COMPANIES ACT

to promote the development of the economy by encouraging entrepreneurship, enterprise efficiency, flexibility and simplicity in the formation and maintenance of companies; provide for the incorporation, categorisation, management and administration of different types of companies; provide the procedure for the approval of company names, change of name and conversion of companies; provide for shareholders' rights and obligations, the conduct of meetings and the passing of resolutions by shareholders; to encourage transparency and high standards of corporate governance by providing for the functions and obligations of company secretaries and directors; provide for issue of shares, share capital requirements, procedures for alteration and reduction of share capital and disclosure requirements of companies; provide for the public issue of shares, the issue and registration of charges and debentures; incorporate financial reporting provisions, maintenance of accounting records, and access to financial information of companies; provide for amalgamations; provide for the registration of foreign companies doing business in Zambia; provide for the deregistration of companies; repeal and replace the Companies Act, 1994; and provide for matters connected with or incidental to the foregoing.

[15th June, 2018]

Act 10 of 2017,

Act 12 of 2020,

SI 47 of 2018.

PART I
PRELIMINARY PROVISIONS

1. Short title

This Act may be cited as the Companies Act.

2. Application of Act

Subject to this Act, this Act shall also apply to-

(a) a body corporate; and

(b) an existing company incorporated in accordance with the repealed Act as if it was incorporated in accordance with this Act.

3. Interpretation

In this Act, unless the context otherwise requires-

"accountant" means a person qualified in the theory and practise of accountancy, audit, tax consultancy and tax advisory registered in accordance with the Accountants Act, 2008;

"accounting period" means the period in respect of which the financial statements of a company or other body corporate are made up, whether that period is a year or not;

"accounting records" include-

(a) invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes, vouchers and other documents of prime entry; and

(b) such working papers and other documents as are necessary to explain the methods and calculations by which accounts are made up;

"accounts" means the financial statements of a company together with accompanying notes, but does not include an auditors' report or annual report of the company;

"address" means a place where an individual or company is located and in the case of the address of-

(a) an individual, includes the full address of the place where that person usually lives; and

(b) a company, includes its registered office or its principal place of business;

"Agency" means the Patents and Companies Registration Agency established in accordance with the Patents and Companies Registration Act, 2010;

"alternate director" means a director specified in section 97;

"amalgamated company" means a company that comes into existence as a result of an amalgamation as specified in section 282;

"amalgamation" means the combination of two or more companies to form a new body corporate as provided for in section 282 and the word "amalgamating" shall be construed accordingly;

"annual accounts" means the annual financial statements of a company that give an accurate and correct view of the financial performance, financial position and cash flows of the company, and includes consolidated financial statements for a group which give a true and fair view of the group's financial performance, financial position and cash flows;

"annual general meeting" means a yearly meeting of a company convened as provided for in section 57;

"annual report" means a report of the affairs of a company that is prepared annually as provided in this Act;

"annual return" means a return that is prepared and lodged in accordance with section 270;

"arrangement" means the reorganisation of the share capital of a company by the consolidation of shares of different classes, division of shares into shares of different classes or other methods intended to alter the shares;

"articles" means the articles of association incorporating the internal governing rules of a company as provided for in section 25;

"auditor" has the same meaning assigned to the word in the Accountants Act, 2008 and other written laws relating to the regulation of auditors and appointed to perform auditing functions for a company;

"auditor's report" means a report provided for in section 259;

"Bank" means the Bank of Zambia established in accordance with the Bank of Zambia Act;

"beneficial owner" means a natural person who-

(a) directly or indirectly, through any contract, arrangement, understanding, relationship or any other means ultimately owns, controls, exercises substantial interest in, or receives substantial economic benefit from a corporate;

(b) exercises ultimate and effective controls over a legal person or legal arrangement; or

and the terms "beneficially own", "beneficial ownership" and cognate expressions shall be construed accordingly;

["beneficial owner" subs by s 2(a) of Act 12 of 2020.]

"board of directors" means persons appointed or nominated as directors of the company whose number is not less than the required quorum acting together as a board or, if the company has one director, that director acting alone;

"body corporate" means an entity incorporated in accordance with any other written law, other than a corporate sole;

"book" includes a book of accounts, deed, register, document, accounting record, and record of information, whether compiled or recorded, stored in written or printed form, or produced through electronic, photographic or other process;

"certificate of incorporation" means a certificate issued to a company by the Registrar in accordance with section 14 or a replacement of the certificate issued in accordance with this Act;

"certificate of share capital" means a certificate issued to a company by the Registrar in accordance with section 14 or a replacement of such a certificate issued in accordance with this Act;

"certified true copy" means-

(a) a copy or extract of a document, certified as a true copy of the original document in a manner approved by the Registrar;

(b) in relation to a translation of a document in a language other than English, a document certified as a true copy of the original document in a manner approved by the Registrar;

"charge" includes-

(a) a security interest or security agreement;

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

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

"chief executive officer" means the person who is responsible, under the immediate authority of the board, for the day-to-day management of the affairs of the company;

"citizen" means a citizen of Zambia;

"class" means a class of shares which have the same rights, privileges, limitations or conditions attached to the share;

"class meeting" means the meeting of members of a particular class as provided for in section 60;

"company" means an entity incorporated in accordance with this Act and section 6 of the repealed Act;

"company's book" means a book belonging to a company;

"compromise" means an agreement for the settlement of a real or supposed claim in which each party surrenders something in concession to the other;

"control" means the control of a company by a person who-

(a) beneficially owns more than 25 percent of the issued share capital of the company;

(b) is entitled to vote a majority of the votes that may be cast at a general meeting of the company, or has the ability to control the voting of a majority of those votes, either directly or through a controlled entity of that person;

(d) is a holding company and the company is a subsidiary of that company as provided for in this Act;

(e) in the case of a company that is a trust, has the ability to control the majority of the votes of the trustees, to appoint the majority of the trustees or to appoint or change the majority of the beneficiaries of the trust; or

(f) has the ability to materially influence the management policy or affairs of the company in a manner comparable to a person who, in ordinary commercial practise, can exercise an element of control referred to in paragraphs (a) to (e);

"corporate" means an entity, including a company or body corporate, that is separate and distinct from its owners and which is recognised as such by law and acts as a single entity;

"Court" means the High Court for Zambia;

"creditor" means a person entitled to claim a debt owing to that person by a company;

"current liability" means a liability that would, in the ordinary course of events, be payable within 12 months after the end of the financial year to which the accounts or group accounts relate;

"debenture" means a document issued by a corporate that evidences or acknowledges a debt of the corporate, whether or not it constitutes a charge on property of the corporate in respect of money that is or may be deposited with or lent to the corporate, and includes a unit of a debenture, debenture stock and bonds and any other security issued by the corporate, whether constituting a charge on the assets of the corporate or not, other than a-

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

(i) carried on by the person; and

(ii) of the corporate as is not part of a business of borrowing money and providing finance;

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

(d) document of a kind and in the circumstances prescribed in regulations issued by the Minister;

"debenture holder" includes a debenture stockholder;

"declaration of guarantee" means a statement made by a member of a private company limited by guarantee as specified in section 10;

"deregistration" means the removal, from the Register of Companies, of a dormant or wound up company;

"designating number" means the registration number assigned to a company or foreign company by the Registrar on incorporation or where the Registrar directs that the name of an existing company be changed in accordance with this Act;

"director" means a person appointed as a member of the board of directors and includes an alternate director, by whatever name designated;

"dividends" means the amount of money to be divided among shareholders out of the profits arising or accumulated from the business of the company as specified in section 159;

"document" means written, printed or electronic material that provides information, evidence or material content, and includes-

(a) any writing, mark, figure, symbol or perforation on any material;

(b) a book, graph or drawing;

"dormant company" means a company which is not carrying on business or is not in operation from the date of incorporation or for a prescribed period;

"entitled person" means a member or other person recognised under the articles as enjoying a shareholder's rights and having a shareholder's obligations;

"equity share" means a share classified as part of the equity share capital of a corporate;

"established place of business" means a place of business of a foreign company in accordance with section 300;

"executive director" means a director who is involved in the day-to-day management of a company;

"executive officer" means the chief executive officer, chief financial officer or a person holding a managerial position;

"existing foreign company" means a body corporate incorporated outside Zambia which immediately before the commencement of this Act was registered as a foreign company in accordance with the repealed Act;

"expert" includes a person belonging to a profession or calling and whose statement on a subject matter is authoritative;

"extraordinary general meeting" means a special meeting of a company as specified in section 59;

"extraordinary resolution" means a resolution passed by a majority of not less than 75 percent of the votes of the members entitled to vote in person or by proxy at a meeting duly convened and held;

"fair value of shares and debentures" means the prevailing market value of shares and debentures in an open market;

"financial assistance" means assistance given by way of-

(a) gift;

(b) guarantee, security or indemnity, other than an indemnity in respect of the indemnifier's own neglect or default, or by way of release or waiver;

(d) any agreement under which any of the obligations of any other party to the agreement remains unfulfilled;

(e) innovation of, or the assignment of, any rights arising under any such loan or agreement; or

(f) any other means, given by a company which does not have net assets, or which reduces the net assets of the company to a material extent;

"financial institution" has the meaning assigned to the words in the Banking and Financial Services Act, 2017;

"financial statement" means a statement of financial position or income statement that summarises a company's financial position as at that balance sheet date by reporting on the assets and liabilities of the company, together with any notes or documents relating to the statement of financial position or income statement, including a statement of accounting policies;

"financial year" means, in relation to-

(a) a company, the period, that begins on the first or subsequent accounting date, whether or not it constitutes a period of 12 months;

(b) a foreign company, the financial year of the foreign company as specified in section 301; and

"first accounting date" means the date the company or foreign company was incorporated or registered, as the case may be;

"foreign company" means-

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

(b) an existing foreign company, subject to section 297;

"group financial statements" means a consolidated statement of financial position for a group of companies as at that statement date, together with any notes or documents relating to the statement of financial position or income statement, including a statement of accounting policies;

"group of companies" means a holding company and its subsidiaries;

"holding company" means a company that controls another company;

"interest group", means a group of shareholders-

(a) whose affected rights are identical;

(b) whose rights are affected by the action or proposal in the same way; and

"interests register" means a register kept and maintained by a company in accordance with this Act, into which a declaration of interest of a director or shareholder is recorded regarding any business of a company is recorded;

"invitation to the public" means an offer of, or an invitation to make an offer for, or the issue of any kind of application form for, shares or debentures of a company, on the condition that a person who accepts the invitation may not renounce or assign the benefit of any shares or debentures to be obtained thereunder in favour of any other person, but does not include an invitation made-

(a) to not more than 15 persons; or

(b) exclusively to existing shareholders, debenture holders or employee of the company;

"legal practitioner" has the meaning assigned to the words in the Legal Practitioners Act;

"liabilities" includes any amount retained as reasonably necessary for the purpose of providing for any liability or loss which is either likely to be incurred, or certain to be incurred but uncertain as to amount or as to the date on which it will arise;

"liquidator" has the meaning assigned to it in the Corporate Insolvency Act, 2017;

"local director" means a director of a foreign company who is resident in Zambia and empowered and authorised to conduct and manage the affairs, property, business and other operations of the company in Zambia;

"meeting" means an annual general meeting, extraordinary general meeting or class meeting as the case may be;

"member" means a shareholder or stockholder of a company or a subscriber to a company limited by guarantee;

"net assets" means the amount by which the aggregate amount of the company's assets exceeds the aggregate amount of its liabilities taking the amount of both assets and liabilities to be stated in the company's accounting records;

"nominee" means a person entitled to exercise a right in accordance with instructions given by another person;

"non-executive director" means a director who is not involved in the day-to-day management of a company;

"officer" includes-

(a) a director, company secretary or executive officer of a company; or

(b) a local director;

"ordinary resolution" means a resolution passed by more than half of the votes cast by the members entitled to vote in person or by proxy at a meeting duly convened and held;

"person concerned" means-

(a) a person who is or has been employed by a company as a director, banker, accountant, legal practitioner or the Registrar; or

(b) a person who, or in relation to whom, there are reasonable grounds for suspecting that the person-

(i) has, in the person's possession, any property of a company;

(ii) is indebted to a company; or

(iii) is able to give information concerning the promotion, formation, management, dealings, affairs or property of a company;

"pre-emptive rights" means a shareholder's privilege to purchase newly issued shares before the shares are offered to the public in amounts proportionate to the shareholder's current holdings;

"private company" means an entity incorporated as a private company in accordance with section 6 or the repealed Act and which fulfils the requirements stipulated in section 8;

"private company limited by guarantee" means an entity incorporated in accordance with section 6 or the repealed Act and which fulfils the requirements stipulated in section 10;

"private company limited by shares" means an entity incorporated in accordance with section 6 and satisfying the requirements of section 9;

"private unlimited company" means a company incorporated in accordance with section 6 and which fulfils the requirements of section 11;

"property" means property of every kind, whether tangible or intangible, real or personal, corporeal or incorporeal, and includes all rights to property, whatever their nature;

"prospectus" means a notice, circular, brochure, advertisement, publication or request issued in a document inviting applications or offers from the public to subscribe for, or purchase of, a share in, or debenture of, a company or proposed company, and includes a statement attached to or intended to be read with the prospectus;

"public company" means an entity incorporated as a public company in accordance with section 6 and which fulfils the requirements stipulated in section 7;

"receiver" has the meaning assigned to it in the Corporate Insolvency Act, 2017;

"registered" means entered in a register;

"registered accountant" means an accountant registered in accordance with the Accountants Act, 2008;

"registered office" means, in relation to a-

(a) company, the registered office of the company as provided in section 28; and

(b) foreign company, the established place of business of the company as provided in section 300;

"Register of Beneficial Owners" means the Register of Beneficial Owners kept and maintained at the Agency in accordance with this Act;

"Register of Companies" means the Register of Companies kept and maintained at the Agency in accordance with this Act;

"register of members" means a register of members and kept and maintained by a company in accordance with this Act;

"Registrar" means the person appointed as Registrar in accordance with the Patents and Companies Registration Agency Act, 2010;

"related company" means any one of two companies-

(a) which is a subsidiary of the other;

(b) which is a holding company of the other; or

"religious activity" means an activity which primarily promotes or manifests a particular belief in, and reverence for, God or a deity, or which proclaims a particular belief;

"repealed Act" means the Companies Act, 1994;

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

"secretary" means in relation to a-

(a) company, a person appointed as the secretary in accordance with section 82; or

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

"secured creditor" has the meaning assigned to the words in the Corporate Insolvency Act;

"security agreement" has the meaning assigned to the word in the Movable Property (Security Interest) Act, 2016;

"security interest" has the meaning assigned to the words in the Movable Property (Security Interest) Act, 2016;

"share" includes stock;

"share and beneficial ownership register" means the register of shares and beneficial ownership of a company as provided in section 195;

"shareholder" means a person whose name-

(a) is entered in the share register as the holder of one or more shares in a company;

(b) appears in the application for incorporation as a promoter of a private company; or

(c) appears in an amalgamation proposal and is entitled to have the name entered in the share register of the amalgamated company;

"small private company" means any business enterprise whose total investment, excluding land and buildings, annual turnover and the number of persons employed by the enterprise, does not exceed the prescribed numerical value;

"solvency test" means a test to determine that-

(a) a company is able to pay its debts as they become due in the normal course of business; and

(b) the value of the company's assets is greater than the value of its liabilities, including contingent liabilities;

"special resolution" means a resolution passed by not less than 75 percent of the votes of members of a company, entitled to vote in person or by proxy at a meeting duly convened and held at which the resolution is moved as a special resolution, or such higher majority percentage as the articles of association may require;

"Standard Articles" means the recommended articles set out in the First and Second Schedules;

"subsequent accounting date" means the-

(a) dates specified, in that application for incorporation of the company as the financial year of the company and the anniversaries of the dates of the financial year specified in the application; or

(b) anniversaries of the first accounting date, specified in the application for incorporation;

"subsidiary" means a corporate that is a subsidiary of another corporate as provided by section 185 and includes a-

(a) company in which the holding company holds more than half in value of the equity share capital, whether the company is incorporated in a jurisdiction that has or does not have nominal value for share capital;

(b) company of which the holding company is a member, and whose composition of board of directors is controlled by the holding company; and

"substantial economic benefit" means the benefit realised by a natural person from a body corporate legally or equitably, of at least five percent of the-

(a) distribution of dividends; or

(b) proceeds of a transaction; and

["substantial economic benefit" ins by s 2(b) of Act 12 of 2020.]

"substantial interest" means at least five percent ownership of shares of a body corporate by a natural person, legally or equitably;

["substantial interest" ins by s 2(b) of Act 12 of 2020.]

"substantial risk of serious loss" means a risk of such a nature or degree that if disregarded will constitute a gross deviation from the standard of care that a reasonable person would exercise;

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

"wholly owned subsidiary" means a company with no members other than-

(a) the holding company and its nominees; or

(b) companies which are themselves wholly owned subsidiaries of the holding company or their nominees.

4. Definition in other laws

In this Act, unless the context otherwise provides, words and expressions used in this Act and which are not defined, but are defined in the Corporate Insolvency Act, 2017, the Movable Property (Security Interest) Act, the Securities Act, the Banking and Financial Services Act or any other relevant Act, shall have the meaning assigned to them in those Acts.

5. Superiority of Act

Subject to the Constitution, and the Banking and Financial Services Act, 2017, and the Securities Act, 2016, where there is any inconsistency between the provisions of this Act and the provisions of any other written law, the provisions of this Act shall prevail to the extent of the inconsistency.

PART II
INCORPORATION AND REGISTRATION OF COMPANIES

6. Types of companies to be incorporated

A company incorporated under this Act shall be-

(a) public company; or

(b) private company, being-

(i) a private company limited by shares;

(ii) a private company limited by guarantee; or

(iii) an unlimited private company.

7. Public companies

(1) A public company shall have share capital.

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

(a) rights, privileges, restrictions and conditions attaching to each class of shares; and

(b) authority given to the directors to determine the number of shares in, the designation of, and the rights, privileges, restrictions and conditions attaching to, each series in a class of shares.

(3) All shares in a public company rank equally except for differences relating to the classes or series of shares.

(4) Where a public company is wound up in accordance with the Corporate Insolvency Act, 2017, a member is liable to contribute, an amount not exceeding the amount, if any, unpaid on the shares held by that member.

(5) The articles of a public company shall not impose any restriction on the right to transfer shares of the company other than a-

(a) restriction on the right to transfer a share which has not been fully paid for; or

(b) provision for the compulsory acquisition, or rights of first refusal, of shares referred to in paragraph (a), in favour of other members of the company or assignees.

8. Private companies

(1) Subject to this section, the articles of a private company shall limit the number of its members to not more than 50 members.

(2) The articles of an unlimited company may, subject to any specified conditions, have more than 50 members.

(3) For the purposes of sub-section (1)-

(a) joint holders of a share shall be counted as one shareholder; and

(b) a member shall not be counted as a member, if the member is-

(i) in the employ of the company or of a related corporate; or

(ii) became a member while previously in the employ of the company or a related corporate and has been a member since.

9. Private companies limited by shares

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

(a) rights, privileges, restrictions and conditions attaching to each class of shares; and

(b) authority given to the directors to determine the number of shares in, the designation of, and the rights, privileges, restrictions and conditions attaching to each series, in a class of shares.

(2) All shares in a private company limited by shares rank equally except for differences relating to the classes or series.

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

10. Companies limited by guarantee

(1) A subscriber to an application for incorporation for a company limited by guarantee shall make a declaration of guarantee specifying the amount that the subscriber undertakes to contribute to the assets of the company in the event of the company being wound up.

(2) A subscriber to an application for incorporation for a company limited by guarantee shall, on incorporation of the company, be a member of the company.

(3) A declaration of a guarantee made under sub-section (1) shall state that a member undertakes to contribute an amount not exceeding the amount specified in the declaration of guarantee made by the member, if the company is wound up in accordance with the Corporate Insolvency Act, 2017, or within one year after the member ceases to be a member.

(4) Subject to sub-section (2), and any additional requirements imposed by the articles and this Act, a person may-

(a) become a member of a company, on approval of the members by special resolution, and by signing a declaration of guarantee delivered to the company; or

(b) cease to be a member, by delivering to the company a signed notice to that effect in the prescribed form.

(5) A company limited by guarantee shall, within seven days after a person becomes or ceases to be a member of the company, lodge with the Registrar the declaration of guarantee and a notice in the prescribed form.

(6) A company limited by guarantee shall not carry on business for the purpose of making profit for its members or anyone concerned in its promotion or management.

(7) If a company fails to comply with this section, the directors and each officer in default commit an offence and are liable, on conviction, to a fine not exceeding three hundred penalty units for each day that the failure continues.

11. Private unlimited companies

(1) A private unlimited company shall have share capital and its articles shall state the-

(a) rights, privileges, restrictions and conditions attaching to each class of shares; and

(b) authority given to the directors to determine the number of shares in, the designation of, and the rights, privileges, restrictions and conditions attaching to each series, in a class of shares.

(2) All shares in a private unlimited company shall rank equally, except for differences relating to classes or series.

(3) A member shall, where a private unlimited company is wound up in accordance with the Corporate Insolvency Act, be liable to contribute without limitation of liability.

12. Application for incorporation

(1) Subject to the other requirements of this Act, two or more persons may apply to incorporate a company specified in section 6 for a lawful purpose, by subscribing their names to an application for incorporation in accordance with this section.

(2) An application for incorporation of a company, specified in sub-section (1), shall be made in the prescribed manner and form and shall be lodged with the Registrar.

(3) The following shall accompany an application for incorporation of a company-

(a) a copy of the proposed articles of the company, or a statement that it has adopted the Standard Articles;

(b) declaration of compliance made in accordance with section 13;

(d) declaration of guarantee by each subscriber, if the company is limited by guarantee;

(e) a statement of beneficial ownership which shall state, in respect of each beneficial owner-

(i) the full names;

(ii) the date of birth;

(iii) the nationality or nationalities;

(iv) the country of residence;

(v) the residential address; and

(vi) any other particulars as may be prescribed; and

(f) a declaration by the applicants that the particulars stated in accordance with paragraph (e) have been submitted to the Registrar with the knowledge of the individuals to whom the particulars relate.

(4) An application for incorporation specified in sub-section (1), shall state-

(i) the name and address of the individual lodging the application;

(ii) the proposed name of the company;

(iii) the physical address of the office to be the registered office of the company;

(iv) the registered postal address, electronic mail address and phone number of the company where available;

(v) the type of company to be formed;

(vi) the particulars of persons who shall be the first directors of the company;

(vii) the particulars of persons who shall be the first secretary or joint secretaries of the company; and

(viii) the nature of the company's proposed business or proposed activity.

(5) Where a company being incorporated is required to have share capital, the applicant shall state on the application for incorporation the-

(a) amount of share capital of the company;

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

(6) An applicant shall specify, on the application for incorporation, the date on which the first financial year of the company shall end, which shall not be more than 12 months from the date of incorporation.

(7) An application for incorporation shall be signed by each subscriber in the presence of at least one witness who attests to the signature.

(8) Subject to section 14(2), an individual shall not subscribe to an application for incorporation if that individual is-

(a) under 18 years of age;

(b) an undischarged bankrupt; or

(9) A person shall not apply to incorporate an entity as a company, for purposes of carrying out religious or faith based activities.

13. Declaration of compliance

(1) An application for incorporation, specified in section 12, shall be accompanied by a declaration made in the prescribed form stating that the requirements of the Act relating to incorporation, have been complied with.

(2) The declaration, referred to in sub-section (1), shall be made in the prescribed manner and form by a-

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

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

(3) The Registrar may accept the declaration as prima facie evidence of compliance with the requirements of this Act.

(4) A person who makes a declaration in accordance with this section, without having reasonable grounds for believing that the requirements of this Act have been complied with, commits an offence and shall be liable, on conviction, to a fine not exceeding fifty thousand penalty units or to imprisonment for a period not exceeding six months, or to both.

14. Certificate of incorporation and share capital

(1) Where an applicant meets the requirements of this Act, the Registrar shall within five days-

(a) register the proposed company;

(b) issue a certificate of incorporation in the prescribed form;

(d) assign a designating number to the company as its registration number.

(2) The incorporation of a company shall not be invalid by reason only that an individual or individuals subscribed to the application for incorporation in contravention of section 12(8).

15. Certificate to be evidence of incorporation

(1) A certificate of incorporation issued in accordance with section 14 shall be conclusive evidence that-

(a) the requirements of this Act regarding the incorporation of the company have been complied with; and

(b) from the date of registration stated in the certificate, the company is incorporated in accordance with this Act.

16. Legal status of registered company

A company registered in accordance with this Act, acquires a separate legal status, with the name by which it is registered, and shall continue to exist as a corporate until it is removed from the Register of Companies.

17. Contractual effect of incorporation

Subject to this Act, the incorporation of a company has the same effect as a contract under seal between the company and its members and between the members themselves, in which they agree to form a company whose business shall be conducted in accordance with the articles and this Act.

18. Display of certificate of incorporation

A company registered in accordance with this Act shall display its certificate of incorporation in a prominent place at its business premises.

19. Rejection of application for incorporation

(1) The Registrar shall reject an application for incorporation of an entity where an applicant-

(a) does not meet the requirements of this Act; or

(b) submits false information in the application for incorporation.

(2) Where the Registrar rejects an application for incorporation, the Registrar shall inform the applicant of its decision, in writing, within 14 days of making the decision and shall give reasons for the rejection.

20. Pre-incorporation contracts

(1) Where a person purports to enter into a contract not evidenced in writing in the name or on behalf of an entity before it is incorporated, that person is bound by the contract and shall incur any liability and be entitled to the benefits arising therefrom.

(2) Subject to this section, where a person purports to enter into a contract evidenced in writing in the name or on behalf of an entity before it is incorporated, the person shall be bound by the contract and entitled to the benefits thereof, except as provided in this section.

(3) A company may, not later than 15 months after its incorporation, adopt the contract specified in sub-section (1) and (2) by an ordinary resolution, and on the adoption, subject to sub-section (4) the-

(a) company shall be bound by the contract and entitled to the benefits thereof, as if the company had been incorporated at the date of the contract and had been a party thereto; and

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

(4) Subject to sub-section (5), whether or not a contract specified in sub-section (3) is adopted by the company, a party to the contract, may apply to the Court for an order fixing obligations under the contract as a joint party or joint and several parties, or apportioning liability between or among the company and, the person who purported to act in the name or on behalf of the company, and on such application, the Court may make any order it considers appropriate in the circumstances.

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

21. Register of Companies and Register of Beneficial Owners

(1) The Registrar shall establish and maintain a Register of Companies in manual or electronic form in which shall be entered, in respect of each company a-

(a) chronological record of the prescribed particulars, and of any other particulars as prescribed in relation to the company; and

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

(2) The Registrar shall establish and maintain a Register of beneficial owners in manual or electronic form in which shall be entered-

(a) the information provided in accordance with section 12(3)(e);

(b) the following information relating to a legal person-

(i) the body corporate name;

(ii) head office address;

(iii) identities of directors, shareholders and beneficial owners;

(iv) proof of incorporation or evidence of legal status and legal form;

(v) provisions governing the authority to bind the legal person; and

(vi) such information as is necessary to understand the ownership and control of the legal person;

(c) with respect to other legal entities or arrangements the name of trustees, settler and beneficiary of a trust, and any other parties with authority to manage, vary or otherwise control the entity or arrangement; and

(d) any other information as may be prescribed.

(3) A company shall, where a change occurs with respect to the particulars of shareholding or beneficial ownership stated in a register maintained in accordance with this Act, notify the Registrar in the prescribed form, within 14 days of such change.

PART III
CORPORATE CAPACITY AND ADMINISTRATION

22. Capacity, powers and rights of company

A company shall have-

(a) perpetual succession and a common seal, capable of suing and being sued in its corporate name and shall, subject to this Act, have power to do all such acts and things as a corporate may by law, do or perform;

(b) subject to this Act and to such limitations as are inherent in its corporate nature, the capacity, rights, powers and privileges of an individual; and

(c) the capacity to carry on business and exercise its powers in any jurisdiction outside Zambia, to the extent that the laws of Zambia and of that jurisdiction permit.

23. Validity of acts

(1) A person dealing with the company or any person who has acquired rights from the company, in good faith, shall not be prejudiced by the company or a guarantor of an obligation of the company by reason only that-

(a) the articles have not been complied with;

(b) a person named as director of the company in the most recent notice received by the Registrar is not-

(i) a director or an employee of the company;

(ii) duly appointed; or

(iii) authorised to exercise powers performed by a director or executive officer; or

(c) a director, nominee or chief executive officer of the company acted fraudulently or forged a document, that was signed on behalf of a company.

(2) Subject to sub-section (3), a document executed on behalf of a company by a director, nominee or chief executive officer of the company with actual authority to execute the document, shall be valid.

(3) A document specified in sub-section (2), shall be void if, at the time the document was executed, a person dealing with the company or acquired rights from the company, knew or ought to have known, by virtue of that person's relationship with the company, of the facts specified in sub-section (1).

24. Presumption of knowledge

A person shall not be affected by, or presumed to have notice of the contents of the articles or any other document of a company, by reason only that the articles or document is-

(a) registered or has been lodged with the Registrar; or

(b) available for inspection at the office of the company.

25. Articles of association

(1) A company shall have articles of association that regulate the conduct of the company.

(2) The articles may contain restrictions on the type of business that a company may carry on or the powers exercisable by the company.

(3) A company shall not carry on any business or exercise a power which the company is restricted by its articles from carrying on or exercising, or exercise any of its powers in a manner that is contrary to its articles.

(4) A provision in the articles which is inconsistent with this Act or any other law is invalid to the extent of the inconsistency.

(5) The articles shall be divided into paragraphs numbered consecutively.

(6) The articles shall be signed by persons who are the first members of the company.

(7) A company may adopt the Standard Articles set out in the Schedules or any specified regulation therein.

(8) Where a company adopts the Standard Articles set out in the Schedules, the company shall not be required to file the Standard Articles with the Registrar.

26. Effect of articles of association

(1) The articles shall have the effect of a contract between-

(a) the company and each member; and

(b) amongst the members.

(2) The articles shall bind the company and its members.

27. Amendment of articles of association

(1) Subject to this Act, and its articles, a company may amend its articles by passing a special resolution.

(2) A company shall, where it amends its articles, in accordance with sub-section (1), within 21 days after the date of passing the resolution, lodge a copy of the resolution with the Registrar, together with a copy of each paragraph of the articles affected by the amendment, in its amended form.

(3) The articles shall take effect, in their amended form, on and from the day of their lodgement with the Registrar, or such later date as may be specified in the resolution.

(4) If a company fails to comply with sub-section (2), the company, and each officer in default, commits an offence and is liable, on conviction, to a fine not exceeding three hundred thousand penalty units for each day that the contravention continues.

28. Registered office and change of registered office

(1) A company shall have a registered office in Zambia to which all communications and notices may be addressed.

(2) The registered office shall be the address for service of legal proceedings on the company.

(3) A company may change its registered office.

(4) The company shall, where a change occurs with respect to its registered office, notify the Registrar in the prescribed manner and form, within 14 days of that change.

(5) A change of the registered office shall take effect on the date the notice referred to in sub-section (4), is lodged with the Registrar.

(6) Where a company fails to comply with sub-section (4), every officer of the company commits an offence and is liable, on conviction, to a fine not exceeding one hundred thousand penalty units.

29. Publication of name of company

(1) A company shall-

(a) paint or affix, and keep painted or affixed, the name of the company, in easily legible Roman letters or a combination of Roman letters with Arabic numerals, above or adjacent to the principal entrance to the company's registered office, its registered records office and to every other office or place in which the company's business is carried on; and

(b) have its name accurately stated in Roman letters or a combination of Roman letters with Arabic numerals on all business letters, invoices, receipts, notices and other publications of the company, and in all negotiable instruments or orders for money, goods or services issued or signed by or on behalf of the company.

(2) If a company fails to comply with sub-section (1), the company and each officer in default commit an offence and are liable, on conviction, to a fine not exceeding one hundred thousand penalty units.

30. Records kept at company's registered office

(1) A company shall, at its registered office, keep the following records-

(a) the articles of association;

(b) a register of-

(i) members indicating separately for each class of equity and preference shares held by each member residing in or outside Zambia;

(ii) beneficial owners, specifying the particulars in section 12(3)(e);

(iii) debenture holders; and

(iv) any other security holders;

(d) minutes of all meetings and resolutions of shareholders for the preceding 10 years;

(e) an interests register;

(f) minutes of all meetings and resolutions of directors and directors' committees within the last 10 years;

(g) copies of all financial statements for the preceding 10 years;

(h) the accounting records for the preceding 10 years;

(i) copies of instruments creating or evidencing charges required to be registered in accordance with this Act or any other written law; and

(j) any other document or record as may be prescribed by the Minister.

(2) A register of members maintained in accordance with sub-section (1)(b) shall have an index of the names contained in it.

(3) The documents required to be maintained in accordance with this section may be kept in electronic form.

(4) A company may, if authorised by its articles, keep in a country outside Zambia, in such a manner as may be prescribed, a part of the register, referred to in sub-section (1)(b), except that such part of the register shall be publicly available in Zambia in accordance with this Act.

(5) If a company fails to maintain a document in accordance with this section, the company and every officer of the company in default commit an offence and are liable, on conviction, to fine not exceeding one hundred thousand penalty units.

31. Register of directors and secretaries

(1) A company shall keep a register of its directors and secretaries.

(2) The register shall contain the following particulars of each director and secretary-

(a) forenames and surname;

(b) residential and postal address;

(d) nationality and national identity card number or passport number;

(e) any directorship held in another corporate, whether or not formed in Zambia, during the preceding five years; and

(f) any local directorship held in a foreign company during the preceding five years.

(3) Where the secretary is a body corporate, the register, specified in sub-section (1), shall contain the-

(a) name of the body corporate;

(b) registered office and registered postal address and, if different, the address of its principal office; and

(4) A director or secretary shall, at the time of being appointed or employed, furnish to the company all the documents, information and particulars, as may be necessary for purposes of this section.

(5) If a company or individual fails to comply with this section, the company, individual and each executive officer in default commits an offence and is liable, on conviction, to a fine not exceeding one hundred thousand penalty units.

32. Seal of company and execution of documents

(1) A company shall have a common seal bearing its name and the words "common seal" in legible letters.

(2) The chairperson, vice-chairperson and the secretary or any other person authorised by a resolution of the Board, shall authenticate the affixing of the seal.

(3) A common seal referred to in sub-section (1), shall not be used for any purpose, except in accordance with the articles and this Act.

(4) A document or deed shall be validly executed by or on behalf of a company-

(a) by the affixing of the common seal; or

(b) if the document or deed bears the signatures or signature of-

(i) two authorised signatories; or

(ii) a director whose signature is attested by a witness.

(5) A document signed, in accordance with sub-section (4)(b), shall have the same effect as if executed under the common seal of the company.

(6) A seal may be kept in electronic form in accordance with the Electronic Communications and Transactions Act, 2009.

33. Common seal for use abroad

(1) A company may, subject to its articles, have for use outside Zambia, a common seal stating, on its face, the name of the country where the seal is to be used.

(2) A company may, in writing, under its common seal specified in sub-section (1), authorise an agent or appoint an attorney to affix the common seal to a document or execute a deed to which the company is a party to outside Zambia.

(3) A person dealing with a person authorised or appointed as specified in sub-section (2), shall be entitled to assume that the authority of the person is valid, unless that person has actual notice of the revocation of the appointment or determination of the authority.

(4) A person affixing the common seal specified in sub-section (1), shall certify on the document or deed to which the seal is affixed the date and the place at which the seal is affixed.

34. Service of documents on company

(1) Despite this Act or any other law, a document may be served on a company by-

(a) delivery of the document to the registered office of the company; or

(b) personally serving a director or secretary of the company.

(2) Where service in the manner specified in sub-section (1) is not possible, a document may be served on a company by registered mail or electronic mail.

35. Service of documents by company

(1) For the purposes of this Act, a document may be served by a company on any member, debenture holder, director or secretary of the company-

(a) personally;

(b) by sending it by registered post in a prepaid letter addressed to that member, debenture holder, director or secretary of that company at the registered postal address or at any other address supplied by that member, debenture holder, director or secretary to that company for the giving of notices to that member, debenture holder, director or secretary to that company; or

(c) by leaving it for that member, debenture holder, director or secretary of that company at the registered address of that member, debenture holder, director or secretary of that company with a person apparently over the age of 18 years.

(2) A document may be served by a company on the joint holders of a share or debenture of the company by serving it on the joint holder named first in the register of members or debenture holders in respect of that share or debenture.

(3) A document may be served by a company on the person upon whom the ownership of a share or debenture has devolved by reason of the person being a legal personal representative, receiver, or trustee in bankruptcy of a member or debenture holder-

(a) personally;

(b) by sending it by registered post in a prepaid letter addressed to the person at a postal address notified by the person to the company;

(c) by leaving it in any manner in which it might have been served if the death, receivership or bankruptcy had not occurred, if the company has not received notice of a postal address for the person;

(d) by leaving it for the person at a place the address of which has been notified by the person to the company, with a person apparently over the age of 18 years; or

(e) by electronic means.

(4) Where a document is sent by registered post, service shall be deemed to be effected by properly addressing, prepaying and posting the letter accompanying the document and to have been effected at the expiration of seven days or, if it is sent to an address outside Zambia, 21 days, after the letter containing the same is posted.

(5) Where a document is sent by electronic means, service shall be deemed to be effected when the complete data message enters an information system designated or used for that purpose in accordance with the Electronic Communications and Transactions Act, 2009.

(6) For purposes of sub-sections (4) and (5), where a document is sent to an address outside Zambia, the letter accompanying the document shall be dispatched by registered or electronic mail, as applicable.

PART IV
COMPANY NAME AND CHANGE OF NAME

36. Company name to end with PLC or Ltd

(1) The name of a public limited company shall end with the words "Public Limited Company" or the abbreviation "PLC" .

(2) Subject to this Part, the name of a private limited company shall end with the words "Limited" or the abbreviation "Ltd" .

37. Application to omit or dispense with "Limited" in name of company limited by guarantee

(1) The Registrar may, on application in the prescribed manner by a-

(a) person applying to form a company limited by guarantee; or

(b) company, that is, or has become a company limited by guarantee,

grant the applicant written approval to omit or dispense with the use of the word "limited" from the name of the company, on such terms and conditions as the Registrar considers necessary.

(2) The Registrar shall, on granting the approval specified in sub-section (1), enter the company name on the register without the word "Limited" and issue a certificate of incorporation or replacement certificate of incorporation worded to meet the circumstances of the case.

(3) A replacement certificate referred to in sub-section (2) shall be conclusive evidence of the alteration to which it relates.

38. Revocation of approval to dispense with "Limited"

Where the Registrar considers that the reasons given by an applicant for omitting or dispensing with the word "Limited" from the name of a company limited by guarantee have ceased to be valid, the Registrar may revoke the approval granted in accordance with section 37 and the revocation shall take effect on a date that the Registrar determines.

39. Clearance and approval of proposed name

(1) A person intending to incorporate a company may apply to the Registrar, for clearance and approval of a proposed name, in the prescribed manner and form.

(2) If the Registrar considers that a proposed name of a company does not contravene section 40, the Registrar may approve the name and shall notify the applicant in writing of the approval.

40. Rejection of application for approval of name

(1) The Registrar may reject an application for approval of a proposed name made in accordance with section 39, where-

(a) the name, if registered, is likely to cause confusion with a name or trademark of a registered company or a well-known name or trademark;

(b) registration of the name is sought to prevent another person who is legitimately entitled to use that name from using it;

(d) the name denotes the patronage of the State or of the President, Government or administration of any foreign state, or of any department or institution of any foreign state;

(e) the name is calculated to deceive or mislead the public, cause annoyance or offence to any person or is suggestive of blasphemy or indecency; or

(f) registration would suggest or imply a connection with a political party or a leader of a political party.

(2) Where the Registrar rejects an application made in accordance with section 39, the Registrar shall within seven days of the decision notify the applicant of the refusal and give reasons for the refusal.

(3) In this section, "well-known name or trademark" means a name or trademark associated generally by the Zambian public with a registered company, products whether within or outside the Republic, and in respect of which confusion is likely to arise if the proposed name or trademark is registered by a company other than the company generally associated with that name.

(4) The Registrar shall, in determining whether a name is well-known in Zambia take into account the degree of association of the name with a registered company by the Zambian public.

41. Reservation of company name

(1) Subject to this section, a person or persons who propose to incorporate a company may reserve a proposed name for the company, by making an application in the prescribed manner and form to the Registrar.

(2) The Registrar may approve a reservation of a name if satisfied that the-

(a) name proposed for reservation is-

(i) a registered business name of the person or persons registered in accordance with any other law; or

(ii) the name of an unincorporated association consisting of, or represented by the person or persons; or

(b) applicant is a body corporate, other than a company, and the name is of the body corporate or that name with minor modifications.

(3) The Registrar shall, on approving a reservation of a name in accordance with sub-section (2), notify the applicant, in writing, and shall register the name as reserved for a period of 90 days from the date of the notice.

(4) Subject to this Act, where a name is registered as specified in sub-section (3)-

(a) the applicant shall be entitled to incorporate a company under the reserved name; and

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

42. Change of name

(1) A company may pass a special resolution to change its name.

(2) Within 21 days after the date of the resolution, the company shall notify the Registrar in the prescribed form that the company intends to change its name to the name specified in the resolution (in this section called the "new name" ).

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

(a) the new name is acceptable; or

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

(4) If the new name is acceptable, the company shall, within 21 days after receiving the notice of the fact, lodge with the Registrar-

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

(b) a copy of the resolution.

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

(6) A certificate under this section shall be conclusive evidence of the alteration to which it relates.

(7) A change of name by a company shall not affect any rights or obligations of the company nor render defective any legal proceedings that could have been continued or commenced against it by its former name, and any such legal proceedings may be continued or commenced against it by its new name.

43. Registrar may direct change of name

(1) Where the Registrar considers that the name of a registered company subsequently contravenes section 40, the Registrar may direct that the company changes its name in accordance with this Part.

(2) Where, after receiving a directive in accordance with sub-section (1), a company fails to change its name, within 50 days or such longer period as the Registrar may allow, the Registrar may register the designation number of the company, together with the word "Limited" or "PLC" if required by section 38, as the name of the company, and shall issue a new certificate of incorporation for the company worded to reflect the change in name of the company.

(3) Where the Registrar directs a company to change its name, the Agency shall not compensate any person in respect of such matter.

44. Document with incorrect name not void

A contract or legal obligation of a company evidenced on a document on which the name of the company is incorrectly stated shall not be void, at the instance of the company, by reason only of the company's name being incorrectly stated.

45. Liability where company name incorrectly stated

Where the name of a company is incorrectly stated in a document which evidences a legal obligation of the company, and the document is issued or signed by or on behalf of the company, every person who issues or signs the document is liable to the same extent as the company unless the-

(a) person who issues or signs the document proves that the person in whose favour the obligation was incurred was aware at the time the document was issued or signed, that the name was incorrectly stated and the obligation was incurred by the company; or

(b) Court before which the document is produced, is satisfied that it would not be just and equitable for the person who issued or signed the document to be held liable.

46. Publication of change of company name prior to public notices

(1) A company shall, where the name of the company changes, within a period of 12 months prior to the company's release of any public notice, cause to be published in the Gazette a notice stating the-

(a) new name of the company;

(b) specific date on which the name of the company changed; and

(2) If a company fails to comply with sub-section (1), the company and each officer in default commits an offence is liable, on conviction, to a fine not exceeding three thousand penalty units for each day that the failure continues.

47. Legal effect of change of name

The change of name of a company in accordance with this Part shall-

(a) not affect the rights or obligations of the company nor render defective legal proceedings by or against it;

(b) not affect any legal proceedings that could have been continued or commenced against the company by or under its former name; and

PART V
CONVERSION OF COMPANIES

48. Conversion of private company limited by shares into company limited by guarantee

A private company limited by shares may be converted into a company limited by guarantee if-

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

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

(d) the members pass a special resolution to amend the articles to convert the company to a company limited by guarantee complying with section 10; and

(e) each member makes a declaration of guarantee.

49. Conversion of private company limited by shares into unlimited company

A private company limited by shares may be converted into an unlimited company if-

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

(b) there is no unpaid liability on any of the company's shares;

(c) the members pass a special resolution to amend the articles to convert the company to an unlimited company complying with section 11; and

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

50. Conversion of company limited by guarantee into company limited by shares or unlimited company

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

(a) all its members agree in writing to-

(i) convert it into a company limited by shares or an unlimited company; and

(ii) a share capital for the company; and

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

(c) the members pass a special resolution to amend the articles to convert the company to a company limited by shares or an unlimited company complying with section 9 or 11.

51. Conversion of unlimited company into private limited company

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

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

(b) in the case of conversion to a company limited by guarantee, each member makes a declaration of guarantee as provided in section 10; and

(c) the members pass a special resolution to amend the articles to convert the company to a private limited company complying with section 8.

(2) The company may, by special resolution, in the case of a conversion to a company limited by shares-

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

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

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

52. Conversion of public company into private company limited by shares

A public company may be converted into a private company limited by shares by-

(a) its members passing a special resolution to convert the company into a company limited by shares;

(b) amending the articles to satisfy sections 8 and 9;

(d) each member agreeing, in writing, to take up a specified number of share.

53. Conversion of private company limited by shares into public company

A private company limited by shares may be converted into a public company by-

(a) passing a special resolution to convert the company into a public company;

(b) amending the articles to satisfy section 7; and

(d) its members agreeing in writing to a share capital for the company.

54. Process of conversion

(1) A company shall, within 21 days of satisfying the requirements of sections 47, 48, 49, 50, 51 or 52, as the case may be, lodge with the Registrar a notice, in the prescribed form, together with the documents specified in sub-section (2).

(2) The following documents shall accompany the notice lodged with the Registrar in accordance with sub-section (1)-

(a) the company's certificate of incorporation;

(b) a copy of each amended paragraph in the articles;

(c) a copy of the special resolution or written agreement by the members as specified in the relevant conversion section;

(d) a statutory declaration by a director and the secretary of the company stating that-

(i) the conditions for converting the company as specified in the relevant section have been complied with; and

(ii) in their opinion, the company is solvent as evidenced in a report by the auditors of the company, made not more than 90 days before the date of the notice referred to in sub-section (1);

(e) if the company is being converted from a public company to a private company and has been incorporated as a public company for not less than 15 months, certified copies, signed by not less than two directors of the company or, where the company has one director, by that director, of every financial statement, statement of comprehensive income, group accounts, directors' report and auditor's report sent to the members of the company in the preceding 12 months.

(3) The Registrar shall, on receipt of the notice referred to in sub-section (1), together with the documents specified in sub-section (2)-

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

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

(4) From the date of conversion stated in the certificate of incorporation the-

(a) company shall stand converted into a company of the status specified on the replacement certificate of incorporation;

(b) articles shall stand amended in accordance with the documents lodged with the notice of conversion; and

(5) The conversion of a company as provided in this section shall not-

(a) alter the identity of the company;

(b) affect any rights or obligations of the company, except as specified in this section; or

(6) If a company fails to comply with sub-section (1), the company and each officer in default commit an offence and are liable, on conviction, to a fine not exceeding three thousand penalty units for each day that the failure continues.

(7) If a director or secretary of a company makes a declaration, for purposes of sub-section (2)(d) that in the director's or secretary's opinion, the company is solvent, without having reasonable grounds for the opinion, the director or secretary commits an offence and shall be liable, on conviction, to a fine not execeeding one hundred thousand penalty units.

55. Imposition of penalty by Registrar for non-compliance

(1) The Registrar shall, where a private company-

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

(b) invites the public to acquire shares or debentures in the company in contravention of section 210,

give notice in the prescribed form to the company, of the Registrar's intention to impose a penalty for failure to comply with the Act.

(2) The Registrar shall, in the notice referred to in sub-section (1)-

(a) give reason for the intended penalty;

(b) require the company to show cause within a period of 30 days, why the penalty should not be imposed.

(3) Where a company takes remedial measures to the satisfaction of the Registrar, within the period specified in sub-section (2), the Registrar shall not impose the intended penalty.

(4) Where a company fails to take remedial measures within 30 days, the Registrar shall impose a penalty not exceeding three hundred penalty units for each day that the failure to comply continues.

PART VI
MEETINGS AND RESOLUTIONS

56. Types of meetings

(1) In this Part, unless the context otherwise requires, "meeting" means any of the following meetings of a company-

(a) an annual general meeting;

(b) an extraordinary general meeting; or

(2) A meeting called in accordance with this Part, at which voting will be conducted or documents tabled, may be held by teleconferencing or other electronic means.

57. Annual general meeting

(1) Subject to this section, a company shall hold, within 90 days after the end of each financial year of the company, an annual general meeting.

(2) The Registrar may, where an annual general meeting is not held in accordance with sub-section (1), on the application of a member, direct the convening of an annual general meeting and give such directions as the Registrar considers expedient, including directions to modify or supplement the-

(a) convening, holding and conducting of the meeting; or

(b) operation of the company's articles.

(3) A private company may dispense with the holding of an annual general meeting required in accordance with this Part, other than the first financial year, if all the members entitled to attend and vote at the annual general meeting agree in writing, before the end of the financial year, and notify the Registrar in the prescribed form.

(4) If a company fails to comply with this section, the company and each officer in default commit an offence and shall be liable, on conviction, to a fine not exceeding three thousand penalty units for each day that the failure continues.

58. Business to be transacted at annual general meeting

The business to be transacted at an annual general meeting shall include the following-

(a) consideration and approval of the financial statements and annual report;

(b) the declaration of a dividend;

(d) the election of directors in place of those retiring;

(e) the fixing of the remuneration of the directors; and

(f) the appointment of the auditors and the fixing of their remuneration.

59. Extraordinary general meeting

An extraordinary general meeting may be convened in accordance with this Act or by-

(a) the board of directors whenever it considers necessary; or

(b) any other person in accordance with the articles.

60. Class meetings

Unless the articles provide otherwise, a meeting of members of a particular class may be convened by-

(a) the board of directors whenever it considers necessary; or

(b) two or more members of that class, holding, at the time the notice of the meeting is sent out, not less than five percent of the total voting rights of all the members having a right to vote at meetings of that class.

61. Requisition of general meeting

(1) Subject to sub-section (2), any member of a company may make a requisition for a general meeting to be held.

(2) A requisition made in accordance with sub-section (1), may be made by any member who at the time when the requisition is made, holds not less than five percent of the total voting rights of all the members having a right to vote at a general meeting of the company.

(3) The requisition, made in accordance with sub-section (1), shall-

(a) state the nature of the business to be transacted at the meeting;

(b) be signed by the member making the requisition; and

and may consist of several documents in like form, each signed by the member making the requisition.

(4) The board shall, where a requisition is made in accordance with sub-section (1), proceed to convene a general meeting of the company.

(5) If the board does not proceed to convene a meeting to be held within the period requested for the convening of the meeting, the members requesting the meeting may, convene the meeting, which shall be held not more than 90 days after receipt of the requisition by the company.

(6) Despite anything in the articles, the notice period for a meeting convened in accordance with this section shall be-

(a) twenty-eight days, if the meeting is an annual general meeting or a meeting at which a special resolution shall be passed; or

(b) twenty-one days, in any other case,

beginning on the date of receipt by the company, of the requisition to convene a general meeting.

(7) The company shall refund, any reasonable expenses incurred by a member requesting a meeting specified in this section.

(8) The company shall, for purposes of making a refund in accordance with sub-section (6), draw the necessary funds from the sums payable as remuneration or fees to the board.

62. Entitlement to receive notice of meetings

(1) The following are entitled to receive notice of a meeting of the company-

(a) a member having the right to vote at such meeting;

(b) a person on whom the ownership of a share devolves by reason of that person being a legal personal representative, receiver or assignee in bankruptcy of a member, and of whom the company has received notice;

(d) an auditor of the company; or

(e) a person entitled under the articles to receive such notice.

(2) The proceedings of a meeting shall not be invalid by reason only of the-

(a) accidental omission to give notice of the meeting to a person entitled to receive notice; or

(b) non-receipt of a notice of the meeting duly sent to a person entitled to receive notice.

(3) Subject to sub-section (1), a notice of a meeting of a company shall be in writing and served on each person entitled to receive the notice.

63. Length of notice for convening meeting

(1) A notice of a company meeting shall be given not less than-

(a) twenty-one days, in the case of an annual general meeting;

(b) twenty-one days, in the case of a meeting at which a special resolution will be proposed; or

and not more than 50 days before the meeting is to be held.

(2) The articles may substitute for the minimum periods of notice provided in sub-section (1) longer periods, being periods of not more than 30 days.

(3) Where a meeting of the company is convened with a shorter period of notice than that required under this section, full notice shall be deemed to have been given if it is so agreed-

(a) by all the members entitled to attend and vote at the meeting, in the case of a meeting convened as the annual general meeting;

(b) by a majority in number of the members having a right to attend the meeting and vote on the resolution concerned, being a majority holding not less than 95 percent of the total of such voting rights, in the case of a meeting convened as a meeting at which a special resolution will be moved, and in relation to that resolution; and

(c) by a majority in number of the members having a right to attend and vote at the meeting, being a majority holding not less than 95 percent of the total of such voting rights, in the case of any other meeting.

64. Meeting by order of Court

(1) The Court may, where it is impracticable to convene a meeting of a company in accordance with this Act and the articles, on the application of a director or a member entitled to vote at the meeting-

(a) order a meeting of the company to be convened, held and conducted in such a manner as the Court considers appropriate; and

(b) give such ancillary or consequential directions which the Court considers expedient, including a direction that one member shall make resolutions relating to the matters for that meeting which resolutions shall be deemed to be resolutions of the company.

(2) A meeting convened, held and conducted in accordance with sub-section (1), shall for all purposes be considered to be a meeting of the company duly convened, held and conducted.

65. Place of meetings

A meeting shall be held in Zambia unless-

(a) the articles provide otherwise; or

(b) all the members entitled to vote at that meeting agree in writing, to hold the meeting at a place outside Zambia.

66. Attendance at meetings

The following persons are entitled to attend and to speak at a meeting of a company-

(a) a member with the right to vote at the meeting;

(b) a person on whom the ownership of a share devolves, by reason of that person being a personal representative, successor in title, receiver or assignee in bankruptcy of a member;

(d) the secretary of the company;

(e) auditor of the company;

(f) a person entitled under the articles to do so; and

(g) any other person permitted to do so by the chairperson.

67. Conduct of meetings and voting

(1) Unless the articles provide otherwise, a member-

(a) shall have one vote for each share and whole unit of stock that the member is registered as holding; and

(b) of a private company limited by guarantee, shall have one vote.

(2) The articles may provide that a member shall have rights in respect of shares not registered to that member.

(3) A person who is not a member shall not be entitled to vote at a meeting of the company.

(4) The quorum for a meeting of a company shall be two members of the company, holding not less than one-third of the total voting rights in relation to the meeting, unless the articles or an order of Court provide otherwise.

(5) A meeting of the company may, unless the articles or this Act provide otherwise, elect a chairperson and determine the conduct of business in that meeting.

(6) The articles may provide that a member shall not be entitled to attend a meeting of the company, unless all outstanding sums payable by the member, in respect of shares in the company, have been paid.

(7) For the purposes of this section, a "unit of stock" of a company is the amount of stock with a nominal value arrived at by adding together the nominal value of all the shares of the company other than stock, and dividing the sum by the number of those shares.

68. Chairperson's declaration as to result of vote

A statement by the chairperson and secretary at a meeting of the company that a motion or resolution at a meeting was passed by a specified majority, shall be conclusive evidence that it was so passed, unless a poll was demanded on the motion or resolution and unless the articles provide otherwise.

69. Right to demand poll

A poll may be demanded, at a meeting of a company on any question other than the election of the chairperson of the meeting or the adjournment of the meeting, by not less than-

(a) three members with the right to vote on the question, representing not less than five percent of the total voting rights of all members having the right to vote on the question, where there are more than eight members present; or

(b) one-third of the members present with the right to vote on the question, where the members present are eight or less.

70. Voting on poll

The articles shall not require a member entitled to more than one vote on a poll taken at a meeting of the company, if the member votes to use or cast all the member's votes in the same way.

71. Proxies

(1) A member entitled to attend and vote at a meeting of the company is entitled to appoint another person as a proxy.

(2) A member shall appoint a proxy in writing, in the prescribed form, in the case of-

(a) an individual member, under the hand of the appointing member or the appointing member's authorised agent; or

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