resolution with the consent of the liquidator, approves the continuance thereof.

   (3) Subject to any direction of the Court on the application of any member, creditor or liquidator, the company may, by special resolution, of which the requisite notice has been given not only to the members but also to the creditors and the liquidator, remove any liquidator.

   (4) If a vacancy occurs by resignation, removal or otherwise in the office of a liquidator, the company by ordinary resolution may fill the vacancy and for that purpose a general meeting may be convened by any member, or, if there were more liquidators than one, by the continuing liquidators.

 

311.   Duty of liquidator to call creditors

   (1) If the liquidator is at any time of the opinion that the company will not be able to pay or provide for the payment of its debts in full within the period stated in the solvency declaration, he shall forthwith convene a meeting of the creditors and lay before the meeting a statement of the assets and liabilities of the company.

   (2) The notice of the meeting shall draw the attention of the creditors to the right conferred upon them by sub-section (3).

   (3) The creditors may, at the meeting convened under sub-section (1), appoint some other person to be liquidator of the company instead of the liquidator appointed by the company.

   (4) Within seven days after a meeting has been held pursuant to sub-section (1), the liquidator shall lodge with—

      (a)   the Registrar; and

      (b)   the official receiver;

a notice that the meeting has been held, stating the decisions, if any, taken at the meeting.

   (5) Where the liquidator has convened a meeting under sub-section (1), the winding-up shall thereafter proceed as if the winding-up were a creditors’ voluntary winding-up, but the liquidator shall not be required to summon an annual meeting of creditors at the end of the first year from the commencement of the winding-up if the meeting held under sub-section (1) was held less than three months before the end of that year.

   (6) A liquidator who fails to comply with sub-section (1) or (4) 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.

 

312.   Staying of members’ voluntary winding-up

   (1) At any time during the course of a voluntary winding-up prior to the dissolution of the company, the company may, by special resolution, resolve that the winding-up proceedings be stayed.

   (2) After the passing of the special resolution, application may be made to the Court by the liquidator or any member of the company and the Court may, in its discretion and subject to such terms and conditions as it thinks fit, order that the winding-up be stayed, that the liquidator be discharged, and that the directors resume the management of the company.

   (3) Not less than twenty-eight days’ written notice of the hearing of any application to the Court under sub-section (2) shall be given by the applicant to the official receiver, to every director of the company, and to any liquidator of the company, and the official receiver shall cause a copy of the notice to be published in the Gazette not later than seven days before the hearing.

   (4) The official receiver and any director, liquidator, member or creditor of the company shall be entitled to appear on the hearing of the application and to call witnesses and give evidence.

   (5) If the Court makes an order confirming the resolution, the company shall within twenty-one days thereafter lodge a copy of the order and resolution with the Registrar, who shall cause a notice thereof to be published in the Gazette.

   (6) On the publication of the notice, the winding-up shall cease and the company shall continue as a going concern subject to any terms or conditions in the order.

   (7) If the company fails to comply with sub-section (5), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues.

 

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

 

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

This Division shall apply to a creditors’ voluntary winding-up of a company.

Provisions applicable only to creditors’ voluntary winding-up

 

314.   Meetings of creditors

   (1) Where a resolution for the voluntary winding-up of a company has been proposed, and no declaration of solvency made, the company shall cause a meeting of the creditors of the company (in this section called “the meeting”) to be convened for the day, or the day after the day, on which the meeting is to be held at which the resolution for voluntary winding-up is to put, or on which the resolution is expected to be passed under section 157.

   (2) The company shall cause notice of the meeting of creditors to be sent to each creditor, being notice—

      (a)   not less than the notice to members of any meeting for the purposes of the resolution for voluntary winding-up; and

      (b)   in any case, of not less than seven days.

   (3) The notice to the creditors shall be accompanied by a statement showing the names of all creditors and the amounts of their claims.

   (4) The company shall cause notice of the meeting of the creditors to be published at least seven days before the date of the meeting in the Gazette and in any newspaper circulating generally in Zambia.

   (5) The company shall—

      (a)   cause a full statement of the company’s affairs to be laid before the meeting of creditors, showing in respect of assets the method and manner in which the valuation of the assets was arrived at, together with a list of the creditors and the estimated amount of their claims; and

      (b)   appoint a director to attend the meeting.

   (6) The director so appointed and the secretary shall attend the meeting and disclose to the meeting the company’s affairs and the circumstances leading up to the proposed winding-up.

   (7) The creditors at the meeting may appoint one of their number, or the director appointed under sub-section (5), to preside at the meeting.

   (8) If the meeting of the company is adjourned and the resolution for winding-up is passed at an adjourned meeting, any resolution passed at the meeting of the creditors shall have effect as if it had been passed immediately after the passing of the resolution for winding-up.

   (9) The company shall nominate a liquidator for the company.

   (10) The creditors may, by ordinary resolution, nominate at the meeting a liquidator for the company.

   (11) If the creditors and the company nominate different persons, the person nominated by the creditors shall be liquidator.

   (12) If no person is nominated by the creditors, the person nominated by the company shall be liquidator.

   (13) Where different persons are nominated as liquidator, any director, member or creditor may, within seven days after the date on which the nomination was made by the creditors, apply to the Court for an order directing that the person nominated as liquidator by the company shall be liquidator instead of or jointly with the person nominated by the creditors.

   (14) If a liquidator, other than a liquidator appointed by or by the direction of the Court, resigns or otherwise vacates that office, the creditors may fill the vacancy and, for that purpose, a meeting of the creditors may be summoned by any two of their number.

   (15) If the company fails to comply with sub-section (1), (2), (3), (4) or (5), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units.

   (16) If the nominated director or the secretary of the company fails to comply with sub-section (6), he shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two hundred and fifty monetary units.

 

315.   Appointment of committee of inspection

   (1) There shall be a committee of inspection for the winding-up of a company if the creditors, at the meeting convened under section three hundred and eleven or three hundred and fourteen or at any subsequent meeting, so decide by ordinary resolution and appoint not more than five persons, whether creditors or not, to be members of the committee.

   (2) The company may, at the time of the passing of the resolution for voluntary winding-up is passed or at any time subsequently, by ordinary resolution, appoint not more than five persons to be, subject to this section, members of any committee of inspection.

   (3) The creditors may resolve that all or any of the persons so appointed by the company ought not to be members of the committee of inspection and, if the creditors so resolve, the persons mentioned in the resolution shall not, unless the Court otherwise directs, be qualified to act as members of the committee, and on any application to the Court under this sub-section the Court may, if it thinks fit, appoint other persons to act as such members in place of the persons mentioned in the resolution.

   (4) Subject to this section, section 295 shall apply with respect to a committee of inspection appointed under this section.

 

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

   (1) The committee of inspection, or, if there is no such committee, the creditors, may fix the remuneration to be paid to the liquidator.

   (2) On the appointment of a liquidator, all the powers of the directors shall vest in the liquidator, and the powers and authority of every director shall cease, except so far as the committee of inspection, or, if there is no such committee, the creditors, sanction the continuance thereof.

 

317.   Stay of proceedings

   (1) Any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of a creditors’ voluntary winding-up shall be void.

   (2) After the commencement of the winding-up, no action or proceeding shall be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court directs.

 

DIVISION 13.6—PROVISIONS APPLICABLE TO EVERY VOLUNTARY WINDING-UP

 

318.   Provisions applicable to every voluntary winding-up

This Division shall apply to every voluntary winding-up of a company.

 

319.   Distribution of property of company

Subject to the provisions of this Act as to preferential payments, the property of a company shall, on its winding-up, be applied pari passu in satisfaction of its liabilities, and subject to that application shall, unless the articles otherwise provide, be distributed among the members according to their rights and interests in the company.

 

320.   Review by Court of liquidators appointment and remuneration

   (1) If for any reason there is no liquidator acting, the Court may appoint a liquidator.

   (2) The Court may on cause shown remove a liquidator and appoint another liquidator.

   (3) Any member or creditor or the liquidator may at any time before the dissolution of the company apply to the Court to review the remuneration of the liquidator, and the decision of the Court shall be conclusive.

 

321.   Powers and duties of liquidators

   (1) The liquidator may—

      (a)   with the approval of—

      (i)   a resolution of the company, in the case of a members’ voluntary winding-up; or

      (ii)   the Court or the committee of inspection, in the case of a creditors’ voluntary winding- up;

exercise any of the powers given by section 289 to a liquidator in a winding-up by the Court;

      (b)   exercise any of the other powers by this Act given to the liquidator in a winding-up by the Court; and

      (c)   convene meetings of the company for the purpose of obtaining the sanction of the company in respect of any matter or for any other purpose he thinks fit.

   (2) When several liquidators are appointed, any power given by this Act may be exercised by such one or more of them as is determined at the time of their appointment, or in default of such a determination, by any number not less than two.

 

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

   (1) Where it is proposed that the whole or part of the business or property of a company (in this section called “the company”) be transferred or sold to another body corporate (in this section called “the corporation”), the liquidator may, with the approval of—

      (a)   a special resolution of the company, in the case of a members’ voluntary winding-up; or

      (b)   the Court or the committee of inspection, in the case of a creditors’ voluntary winding- up;

receive, in compensation or part compensation for the transfer or sale, fully paid shares, debentures or other like interests in the corporation for distribution among the members of the company or may enter into any other arrangement whereby the members of the company may, in lieu of receiving cash, shares, debentures or other like interests or in addition thereto, participate in the profits of or receive any other benefit from the corporation.

   (2) If, within one year after the date of the passing of such a special resolution, the winding-up becomes a winding-up by the Court because of an order made under section 272, the transfer or sale and distribution or arrangement shall not be valid unless approved by the Court.

   (3) Subject to this section, any transfer or sale and distribution of arrangement under this section shall be binding on the company and all the members thereof and each member shall be deemed to have agreed with the corporation to accept the fully-paid shares, debentures, or other like interests to which he is entitled under the distribution or arrangement.

   (4) If any member of the company, in respect of any shares held by him, expresses his dissent in writing addressed to the liquidator and served upon the liquidator within twenty-eight days after the passing of the special resolution, he may require the liquidator either to abstain from carrying the resolution into effect or to purchase the shares that he holds at a price to be determined by agreement or by arbitration in the manner provided by sub-section (7).

   (5) If the liquidator elects to purchase the member’s shares, the purchase money shall be paid before the company is dissolved and be raised by the liquidator in such manner as is determined by special resolution.

   (6) A special resolution shall not be valid for the purposes of this section unless it is passed before or concurrently with the resolution for voluntary winding-up.

   (7) For the purposes of an arbitration under this section—

      (a)   the Arbitration Act shall apply as if there were a submission for reference to two arbitrators, one to be appointed by each party.

      (b)   the appointment of an arbitrator may be made under the hand of the liquidator, or if there is more than one liquidator then under the hands of any two or more of the liquidators; and

      (c)   the Court may give any directions necessary for the initiation and conduct of the arbitration and the directions shall be binding on the parties.

   (8) Nothing in this section shall authorise any variation or abrogation of the rights of any creditors of the company.

 

323.   Annual meeting of members and creditors

   (1) If a winding-up continues for more than one year, the liquidator shall convene—

      (a)   a general meeting of the company, in the case of a members’ voluntary winding-up; and

      (b)   separate meetings of the creditors and of the company, in the case of a creditors’ voluntary winding-up;

within three months after the end of the first year after the commencement of the winding-up and of each succeeding year, and shall lay before every such meeting an account of his acts and dealings and of the conduct of the winding-up during the preceding year.

   (2) In the case of a creditors’ voluntary winding-up, the meeting of the company shall be held after, but not more than one month after, the meeting of the creditors.

   (3) A liquidator who fails to comply with this section 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.

 

324.   Final meeting and dissolution of company

   (1) As soon as the affairs of the company are fully wound-up, the liquidator shall make up a report showing how the winding-up has been conducted and the property of the company has been disposed of, and thereupon shall convene—

      (a)   a general meeting of the company, in the case of a members’ voluntary winding-up; and

      (b)   separate meetings of the creditors and of the company, in the case of a creditors’ voluntary winding-up;

for the purpose of laying before the meetings the report and giving any explanation thereof.

   (2) In the case of a creditors’ voluntary winding-up, the meeting of the company shall be held after, but not more than one month after, the meeting of the creditors.

   (3) A notice of the meetings shall be published in one issue of the Gazette and in one issue of a newspaper in general circulation throughout Zambia, which notice shall specify the time, place and object of each meeting and shall be published one month at least before each such meeting.

   (4) The liquidator shall, within seven days after the meeting or the later of the meetings, lodge with the Registrar and with the official receiver a return in the prescribed form of the holding of the meetings or meeting and of the date or dates thereof, with a copy of the report attached to the return.

   (5) The quorum at a meeting of the company shall be two members and at a meeting of the creditors shall be two creditors.

   (6) If a quorum is not present at a meeting, the liquidator shall, in lieu of the return referred to in sub-section (4), lodge with the Registrar and the official receiver a return (with account attached) that the meeting or meetings were duly summoned and that no quorum was present thereat.

   (7) Upon the lodgement of the return, the Registrar shall strike the name of the company off the register and cause notice thereof to be published in the Gazette, and the company shall thereupon be dissolved as at the date of the publication of the notification in the Gazette.

   (8) A liquidator who fails to comply with this section 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.

 

325.   When an arrangement is binding on creditors

   (1) Any arrangement entered into between a company about to be or in the course of being wound-up and its creditors shall, subject to the right of appeal under this section, be binding on the company if approved by a special resolution, and on the creditors if approved by a special resolution of the creditors.

   (2) Any dispute with regard to the value of any security or lien or the amount of a debt or set- off the subject of the arrangement may be settled by the Court on the application of the company, the liquidator, or the creditor.

   (3) Any creditor or member may, within twenty-one days after the completion of the arrangement, appeal to the Court against it, and the Court may thereupon amend, vary or confirm the arrangement, as it thinks just.

 

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

   (1) The liquidator or any member or creditor may apply to the Court—

      (a)   to determine any question arising in the winding-up of a company; or

      (b)   to exercise all or any of the powers which the Court might exercise if the company were being wound-up by the Court.

   (2) The Court, if satisfied that the determination of the question or the exercise of power will be just or beneficial, may accede wholly or partially to any such application on such terms and conditions as it thinks fit, or may make such other order on the application as it thinks just.

 

327.   Costs

All proper costs, charges and expenses of and incidental to the winding-up, including the remuneration of the liquidator, shall be payable out of the assets of the company in priority to all other claims.

 

328.   Limitation on right to wind-up voluntarily

Where a petition has been presented to the Court to wind-up a company on the ground that it is unable to pay its debts, the company shall not resolve that it be wound-up voluntarily, except with the leave of the Court.

 

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

 

329.   Provisions applicable to every mode of winding-up

This Division shall apply to every winding-up of a company.

 

330.   Meetings of creditors

The Court may at any time during the course of a winding-up direct a meeting of the creditors of any class to be held and conducted in such manner as it thinks fit to consider such matters as it shall direct, and may give such ancillary or consequential directions as it thinks fit.

 

331.   Conduct of meetings of creditors

   (1) A person shall be accounted a creditor of a company for the purposes of a meeting of creditors under this Part if, upon an account fairly stated, after allowing the value of security or liens held by him and the amount of any debt or set-off owing by him to the company, there appears to be a balance due to him.

   (2) At a meeting of creditors, unless the Court directs otherwise—

      (a)   each creditor shall have votes in proportion to amount of the balance apparently due to him by the company upon an account fairly stated, after allowing the value of security or liens held by him and the amount of any debt or set-off owing by him to the company; and

      (b)   sections 146 to 152 shall apply with the necessary modifications.

   (3) Subject to this Part and to any direction by the Court, fourteen days’ notice of a meeting of creditors shall be given either personally or in a newspaper circulating generally in Zambia.

 

332.   Eligibility for appointment as liquidator

   (1) An individual who wishes to perform the function of a liquidator shall apply for accreditation with the Registrar in the prescribed manner and form.

   (2) The Minister shall prescribe—

      (a)   the qualifications for persons to be accredited under subsection (1); and

      (b)   the form of and procedure for issuance of accreditation certificates.

   (3) A person shall not be appointed to act or continue to ac as a liquidator of the property or undertaking of a company if the person—

      (a)   is under the age of eighteen years;

      (b)   is under any legal disability;

      (c)   is prohibited or disqualified from so acting by any order of a court of competent jurisdiction;

      (d)   is a body corporate;

      (e)   is a mortgagee or chargee of the company or an employee or officer of the mortgagee or chargee;

      (f)   is an undischarged bankrupt;

      (g)   is a person who is, or has been within the previous two years, a director or officer of the company or any related body corporate, except with the leave of court;

      (h)   has been a receiver of the company during the preceding three years;

      (i)   is removed from the register of liquidators kept by the Registrar in accordance with subsection (4); or

      (j)   is not eligible to be liquidator or receiver under this Act.

   (4) The Registrar shall—

      (a)   cause to be kept a register of liquidators in the prescribed manner and form; and

      (b)   notify a professional body of any misconduct of a liquidator or of any removal of a liquidator from the register of liquidators.

[S 332 subs by s 27 of Act 24 of 2011.]

 

333.   Acts of liquidator valid

   (1) Subject to this Act, the acts of a liquidator shall be valid notwithstanding any defect that may afterwards be discovered in his appointment or qualification.

   (2) Any conveyance, assignment, transfer, mortgage, charge or other disposition of a company’s property made by a liquidator shall, notwithstanding any defect or irregularity affecting the validity of the winding-up or the appointment of the liquidator, be valid in favour of any person taking such property bona fide and for value and without notice of the defect or irregularity.

   (3) Every person making or permitting any disposition of property to any liquidator shall be protected and indemnified in so doing notwithstanding any defect or irregularity affecting the validity of the winding-up or the appointment of the liquidator not then known to the person.

   (4) For the purposes of this section a disposition of property includes a payment of money.

 

334.   General provisions as to liquidators

   (1) A liquidator shall keep proper books at his office in which he shall cause to be made entries or minutes of proceedings at meetings and of such other matters, if any, as may be prescribed.

   (2) Any creditor or member may, subject to the control of the Court, personally or by his agent inspect the liquidator’s books at his office in accordance with section 193.

   (3) The Court shall take cognizance of the conduct of liquidators, and if a liquidator does not faithfully perform his duties and observe the prescribed requirements or the requirements of the Court, or if any complaint is made to the Court by any creditor or member or by the official receiver in regard thereto, the Court shall inquire into the matter and take such action as it thinks fit.

   (4) The Registrar or the official receiver may report to the Court any matter which in his opinion is misfeasance, neglect or omission on the part of the liquidator, and the Court may order the liquidator to make good any loss which the estate of the company has sustained thereby and make such other order as it thinks fit.

   (5) The Court may at any time require a liquidator to answer any inquiry in relation to the winding-up and may examine him or any other person on oath concerning the winding-up, and may direct an investigation to be made of the books and vouchers of the liquidator.

   (6) The Court may require any member, trustee, receiver, banker, agent or officer of the company to pay, deliver, convey, surrender or transfer to the liquidator or provisional liquidator forthwith, or within such time as the Court directs, any money, property, books and papers in his hands to which the company is prima facie entitled.

   (7) Subject to the provisions of this Act, a liquidator shall act in good faith, not make a secret profit and avoid any conflict of interest.

[S 334(7) ins by s 28 of Act 24 of 2011.]

   (8) Except as otherwise directed by the court or by a resolution of creditors or members passed at a general meeting or by a committee of inspection, a liquidator shall—

      (a)   dispose of company assets by public tender or the most transparent manner under the circumstances; and

      (b)   not less than 21 days before such disposal, furnish the Registrar with a notice, in the prescribed manner and form, of the intention to dispose of the assets.

[S 334(8) ins by s 28 of Act 24 of 2011.]

 

335.   Powers of official receiver where no committee of inspection

   (1) Where a person other than the official receiver is the liquidator and there is no committee of inspection, the official receiver may, on the application of the liquidator, do any act or thing or give any direction or permission which is by this Act authorised or required to be done or given by the committee.

   (2) Where the official receiver is the liquidator and there is no committee of inspection, the official receiver may in his discretion do any act or thing which is by this Act required to be done by, or subject to any direction or permission given by, the committee.

 

336.   Appeal against decision of liquidator

Any person aggrieved by any act or decision of the liquidator may apply to the Court, which may confirm, reverse, or modify the act or decision complained of and make such order as it thinks just.

 

337.   Notice of appointment and address of liquidator

   (1) A liquidator shall, within fourteen days after his appointment, lodge with the Registrar and with the official receiver notice of his appointment and of the situation of his office and of his postal address and, in the event of any change in the situation of his office or in his postal address, shall within twenty-one days after the change lodge with the Registrar and with the official receiver notice of the change.

   (2) Service made by leaving any document at the office of the liquidator given in such a notice, or by sending it in a properly addressed and prepaid registered letter posted to the postal address given in such a notice, shall be good service upon the liquidator and upon the company.

   (3) A liquidator shall, within twenty-one days after his resignation or removal from office, lodge notice thereof with the Registrar and with the official receiver.

   (4) If a liquidator fails to comply with this section, 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.

 

338.   Liquidator’s accounts

   (1) A liquidator shall, within one month after—

      (a)   the end of the period of six months from the date of his appointment;

      (b)   the end of every subsequent period of six months; and

      (c)   ceasing to act as liquidator or obtaining an order of release;

lodge with the Registrar and, if the liquidator is not the official receiver, with the official receiver, accounts of his receipts and payments and a statement of the position in the wind-up, verified by a statutory declaration.

   (2) The official receiver may cause the accounts of any liquidation to be audited by an auditor approved by him, and for the purpose of the audit the liquidator shall furnish the auditor with such vouchers and information as he requires, and the auditor may at any time require the production of and inspect any books or accounts kept by the liquidator.

   (3) A copy of the accounts or, if audited, a copy of the audited accounts, shall be kept by the liquidator at his office and shall there be open to the inspection of any member or creditor or of any other person interested in accordance with section 193.

   (4) The liquidator shall, when he is next forwarding any report or notice to the creditors and members generally—

      (a)   give notice to every member and creditor that the accounts have been prepared; and

      (b)   in the notice inform members and creditors that the accounts may be inspected at his office and state the times during which inspection may be made.

   (5) The cost of an audit under this section shall be fixed by the official receiver and be part of the expenses of winding-up.

   (6) A liquidator other than the official receiver who fails to comply with this section shall be guilty of an offence, and shall be liable to a fine not exceeding five hundred monetary units.

 

339.   Notification that a company is in liquidation

   (1) Where a company is being wound-up, every invoice, order of goods or business letter issued by or on behalf of the company or a liquidator of the company or a receiver of any property of the company, being a document on or in which the name of the company appears, shall have the words, “in liquidation” added after the name of the company where it first appears therein.

   (2) 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 in respect of each document.

 

340.   Books of company

   (1) Where a company is being wound-up, all books and papers of the company and of the liquidator that are relevant to the affairs of the company at or subsequent to the commencement of the winding-up of the company shall, as between the members and creditors of the company, be prima facie evidence of the truth of all matters purporting to be therein recorded.

   (2) Subject to this section, when a company has been wound-up, the liquidator shall retain the books and papers referred to in sub-section (1) (other than vouchers) for a period of seven years from the date of dissolution of the company.

   (3) The books and papers referred to in sub-section (1) may be destroyed within a period of seven years after dissolution of the company—

      (a)   in accordance with the directions of the Court, in the case of a winding-up by the Court;

      (b)   as the company by resolution directs, in the case of a members’ voluntary winding-up; and

      (c)   as the committee of inspection, or, if there is no such committee, as the creditors of the company direct, in the case of a creditors’ voluntary winding-up.

   (4) A liquidator who fails to comply with sub-section (2) shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units.

   (5) No responsibility shall rest on the company or the liquidator by reason of any such book or paper not being forthcoming to any person claiming to be interested therein if the book or paper has been destroyed in accordance with this section.

 

341.   Investment of surplus funds

   (1) Whenever the cash balance standing to the credit of a company in liquidation is in excess of the amount which, in the opinion of the committee of inspection, is required for the time being to answer demands on the company, the committee may authorise the liquidator, unless the Court on application by any creditor directs otherwise, to invest the sum or any part thereof in securities issued by the Government of Zambia or place it on deposit at interest with any bank, and any interest received in respect thereof shall form part of the assets of the company.

   (2) Where there is no committee of inspection, the liquidator, may form the opinion for the purposes of sub-section (1), and the authorisation of the committee referred to in that section shall be dispensed with.

   (3) Whenever any part of the money so invested is, in the opinion of the committee of inspection, required to answer any demands in respect of the company’s estate, the committee of inspection may direct the sale or realisation of such part of the securities as is necessary.

   (4) If there is no committee of inspection, sub-section (2) shall apply as if a reference to the committee were a reference to the liquidator.

 

342.   Unclaimed assets

   (1) Where a liquidator has in his hands or under his control—

      (a)   any unclaimed dividend or other moneys which have remained unclaimed for more than six months from the date when the dividend or other moneys became payable; or

      (b)   any unclaimed or undistributed moneys arising from the property of the company after making final distribution;

he shall forthwith pay those moneys to the official receiver to be placed to the credit of the Companies Liquidation Account and shall be entitled to a certificate or receipt for the moneys so paid, which certificate shall be an effectual discharge to him in respect thereof.

   (2) The Court may at any time—

      (a)   on the application of the official receiver, order any liquidator to submit to it accounts of any unclaimed or undistributed funds, dividends or other moneys in his hands or under his control, verified by affidavit;

      (b)   direct an audit thereof; and

      (c)   direct the liquidator to pay those moneys to the official receiver to be placed to the credit of the Companies Liquidation Account.

   (3) This section shall not deprive any person of any other right or remedy to which he is entitled against the liquidator or any other person.

   (4) If a claimant makes any demand for any moneys placed to the credit of the Companies Liquidation Account, the official receiver, upon being satisfied that the claimant is the owner of the money, shall authorise payment thereof to be made to him out of the Account.

   (5) A person dissatisfied with the decision of the official receiver in respect of a claim made in pursuance of sub-section (5) may appeal to the Court, which may confirm, disallow or vary the decision.

   (6) Where any unclaimed moneys paid to any claimant are afterwards claimed by any other person, that other person shall not be entitled to any payment out of the Account, but such a person may have recourse against the claimant to whom the unclaimed moneys have been paid.

   (7) Any unclaimed moneys paid to the credit of the Companies Liquidation Account, to the extent to which they have not been under this section paid out of the Account, shall, on the expiration of six years from the date of the payment of the moneys to the credit of the account, be paid into the General Revenues of the Republic.

 

343.   Expenses of winding-up where assets insufficient

   (1) Unless expressly directed to do so by the official receiver pursuant to sub-section (2), a liquidator shall not incur any expense in relation to the winding-up of a company unless there are sufficient available assets.

   (2) The official receiver may, on the application of any creditor or member, direct a liquidator to incur a particular expense on condition that the creditor or member indemnify the liquidator in respect of the recovery of the amount expended and, if the official receiver so directs, gives such security to secure the amount of the indemnity as the official receiver thinks reasonable.

 

344.   Meetings to ascertain wishes of members of creditors

   (1) The Court may, as to all matters relating to the winding-up of a company, have regard to the wishes of the members or creditors as proved to it by any sufficient evidence, and may if it thinks fit for the purpose of ascertaining those wishes, direct meetings of the members or creditors to be convened, held and conducted in such manner as the Court directs, and may appoint a person to act as Chairman of any such meeting and to report the result thereof to the Court.

   (2) In the case of creditors, regard shall be had to the value of each creditor’s debt.

   (3) In the case of members, regard shall be had to the number of votes held by each member under this Act or the articles.

 

345.   Proof of debts

   (1) In every winding-up, subject to this section, debts payable on a contingency, and all claims against the company, present or future, certain or contingent, ascertained or sounding only in damages, shall be admissible to proof against the company, a just estimate being made so far as possible of the value of such debts or claims as are subject to any contingency or sound only in damages or for some other reason do not bear a certain value.

   (2) Subject to section 346, the same rules shall apply in the winding-up of an insolvent company with regard to the respective rights of secured and unsecured creditors and debts provable and the valuation of annuities and future and contingent liabilities as apply in relation to the estates of bankrupt persons under the law relating to bankruptcy.

 

346.   Preferential debts

   (1) Subject to this Act, in a winding-up there shall be paid in priority to all other unsecured debts—

      (a)   the costs and expenses of the winding-up including the taxed costs of a petitioner payable under section 274, the remuneration of the liquidator, and the costs of any audit carried out pursuant to section 338;

      (b)   all amounts due—

      (i)   by way of wages or salary (whether or not earned wholly or in part by way of commission) accruing to any employee within the period of three months before the commencement of the winding-up;

      (ii)   in respect of leave accruing to any employee within the period of two years before the commencement of the winding-up;

      (iii)   in respect of any paid absence (not being leave) accruing to any employee within the period of three months before the commencement of the winding-up;

      (iv)   by way of recruitment expenses or other amounts reimbursable under any contract of employment;

      (c)   an amount equal to three months’ wages or salary, by way of severance pay, to each employee;

      (d)   all amounts due in respect of workers’ compensation under any written law relating to workers’ compensation accrued before the commencement of the winding-up;

      (e)   any tax, duty or rate payable by the company in respect of any period prior to the commencement of the winding-up, whether or not payment has become due after that date;

      (f)   all Government rents not more than five years in arrears at the commencement of the winding-up; and

      (g)   all rates from the company to a local authority having become due and payable within the period of three years before the date of commencement of the winding-up.

   (2) Debts having priority shall rank as follows—

      (a)   firstly, the debts referred to in paragraph (a);

      (b)   secondly, the debts referred to in paragraphs (b), (c) and (d);

      (c)   thirdly, the debts referred to in paragraphs (e) and (f);

      (d)   fourthly, the debts referred to in paragraph (g);

of sub-section (1).

   (3) Debts having the same priority shall rank equally between themselves, and shall be paid in full, unless the property of the company is insufficient to meet them, in which case they shall abate in equal proportions between themselves.

   (4) Where a payment has been made to any employee of the company on account of wages or salary out of money advanced by a person for that purpose, the person by whom the money was advanced shall, in a winding-up, have a right of priority in respect of the money so advanced and paid, up to the amount by which the sum in respect of which the employee would have been entitled to priority in the winding-up has been diminished by reason of the payment, and shall have the same right of priority in respect of that amount as the employee would have had if the payment had not been made.

   (5) So far as the assets of the company available for payment of general creditors are

insufficient to meet any preferential debts specified in sub-section (1) and any amount payable in priority by virtue of sub-section (3), those debts shall have priority over the claims of the holders of debentures under any floating charge created by the company, and shall be paid accordingly out of any property comprised in or subject to that charge.

   (6) Where the company is, under a contract of insurance entered into before the commencement of the winding-up, insured against liability to third parties, then if any such liability is incurred by the company (either before or after commencement of the winding-up) and an amount in respect of that liability is or has been received by the company or the liquidator from the insurer, the amount shall, after deducting any expenses of or incidental to getting the amount, be paid by the liquidator to the third party in respect of whom the liability was incurred to the extent necessary to discharge that liability or any part of that liability remaining undischarged in priority to all payments in respect of the debts referred to in sub-section (1).

   (7) If the liability of the insurer to the company is less than the liability of the company to the third party nothing in sub-section (5) shall limit the third party in respect of the balance.

   (8) sub-sections (5) and (6) shall have effect notwithstanding any agreement to the contrary entered into after the commencement of this Act.

   (9) Notwithstanding anything in sub-section (1)—

      (a)   paragraph (d) of that sub-section shall not apply in relation to the winding-up of a company in any case where—

      (i)   the company has entered into a contract with an insurer in respect of any liability under any law relating to workmen’s compensation;

      (ii)   the company is being wound-up voluntarily merely for the purpose of reconstruction or of amalgamation with another company; and

      (iii)   the right to the compensation has, on the reconstruction or amalgamation, been preserved to the person entitled thereto; and

      (b)   where a company has given security for the payment or repayment of any amount to which paragraph (e), (f) or (g) of that sub-section relates, that paragraph shall apply only in relation to the balance of any such amount remaining due after deducting therefrom the net amount realised from the security.

   (10) Where, in any winding-up—

      (a)   assets have been recovered under an indemnity for costs of litigation given by certain creditors;

      (b)   assets have been protected or preserved by the payment of moneys or the giving of indemnity by creditors; or

      (c)   expenses in relation to which a creditor has indemnified a liquidator have been recovered;

the Court may make such order as it thinks just with respect to the distribution of those assets and the amount of those expenses so recovered with a view to giving those creditors an advantage over others in consideration of the risk run by them in so doing.

   (11) Subject to this Act, all debts proved in the winding-up shall be paid pari passu.

   (12) An amount paid to an employee under paragraph (c) of sub-section (1) shall be deducted from any amount payable as severance pay due to the employee under any law or agreement.

   (13) This section shall be deemed to have commenced on 1st November, 1994.

[S 346 am by Act 6 of 1995.]

346A.   Remuneration of liquidator

   (1) A liquidator shall be entitled to the payment of a fee which shall be a percentage of the gross proceeds of the realization of the liquidation of the company.

   (2) Notwithstanding the generality of subsection (1), the rates payable to a liquidator shall not exceed such amount as may be prescribed.

   (3) A liquidator who collects a fee in excess of the prescribed fees shall be personally liable to reimburse the amount of the excess fees so collected.

[S 346A ins by s 29 of Act 24 of 2011.]

 

347.   Avoidance of preference

   (1) Any conveyance, transfer, mortgage, delivery of goods, payment, execution or other

act relating to property made or done by or against a company which, had it been made or done by or against an individual, would in his bankruptcy under the law of bankruptcy be void or voidable, shall, if the company is wound-up, be void or voidable in the same way.

   (2) For the purposes of this section, the date which corresponds with the date of presentation of the bankruptcy petition in the case of an individual shall be the date upon which the winding- up commenced.

   (3) Any transfer or assignment by a company of all its property to trustees for the benefit of all its creditors shall be void.

 

348.   Avoidance of floating charge

A floating charge on the undertaking or property of the company created within twelve months before the commencement of the winding-up shall, unless it is proved that the company immediately after the creation of the charge was solvent, be invalid except to the amount of any cash paid to the company at the time, or subsequently, in consideration for the charge, together with interest on that amount at the rate fixed by the terms of the charge.

 

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

   (1) Where any property, business or undertaking has been acquired by a company within the period of two years before the commencement of the winding-up of the company—

      (a)   from a person who was at the time of the acquisition a director of the company; or

      (b)   from a second company of which, at the time of the acquisition, a person was a director who was also a director of the first company;

the liquidator may recover from the person or company from which the property, business or undertaking was acquired any amount by which the value of the consideration given exceeded the value of the property, business or undertaking at the time of its acquisition.

   (2) Where any property, business or undertaking has been sold by a company within the period of two years before the commencement of the winding-up of the company—

      (a)   to a person who was at the time of the sale a director of the company; or

      (b)   to a second company of which at the time of the sale a person was a director who was also a director of the first company; the liquidator may recover from the person or company to which the property, business or undertaking was sold any amount by which the value of the property, business or undertaking at the time of the sale exceeded the value of the consideration received.

   (3) For the purposes of this section the value of the property, business or undertaking includes the value of any goodwill or profits which might have been made from the business or undertaking and any similar consideration.

 

350.   Disclaimer of onerous property

   (1) Where any part of the property of a company consists of—

      (a)   any estate or interest in land which is burdened with onerous covenants;

      (b)   shares in any body corporate that are subject to restrictions on transfer;

      (c)   unprofitable contracts; or

      (d)   any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act, or to the payment of any sum of money;

the liquidator of the company, notwithstanding that he has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation thereto, may, with the leave of the Court or the committee of inspection and subject to this section, by writing signed by him, disclaim the property at any time within twelve months after—

      (i)   the commencement of the winding-up; or

      (ii)   the property in question came to the knowledge of the liquidator, if it did not do so within one month after the commencement of the winding-up;

or within such extended period as is allowed by the Court.

   (2) The disclaimer shall operate to determine, as from the date of disclaimer, the rights, interests and liabilities of the company and the property of the company in or in respect of the property disclaimed, but shall not, except so far as is necessary for the purpose of releasing the company and the property of the company from liability, alter the rights or liabilities of any other person.

   (3) The Court or committee of inspection, before or on granting leave to disclaim, may require such notices to be given to persons interested, and impose such terms as a condition of granting leave, and make such other orders in the matter, as the Court or committee thinks just.

   (4) The liquidator shall not disclaim if an application in writing has been made to him by any person interested in the property requiring him to decide whether he will or will not disclaim, and the liquidator has not, within a period of twenty-eight days after the receipt of the application or such further period as is allowed by the Court, given notice to the applicant that he intends to apply to the Court or the committee for leave to disclaim.

   (5) In the case of a contract, if the liquidator, after an application referred to in sub-section (4), does not within that period or further period disclaim the contract, the liquidator shall be deemed to have adopted it.

   (6) The Court may, on the application of a person who is, as against the liquidator, entitled to the benefit or subject to the burden of a contract made with the company, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise, as the Court thinks just, and any damages payable under the order to that person may be proved by him as a debt in the winding-up.

   (7) The Court may, on the application of a person who claims an interest in any disclaimed property or is under any liability not discharged by this Act in respect of any disclaimed property, and on hearing such persons as it thinks fit, make an order for the vesting of the property in or the delivery of the property to—

      (a)   any person entitled thereto;

      (b)   any person to whom it seems just that the property should be delivered by way of compensation for such liability; or

      (c)   a trustee for such a person;

on such terms as the Court thinks just.

   (8) On any such vesting order being made and a copy thereof being lodged with—

      (a)   the Registrar;

      (b)   the official receiver; and

      (c)   the appropriate authority concerned with the recording or registration of dealings in the land, if the order relates to land;

the property shall vest accordingly without any further conveyance, transfer or assignment.

   (9) Notwithstanding anything in sub-section (7), where the property disclaimed is of a leasehold nature, the Court shall not make a vesting order in favour of any person claiming under the company, whether as under-lessee or as mortgagee, except upon the terms of making that person—

      (a)   subject to the same liabilities and obligations as those to which the company was subject under the lease in respect of the property at the commencement of the winding-up; or

      (b)   if the Court thinks fit, subject only to the same liabilities and obligations as if the lease had been assigned to that person at that date;

and in either event, if the case so requires, as if the lease had comprised only the property comprised in the vesting order.

   (10) A mortgagee or under-lessee who declines to accept a vesting order on the terms referred to in sub-section (9) shall be excluded from all interests in and security upon the property, and, if there is no person claiming under the company who is willing to accept an order upon such terms, the Court may vest the estate and interest of the company in the property in any person liable personally or in a representative capacity and either alone or jointly with the company to perform the lessee’s covenants in the lease, freed and discharged from all estates, incumbrances and interests created therein by the company.

   (11) Any person injured by the operation of a disclaimer under this section shall be deemed to be a creditor of the company to the amount of the injury, and may accordingly prove the amount as a debt in the winding-up.

 

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

   (1) Where a creditor has issued execution against the goods or land of a company or has attached any debt due to the company and the company is subsequently wound-up, he shall not be entitled to retain the benefit of the execution or attachment against the liquidator unless he has completed the execution or attachment before—

      (a)   the date on which he had any notice of a meeting at which a resolution for voluntary winding-up was to be proposed; or

      (b)   the date of the commencement of the winding-up, if he had no such notice.

   (2) A person who purchases in goods faith under a sale by the sheriff any goods of a company on which an execution has been levied shall, in all cases, acquire a good title to them against the liquidator.

   (3) The rights conferred by sub-section (1) on the liquidator may be set aside by the Court in favour of the creditor to such extent and subject to such terms as the Court thinks just.

   (4) For the purposes of this section—

      (a)   an execution against goods is completed by seizure and sale;

      (b)   an attachment of a debt is completed by receipt of the debt; and

      (c)   an execution against land is completed by sale or, in the case of an equitable interest, by the appointment of a receiver.

   (5) For the purposes of this section, “goods” includes all chattels personal.

 

352.   Duties of sheriff as to goods taken in execution

   (1) Subject to sub-section (3), where any goods of a company are taken in execution and, before the sale thereof or the completion of the execution by the receipt or recovery of the full amount of the levy, notice is served on the sheriff that—

      (a)   a provisional liquidator has been appointed;

      (b)   a winding-up order has been made; or

      (c)   a resolution for voluntary winding-up has been passed;

the sheriff shall, on being required, deliver to the liquidator the goods and any money seized or received in part satisfaction of the execution.

   (2) The costs of the execution shall be a first charge on the goods or moneys so delivered, and the liquidator may sell the goods, or a sufficient part thereof, for the purpose of satisfying that charge.

   (3) Subject to this section, where, under an execution in respect of a judgement for a sum exceeding fifty monetary units, the goods of a company are sold or money is paid in order to avoid sale, the sheriff shall deduct the costs of the execution from the proceeds of the sale or the money paid, and shall retain the balance for fourteen days.

   (4) If, within that period of fourteen days, notice is served on him of an application for the winding-up of the company having been presented or of a meeting having been called at which there is to be proposed a resolution for the voluntary winding-up, the sheriff shall, when an order is made or a resolution is passed for the winding-up, pay the balance to the liquidator who shall be entitled to retain it as against the execution creditor.

   (5) The rights conferred by this section on the liquidator may be set aside by the Court in favour of the creditor to such extent and subject to such terms as the Court thinks fit.

   (6) For the purposes of this section, “goods” includes all chattels personal.

 

353.   Offences by officers of companies in liquidation

   (1) A person who, being a past or present officer or a past or present member of a company which is being wound-up—

      (a)   does not to the best of his knowledge and belief fully and truly reveal to the liquidator all the property real and personal of the company, and how and to whom and for what consideration and when the company disposed of any part thereof, except such part as has been disposed of in the ordinary way of the business of the company;

      (b)   does not deliver up to the liquidator, or as he directs—

      (i)   all the real and personal property of the company in his custody or under his control and which he is required by law to deliver up; or

      (ii)   all books and documents in his custody or under his control belonging to the company and which he is required by law to deliver up;

      (c)   within twelve months before the commencement of the winding-up or at any time thereafter—

      (i)   has concealed any part of the property of the company having a value of more than ten monetary units, or has concealed any debt due to or from the company;

      (ii)   has fraudulently removed any part of the property of the company having a value of more than ten monetary units;

      (iii)   has concealed, destroyed, mutilated or falsified, or has been privy to the concealment, destruction, mutilation or falsification of, any book or document affecting or relating to the property or affairs of the company;

      (iv)   has made or has been privy to the making of any false entry in any book or document affecting or relating to the property or affairs of the company;

      (v)   has fraudulently parted with, altered or made any omission in, or has been privy to fraudulent parting with, altering or making any omission in, any document affecting or relating to the property or affairs of the company;

      (vi)   by any false representation or other fraud, has obtained any property for or on behalf of the company on credit which the company has not subsequently paid for;

      (vii)   has obtained on credit, or for or on behalf of the company, under the false pretence that the company is carrying on business, any property which the company has not subsequently paid for; or

      (viii)   has pawned, pledged or disposed of any property of the company which has been obtained on credit and has not been paid for, except where the pawning, pledging or disposing was in the ordinary way of the business of the company;

      (d)   makes any material omission in any statement relating to the affairs of the company;

      (e)   knowing or believing that a false debt has been proved by any person, fails for a period of one month to inform the liquidator thereof;

      (f)   prevents the production of any book or paper affecting or relating to the property or affairs of the company;

      (g)   within the period of twelve months before the commencement of the winding-up or at any time thereafter has attempted to account for any part of the property of the company by fictitious losses or expenses; or

      (h)   within the period of twelve months before the commencement of the winding-up or at any time thereafter has made any false representation or committed any other fraud for the purpose of obtaining the consent of the creditors of the company or any of them to an agreement with reference to the affairs of the company or to the winding-up;

shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two thousand monetary units or to imprisonment for a period not exceeding two years, or to both.

   (2) It shall be a defence to a charge under paragraph (a), (b) or (d) or subparagraph (i), (vii) or (viii) of paragraph (c) of sub-section (1) if the accused proves that he had no intent to defraud, and to a charge under paragraph (f) or subparagraph (iii) or (iv) of paragraph (c) of sub-section (1) if he proves that he had no intent to conceal the state of affairs of the company or to defeat the law.

   (3) Where a person pawns, pledges or disposes of any property in circumstances which amount to an offence under subparagraph (viii) of paragraph (c) of sub-section (1), every person who takes in pawn or pledge or otherwise receives the property, knowing it to be pawned, pledged or disposed of in those circumstances shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units or to imprisonment for a period not exceeding six months, or to both.

 

354.   Inducement to be appointed liquidator

Any person who gives or agrees or offers to give to any member or creditor of a company any valuable consideration with a view to securing the appointment of the person, or of any other person, as the company’s liquidator shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units or to imprisonment for a period not exceeding six months, or to both.

 

355.   Penalty for falsification of books

Every officer or member of any company being wound-up who destroys, mutilates, alters or falsifies any books, documents or securities, or makes or is privy to the making of any false or fraudulent entry in any register, book or document belonging to the company with intent to defraud or deceive any person shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two thousand monetary units or to imprisonment for a period not exceeding two years, or to both.

 

356.   Liability where proper accounts not kept

If, when a company is wound-up, it is shown that the company failed to keep accounting records in accordance with section one hundred and sixty-two for any period during the period of two years before the commencement of the winding-up, each officer in default, unless he acted honestly and shows that in the circumstances in which the business of the company was carried on the failure was excusable, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding one thousand monetary units or to imprisonment for a period not exceeding twelve months, or to both.

 

357.   Liability for contracting debt

   (1) If an officer of a company who is knowingly a party to the contracting of a debt by the company has, at the time the debt is contracted, no reasonable or probable ground of expectation (after taking into consideration the other liabilities, if any, of the company at the time) of the company’s being able to pay the debt, the officer shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two hundred and fifty monetary units or to imprisonment for a period not exceeding three months, or to both.

   (2) Where a person has been convicted of an offence against this section, the Court, on the application of the liquidator or any creditor or member of the company, may make an order that the person shall be personally responsible, without any limitation of liability, for the debts or other liabilities of the company or for such of those debts or other liabilities as the Court directs.

   (3) An order under this section may provide for measures to give effect to the liabilities of the person under the order, and in particular may provide that those liabilities shall be a charge on any debt or obligation due from the company to him, or on any interest in the company of which he has, directly or indirectly, the benefit.

   (4) The Court may make such further orders as it thinks necessary to enforce any charge imposed under this section.

 

358.   Power of Court to assess damages against delinquent officers

   (1) If, in the course of winding-up, it appears that any person who has taken part in the formation or promotion of the company, or any past or present liquidator or officer—

      (a)   has misapplied or retained, or become liable or accountable for, any money or property of the company; or

      (b)   has been guilty of any misfeasance or breach of trust or duty in relation to the company;

the Court may, on the application of the liquidator or of any creditor or member, inquire into the conduct of that person, liquidator or officer and compel him to repay or restore the money or property, or any part thereof, with interest at such rate as the Court thinks just, or to contribute such a sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust or duty as the Court thinks just.

   (2) This section shall apply to and in respect of the receipt of any money or property by an officer of the company during the two years preceding the commencement of the winding-up, whether by way of salary or otherwise, that appears to the Court to be unfair or unjust.

   (3) This section shall apply to the conduct of a person notwithstanding that the person is criminally liable for the conduct.

 

359.   Prosecution of delinquent officer and members

   (1) If it appears to the Court, in the course of either a winding-up by the Court or a voluntary winding-up, that any past or present officer, or any member, of the company has been guilty of an offence in relation to the company for which he is criminally liable, the Court may, either on the application of any person interested in the winding-up or of its own motion, direct the liquidator to report the matter to the Director of Public Prosecutions.

   (2) If—

      (a)   it appears to the liquidator, in the course of a voluntary winding-up, that any past or present officer, or any member, of the company has been guilty of any offence in relation to the company for which he is criminally liable; or

      (b)   the liquidator in any winding-up is given a direction under sub-section (1);

he shall forthwith report the matter to the Director of Public Prosecutions and shall, in respect of information or documents in his possession or under his control which relate to the matter in question, furnish the Director of Public Prosecutions with such information and give to him such access to and facilities for inspecting and taking copies of any documents as he may require.

   (3) Where the Director of Public Prosecutions receives a report under this section, he may refer the matter to the Registrar for further inquiry, and the Registrar shall thereupon investigate the matter, and may apply to the Court for an order conferring on any person designated by the Court for the purpose, with respect to the company concerned, all such powers of investigating the affairs of the company as are provided by this Act in the case of a winding-up by the Court.

   (4) If the Director of Public Prosecutions institutes proceedings in a matter reported to him under this section, the liquidator and every officer and agent of the company past and present, other than the defendant in the proceedings, shall give the Director of Public Prosecutions all assistance in connection with the prosecution which he is reasonably able to give.

   (5) For the purposes of sub-section (4) “agent of the company” includes any banker or legal practitioner of the company and any person appointed by the company as auditor.

   (6) If any person fails to comply with sub-section (4), the Court may, on the application of the Director of Public Prosecutions, direct that person to comply with that sub-section, and where any application is made under this sub-section with respect to a liquidator, the Court may, unless it appears that the failure or neglect to comply was due to the liquidator not having in his hands sufficient assets of the company to enable him so to do, direct that the costs of the application shall be borne by the liquidator personally.

 

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

A person who, while an officer of a company which is subsequently ordered to be wound- up by the Court or which subsequently passes a resolution for voluntary winding-up—

      (a)   induced any person to give credit to the company by false pretences or by means of any other fraud;

      (b)   with intent to defraud creditors of the company, made or caused to be made any gift or transfer of charges on, or caused or connived at the levying of any execution against, the property of the company; or

      (c)   with intent to defraud creditors of the company, concealed or removed any part of the property of the company within two months before the date of any unsatisfied judgement or order for payment of money obtained against the company;

shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two thousand monetary units or to imprisonment for a period not exceeding two years, or to both.

DIVISION 13.8—DISSOLUTION OF DEFUNCT COMPANIES

 

361.   Power of Registrar to strike defunct company off register

   (1) Where the Registrar has reasonable cause to believe that a company is not carrying on business or is not in operation, he may send to the company by registered post a letter to that effect and also stating that, if an answer showing cause to the contrary is not received within one month from the date of the letter, a notice will be published in the Gazette with a view to dissolving the company under this section.

   (2) If the Registrar, at the expiration of the period of one month after the sending of the letter, is not satisfied that the company is carrying on business or is in operation, he may at any time thereafter cause to be published in the Gazette and send to the company by registered post a notice that at the expiration of three months from the date of that notice, unless cause is shown to the contrary, the company will be dissolved.

   (3) Where a company is being wound-up and the Registrar has reasonably cause to believe that—

      (a)   no liquidator is acting;

      (b)   the affairs of the company are fully wound-up and for a period of six months the liquidator has been in default in lodging any return required to be made by him;

      (c)   the affairs of the company have been fully wound-up and there are no assets, or the assets available are not sufficient to pay the costs of obtaining an order of the Court dissolving the company; or

      (d)   the affairs of the company have been fully wound-up and that it is not necessary in the circumstances of the case to obtain an order of the Court dissolving the company;

he may cause to be published in the Gazette and send to the company or the liquidator, if any, a notice to the same effect as that referred to in sub-section (2).

   (4) Where a company—

      (a)   by ordinary resolution requests the Registrar to strike it off the register; and

      (b)   lodges with the Registrar a copy of the resolution, summary of accounts, and a statutory declaration of two or more directors showing what disposition the company has made of its assets and that the company has no debts or liabilities;

the Registrar shall cause to be published in the Gazette a notice to the same effect as that referred to in sub-section (2).

   (5) After the expiration of three months from the publication in the Gazette of a notice under this section, the Registrar shall, unless cause to the contrary is shown, strike the name of the company off the register, and shall cause notice thereof to be published in the Gazette.

   (6) On the publication in the Gazette of the notice that name of the company has been struck off the register, the company shall be dissolved, but—

      (a)   the liability, if any, of every officer and member of the company shall continue and may be enforced as if the company had not been dissolved; and

      (b)   nothing in this sub-section shall affect the power of the Court to wind-up a company which has been dissolved under this section.

   (7) A notice to be sent under this section to a liquidator may be addressed to the liquidator at his last known place of business.

   (8) The fees of the Registrar in respect of the dissolution of a company under this section and the costs incurred by him in publishing notices in the Gazette shall be payable by the company and recoverable from it.

   (9) The Registrar may, not less than five years after striking a defunct company off the register, re-issue the name of the company where a person seeks to apply for the registration of a company with the name that was struck off the register, in accordance with this Act.

[S 361(9) ins by s 30 of Act 24 of 2011.]

 

362.   Power of Court to declare dissolution of company void

   (1) Where a company has been dissolved under section 293, 324 or 361, the Court may at any time within two years after the date of dissolution, on application by the 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 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 sub-section (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.

 

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

   (1) Where, after a company has been dissolved, the Registrar is satisfied—

      (a)   that the company, if still existing, would be legally or equitably bound to carry out, complete or give effect to some dealing, transaction or matter; and

      (b)   that in order to carry out, complete or give effect thereto, some purely administrative and not discretionary act should have been done by or on behalf of the company, or should be done by or on behalf of the company if it were still existing;

the Registrar may, as representing the company or its liquidator; do or cause to be done any such act.

   (2) The powers of the Registrar under sub-section (1) shall include the powers to execute or sign any relevant instrument or document, and the Registrar shall, when so executing or signing an instrument or document, endorse thereon a note or memorandum to the effect that he has done so under this section, and such an execution or signature shall have the same force, validity and effect as if the company had been in existence and had executed the instrument or document.

   (3) Neither the Registrar nor the Government shall incur any liability to any person by reason of any act done or caused to be done by the Registrar under this section.

DIVISION 13.9—WINDING-UP OF OTHER BODIES CORPORATE

 

364.   Winding-up of other Zambian bodies corporate

   (1) Subject to this section, this Part shall apply, with the necessary modifications, to any body corporate incorporated in Zambia, not being a company.

   (2) This section shall not apply to a body corporate incorporated by or under any written law of Zambia if the law makes specific provisions for the winding-up of bodies corporate formed by or under it.

   (3) A winding-up by the Court under this section may be made only on the petition of the body corporate.

 

365.   Winding-up of other foreign bodies corporate

   (1) In this section, “external company” means a body corporate incorporated in a foreign country, not being a foreign company, that has assets or an undertaking in Zambia.

   (2) Subject to this section, this Part shall apply with the necessary modifications to the operations and business and assets in Zambia of an external company, as if it were a company incorporated in Zambia, carrying on the operations or business of the external company in Zambia, whose only assets are the assets of the external company in Zambia.

   (3) An external company may be wound-up under this section whether or not it has been dissolved or has otherwise ceased to exist according to the law of the country of its incorporation.

   (4) An external company may be wound-up under this section on the following grounds in addition to those referred to in section two hundred and seventy-two:

      (a)   if it is in the course of being wound-up, voluntarily or otherwise, in the country of its incorporation;

      (b)   if it is dissolved in the country of its incorporation or has ceased to carry on business in Zambia, or is carrying on business for the purposes only of winding-up its affairs;

      (c)   if the Court is of the opinion that the company is being operated in Zambia for any unlawful purposes.

   (5) The Court may, in the winding-up order or on subsequent application by the liquidator, direct that all transactions in Zambia by or with the external company shall be deemed to be, or have been, validly done notwithstanding that they occurred after the date when the body corporate was dissolved or otherwise ceased to exist according to the law of the country of its incorporation, and may make the order on such terms and conditions as it deems fit.

PART XIV
MISCELLANEOUS

 

DIVISION 14.1—ADMINISTRATION OF ACT

 

366.   Administration of Act

This Act shall be administered by the Agency.

[S 366 subs by s 5 of Act 12 of 2010.]

 

367.   Registrar

The Registrar shall exercise the powers and perform the duties assigned to the Registrar by this Act and the Patents and Companies Registration Agency Act, 2010.

[S 367 subs by s 6 of Act 12 of 2010.]

 

368.   Seal

   (1) The seal of the Agency kept in terms of the Patents and Companies Registration Agency Act, 2010, shall be used for the purposes of this Act and the impression thereof made for such purposes shall be judicially noticed.

   (2) On the commencement of this Act, any impression of a seal made for the purposes of this Act before the commencement of this Act shall be deemed to be an impression of the seal of the Agency.

[S 368 subs by s 7 of Act 12 of 2010.]

 

369.   Keeping of registers and lodged documents

   (1) The Registrar shall maintain the registers required under this Act together with any other registers that he thinks necessary or convenient for the purposes of this Act.

   (2) Where a document is lodged under this Act, the Registrar shall keep the document, or a copy thereof, and register it.

   (3) The registers and other documents may be recorded or stored in written or printed form or by electronic or photographic process or otherwise.

   (4) The Registrar shall ensure that, as far as practicable—

      (a)   all the particulars in the registers; and

      (b)   all the documents, or the copies thereof, lodged with the Registrar,

in respect of a particular company can be made available to a person who requests them within two hours after the making of the request.

   (5) For the purposes of this section—

      (a)   the information in any register kept under the former Act shall, if it is information that would have been required to be kept on a register had this Act been in force, be deemed to be information required to be kept on a register under this Act; and

      (b)   any document lodged for the purposes of the former Act shall be deemed to be a document lodged under this Act.

 

370.   Registration of documents

   (1) Where this Act requires any document or particulars to be lodged with the Registrar, the Registrar shall register them in the manner prescribed or, if no manner is prescribed for the document or particulars, as determined by the Registrar.

   (2) For the purposes of this Act, a document or particulars shall be deemed not to have been lodged with the Registrar until any fee prescribed under section three hundred and seventy- seven has been paid to the Registrar.

   (3) Subject to this Act, where this Act requires a document or particulars to be lodged under this Act, each company concerned shall lodge a separate document or set of particulars.

   (4) All documents and particulars which are lodged with the Registrar shall be printed or typewritten on good quality paper to the satisfaction of the Registrar.

   (5) If the Registrar is of opinion that any document or particulars lodged with him—

      (a)   contain matter or matters contrary to law;

      (b)   by reason of any error, omission or misdescription have not been duly completed;

      (c)   are insufficiently legible;

      (d)   are written on paper insufficiently durable; or

      (e)   otherwise do not comply with the requirements of this Act;

he may refuse to register the document or particulars in that state and direct that they be amended or completed in a specified manner and re-submitted.

   (6) If the Registrar gives a direction under sub-section (5), the document or particulars shall be deemed not to have been lodged.

   (7) The Registrar may require that a document or a fact stated in a document lodged with him shall be verified by statutory declaration.

   (8) Where the Registrar is required or permitted under this Act to cause a copy or particulars of a document lodged with him to be published in the Gazette, he may require the lodgement with him of any such document in duplicate, or the provision of any such particulars, and may withhold registration of the document until the requirement has been complied with.

   (9) The Registrar may alter a document if so authorised by the person who lodged the document or his representative.

 

371.   Extension of time for lodgement

   (1) Where under this Act a document is required to be lodged with the Registrar within a specified period, the period shall be extended by fourteen days in relation to a document executed or made in a place outside Zambia.

   (2) The Registrar may, before the end of any period fixed for the lodgement of a document or particulars, at the request of the person concerned, extend the period for lodgement by such a period, and on such terms, as he thinks reasonable in the circumstances.

   (3) Subject to this section, where any document or particulars are lodged with the Registrar after the end of the period fixed for its lodgement, the Registrar shall accept it for registration upon payment of such additional fee as may be prescribed.

   (4) The Registrar may reduce or waive any additional fee imposed under sub-section (3) if he is satisfied that the failure to lodge the document or particulars was caused or continued solely through administrative oversight and that no person is likely to have suffered damage or to have been prejudiced as a result of the failure.

 

372.   Documents to be in approved language

   (1) Subject to this Act, where this Act requires a document or register to be prepared, kept, maintained or lodged, the document shall be in English.

   (2) Where the Registrar approves the lodgement of a document all or part of which is in a language other than English, he may require a certified translation into English to be annexed to it.

372A.   Notice by Registrar

   (1) The Registrar may issue such notices in connection with matters under this Act for which notice is required to be given in order to give effect to this Act.

   (2) The Registrar shall take reasonable steps to ensure that a notice under subsection (1) is issued using a method that will ensure the widest possible circulation to the persons to which the notice is directed.

   (3) Unless otherwise provided, a notice issued by the Registrar under subsection (1) may be effected by—

      (a)   serving the notice at the address of the person to be notified;

      (b)   publication in a daily newspaper of general circulation in Zambia;

      (c)   display in a prominent public place;

      (d)   publication on the website of the Agency or any other appropriate third party website; or

      (e)   publication in the Gazette.

[S 372A ins by s 31 of Act 24 of 2011.]

 

373.   Prescribed forms

   (1) Where this Act provides that a document to be lodged shall be “in the prescribed form”, the Registrar shall accept for lodgement and registration a document that contains all the information required and varies from the prescribed form in inessential respects only.

   (2) In the period of six months from the commencement of this Act, where this Act provides that a document to be lodged shall be “in the prescribed form” and no form has been prescribed by the regulations for the purposes of the provision, the document shall be in a form approved by the Registrar.

 

374.   Inspection, copies and evidence

   (1) A person may inspect any document registered by the Registrar upon payment of such fee as may be prescribed for each inspection of the documents relating to one company.

   (2) On the payment of the appropriate prescribed fee, the Registrar shall provide a person with—

      (a)   a certificate of incorporation of a company;

      (b)   a certificate of share capital of a company; or

      (c)   a copy of any other document, or any part of any other document, registered by the Registrar;

certified under the hand of the Registrar.

   (3) A document kept by the Registrar shall not be required to be produced for the purpose of any proceedings except by an order of the Court.

 

375.   Evidentiary provisions

   (1) A copy of, or extract from, any document registered by the Registrar, being a copy or extract certified by the Registrar to be a true copy or extract, shall be admitted in any proceedings as of equal validity to the original document.

   (2) In any proceedings, a Court shall take judicial notice of the office of the Registrar.

   (3) A document purporting—

      (a)   to be—

      (i)   an order, certificate, license or approval made or issued by the Registrar for the purposes of this Act; or

      (ii)   a revocation of such an order, certificate, license or approval; and

      (b)   to be sealed with the seal of the Registrar or to be signed by him, or on his behalf by a Deputy Registrar or other authorised officer;

shall be presumed to be such a document, or to be duly sealed or signed.

   (4) A certificate signed by the Registrar that an order made, certificate issued, or act done is the order, certificate, or act of the Registrar shall be conclusive evidence or the fact certified.

 

376.   Enforcement of duty to make returns

   (1) For the purpose of ascertaining whether a company or an officer is complying with this Act or any regulations made under this Act, the Registrar may, on giving fourteen days written notice to the company, call for the production of or inspect any book required to be kept by the company.

   (2) If a body corporate or any officer, receiver or liquidator of a body corporate;

      (a)   fails to comply with any provision of this Act which requires it, or him, to lodge or deliver any return, account, or other document, or to give notice of any matter;

      (b)   continues to fail to comply with the provision for the period of fourteen days after the service of a notice on it or him requiring him to do so;

the Court may, on an application by the Registrar or by any member or creditor of the body corporate, or by any other person claiming an interest which the Court thinks sufficient, make an order directing the body corporate and any officer thereof, or the receiver or liquidator, to comply with the provision within such time as may be specified in the order, and may provide that all costs of and incidental to the application shall be borne by the body corporate or by any officer, receiver or liquidator of the body corporate responsible for the failure.

 

377.   Fees

   (1) The regulations may prescribe fees in respect of—

      (a)   the performance by the Registrar of his functions under this Act, including the receipt by him of any notice or other document which under this Act is required to be lodged with him; and

      (b)   the inspection of documents kept by him under this Act.

   (2) Where the regulations provide that an additional fee is payable, by reason of the late lodgement of a document for registration or otherwise, the Registrar may in his discretion remit the whole or any part of the additional fee.

   (3) Where the regulations provide that an additional fee is payable, by reason of the late lodgement of a document for registration or otherwise, the additional fee shall be payable notwithstanding that the company or any other person may be criminally liable in respect of the same act or omission.

   (4) Where a provision in this Act refers to a prescribed fee and no fee has been prescribed for the purposes of the provision, the provision shall be read as if the reference were omitted.

   (5) The Minister may, by statutory instrument exempt the payment any fees, prescribed by regulations pursuant to sub-section (1) in respect of any person or company lodging documents for registration under this Act if such person or company has entered into a Development Agreement under section nine of the Mines and Minerals Act.

[S 377(5) ins by s 4 of Act 1 of 2000.]

 

378.   …

[S 378 rep by s 8 of Act 12 of 2010.]

 

379.   Appeal against a decision of the Registrar

Subject to this Act, a person aggrieved by a decision of the Registrar may within fourteen days after the date on which he is notified of the decision, appeal to the Court against the decision, and the Court may confirm, reverse or vary the decision or make such order or give such directions in the matter as it thinks fit.

 

380.   Collection of information and statistics from companies

   (1) The Registrar may issue an order requiring companies generally, or any class of companies, to furnish, by the time specified in the order, specified information or statistics with regard to their constitutions or working, in relation to periods specified in the order.

   (2) The Registrar may issue an order requiring a person, being a company or a person who is, or has at any time been, an officer or employee of the company, to furnish, by the time specified in the order, specified information or statistics with regard to the company’s constitution or working, in relation to periods specified in the order.

   (3) An order under this section shall not have the effect of requiring a person to furnish any information less than fourteen days after the date on which the person was notified of the order.

   (4) An order under sub-section (1) shall be published in the Gazette and may, as the Registrar thinks fit, be published in a newspaper or newspapers circulating generally in Zambia or served on individual companies.

   (5) An order under sub-section (2) shall be served on the person subject to the order.

   (6) A person shall be deemed to have been notified of an order on the earliest of the following dates:

      (a)   the date on which the order was served on the person;

      (b)   the date on which the order was published in the Gazette;

      (c)   the date on which the order was published in a newspaper circulating generally in Zambia.

   (7) For the purpose of satisfying himself that any information or statistics furnished in pursuance of an order under this section is correct and complete, the Registrar may require a person subject to the order—

      (a)   to produce specified records or documents in his possession or under his control for inspection, before a specified officer and at a specified time; or

      (b)   to furnish specified further information or statistics within a specified time.

   (8) The Registrar may, in writing, authorise a person to make an inquiry—

      (a)   for the purpose of obtaining any information or statistics which a company has failed to furnish as required of it by an order under sub-section (1); or

      (b)   for the purpose of—

      (i)   satisfying the Registrar that any information or statistics furnished by a company in pursuance of an order made under sub-section (1) is correct and complete; and

      (ii)   obtaining such information or statistics as may be necessary or make the information or statistics furnished correct and complete;

and the person authorised shall, for the purposes of such an inquiry, have such powers as may be prescribed.

   (9) If a company fails to comply with an order under this section to provide information and statistics about itself, or knowingly furnishes any information or statistics which is incorrect or incomplete in any material respect, the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two hundred and fifty monetary units or to imprisonment for a period not exceeding three months, or to both.

   (10) A person who willfully fails to comply with an order under this section shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two hundred and fifty monetary units or to imprisonment for a period not exceeding three months, or to both.

   (11) For the purposes of this section, where a body corporate incorporated outside Zambia carries on business in Zambia having established an office within Zambia, a reference to a company in this section includes a reference to the body corporate in relation, and only in relation, to that business.

 

DIVISION 14.2—PENALTIES AND LIABILITIES

 

381.   Penalty for false statements

   (1) A person who, in any return, report, certificate, account or other document required by or for the purposes of this Act makes a statement that he knows to be false in any material particular shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two thousand monetary units or to imprisonment for a term not exceeding two years, or to both.

   (2) This section shall not affect the liability of a body corporate or other person under another section of this Act or any other written law, but the penalties imposed by this section shall be alternative, and not additional, to any penalties imposed by the other section or written law.

 

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

   (1) A person who, not being a body corporate, trades or carries on business in Zambia under a name or title which includes the word “incorporated”, “corporation” or any contraction or imitation thereof, or any equivalent in a language other than English shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that he trades or carries on business under that name or title.

   (2) A person who, not being a body corporate whose members have limited liability under the laws of the country of its incorporation, trades or carries on business in Zambia under a name or title the last word of which is “limited” or any contraction or imitation thereof, or any equivalent in a language other than English, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that he trades or carries on business under that name or title.

 

383.   Civil liability for fraudulent trading

   (1) In the course of the winding-up of a company or any proceedings against a company, the Court may, on the application of the liquidator or any creditor or member of the company, if it is satisfied that a person was knowingly a party to the carrying on of any business of the company for a fraudulent purpose, make an order that the person shall be personally responsible, without any limitation of liability, for the debts or other liabilities of the company or for such of those debts or other liabilities as the Court directs.

   (2) An order under this section may provide for measures to give effect to the liabilities of the person under the order, and in particular may provide that those liabilities shall be a charge on any debt or obligation due from the company to him or on any interest in the company of which he has, directly or indirectly, the benefit.

   (3) The Court may make such further orders as it thinks necessary to enforce any charge imposed under this section.

   (4) This section shall apply whether or not the person concerned has been convicted of an offence against section three hundred and eighty-four or of any other offence in respect of the matters on the ground of which the order is made.

 

384.   Offence of fraudulent trading

A person who is knowingly a party to the carrying on of any business of the company for a fraudulent purpose shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding one thousand monetary units or to imprisonment for a period not exceeding twelve months, or to both.

 

385.   Imprisonment for failure to pay fine

Where a Court issues a warrant under section three hundred and eleven of the Criminal Procedure Code for the commitment of a person to prison for a failure by him to pay a fine imposed on him for an offence under this Act, the period of imprisonment specified in the warrant shall not exceed one day for every three monetary units of the fine that remain unpaid.

 

386.   Costs in actions by limited companies

Where a body corporate with limited liability is a plaintiff in any legal proceedings, the Court may, if the Court is satisfied that there is reason to believe that the body corporate will be unable to pay the costs of the defendant if the defendant is successful in his defence, require sufficient security to be given for those costs, and may stay all proceedings until the security is given.

 

387.   Contribution between joint wrongdoers

Where more than one person is liable (whether as an officer of a body corporate or otherwise) to pay any damages, costs, compensation, debt or monetary penalty to an aggrieved party under, or in respect of any breach of, any section of this Act—

      (a)   the persons shall have a right of contribution amongst themselves; and

      (b)   in any action to enforce liability or in an action to recover contribution, the Court may—

      (i)   award contribution on such terms as it considers equitable in all the circumstances; and

      (ii)   exempt any person from liability to make contribution or direct that the contribution to be recovered from any other person shall amount to a complete indemnity.

 

388.   Power to grant relief from civil liability

   (1) If the Court is satisfied that a member, officer, receiver, liquidator, auditor, or trustee for debentures of a company might be civilly liable under this Act in respect of some matter, but that he had acted honestly and reasonably in the matter and that, having regard to all the circumstances or the case, he ought fairly to be excused, the Court may relieve him in whole or in part from his liability on such terms as the Court thinks fit.

   (2) Relief of a person under this section may be granted—

      (a)   in proceedings against the person in relation to the matter, or

      (b)   on the application of the person, if he has reason to apprehend that such proceedings may be instituted.

 

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

No person shall be liable to any action in damages for anything done or omitted to be done by any person in the exercise or performance of any power or function conferred or imposed on him by or under this Act unless the act or omission was in bad faith or was due to a want of reasonable care of diligence.

 

DIVISION 14.3—TRANSITIONAL PROVISIONS

 

390.   Certificates and documents made or lodged under former Act

   (1) Any certificate or document made, executed, or issued under the former Act and in force and operative at the commencement of this Act, shall so far as it could have been made, executed, or issued under this Act, have effect as if made, executed or issued under this Act.

   (2) Any document that, in accordance with the former Act, was duly lodged by it with the Registrar, or duly registered by the Registrar, shall be deemed to have been duly lodged or registered under this Act.

 

391.   Articles of existing companies

   (1) An existing company shall be deemed to have, on and from the commencement of this

Act, articles consisting of—

      (a)   those provisions of the memorandum of association and articles of association of the company, within the meaning of the former Act, which regulate the operation of the company and are not inconsistent with the former Act; and

      (b)   any provisions of Table A of the former Act which, under the former Act, applied to the company;

whether or not the articles so deemed are consistent with this Act.

   (2) The articles of an existing company under sub-section (1) shall be valid, and this Act shall not apply to the company to the extent of any inconsistency with them, until—

      (a)   the company adopts new articles in accordance with sub-section (3); or

      (b)   the last day of the first financial year of the company to commence after the commencement of this Act;

whichever is earlier.

   (3) An existing company shall, not later than the last day of the first financial year of the company to commence after the commencement of this Act, in accordance with section eight, adopt articles expressed in terms of and consistent with this Act.

   (4) Where an existing company has lodged with the Registrar new articles for the purposes of sub-section (3), the Registrar shall issue to the company—

      (a)   a replacement certificate of incorporation; and

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

worded to meet the circumstances of the case.

   (5) An existing company shall not amend its articles unless, after the amendment, the articles are expressed in terms of and consistent with this Act.

   (6) Until sub-section (3) has been complied with, an existing company may satisfy the requirements of section twenty-nine in relation to the articles of the company and the certificate of share capital by supplying to a member a copy of its memorandum of association and articles of association within the meaning of the former Act.

   (7) If an existing company fails to comply with sub-section (3), the company, and each officer of the company in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues.

 

392.   Minimum capital for existing companies

   (1) Section fifteen shall not apply to an existing company that is a public company from the commencement of this Act until—

      (a)   the end of the period of six months after the commencement of this Act; or

      (b)   it receives a certificate under sub-section (2) of section 15;

whichever is earlier, but the provisions of the former Act relating to minimum capital shall continue to apply to it during that period while it remains a public company.

   (2) An existing company that, immediately before the commencement of this Act, satisfied the provisions of that Act applying to the company relating to minimum capital, shall be deemed to satisfy section eighteen.

 

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

   (1) The register of members of an existing company kept for the purposes of the former Act shall be deemed to be part of the register of members for the purposes of this Act.

   (2) Where both a provision of the former Act and a corresponding provision of this Act require a fund or account to be kept or opened, such a fund or account kept or opened by an existing company to satisfy the provision of the former Act shall be deemed to satisfy the corresponding provision of this Act.

 

394.   Registration of charges

Where an existing company has, immediately before the commencement of this Act, property which is subject to a charge of any kind, the company shall, within three months after the commencement of this Act—

      (a)   enter in the register referred to in section ninety-seven the particulars referred to in that section in relation to each such charge; and

      (b)   lodge with the Registrar a statement containing the particulars referred to in section 99 in relation to each such charge to which that section applies.

 

395.   Directors’ reports for existing companies

Sections 171 to 181 shall not apply to a directors’ report in respect of a financial year of an existing company that began before the commencement of this Act.

 

396.   Related bodies corporate of existing companies

Section forty-four shall not apply to an existing company until the date on which it is required to lodge its first annual return after the commencement of this Act.

 

397.   Directors of existing companies

   (1) A corporation which holds office as a director of an existing company immediately before the commencement of this Act shall, on that commencement, cease to hold office and the vacancy may be filled as a casual vacancy in accordance with this Act and the articles.

   (2) Where an existing company has, immediately before the commencement of this Act, a single director, the company shall not be required to appoint a second director until—

      (a)   the director vacates his office; or

      (b)   three months after the end of the first financial year of the company to be completed after the commencement of this Act.

 

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

For the purposes of section two hundred and forty-six, a body corporate incorporated outside Zambia, being a body corporate which was not registered as a foreign company under the former Act but which, immediately before the commencement of this Act, had an established place of business in Zambia, shall be deemed to have established that place of business on the date of commencement of this Act.

 

DIVISION 14.4—GENERAL

 

399.   Companies subject to other legislation

Nothing in this Act shall abrogate or affect any special legislation relating to companies carrying on the business of banking, insurance or any other business.

 

400.   Regulations

   (1) The Minister may, by statutory instrument, make regulations for or with respect to any matter that by this Act is required or permitted to be prescribed, or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act, other than a matter required or permitted to be prescribed by the Minister or any other person or body.

   (2) Without limiting the generality of sub-section (1), such regulations may be made on the following matters;

      (a)   the conduct of the business of the office of the Registrar;

      (b)   the form and content of any application, notice, return, account, book, record, certificate, license or other document required for the purposes of this Act;

      (c)   the payment of fees and charges in respect of any matter or anything done or supplied under this Act;

      (d)   the procedure to be followed in connection with any application or request to the Registrar or any proceeding before him;

      (e)   the provision of copies of any documents under this Act, and the certification of such copies;

      (f)   the making of inspections and searches under this Act, including the times when they may be made;

      (g)   the conduct of any winding-up or other proceeding or transaction under this Act;

      (h)   the service of notices and other documents under this Act;

      (i)   any matter necessary or convenient to be provided for in relation to the transition between the former Act and this Act.

   (3) The regulations may be made so as—

      (a)   to make prescription vary depending on the circumstances;

      (b)   to be of general or specifically limited application; or

      (c)   to permit any matter to be determined from time to time by any person or body specified in the regulations.

 

401.   Rules of Court

The Chief Justice may make Rules of Court governing the practice and procedure for the winding-up of companies in Zambia and with respect to the procedure in any application to the Court under this Act, and enabling all or any of the powers and duties conferred and imposed on the Court in respect of the winding-up of companies to be exercised or performed by the Registrar or by the official receiver, or by the liquidator as an officer of the Court and subject to the control of the Court.

 

402.   Repeal of former Act

The Companies Act is hereby repealed. (Cap. 686 of the former edition.)

FIRST SCHEDULE

[Section 2]

STANDARD ARTICLES

REGULATIONS FOR MANAGEMENT OF A COMPANY LIMITED BY SHARES

TABLE OF DIVISIONS

1. INTERPRETATION

1. (1) In these regulations, unless the context otherwise requires:

“Act” means the Companies Act, 1994;

“prescribed rate of interest” means the rate of interest prescribed in regulations made under the Act for the purposes of the Standard Articles;

“seal” means the common seal of the company and includes any official seal of the company;

“resolution” means an ordinary resolution of the company;

“secretary” means any person appointed to perform the duties of a secretary of the company.

   (2) Unless the context otherwise requires an expression, if used in a provision of these regulations that deals with a matter dealt with by a particular provision of the Act, has the same meaning as in that provisions of the Act.

2. SHARE CAPITAL AND VARIATION OF RIGHTS

2. Without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, but subject to the Act, shares in the company may be issued by the directors and any such share may be issued with such preferred deferred or other special rights or such restrictions, whether with regard to dividend, voting, return of capital or otherwise, as the director, subject to a resolution, determine.

3. The directors shall not issue any rights or options to shares in favour of any persons unless the issue has been authorised at a general meeting by a special resolution.

4. Subject to the Act, any preference shares may, with the sanction of a resolution, be issued on the terms that they are, or at the option of the company are liable to be redeemed.

5. (1) If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the company is being wound-up, be varied with the consent in writing of the holders of three-quarters of the issued shares of that class, or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of the class.

   (2) The provisions of the Act and these regulations relating to general meetings apply so far as they are capable of application and with the necessary modifications to every such class meeting except that—

      (a)   where a class has only one member-that member shall constitute a meeting;

      (b)   in any other case- a quorum shall be constituted by two persons who, between them, hold or represent by proxy one-third of the issued shares of the class; and

      (c)   any holder of shares of the class, present in person or by proxy, may demand a poll.

   (3) The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall, unless otherwise expressly provided by the terms of issue of the shares of that class, be varied by the creation or issue of further shares ranking equally with the first- mentioned shares.

6. (1) The Company may make payments by way of brokerage or commission on the issue of shares.

   (2) Such payments shall not exceed the rate of 10 per cent of the price at which the shares are issued or an amount equal to 10 per cent of that price, as the case may be.

   (3) Such payments may be made in cash, by the allotment of fully or partly paid shares or partly by the payment of cash and partly by the allotment of fully or partly paid shares.

7. (1) Except as required by law, the company shall not recognise a person as holding a share upon any trust.

   (2) The company shall not be bound by or compelled in any way to recognise (whether or not it has notice of the interest or rights concerned) any equitable, contingent, future or partial interest in any share or unit of a share or (except as otherwise provided by these regulations or by law) any other right in respect of a share except an absolute right of ownership in the registered holder.

8. (1) A person whose name is entered as a member in the register of members shall be entitled without payment to receive a certificate in respect of the share under the seal of the company in accordance with the Act but, in respect of a share or shares held jointly by several persons, the company shall not be bound to issue more than one certificate.

   (2) Delivery of a certificate for a share to one of several joint holders shall be sufficient delivery to all such holders.

   (3) If a share certificate is defaced, lost or destroyed, it may be renewed on payment of the fee allowed by the Act, or such lesser sum, and on such terms (if any) as to evidence and the payment of costs to the company of investigating evidence as the directors decide.

3. CALLS ON SHARES

9. (1) The directors may make calls upon the members in respect of any money unpaid on the shares of the members (whether on account of the nominal value of the shares or by way of premium) and not by the terms of issue of those shares made payable at fixed times, except that no call shall exceed one-quarter of the sum of nominal values of the shares or be payable earlier than one month from the date fixed for the payment of the last preceding call.

   (2) Each member shall, upon receiving at least fourteen days notice specifying the time or times and place of payment, pay to the company, at the time or times and place so specified the amount called on his shares.

   (3) The directors may revoke or postpone a call.

10. A call shall be deemed to have been made at the time when the resolution of the directors authorising the call was passed and may be required to be paid by installments.

11. The joint holders of a share are jointly and severally liable to pay all calls in respect of the share.

12. If a sum called in respect of a share is not paid before or on the day appointed for payment of the sum, the person from whom the sum is due shall pay interest on the sum from the day appointed for payment of the sum to the time of actual payment at such rate not exceeding the prescribed rate of interest as the directors determine, but the directors may waive payment of that interest wholly or in part.

13. Any sum that, by the terms of issue of a share, becomes payable on allotment or at a fixed date, whether on account of the nominal value of the share or by way of premium, shall for the purposes of these regulations be deemed to be a call duly made and payable on the date on which by the terms of issue the sum becomes payable, and, in case of non-payment, all the relevant provisions of these regulations as to payment of interest and expenses, forfeiture or otherwise apply as if the sum had become payable by virtue of a call duly made and notified.

14. The directors may, on the issue of shares, differentiate between the holders as to the amount of calls to be paid and the times of payment.

15. (1) The directors may accept from a member the whole or a part of the amount unpaid on a share although no part of that amount has been called up.

   (2) The directors may authorise payment by the company of interest upon the whole or any part of an amount so accepted, until the amount becomes payable, at a rate agreed upon between the directors and the member paying the sum subject to sub regulation (3).

   (3) For the purposes of sub regulation (2), the rate of interest shall not be greater than—

      (a)   if the company has, by resolution, fixed a rate-rate the so fixed; and

      (b)   in any other case the prescribed rate of interest.

4. LIEN

16. (1) The company has a first and paramount lien on every share (not being a fully paid share) for all money (whether presently payable or not) called or payable at a fixed time in respect of that share.

   (2) The company also has a first and paramount lien on all shares (other than fully paid shares) registered in the name of a sole holder for all money presently payable by him or his estate to the company.

   (3) The directors may at any time exempt a share wholly or in part from the provisions of this regulation.

   (4) The company’s lien (if any) on a share extends to all dividends payable in respect of the share.

5. FORFEITURE OF SHARES

17. (1) If a member fails to pay a call or installment of a call on the day appointed for payment of the call or installment, the directors may, at any time thereafter during such time as any part of the call or installment remains unpaid, serve a notice on him requiring payment of so much of the call or installment as is unpaid, together with any interest that has accrued.

   (2) The notice shall name a further day (not earlier than the expiration of fourteen days from

the date of service of the notice) on or before which the payment required by the notice is to be made and shall state that, in the event of non-payment at or before the time appointed, the shares in respect of which the call was made will be liable to be forfeited.

18. (1) If the requirements of a notice served under regulation 17 are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the directors to that effect.

   (2) Such a forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture.

19. A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the directors think fit, and, at any time before a sale or disposition, the forfeiture may be cancelled on such terms as the directors think fit.

20. A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but shall remain liable to pay to the company all money that, at the date of forfeiture, was payable by him to the company in respect of the shares (including interest at the prescribed rate of interest from the date of forfeiture on the money for the time being unpaid if the directors think fit to enforce payment of the interest), but his liability shall cease if and when the company receives payment in full of all the money (including interest) so payable in respect of the shares.

21. A statement in writing declaring that the person making the statement is a director or a secretary of the company, and that a share in the company has been duly forfeited on a date stated in the statement, shall be prima facie evidence of the facts stated in the statement as against all persons claiming to be entitled to the share.

22. (1) The company may receive the consideration (if any) given for a forfeited share on any sale or disposition of the share and may execute a transfer of the share in favour of the person to whom the share is sold or disposed of.

   (2) Upon the execution of the transfer, the company shall register the transferee as the holder of the share.

   (3) The transferee shall not be bound to see to the application of any money paid as consideration.

   (4) The title of the transferee to the share shall not be affected by any irregularity or invalidity in connection with the forfeiture, sale or disposal of the share.

23. The consideration referred in regulation 22 shall be applied by the company in payment of such part of the amount in respect of which the lien exists as is presently payable, and the residue (if any) shall (subject to any like lien for sums not presently payable that existed upon the shares before the sale) be paid to the person entitled to the shares immediately before the transfer.

24. The provisions of these regulations as to forfeiture shall apply in the case of non-payment of any sum that, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the nominal value of the shares or by way of premium, as if that sum had been payable by virtue of a call duly made and notified.

6. TRANSFER OF SHARES

25. (1) Subject to these regulations, a member may transfer all or any of his shares by instrument in writing in a form prescribed for the purposes of section fifty-seven of the Act or in any other form that the directors approve.

   (2) An instrument of transfer referred to in sub regulation (1) shall be executed by or on behalf of both the transferor and the transferee.

26. The instrument of transfer shall be left for registration at the registered office of the company, together with such fee (if any) not exceeding two monetary units as the directors require, accompanied by the certificate of the shares to which it relates and such other information as the directors properly require to show the right of the transferor to make the transfer, and thereupon the company shall subject to the powers vested in the directors by these regulations, register the transferee as a shareholder.

27. The directors may decline to register a transfer of shares, not being fully paid shares, to a person of whom they do not approve and may also decline to register any transfer of shares on which the company has a lien.

28. The directors may refuse to register any transfer that is not accompanied by the appropriate share certificate, unless the company has not yet issued the share certificate or is bound to issue a renewal or copy of the share certificate.

29. The registration of transfers may be suspended at such times and for such periods as the directors from time to time determine, provided that the periods do not exceed in the aggregate thirty days in any year.

7. TRANSMISSION OF SHARES

30. In the case of the death of a member, the survivor where the deceased was a joint holder, and the legal personal representatives of the deceased where he was a sole holder, shall be the only persons recognised by the company as having any title to his interest in the shares, but this regulation does not release the estate of a deceased joint holder from any liability in respect of a share that had been jointly held by him with other persons.

31. (1) Subject to any written law relating to bankruptcy, a person becoming entitled to a share in consequence of the death or bankruptcy of a member may, upon such information being produced as is properly required by the directors, elect either to be registered himself as holder of the share or to have some other person nominated by him registered as the transferee of the share.

   (2) If the person becoming entitled elects to be registered himself, he shall deliver or send to the company a notice in writing signed by him stating that he so elects.

   (3) If he elects to have another person registered, he shall execute a transfer of the share to that other person.

   (4) All the limitations, restrictions and provisions of these regulations relating to the right to transfer, and the registration of the transfer of share are applicable to any such notice or transfer as if the death or bankruptcy of the member had not occurred and the notice or transfer were a transfer signed by that member.

32. (1) Where the registered holder of a share dies or becomes bankrupt, his personal representatives or the trustee of his estate, as the case may be, shall be upon the production of such information as is properly required by the directors, entitled to the same dividends and other advantages, and to the same rights (whether in relation to meetings of the company, or to voting or otherwise), as the registered holder would have been entitled to if he had not died or become bankrupt.

   (2) Where two or more persons are jointly entitled to any share in consequence of the death of the registered holder, they shall, for the purposes of these regulations, be deemed to be joint holders of the shares.

8. CONVERSION OF SHARES INTO STOCK

33. The company may, by resolution, convert all or any of its paid up shares into stock and reconvert any stock into paid up shares of any nominal value.

34. (1) Subject to sub regulation (2), where shares have been converted into stock, the provisions of these rules relating to the transfer of shares apply, so far as they are capable of application, to the transfer of the stock or of any part of the stock.

   (2) The directors may fix the minimum amount of stock transferable and restrict or forbid the transfer of fractions of that minimum, but the minimum shall not exceed the aggregate of the nominal values of the shares from which the stock arose.

35. (1) The holders of stock shall have, according to the amount of the stock held by them, the same rights, privileges and advantages as regards dividends, voting at meetings of the company and other matters as they would have if they held the shares from which the stock arose.

   (2) No privilege or advantage shall be conferred by any amount of stock that would not, if existing in shares, have conferred that privilege or advantage.

36. The provisions of these regulations that are applicable to paid up shares shall apply to stock, and references in those provisions to share and shareholder shall be read as including references to stock and stockholder, respectively.

9. ALTERATION OF CAPITAL

37. The company may by resolution—

      (a)   increase its authorised share capital by the creation of new shares of such amount as is specified in the resolution;

      (b)   consolidate and divide all or any of its authorised share capital into shares of larger amount than its existing shares;

      (c)   subdivide all or any of its shares into shares of smaller amount than is fixed by the certificate of share capital, but so that in the subdivision the proportion between the amount paid and the amount (if any) unpaid on each such share of a smaller amount is the same as it was in the case of the share from which the share of a smaller amount is derived; and

      (d)   cancel shares that, at the date of passing of the resolution, have not been taken or agreed to be taken by any person or have been forfeited, and reduce its authorised share capital by the amount of the shares so cancelled.

38. (1) Subject to any resolution to the contrary, all unissued shares shall, before issue, be offered to such persons as at the date of the offer are entitled to receive notices from the company of general meetings in proportion, as nearly as the circumstances allow, to the sum of the nominal values of the shares already held by them.

   (2) The offer shall be made by notice specifying the number of shares offered and delimiting a period within which the offer, if not accepted, will be deemed to be declined.

   (3) After the expiration of that period or on being notified by the person to whom the offer is made that he declines to accept the shares offered, the directors may issue those shares in such manner as they think most beneficial to the company.

   (4) Where, by reason of the proportion that shares proposed to be issued bear to shares already held, some of the first-mentioned shares cannot be offered in accordance with sub- regulation (1), the directors may issue the shares that cannot be so offered in such manner as they think most beneficial to the company.

39. Subject to the Act, the company may, by special resolution, reduce its share capital, any capital redemption reserve fund or any share premium account.

10. GENERAL MEETINGS

40. (1) A director may, whenever he thinks, fit, convene a general meeting.

   (2) If no director is present within Zambia, any two members may convene a general meeting in the same manner, or as nearly as possible, as that in which such meetings may be convened by a director.

   (3) A general meeting shall be held in Zambia unless all the members entitled to vote at that meeting agree in writing to a meeting at a place outside Zambia.

41. (1) A notice of a general meeting shall specify the place, the day and the hour of meeting and, except as provided by sub regulation (2), shall state the general nature of the business to be transacted at the meeting.

   (2) It shall not be necessary for a notice of an annual general meeting to state that the business to be transacted at the meeting includes the declaring of a dividend, the consideration of annual accounts and the reports of the directors and auditors, the election of directors in the place of those retiring or the appointment and fixing of the remuneration of the auditors.

11. PROCEEDINGS AT GENERAL MEETINGS

42. (1) No business shall be transacted at any general meeting unless a quorum of members is present at the time when the meeting proceeds to business.

   (2) For the purpose of determining whether a quorum is present, a person attending as a proxy, or as representing a body corporate or association that is a member, shall be deemed to be a member.

43. If a quorum is not present within half an hour after the time appointed for the meeting—

      (a)   where the meeting was convened upon the requisition of members-the meeting shall be dissolved; or

      (b)   in any other case—

      (i)   the meeting shall stand adjourned to such day, and at such time and place, as the directors determine or, if no determination is made by the directors, to the same day in the next week at the same time and place; and

      (ii)   if a quorum is not present at the adjourned meeting within half an hour after the time appointed for the meeting—

      (a)   two members shall constitute a quorum; or

      (b)   the meeting shall be dissolved, if two members are not present.

44. (1) If the directors have elected one of their number as Chairman of their meetings, he shall preside as Chairman at every general meeting.

   (2) Where a general meeting is held and—

      (a)   a Chairman has not been elected as provided by sub-regulation (1); or

      (b)   the Chairman is not present within fifteen minutes after the time appointed for the holding of the meeting or is unwilling to act;

the member present shall elect one of their number to be Chairman of the meeting.

45. (1) The Chairman may with the consent of any meeting at which a quorum is present, and shall if so directed by the meeting, adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

   (2) When a meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as in the case of an original meeting.

   (3) Except as provided by sub regulation (2), it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.

46. (1) At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded—

      (a)   by the Chairman;

      (b)   by at least three members present in person or by proxy;

      (c)   by a member or members present in person or by proxy and representing not less than one tenth of the total voting rights of all the members having the right to vote at the meeting; or

      (d)   by a member or members holding shares in the company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

   (2) The demand for a poll may be withdrawn.

47. (1) If a poll is duly demanded, it shall be taken in such manner and (subject to sub- regulation (2)) either at once or after an interval or adjournment or otherwise as the Chairman directs, and the result of the poll shall be the resolution of the meeting at which the poll was demanded.

   (2) A poll demanded on the election of a Chairman or on a question of adjournment shall be taken forthwith.

48. In the case of an equality of votes, whether on a show of hands or on a poll, the Chairman of the meeting at which the show of hands takes place or at which the poll is demanded, in addition to his deliberative vote (if any), shall have a casting vote.

49. (1) Subject to any rights or restrictions for the time being attached to any class or classes of shares at meetings of members or classes of members—

      (a)   each—

      (i)   registered member, or registered member of that class;

      (ii)   person on whom the ownership of a share of such a registered member has evolved by operation of law;

      (iii)   proxy or attorney of a person referred to in paragraph (i) or (ii), if the person is not present at the meeting;

shall be entitled to vote;

      (b)   on a show of hands, each person present who is entitled to vote shall have one vote; and

      (c)   on a poll, every person present who is entitled to vote shall have votes in accordance with section one hundred and forty-seven of the Act.

50. In the case of joint holders, the vote of the senior who tenders a vote whether in person or by proxy or by attorney, shall be accepted to the exclusion of the votes of the other joint holders and, for this purpose, seniority shall be determined by the order in which the names stand in the register of members.

51. If a member is of unsound mind or is a person whose person or estate is liable to be dealt with in any way under the law relating to mental health, his committee or trustee or such other person as properly has the management of his estate may exercise any rights of the member in relation to a general meeting as if the committee, trustee or other person were the member.

52. A member shall not be entitled to vote at a general meeting unless all polls and other sums presently payable by him in respect of shares in the company have been paid.

53. (1) An objection may be raised to the qualification of a voter only at the meeting or adjourned meeting at which the vote objected to is given or tendered

   (2) Any such objection shall be referred to the Chairman of the meeting, whose decision shall be final.

   (3) A vote not disallowed pursuant to such an objection shall be valid for all purposes.

54. (1) An instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or, if the appointer is a body corporate, either under seal or under the hand of an officer or attorney duly authorised.

   (2) An instrument appointing a proxy may specify the manner in which the proxy is to vote in respect of a particular resolution and, where an instrument of proxy so provides the proxy shall not be entitled to vote in the resolution except as specified in the instrument.

   (3) An instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.

   (4) A proxy need not be member of the company.

   (5) An instrument appointing a proxy shall be in the following form or in as similar a form as the circumstances allow.

_____________________________

(name of Company)

I/we ..................................................................................................................................., of
.................................................................................................................................... being a

member/members of the above named company, hereby ...................................................

.............................................................................................................................................of

..................................................................................................................or, in his absence.

.............................................................................................................................................of

.....................................................................................................as my/our proxy to vote for

me/us on my/our behalf at the annual/extraordinary general meeting of the company to be held on the .................................... day of 20........ and at any adjournment of that meeting:

*in favour of/
against                        resolution No..........................................

*in favour of/
against                        resolution No..........................................

*in favour of/
against                        resolution No..........................................

Unless otherwise instructed, the proxy will vote as he thinks fit.

Signed..................................................................

Date......................................................................

55. An instrument appointing a proxy shall not be treated as valid unless the instrument, and the power of attorney or other authority (if any) under which the instrument is signed or a notarially certified copy of that power or authority, is or are deposited, not less than forty-eight hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote, or, in the case of a poll, not less than twenty-four hours before the time appointed for the taking of the poll, at the registered office of the company or at such other place in Zambia as is specified for that purpose in the notice convening the meeting.

56. A vote given in accordance with the terms of an instrument of proxy or of a power of attorney shall be valid notwithstanding the previous death of unsoundness of mind of the principal, the revocation of the instrument (or of the authority under which the instrument was executed) or of the power, or the transfer of the share in respect of which the instrument or power is given, unless notice in writing of the death, unsoundness of mind, revocation or transfer has been received by the company at the registered office before the commencement of the meeting or adjourned meeting at which the instrument is used or the power is exercised.

12. DIRECTORS

57. The company may by ordinary resolution fix a share qualification for directors, but unless and until a qualification is so fixed, there shall be no share qualification.

58. In addition to the circumstances in which the office of a director becomes vacant by virtue of the Act, the office of a director shall become vacant if the director makes any arrangement or composition with his creditors generally.

13. BORROWING POWERS

59. (1) Subject to sub-regulation (2), the directors may exercise the powers of the company to borrow money, to charge any property or business of the company or all, or any of its uncalled capital and to issue debentures or give any other security for a debt, liability or obligation of the company or of any other person.

   (2) The amount of any borrowings outstanding at any time shall not exceed the amount of issued share capital of the company at the time.

14. PROCEEDINGS OF DIRECTORS

60. The provisions of sub-section (7) of section two hundred and eighteen of the Act (providing that a director who is materially interested in a contract or arrangement to be considered at a meeting of the company or of the directors should not be counted in the quorum or vote on the matter) may be suspended or relaxed, whether generally or in respect of a particular transaction, by a resolution of the company.

61. (1) A director may, if the other directors approve, appoint a person as an alternate director in accordance with the Act.

   (2) An alternate director shall be entitled to notice of meetings of the directors.

   (3) An alternate director may, subject to the instrument of appointment, exercise any powers that the appointer may exercise.

62. At a meeting of directors, the quorum shall be two, or such larger number as is determined by resolution of the company.

63. In the event of a vacancy or vacancies in the office of a director or offices of directors, the remaining directors may act but, if the number of remaining directors is not sufficient to constitute a quorum at a meeting of directors, they may act only for the purpose of increasing the number of directors to a number sufficient to constitute such a quorum or of convening a general meeting of the company.

64. (1) The directors shall elect one of their number as Chairman of their meetings and may determine the period for which he shall hold office.

   (2) Where meeting of directors is held and—

      (a)   a Chairman has not been elected as provided by sub regulation (1); or

      (b)   the Chairman is not present within ten minutes after the time appointed for the holding of the meeting or is unwilling to act;

the directors present shall elect one of their number to be a Chairman of the meeting.

65. (1) The directors may delegate any of their powers to a committee or committees consisting of such of their number as they think fit.

   (2) A committee to which any powers have been so delegated shall exercise the powers delegated in accordance with any directions of the directors and a power so exercised shall be deemed to have been exercised by the directors.

   (3) The members of such a committee may elect one of their number as Chairman of their meetings.

   (4) Where such a meeting is held and—

      (a)   a Chairman has not been elected as provided by sub regulation (3); or

      (b)   the Chairman is not present within ten minutes after the time appointed for the holding of the meeting or is unwilling to act;

the members present may elect one of their number to be Chairman of the meeting.

   (5) A committee may meet and adjourn as it thinks proper.

   (6) Questions arising at a meeting of a committee shall be determined by a majority of votes of the members present and voting.

   (7) In the case of an equality of votes, the Chairman, in addition to his deliberative vote (if any), has a casting vote.

15. MANAGING DIRECTOR

66. (1) The directors may, upon such terms and conditions and with such restrictions as they think fit, appoint a managing director in accordance with the Act and confer upon him any of the powers exercisable by them.

   (2) Any powers so conferred may be concurrent with, or be to the exclusion of the powers of the directors.

   (3) The directors may at any time withdraw or vary any of the powers so conferred on a managing director.

16. ASSOCIATE DIRECTORS

67. (1) The directors may from time to time appoint any person to be an associate director and may from time to time terminate any such appointment.

   (2) The directors may from time to time determine the powers, duties and remuneration of any person so appointed.

   (3) A person so appointed shall not be required to hold any shares to qualify him for appointment but, except by the invitation and with the consent of the directors, shall not have any right to attend or vote at any meeting of directors.

17. SECRETARY

68. A secretary of the company shall hold office on such terms and conditions, as to remuneration and otherwise, as the directors determine.

18. SEAL

69. (1) The directors shall provide for the safe custody of the seal.

   (2) The seal shall be used only by the authority of the directors, or of a committee of the directors authorised by the directors to authorise the use of the seal, and every document to which the seal is affixed shall be signed by a director and be countersigned by another director, a secretary or another person appointed by the directors to countersign that document or a class of documents in which that document is included.

19. INSPECTION OF RECORDS

70. Subject to the Act, the directors shall determine whether and to what extent, and at what time and places and under what conditions, the accounting records and other documents of the company or any of them will be open to the inspection of members other than directors, and a member other than a director shall not have the right to inspect any document of the company except as provided by law or authorised by the directors or by a resolution of the company.

20. DIVIDENDS AND RESERVES

71. (1) The company by resolution may declare a dividend if, and only if, the directors have recommended a dividend.

   (2) A dividend shall not exceed the amount recommended by the directors.

72. The directors may authorise the payment by the company to the members of such interim dividends as appear to the directors to be justified by the profits of the company.

73. Interests shall not be payable by the company in respect of any dividend.

74. A dividend shall not be paid except out of profits of the company.

75. (1) The directors may, before recommending any dividend, set aside out of the profits of the company such sums as they think proper as reserves, to be applied, at the discretion of the directors, for any purpose for which the profits of the company may be properly applied.

   (2) Pending any such application, the reserves may, at the discretion of the directors, be used in the business of the company or be invested in such investments as the directors think fit.

   (3) The directors may carry forward so much of the profits remaining as they consider ought not to be distributed as dividends without transferring those profits to a reserve.

76. (1) Subject to the rights of persons (if any) entitled to shares with special rights as to dividend, all dividends shall be declared and paid according to the amounts paid or credited as paid on the shares in respect of which the dividend is paid.

   (2) All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid, but, if any share is issued on terms providing that it will rank for dividend as from a particular date, that share shall rank for dividend accordingly.

   (3) An amount paid or credited as paid on a share in advance of a call shall not be taken for the purposes of this regulation to be paid or credited as paid on the share.

77. The directors may deduct from any dividend payable to a member all sums of money (if any) presently payable by him to the company on account of calls or otherwise in relation to shares in the company.

78. (1) If the company declares a dividend it may by resolution direct the directors to pay the dividend wholly or partly by the distribution of specific assets, including paid up shares in, or debentures of, any other corporation.

   (2) Where a difficulty arises in regard to such a distribution, the directors may settle the matter as they consider expedient and in particular may issue fractional certificates and fix the value for distribution of the specific assets or any part of those assets, and may determine that cash payments will be made to any members on the basis of the value so fixed in order to adjust the rights of all parties, and may vest any such specific assets in trustees as the directors consider expedient.

79. (1) Any dividend, interest or other money payable in cash in respect of shares may be paid by cheque sent through the post directed to—

      (a)   the registered address of the holder or, in the case of joint holders, to the registered address of the joint holder named first in the register of members; or

      (b)   to such other address as the holder or joint holders in writing directs or direct.

   (2) Any one of two or more joint holders may give effectual receipts for any dividends, interests or other money payable in respect of the shares held by them as joint holders.

21. CAPITALISATION OF PROFITS

80. (1) Subject to sub regulation (2), the company may resolve—

      (a)   to capitalise any sum, being the whole or a part of the amount for the time being standing to the credit of any reserve account or the profit and loss account or otherwise available for distribution to members; and

      (b)   to apply the sum, in any of the ways mentioned in sub regulation (3), for the benefit of members in the proportions to which those members would have been entitled in a distribution of that sum by way of dividend.

   (2) The company shall not pass a resolution under sub regulation (1) unless it has been recommended by the directors.

   (3) The ways in which a sum may be applied for the benefit of members under sub regulation (1) shall be—

      (a)   in paying up any amounts unpaid on shares held by members;

      (b)   in paying up in full unissued shares or debentures to be issued to members as fully paid; or

      (c)   partly under paragraph (a) and partly under paragraph (b).

   (4) The directors shall do all things necessary to give effect to the resolution and, in particular, to the extent necessary to adjust the rights of the members among themselves, may—

      (a)   issue fractional certificates or make cash payments in cases where shares or debentures become issuable

infractions; and

      (b)   authorise any person to make, on behalf of all the members entitled to any further shares or debentures upon the capitalisation, an agreement with the company providing for the issue to them, credited as fully paid up, of any such further shares or debentures or for the paying up by the company on their behalf of the amounts or any part of the amounts remaining unpaid on their existing shares by the application of their respective proportions of the sum resolved to be capitalised;

and any agreement made under an authority referred to in paragraph (b) shall be effective and binding on all the members concerned.

22. WINDING UP

81. (1) If the company is wound up, the liquidator may, with the sanction of a special resolution, divide among the members in kind the whole or any part of the property of the company and may for that purpose set such value as he considers fair upon any property to be so divided and may determine how the division is to be carried out as between the members or different classes of members.

   (2) The liquidator may, with the sanction of a special resolution, vest the whole or any part of any such properly in trustees upon such trusts for the benefit of the contributories as the liquidator thinks fit, but so that no member is compelled to accept any shares or other securities in respect of which there is any liability.

23. INDEMNITY

82. Every officer, auditor or agent of the company shall be indemnified out of the property of the company against any liability incurred by him in his capacity as officer, auditor or agent in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or in connection with any application in relation to any such proceedings in which relief is under the Act granted to him by the Court.

SECOND SCHEDULE

[Section 164]

ANNUAL ACCOUNTS

Preliminary

1. The annual accounts of a company shall give a true and fair view of the state of affairs and the operation and results thereof of the company, together with any material matters not specifically described by the Act or this Schedule which have affected or are likely to affect the business of the company.

2. The view shall be given both by way of figures, and by narrative report complementing and explaining, where necessary, figures in financial statements.

3. A company may, in addition to matter expressly permitted by this Schedule to be given in notes, give any information required by this Schedule to be stated in a balance sheet or profit and loss account in the form of a note or annexure thereto if such presentation would be more effective or convenient.

4. Nothing in this Schedule shall require disclosure of items that are not material.

Interpretation

5. (1) In this Schedule, unless the context otherwise requires—

“distributable reserve” means, subject to subclause (2), any amount which has been carried to reserves and which may, in accordance with generally acceptable accounting practice and legal principles, be treated as income and distributed by way of dividend, and does not include any amount retained by way of providing for any known liability and “non distributable reserve” shall be construed accordingly;

“listed investment” means an investment in regard to which permission has been granted to deal therein on any stock exchange of repute: and “unlisted investment” shall be construed accordingly;

“material”, in relation to an amount or a fact in respect of a company’s accounts, means material from the point of view of the interests of the members of the company;

“provision” means, subject to subclause (2), any amount—

      (a)   written off or retained by way of providing for depreciation, renewals or diminution in the value of assets; or

      (b)   retained by way of providing for any known liability, including the liability for income or any other tax;

where the amount cannot be determined with substantial accuracy.

   (2) If the directors are of the opinion that—

      (a)   any amount written off or retained by way of provision for depreciation, renewal or diminution in value of assets; or

      (b)   any amount retained by way of provision for any known liability;

is in excess of that which in the opinion of the directors and the auditor is reasonably necessary for the purpose, the excess shall be treated for the purposes of this Schedule as a reserve and not as a provision, but, if the auditor disagrees with the directors on the point, he shall report specifically on the subject in the auditor’s report.

PART A
BALANCE SHEET

Share capital and shares

6. The balance sheet shall state—

      (a)   the authorised and issued share capital;

      (b)   the classes of shares into which the authorised share capital is divided and their respective numbers and nominal values;

      (c)   the number of the issued shares and the amount of the issued shares capital in respect of each class of shares;

      (d)   in respect of redeemable preference shares—

      (i)   the earliest and latest dates on which the company has power to redeem them;

      (ii)   whether they must be redeemed in any event or are liable to be redeemed at the option of the company; and

      (iii)   the premium, if any, payable on redemption; and

      (e)   in respect of preference shares or other shares or liabilities convertible into ordinary shares—

      (i)   the conditions of conversion; and

      (ii)   rights of conversion;

or a place where these conditions may be inspected.

Reserves and provisions

7. The balance sheet shall state the respective aggregate amounts, if material, of reserves and provisions (other than provisions for depreciation, or diminution in value of assets) under separate headings and subheadings indicating the types of reserves and provisions.

8. The balance sheet shall state, in respect of the financial year concerned—

      (a)   the source of and the amount of any transfers to reserves and aforesaid provisions; and

      (b)   the amount and the application of any transfer from reserves and aforesaid provisions. unless it is shown in the profit and loss account or a statement or report annexed thereto, or the amount involved is not material.

LIABILITIES

General

9. (1) The liabilities shall be summarised with such particulars as are necessary to disclose their general nature and shall be classified under headings and subheadings appropriate to the company’s business (including a statement of current liabilities).

   (2) Where the amount of any class of liability is not material, it may be included under the same heading as some other class.

Debentures

10. The balance sheet shall state—

      (a)   the amount and classes of debentures issued and, if convertible into shares, the conditions of conversion and the dates on which debentures may, or shall, be redeemed, or the place where these conditions may be inspected;

      (b)   the nominal amount of any debentures held by a nominee and the amount at which they are stated in the books of the company; and

      (c)   particulars of any redeemed debentures which the company has power to reissue.

Overdrafts, loans and dividends

11. There shall be shown under separate headings—

      (a)   the aggregate amount of bank borrowings and overdrafts;

      (b)   in relation to each loan made to the company—

      (i)   the amount;

      (ii)   whether the date of repayment of the loan is more than one year after the accounting date;

      (iii)   the dates of repayment and, if repayable in installments, the amounts thereof; and

      (c)   the aggregate amount which has been declared or is recommended for distribution by way of dividend.

   (2) The matters referred to in paragraph (b) of sub-clause (1) may be set out in a note.

Secured liabilities

12. Where any liability of the company is secured over any assets of the company, otherwise than by operation of law, that fact shall be stated, specifying the liability and the assets over which it is secured, and the amount at which such assets are shown in the balance sheet.

Indebtedness to related bodies corporate

13. There shall be shown under separate headings—

      (a)   the amount of indebtedness (whether by way of loan or otherwise) to each of the company’s subsidiaries; and

      (b)   the amount of the company’s indebtedness to every other related body corporate, distinguishing between indebtedness in respect of debentures and otherwise.

ASSETS

General

14. (1) The assets shall be summarised with such particulars as are necessary to disclose their general nature and shall be classified under headings and subheadings appropriate to the company’s business.

   (2) Where the amount of any class of assets is not material, it may be included under the same heading as some other class.

15. Fixed assets, current assets and assets that are neither fixed nor current shall be separately identified.

16. The method or methods used to arrive at the amount of the fixed assets and the assets which are neither fixed nor current, under each heading, shall be stated.

Fixed assets

17. (1) The method of arriving at the amount of any fixed asset (and asset neither fixed nor current) shall be, subject to sub-clause (2), to take the difference between—

      (a)   its cost, or if it stands at the company’s books at a valuation, the amount of the valuation; and

      (b)   the aggregate amount provided or written off since the date of acquisition or valuation, as the case may be, by way of depreciation or diminution of value.

   (2) Sub-clause (1) shall not apply—

      (a)   to any listed and unlisted investments;

      (b)   to interests of the company in its subsidiaries; or

      (c)   to goodwill or intellectual property.

   (3) In respect of the assets under each heading whose amount is arrived at in accordance with subclause (1), there shall be stated—

      (a)   the aggregate of the amounts referred to in paragraph (1) (a); and

      (b)   the aggregate of the amounts referred to in paragraph (1) (b).

   (4) As regards any land and buildings which are fixed assets, there shall also be stated—

      (a)   a description of the land and buildings and the situation thereof, distinguishing between land owned absolutely and land owned for a term of years or other period;

      (b)   the date of their acquisition by the company;

      (c)   their purchase price; and

      (d)   the costs of additions or improvements since the date of acquisition or valuation, which costs shall be analysed to indicate the years in which the additions and improvements to buildings were carried out.

   (5) The information required under subclause (4) may be provided in a schedule or register, in which case the balance sheet shall state that the schedule or register shall be open for inspection by members or their duly authorised agents at the registered records office of the company in accordance with section one hundred and ninety-three of the Act. Such a schedule or register shall be part of the company’s accounting records.

   (6) As regards any fixed asset referred to in subclause (4), the amount of which is arrived at by reference to a valuation, the provisions of paragraphs (4) (b) and (c) shall not apply, but there shall be stated the years in which the assets were severally valued and the several values and, in the case of assets that have been valued during the financial year concerned, the names and qualifications of the persons who valued them and the basis of valuation used by them.

   (7) Where there are more than five different items of land and buildings which have over the years been severally valued for the purposes of subclause (6), a company may, if it considers that compliance with that subclause would be inconvenient or cumbersome, include the information in a schedule or register, in which case the balance sheet shall state that the schedule or register shall be open for inspection by members or their duly authorised agents at the registered records office of the company in accordance with section one hundred and ninety-three of this Act.

Interests in subsidiaries

18. If the company has subsidiaries, the amount of interests of the company consisting of shares of its subsidiaries or amounts owed to it (whether by way of loan or otherwise) by its subsidiaries, distinguishing shares from indebtedness, shall be set out in the balance sheet separately from the other assets of the company.

Indebtedness of related bodies corporate

19. The amount of the indebtedness to the company of all related bodies corporate, shall be set out, distinguishing between indebtedness in respect of debentures and otherwise.

Loans to employees and other persons

20. The aggregate amounts of any outstanding loans under sections eighty-three and one hundred and sixty-eight of this Act shall be shown under separate headings. The amount outstanding of loans to each person who is, or at any time during the currency of the loan has been, a director shall be shown separately.

Goodwill and intellectual property

21. (1) If the amount of the goodwill and of any intellectual property, or part of that amount, is shown as a separate item in, or is otherwise ascertainable from, the accounting records, from any contract for the sale or purchase of any property to be acquired by the company, or from any documents in the possession of the company, the amount so shown or ascertainable, so far as it is not written off, shall be stated as a separate item.

   (2) Nothing in this clause shall require the amount of the goodwill and intellectual property to be stated otherwise than as a single item.

Investments

22. (1) There shall be shown under separate headings the aggregate amounts respectively of the company’s listed and unlisted investments, other than interests in those subsidiaries of the company covered by group accounts (if any).

   (2) There shall be shown—

      (a)   in respect of the company’s listed investments, the aggregate market value where it differs from the amount of the investments as stated; and

      (b)   in respect of the company’s unlisted investments and unless they are dealt with under subclause (3), the aggregate of the directors’ valuation of the investments.

   (3) Where no directors’ valuation is shown for the purposes of subclause (2), the following information shall be stated in a note to be annexed to the balance sheet:

      (a)   the aggregate amount of the company’s income for the financial year concerned that is ascribable to the investments;

      (b)   the amounts of the company’s share, before and after taxation, of the net aggregate profits or losses of the companies of which shares are held (and the extent by which such profits have been affected by abnormal items), being profits for the several financial years in respect of which they have issued accounts during the company’s financial year concerned, after deducting those companies’ losses for those periods;

      (c)   the amount of the company’s share of the aggregate of the share capital, distributable and non-distributable reserves and undistributed profits accumulated by the companies of which shares are held since the dates when the investments were acquired, after deducting the losses accumulated by them since that time; and

      (d)   the manner in which any losses have been dealt with in the company’s accounts.

23. (1) There shall be shown in the balance sheet or in an annexure thereto, unless the aggregate amount of the interest of the company consisting of shares in other bodies corporate and amounts owing to it (whether by way of loan or otherwise) by other bodies corporate is not material, the names of all bodies corporate of which the company beneficially owns shares and, in each case, either the number of shares so held or the percentage of the amount of such shares in the aggregate amount of the listed or unlisted investments.

   (2) Where a percentage is so given there shall be a statement as to whether this is a percentage of the aggregate book value, market value or directors’ valuation, as the case may be.

   (3) For the purposes of this clause, a company shall not be regarded as beneficially owning shares in a body corporate by reason only that it owns shares in a holding company of the body corporate.

24. (1) Where the proceeds or any part of the profit made on the realisation of any investments is applied to write down the amount of the remaining investments, that fact and the amount so applied shall be stated in the balance sheet.

   (2) This clause shall not apply in respect of the proceeds or profits on the realisation of investments dealt with under paragraph 36 (1) (a).

Current Assets

25. (1) For the purposes of this clause, “stock” includes any property, whether corporeal or incorporeal, which the company, in the ordinary course of its business, buys, manufacturers, processes, develops for sale or sells.

   (2) The amount of stock shall be shown as a separate item and, where the amount of stock and work in progress is material in relation to either the trading results or the financial position, it shall be classified under appropriate subheadings which shall include, where applicable—

      (a)   raw materials (including component parts);

      (b)   finished goods;

      (c)   merchandise, including any form of stock not mentioned in subclause (1) and which may itself be shown under appropriate subheadings;

      (d)   consumable stores (including maintenance spares);

      (e)   work in progress (including standing crops); and

      (f)   contracts in progress.

   (3) Where directors are of the opinion that classification into some or all of the categories referred to in subclause (2) would result in a failure to present a fair view, the classification should be reduced to those categories where a fair view would be obtained, and the reasons given for not indicating all categories.

   (4) In regard to the method of determining the value of stock, there shall be stated—

      (a)   whether it is consistent with the method of the previous financial year;

      (b)   whether it is the lower of cost or net realisable or replacement value or some other expressly specified value or values;

      (c)   the accounting basis which has been used in determining the value of stock to have been used or, if the directors are of the opinion that a statement of all the bases used would be the little value to the shareholders, an intelligible summary of the bases used;

      (d)   whether the value includes both direct costs and overheads; and

      (e)   in the case of spares held for maintenance purposes, the method employed in providing for obsolescence.

   (5) There shall be stated any additional information required fairly to present the value of the stock including, in the case of contracts in progress, whether profits or losses have been taken into account and, if so, to what extent.

   (6) If the directors are of the opinion that any of the current assets do not have a value on realisation in the ordinary course of the company’s business at least equal to the amount at which they are stated, the fact that the directors are of that opinion and the extent of the estimated shortfall shall be stated.

Preliminary expenses, commission and discounts

26. There shall be stated under separate subheadings so far as they are not written off—

      (a)   the preliminary expenses incurred in incorporation;

      (b)   any expenses incurred in connection with any issue of shares or debentures;

      (c)   any sums paid by way of commission in respect of any shares or debentures; and

      (d)   any sums allowed by way of discount in respect of any debentures.

Corresponding amounts of preceding year

27. Except in the case of the first balance sheet, the corresponding amounts at the end of the immediately preceding financial year in respect of all items shown in the balance sheet shall be stated.

Notes to balance sheet

28. The matters stated in clause 29 to 35 may be stated by way of a note or in a statement or report annexed to the balance sheet.

Shares or debentures held by subsidiary or nominee

29. There shall be stated the number, description and amounts of the shares and debentures of the company held by its subsidiaries or their nominees, but excluding any such shares or debentures which a subsidiary holds in a representative capacity or as a trustee under a trust in which neither the company nor any subsidiary is beneficially interested otherwise than by way of security for the purposes of a transaction entered into by it in the ordinary course of business which includes the lending of money.

Options and preferential rights to shares

30. The number, description and amount of any shares of the company which any person has an option to subscribe for or in respect of which any person has any preferential right of subscription, shall be stated together with the following particulars—

      (a)   the period during which the option or right is exercisable; and

      (b)   the price, or the formula for fixing the price, to be paid for shares subscribed for under it.

Directors’ authority to issue shares

31. The amount of any share capital or the number of shares which the directors are

authorised to issue by resolution of the shareholders, the terms of such authority and the period for which it was granted, shall be stated.

Arrear dividends

32. The amount of any arrears of fixed cumulative dividends on each class of the company’s shares and the period for which the dividends are in arrears, shall be stated.

Contingent liabilities

33. (1) Particulars of any encumbrance on the assets of the company to secure the liabilities of any other person, including, where practicable, the amount secured, shall be stated.

   (2) The general nature of any other contingent liabilities not provided for and, where practicable, the aggregate or estimated amount of those liabilities if it is material, shall be stated.

Contracts for capital expenditure

34. Where practicable, the aggregate amount or estimated amount, if it is material, of contracts for capital expenditure, not otherwise provided for and the aggregate amount or estimated amount, if it is material, of capital expenditure authorised by the directors which has not been contracted for, shall be stated. There shall also be stated the source from which funds to meet such expenditure will be provided.

Basis for currency conversion

35. The basis on which foreign currencies have been converted into Zambian currency, where the amount of the assets or liabilities affected is material, shall be stated.

PART B
PROFIT AND LOSS ACCOUNT

36. (1) The profit and loss account shall show separately—

      (a)   profits or losses on share transactions, showing the application of profits or part thereof to write down the amount of the remaining investment, if not already dealt with under clause 24;

      (b)   the amount of income from investment, distinguishing between listed and unlisted investment;

      (c)   the aggregate amount of income from related bodies corporate, stating whether dividends, interest, fees or other specified income;

      (d)   the aggregate amount of the dividends paid and proposed, and if such dividends are provided partly or wholly from capital profits, a statement to that effect;

      (e)   the aggregate amount of profits and losses on the realisation, scrapping or other disposal of non-trading, fixed and other non-current assets;

      (f)   the amount charged to revenue by way of provisions (other than provisions for diminution in values of current assets, unless material to the understanding of the accounts) specifying the nature of each provision or the amount withdrawn from such provisions and not applied for the purpose thereof;

      (g)   the amount provided for taxation (specifying, where material, the origin and different classes of taxes) in respect of the financial year concerned and the amount, if any, so provided in respect of any other financial year;

      (h)   the amounts respectively set above for redemption of shares and of loans;

      (i)   the amount set aside or proposed to be set aside to, or withdrawn from, reserves;

      (j)   the amount of any credit or charge arising in consequence of an event in a preceding financial year;

      (k)   the amount of interest (or other consideration) on any loans made to the company, including debentures and bank overdrafts;

      (l)   the amount paid by way of leasing charges for the use of any asset, other than immovable property, which would have been subject to a charge for depreciation if owned by the company;

      (m)   the respective amounts paid as remuneration for managerial, technical, administrative or secretarial services, however described, other than to the bona fide employees of the company;

      (n)   the amount of the remuneration of the auditor, distinguishing between the fee for the audit, the fee for other services and his expenses; and

      (o)   the total amount of any gifts or donations made by the company.

   (2) Nothing in this clause shall require the separate listing of any item that is not material.

37. (1) There shall be shown separately the information required by section one hundred and sixty-seven of this Act in relation to directors’ emoluments.

   (2) The amounts to be shown for any financial year shall be the sums receivable in respect of that year whenever paid or, in the case of sums not receivable in respect of a period, the sums paid during that year, except that any sums paid in advance of the financial year to which they are expressed to relate shall be shown in the accounts for the financial year in which they are paid.

   (3) Where it is necessary so to do for the purpose of making any distinction required by this clause, the directors may apportion any payments in such manner as they think appropriate between the matter in respect of which they have been paid or are receivable.

38. (1) There shall be shown—

      (a)   the aggregate amount of the turnover for the financial year concerned; or

      (b)   the increase or decrease of the aggregate turnover for the financial year concerned expressed as a percentage of the aggregate turnover for the preceding financial year.

   (2) If the nature of the business is such that there could be any doubt as to what is meant by turnover, there shall be indicated (by way of note) the basis upon which turnover has been determined.

   (3) The method employed to determine the amount of turnover shall be stated and, if a method different to that employed in the preceding financial year is used, that fact shall be stated.

39. Except in the case of the first profit and loss account, the corresponding amount for the immediately preceding financial year for all items shown in the profit and loss account shall be stated.

Notes to the profit and loss account

40. The matters referred to in clauses 41 and 42 shall be stated by way of a note, or in a statement or report annexed to the balance sheet.

41. (1) If provision for depreciation, replacement or the diminution in value of fixed assets is made by some method other than a depreciation charge, or provision for renewals or diminution in value or is not provided for, the method by which it is provided for, or the fact that it is not provided for, shall be stated.

   (2) If any of the items are shown net of income or any other tax, that fact shall be stated.

42. There shall be stated any material respects in which any items included in the profit and loss account (stating in each case the amount involved) are affected by—

      (a)   transactions of a sort not usually undertaken by the company or otherwise by circumstances of an exceptional or non recurrent nature;

      (b)   any change in the basis of accounting; or

      (c)   any change in the methods for the determination of the amount of any assets.

PART C
STATEMENT OF SOURCE AND APPLICATION OF FUNDS

43. There shall be annexed to the balance sheet or separately contained therein a statement showing the source and the application of any funds received and applied during the financial year specifying—

      (a)   funds derived from—

      (i)   net income (before deduction of taxes, dividends paid and proposed, and internal provisions and retentions);

      (ii)   the disposal of specified fixed and other non-current assets; (iii) the proceeds of loans raised and debentures issued;

      (iv)   the proceeds of shares issued;

      (v)   repayments received on loans and advances made; and

      (vi)   any reduction in net working capital (being current assets less current liabilities); and

      (b)   funds applied to—

      (i)   meeting any loss;

      (ii)   the acquisition of specified fixed and other non-current assets;

      (iii)   the redemption of any loans and debentures;

      (iv)   loans and advances made and the purposes for which they were made;

      (v)   liability for taxes;

      (vi)   dividends paid and proposed; and

      (vii)   any increase in net working capital (being current assets less current liabilities).

PART D
GROUP ACCOUNTS

Preliminary

44. Clauses 45 to 48 shall apply to all forms of group accounts and shall also apply in respect of the requirements of clauses 54 to 57 in relation to subsidiaries not dealt with in group accounts.

45. Any material profit or loss arising from transactions within the group of companies (other than bona fide arm’s-length transactions), insofar as those profits or losses were realised or incurred in respect of a transaction with a person outside the group, shall be excluded in determining the total group profit or loss, or the interest of the holding company in the profit or loss of any subsidiary.

46. Inter-group balances, were shown, shall be excluded in determining the total assets and liabilities of the group.

47. (1) Dividends declared by a subsidiary out of profits accrued prior to the date on which it became a subsidiary of the holding company, being pre-acquisition profits so far as they are material and reasonably ascertainable, shall not, in the hands of that holding company, form part of its profits available for distribution by way of dividends unless—

      (a)   the holding company is itself the subsidiary of another body corporate incorporated or registered in Zambia;

      (b)   the shares in the subsidiary were acquired by the holding company from the other body corporate;

      (c)   the subsidiary was, before the acquisition, a subsidiary of the other body corporate; and

      (d)   the profits out of which the dividend is declared accrued after the subsidiary had become a subsidiary of the other body corporate.

   (2) For the purposes of establishing whether any profit accrued prior to the acquisition of the shares of the subsidiary, the profit or loss for any financial year of the subsidiary may, if it is not

practicable to apportion it with reference to the facts, be treated as if it had accrued from day to day during that financial year and be apportioned accordingly.

48. There shall be stated any qualifications contained in the reports of the auditors of the subsidiaries on their financial statements and any note or saving contained in those financial statements to call attention to the matter which, apart from the note or saving, would properly have been referred to in such a qualification, insofar as the matter which is the subject of the qualification is not covered by the holding company’s own accounts of the group accounts and is material from the point of view of its members.

Group accounts in the form of consolidated accounts

49. Subject to clauses 50 to 52, the consolidated balance sheet and the consolidated profit and loss account shall combine the information contained in the separate balance sheets and profit and loss accounts of the holding company and of the subsidiaries dealt with in the consolidated accounts, with such adjustment as may be appropriate and necessary to give a true and fair view of the state of affairs of the group of companies as at the end of the financial year and the results of the operations of the group of companies during the financial year.

50. Subject to clauses 51 and 52 the consolidated accounts shall, in giving the information, comply as far as is practicable with the requirements of this Act and this Schedule as if they were the accounts of a single company.

51. Section 167 of this Act shall not require the disclosure in consolidated accounts of the remuneration of directors of the subsidiaries of the holding company.

52. In relation to any subsidiaries of the holding company not dealt with in the consolidated accounts—

      (a)   clause 13 (concerning indebtedness to bodies corporate in the group), clause 18 (concerning interests in subsidiaries) and clause 29 (concerning shares or debentures held by subsidiaries), shall apply for the purposes of such consolidated accounts as if those accounts were the accounts of a single company of which they were the subsidiaries; and

      (b)   there shall be annexed the information required by clauses 54 to 57 in respect of subsidiaries not dealt with in group accounts but as if reference therein to a holding company’s accounts were a reference to the consolidated accounts.

Group accounts in a form other than consolidated accounts

53. (1) Where group accounts are prepared in a form other than consolidated accounts, they shall, as far as practicable, present the same or equivalent information concerning the state of affairs and the results of the operations of the group as would be contained in the consolidated accounts, including the aggregate amounts of—

      (a)   the excess (if any) of the cost of the shares of the subsidiaries in the group over the net asset value of the shares at the date of acquisition and the non-distributable reserve (if any) arising in consequence of the excess of the net value of the assets at the date of acquisition over the cost of shares of the subsidiaries;

      (b)   the holding company’s shares of the non-distributable reserves of subsidiaries;

      (c)   the interest of outside shareholders, being shareholders other than the holding company and its subsidiaries or their nominees, in subsidiaries of the group; and

      (d)   the interest of the holding company, insofar as it has been disclosed in the group accounts in—

      (i)   the accumulated revenue profits or losses and accumulated distributable reserves of subsidiaries for the period after the dates on which they respectively became subsidiaries to the end of the preceding financial year; and

      (ii)   the revenue profits or losses of subsidiaries for the financial year.

   (2) For the purposes of paragraph (1) (a), non-distributable reserves arising from the acquisition of shares in a subsidiary may be set off against of shares of other subsidiaries over the net asset

Requirements in respect of subsidiaries not dealt with in group accounts

54. Where a subsidiary is not dealt with in group accounts under sub-section (3) of section 165 of this Act and the interest in the subsidiary is material in relation to the financial position or the results of the holding company, there shall be included in the accounts of the holding company the information required to be stated under clauses 55 to 57 or, if any such information is not obtainable, the reasons why it is not obtainable.

55. The reasons shall be stated why the subsidiaries or any of them are not dealt with in the group accounts.

56. (1) In regard to the shareholders’ equity, liabilities and assets of the subsidiaries not dealt with in group accounts, there shall be stated the aggregate amounts of—

      (a)   the cost of the holding company’s investment in shares of the subsidiaries;

      (b)   the excess (if any) of the cost of the shares of the subsidiaries over the net asset value of the shares at the date of acquisition, and the non-distributable reserve (if any) arising in consequence of the excess of the net value of the assets at the date of acquisition over the cost of the shares of subsidiaries;

      (c)   the holding company’s shares of the non-distributable reserves of subsidiaries;

      (d)   the interest of outside shareholders, being shareholders other than the holding

company and its subsidiaries or their nominees, in the subsidiaries;

      (e)   long-term loans owing to the subsidiaries by the bodies corporate in the group;

      (f)   fixed assets;

      (g)   net current assets;

      (h)   goodwill (if any) shown in the books of the subsidiaries insofar as it has not already been absorbed in the calculation referred to in paragraph (b); and

      (i)   separately stated assets not included in paragraphs (f), (g) and (h).

   (2) For the purposes of paragraph (1) (b), non-distributable reserves arising on the acquisition of shares in a subsidiary may be set off against any excess of the cost of shares of other

subsidiaries over the net value of such shares.

57. In regard to revenue profits or losses and distributable reserves not dealt with in group accounts, there shall be stated the aggregate interest of the holding company in—

      (a)   the accumulated revenue profits or losses and accumulated distributable reserves of the subsidiaries for the period from the dates on which they respectively became subsidiaries to the end of the preceding financial year;

      (b)   the revenue profits or losses and distributable reserves attributable to any shares of the subsidiaries disposed of during the financial year;

      (c)   the revenue profits or losses of the subsidiaries for the financial year;

      (d)   dividends paid or declared by the subsidiaries during the financial year; and

      (e)   the revenue profits or losses and distributable reserves at the end of the financial year not dealt within the accounts of the holding company.

THIRD SCHEDULE

[Section 185]

ANNUAL RETURN

In this Schedule, a reference to the date of a return is a reference to the date as at which the return states the position of the company in accordance with section one hundred and eighty- four of this Act.

An annual return shall contain the information specified below.

1. The name of the company.

2. The nature of the business of the company or, if the company is not carrying on a business, the nature of its objects.

3. The address of the registered office and the registered postal address of the company.

4. The address of the registered records office of the company.

5. The address of the company’s principal place of business in Zambia.

6. All such particulars with respect of the persons who at the date of the return are the directors and secretary of the company as are required by section two hundred and twenty-four of this Act to be contained in the register of directors and secretary.

7. Particulars of the total amount of the indebtedness of the company in respect of all charges to which section ninety-nine of this Act applies.

8. The names, countries of incorporation, and nature of the business of—

      (a)   all bodies corporate related to the company; and

      (b)   all bodies corporate in which the company is beneficially entitled to equity shares conferring the right to exercise more than 25 per cent of the votes exercisable at a general meeting of the body corporate.

9. If the company has share capital—

      (a)   the amount of the share capital of the share capital of the company and the number of shares into which it is divided;

      (b)   the number of its authorised shares of each class;

      (c)   the number of its issued shares of each class;

      (d)   the total amount of any unpaid installments or calls which are due and payable and the number and class of shares concerned;

      (e)   the total amount of any unpaid liability, on shares of each class, which is not yet due for payment;

      (f)   the total number of shares forfeited; and

      (g)   the total amount of share capital for which share warrants are outstanding at the date of the return and of share warrants issued and surrendered respectively since the date of the last return, and the number of shares comprised in each warrant.

10. A list—

      (a)   containing the names and addresses of all persons who are registered members of the company and of persons who have ceased to be members since the date of the last return or, in the case of the first return, since the incorporation of the company;

      (b)   stating the number of shares held by each registered member, at the date of the return, specifying shares transferred since the date of the last return (or, in the case of the first return, since the incorporation of the company) by persons who are still members and have ceased to be members respectively and the dates of registration of the transfers; and

      (c)   having annexed thereto an index sufficient to enable the name of any person therein to be easily found, if the names are not arranged in alphabetical order.

FOURTH SCHEDULE

[Sections 124, 126, 127, 131 AND 135]

CONTENTS OF PROSPECTUS

1. In this Schedule, unless the context otherwise requires—

“company” includes a company proposed to be formed;

“proposed subsidiary”, in relation to a company, means a body corporate in which the company proposes to acquire securities and which, by reason of the acquisition or anything to be done in consequence thereof or in connection therewith, will become a subsidiary of the company.

2. The prospectus shall state at its head:

“A copy of this prospectus has been delivered to the Registrar of Companies for registration. The Registrar has not checked and will not check the accuracy of the statements made and accepts no responsibility therefor or for the financial soundness of the company or the value of the securities concerned.”

3. The reports set out in a prospectus for purposes of Part B shall be made by a person or persons duly qualified under Part VIII of this Act to be appointed as auditors of the company.

4. Where reports prepared for the purposes of Part B would not otherwise give a true and fair view of the matters required to be covered by the reports, the persons charged with the preparation of the reports shall add such information and explanations as well give a true and fair view of those matters.

5. If any of the information required for the purposes of reports for the purposes of Part B is for reasons beyond the power of the company not available, that fact and the reasons therefor shall be stated.

PART A
MATTERS TO BE SPECIFIED IN PROSPECTUS

6. The full name of the company.

7. (1) A full description of the securities which the public are being invited to acquire, and of the terms on which they are being invited to acquire them, including—

      (a)   the date prior to the expiration of which applications will not be accepted or treated as binding;

      (b)   the total amount payable for each share or debenture and the amount thereof payable on application and allotment, if securities are being offered for subscription or purchase; and

      (c)   the policy which will be adopted if applications exceed the shares or debentures on offer.

   (2) Where the securities are unsecured debentures they shall be described as “unsecured”.

8. Whether or not an application has been or is being made to a stock exchange for permission to deal in the securities concerned, and—

      (a)   if so, the name of the stock exchange; or

      (b)   if not, a statement that there will not be a market for the securities and that any holder wishing to dispose of his securities may be unable to do so.

9. The full name (including any former or other names), residential and postal addresses and business occupation of each person making the invitation, other than the company.

10. The situation of the company’s registered office, and its postal address.

11. The full name (including any former or other names), residential and postal addresses and business occupation of every director or proposed director and of the secretary or proposed secretary of the company, and particulars of all other directorships held by each director or proposed director.

12. Other than for a proposed company, the names, addresses and professional qualifications of the company’s auditors.

13. The name and address of any underwriter of the invitation.

14. The names and addresses of the company’s bankers, stockbrokers and legal practitioners.

15. If the invitation relates to debentures, the names and addresses of any trustees for debenture holders, the date of the resolutions creating the debentures, and short particulars of the security therefor or, if the debentures are unsecured, a statement to that effect.

16. The nature of the business or businesses of the company or, if the company has no business, its principal objects.

17. The restrictions, if any, upon the business of the company contained in the articles.

18. A brief summary of the history of the company.

19. The names, countries of incorporation, and nature of the businesses of all subsidiaries of the company and of all bodies corporate in which the company is beneficially entitled to equity shares conferring the right to exercise more than 25 percent of the votes exercisable at a general meeting of the body corporate.

20. If the company is a subsidiary, the name, country of incorporation and nature of the business of each holding company and, in the case of a holding company that is a member of the company, the number of shares in each class of the company held by the holding company.

21. The name, country of incorporation, and nature of the business of any proposed subsidiary of the company.

22. Where the company is proposing to acquire a business, a full description, of the nature of that business.

23. The situation, area and tenure (including, where appropriate, the rent and unexpired term of any lease or concession) of the main places of business of the company and its subsidiaries and proposed subsidiaries.

24. A statement as to—

      (a)   the financial and trading prospects of the company together with any material information which may be relevant thereto; and

      (b)   any material changes in the financial or trading position of the company which may have occurred since the end of the last completed financial year of the company.

25. A statement by the directors of the company that in their opinion the company’s working capital is sufficient or, if not, how it is proposed to provide the additional working capital thought by the directors to be necessary.

26. The amount or estimated amount of the expenses incidental and preliminary to the invitation (including the expenses of any application to a stock exchange for permission to deal in the securities concerned in the invitation) and by whom such expenses are payable.

27. Particulars of any commissions payable, or paid within the two preceding years, as commission for acquiring any shares or debentures of the company or of any of its subsidiaries and proposed subsidiaries.

28. Where the company is inviting the public to subscribe for any of its shares or debentures—

      (a)   a statement or an estimate of the net proceeds of the issue and a statement as to how such proceeds were or are to be applied;

      (b)   the minimum amount which in the opinion of the company’s directors must be raised by the issue in order to provide the sums, or, if part thereof is to be defrayed in any other manner, the balance of the sums, required to be provided in respect of each of the following matters:

      (i)   the purchase price of any property purchased or to be purchased which is to be defrayed in whole or in part out of the proceeds of the issue;

      (ii)   any expenses incidental and preliminary to the invitation and issue (including the expenses of any application to a stock exchange for permission to deal in the shares or debentures) payable by the company, and any commission be payable to any person in consideration of his agreeing to subscribe for, or of his procuring or agreeing to procure subscriptions for any share or debentures of the company;

      (iii)   the repayment of any moneys borrowed by the company in respect of any of the foregoing matters;

      (iv)   working capital; and

      (c)   the amounts to be provided in respect of the matters stated in paragraph (b) otherwise than out of the proceeds of the issue, and the sources out of which these amounts are to be provided.

29. Where a person other than the company is inviting the public to purchase any shares or debentures of the company (whether or not the invitation is also made by the company)—

      (a)   if the shares or debentures were issued by the company for cash-a statement of the price per share or debenture at which those shares or debentures were issued, and of the total net proceeds of the issue;

      (b)   if the shares or debentures were issued by the company for a consideration other than cash-a statement of the nature of the consideration and an estimate by the directors of its fair value and of the price per share or debenture which it represents;

      (c)   if the person making the invitation did not acquire the shares or debentures directly from the company on their issue—

      (i)   if he purchased them for cash-a statement of the price per share or debenture at which he purchased them (or, if purchased over a period of time at different prices, the lowest and highest prices) and the total purchase price paid by him; or

      (ii)   if he acquired them for a consideration other than cash-a statement of the nature of the consideration and an estimate by him of its fair value and of the price per share or debenture which it represents.

30. The authorised capital of the company and the number and description of the company’s authorised shares of each class and issued shares of each class.

31. The amount paid on the issued shares of each class—

      (a)   in cash; and

      (b)   otherwise than in cash.

32. The amount, if any, remaining payable on the shares of each class previously issued, distinguishing between the amount presently due for payment and the amount not yet due for payment.

33. The number of unissued shares of each class agreed to be issued and the amounts payable therefor, distinguishing between amounts payable in cash and amounts payable otherwise than in cash.

34. If the company’s shares are divided into different classes, the rights in respect of voting, repayment, and dividends and other special rights attached to the several classes and a statement as to the consents necessary for the variation of such rights.

35. The amounts of the dividends (if any) per share paid by the company in respect of each class of shares in each of the ten completed financial years of the company immediately preceding the date of publication of the prospectus, or in respect of each of the financial years since the incorporation of the company if this occurred less than ten years before the publication, and particulars of any cases in which no dividends have been paid in respect of any class of shares in any of those years.

36. If any of the company’s shares are redeemable preference shares, the earliest date on which the company has power to redeem them.

37. The name of each person who holds more than 25 per cent of the company’s shares or any class of shares and the number and description of the shares held or owned.

38. So far as is known to the company, the name of each person who is the beneficial owner of more than 25 per cent of the company’s shares or any class of shares and the number and description of the shares held or owned.

39. The amount of the outstanding debentures issued or agreed to be issued by the company and any of its subsidiaries and proposed subsidiaries or, if none, a statement to that effect.

40. Particulars of any bank overdrafts of the company and any of its subsidiaries and proposed subsidiaries as at the latest practical date (which shall be stated) or, if there are no bank overdrafts, a statement to that effect.

41. The nature of the consideration for the issue of any of the company’s shares or debentures issued or proposed to be issued otherwise than for cash.

42. Particulars of any share or debentures of any of the company’s subsidiaries and proposed subsidiaries which have, within two years immediately proceeding the publication of the prospectus, been issued, or which are proposed to be issued otherwise than for cash and the nature of the consideration.

43. Particulars of any shares or debentures of the company or any of its subsidiaries and proposed subsidiaries which have, within two years immediately proceeding the publication of the prospectus, been issued, or which are proposed to be issued, for cash, the price and terms upon which the same have been or are to be issued and (if not already fully paid) the dates when any installments are payable.

44. Particulars of any shares or debentures of the company or any of its subsidiaries and proposed subsidiaries which are under option, or agreed conditionally or unconditionally to be put under option, with the price to be paid for the securities option, the duration of the option, the consideration for which the option was granted, and—

      (a)   where the option is to all the shareholders or debenture holders or any class thereof or to employees generally-a statement of that fact; or

      (b)   in any other case-the name and address of each grantee.

45. (1) Subject to subclause (2), where any property has been acquired or is proposed to be acquired by the company or any of its subsidiaries and proposed subsidiaries—

      (a)   the names and addresses of the vendors;

      (b)   the amount paid or to be paid in cash, shares, debentures or otherwise to the vendor, and, where there is more than one separate vendor or the company or subsidiary or proposed subsidiary is a sub-purchaser, the amount so paid or to be paid to cash vendor, distinguishing between the amounts paid or to be paid—

      (i)   in cash;

      (ii)   in shares;

      (iii)   in debentures;

      (c)   the nature of, and value attributed to, any other consideration;

      (d)   the amount (if any) paid or payable for goodwill;

      (e)   full particulars of the nature and extent of the interest, direct or indirect, of every director or proposed director of the company or any of its subsidiaries and proposed subsidiaries in the property; and

      (f)   short particulars of the property.

   (2) Subclause (1) shall not apply where the contract for the acquisition of the property was—

      (a)   completed, and any purchase money fully paid, more than two years before the date of publication of the prospectus; or

      (b)   entered into in the ordinary course of business and there is no connection between the contract and the invitation.

46. Unless more than two years have elapsed since the registration of the company—

      (a)   the amount or estimated amount of the expenses incidental or preliminary to the promotion and registration of the company and by whom those expenses have been paid or are payable;

      (b)   the names of the promoters of the company;

      (c)   the amount of any cash or securities paid, or benefit given or proposed to be given, to any promoter and the consideration for such payment or benefit; and

      (d)   full particulars of the nature and extent of the interest of every director and proposed director in the promotion of the company.

47. Where the prospectus includes a statement purporting to be made by an expert, a statement that the expert has given and has not withdrawn his written consent to the publication of the prospectus with the statement included in the form and in the context in which it is included.

48. The dates of, parties to, and general nature of, every material contract (other than contracts entered into in the ordinary course of business or completed more than two years before the date of publication of the prospectus).

49. (1) A reasonable time (not being less than twenty-eight days) during which, and place at which, subject to this clause, the following documents (or certified copies thereof), may be inspected—

      (a)   the company’s certificate of incorporation, certificate of share capital and articles; (b)   where the invitation relates to debentures-the debenture trust deed;

      (c)   each contract disclosed pursuant to clause 48 of this Schedule or, in the case of a contract not reduced to writing, a memorandum giving full particulars thereof;

      (d)   the annual accounts (including any group accounts), auditor’s report and directors’ report for each of the last five financial years, or, where part of that period fell before the commencement of this Act, all similar accounts and reports produced by the company in respect of that part of the period;

      (e)   the annual accounts (including any group accounts), auditors’ report and directors’ report in respect of each subsidiary and proposed subsidiary, for each of the last five financial years, or where—

      (i)   part of that period fell before the commencement of this Act; or

      (ii)   the subsidiary or proposed subsidiary is not a company to which this Act applies;

all similar accounts and reports produced by the subsidiary or proposed subsidiary in respect of that period or part of the period;

      (f)   all other reports, letters, balance sheets, valuations and statements by an expert any part of which is extracted or referred to in the prospectus; and

      (g)   a written statement, signed by the accountants making the report required under Part B of this Schedule, setting out the adjustments made by them in arriving at the figures shown in their report and giving the reasons therefor.

   (2) If any part of any of the above-mentioned documents is in a language other than English, a certified translation into English of that part of the document shall be made available for inspection instead of the original or a certified copy.

   (3) Paragraph (1) (e) shall not require to be made available for inspection the profit and loss accounts and balance sheets of a subsidiary or business in respect of any financial years in which the profits or losses and assets and liabilities of the subsidiary or business are dealt with in the accounts or group accounts of the company.

50. The names and addresses of the persons making the reports required under Part B of this Schedule.

PART B
REPORTS TO BE SET OUT IN PROSPECTUS

51. A report with respect to—

      (a)   the profits or losses of the company in respect of—

      (i)   each of the ten completed financial years immediately proceeding the publication of the prospectus, (or since the incorporation of the company if less than ten years); and

      (ii)   the period from the end of the last financial year to the latest practicable date being a date less than three months before the date of the publication of the prospectus, if the last financial year of the company ended three months or more before the date of the publication of the prospectus; or

      (b)   if the company has subsidiaries-a report as required by paragraph (a) with respect to the profits or losses of the company and of its subsidiaries, so far as such profits or losses can properly be regarded as attributable to the interests of the company.

52. A report with respect to—

      (a)   the assets and liabilities of the company as at the end of its last financial year or, if the financial year ended three months or more before the date of publication of the prospectus, as at the latest practicable date, being a date less than three months before the date of publication of the prospectus; or

      (b)   if the company has subsidiaries-a report of the kind required by paragraph (a) with respect to the assets and liabilities of the company, and of its subsidiaries so far as such assets can properly be regarded as attributable to the interests of the company.

53. A report with respect to the aggregate emoluments paid by the company to the directors of the company or any related body corporate during the last period for which the accounts have been made up and the amount, if any, by which such emoluments would differ from the amounts payable under any arrangement in force at the date of publication of the prospectus.

54. (1) A report with respect to profits or losses of—

      (a)   each proposed subsidiary of the company;

      (b)   each business acquired by the company within ten years before the date of publication of the prospectus; and

      (c)   each body corporate that became a subsidiary of the company within ten years before the date of publication of the prospectus;

in respect of—

      (i)   each of the ten financial years immediately preceding the publication of the prospectus, (or each financial year since the commencement of that business or the incorporation of that subsidiary or proposed subsidiary, if less than ten years); and

      (ii)   if the last financial year of that business, subsidiary or proposed subsidiary ended three months or more before the date of the publication of the prospectus-the period from the end of the last financial year to the latest practicable date, being a date less than three months before the date of the publication of the prospectus.

   (2) The report shall deal with such of the profits or losses of a subsidiary or proposed subsidiary as can properly be regarded as attributable to the interests of the company.

   (3) Where the report relates to any financial year before the subsidiary became a subsidiary of the company or relates to a proposed subsidiary, only such of its profits or losses shall be regarded as attributable to the interests of the company as would have been properly so attributable if the company had held the securities in the subsidiary or proposed subsidiary which it holds at the date of publication of the prospectus or proposes to acquire.

   (4) Where any such subsidiary or proposed subsidiary itself has subsidiaries, the report shall extend to the profits or losses of its subsidiaries so far as the same can properly be regarded as attributable to the interests of the company.

   (5) The report need not extend to any period in respect of which the profits or losses of that business or the appropriate part of the profits or losses of that subsidiary are dealt with in the report required under clause 51.

55. (1) A report with respect to the assets and liabilities of each proposed subsidiary of the company and each business or subsidiary acquired since the latest date up to which the accounts of the company have been made, as at the end of the last financial year of the

business, subsidiary or proposed subsidiary, or, if the financial year ended three months or more before the date of publication of the prospectus, as at the latest practicable date not being more than three months before the date of publication of the prospectus.

   (2) The report shall deal with the assets and liabilities of the business, subsidiary or proposed subsidiary so far as such assets and liabilities can properly be regarded as attributable to the interests of the company.

   (3) In relation to a proposed subsidiary, only such assets and liabilities shall be regarded as attributable to the interests of the company as would have been properly so attributable if the company had held the securities in the proposed subsidiary which it proposes to acquire.

   (4) Where any such subsidiary or proposed subsidiary itself has subsidiaries, the report shall extend to the assets and liabilities of its subsidiaries so far as the same can properly be attributable to the interest of the company.

56. A report with respect to any other matters which appear to the persons charged with making the reports to be relevant having regard to the purposes of the reports.

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