Companies Act

A transferee company may compulsorily buy minority shares after a qualifying takeover offer if the stated conditions and acceptance thresholds are met.

If a takeover results in the transferee company holding at least three-fourths of the shares, it must notify the remaining shareholders within one month, and those shareholders may require the company to buy their shares within three months of notice.

A company member may ask the court for relief if the company’s affairs are being run oppressively or unfairly, and the court may make orders to fix the problem.

A company may be wound up either by the court or voluntarily.

If a company is wound up, every member must contribute to the company’s assets, subject to limits for companies limited by shares or guarantee.

The Act’s winding-up rules do not apply to companies already in winding-up before this Act started, and those wind-ups continue as if the Act had never been passed.

Past members may have to contribute to a company’s assets when it is being wound up, but only within the limits and exceptions set out here.

A member’s liability becomes a debt, due when the liability starts, and payable when calls are made to enforce it.

If a member dies, the member’s personal representatives become liable for the company-related liability in due course of administration.

If a member becomes bankrupt, the trustee in bankruptcy represents the member in the winding-up and is liable to contribute accordingly.

Sections 212 to 243 apply when a company is wound up by the court.

A company may be wound up by court order on petition by specified persons, but a member of a company limited by shares must meet share-holding conditions, and the court has limits before hearing or making orders in voluntary winding-up cases.

A court may wind up a company in several circumstances, including shareholder resolution, insolvency, inactivity, reduced membership, expired duration, or if winding up is just and equitable.

This section sets when a company’s winding-up is treated as having started.

The petitioner for a winding-up order must continue the winding-up proceedings at their own cost until a liquidator is appointed, and the liquidator must reimburse taxed costs unless the court orders otherwise.

The court has broad powers when hearing a winding-up petition, including dismissing it, adjourning it, making interim orders, and giving procedural directions.

After a winding-up petition is presented and before a winding-up order is made, the company, a creditor, or a member may ask the court to stay or restrain proceedings against the company.

After winding-up by the court starts, dispositions of company property, transfers of shares, and changes in member status are void unless the court orders otherwise.

Attachments, sequestration, distress, or execution against a company’s estate or effects after a court winding-up begins are void.

The petitioner must send copies of a winding-up order to specified people within 7 days, and the registrar must publish notice in the Gazette within 14 days after receiving the order copy.

The court may appoint a provisional liquidator after a winding-up petition is presented and before a winding-up order is made.

After a winding-up order is made or a provisional liquidator is appointed, actions or proceedings against the company cannot continue or start unless the court gives leave.

This section sets the rules for who acts as liquidator after a winding-up order, and gives the court powers to appoint, replace, remove, and direct liquidators.

A court-appointed liquidator who is not the official receiver must first notify the registrar and provide required security before acting, and must help the official receiver with information, access, and inspection of company records.

The official receiver oversees a non-official liquidator in a court winding-up and may investigate, question, and direct inquiries into the liquidator’s conduct and records.

Liquidators and provisional liquidators (except the official receiver in some cases) are entitled to remuneration, with the amount set by the court, agreement, creditors’ resolution, or prescribed rules depending on the case.

When a winding-up order is made or a provisional liquidator is appointed, the liquidator or provisional liquidator must take the company’s property into custody or control. The court may order property to vest in the liquidator, and the liquidator must file and register copies of that order within 14 days. Failure to comply attracts a daily fine of ten Kwacha.

A company’s statement of affairs must be prepared and submitted to the liquidator, then verified and filed/delivered within set time limits.

The liquidator must promptly submit a preliminary report to the court after receiving the statement of affairs.

A liquidator has broad powers to manage, dispose of, compromise, litigate, and otherwise deal with company assets and claims while winding up the company, subject in some cases to court or committee authority and court control.

The liquidator must follow creditor or member directions in winding up, can call meetings, may ask the court for directions, and must use personal discretion subject to the Act.

A liquidator may apply to the court to be released, or to be released and have the company dissolved, once the stated winding-up steps are completed or if the liquidator has resigned or been removed.

After an application under section 232, the court can deal with a liquidator’s release, and if a company is ordered dissolved the liquidator must file the order and the registrar must remove the company from the register.

The liquidator may call separate meetings of creditors and members to decide whether a committee of inspection should be appointed; if a creditor or member asks, the liquidator must do so.

This section sets rules for how the committee of inspection is appointed, meets, acts, loses members, and fills vacancies.

The court may stay a winding-up on application by the liquidator, creditor, or member, and may require a report from the liquidator before deciding. The company must deliver a copy of any stay order to the registrar and the official receiver within 21 days, or it and any defaulting officer may be fined 10 Kwacha per day.

The liquidator may apply to the court for a special manager, and the court may appoint one and set the manager’s powers, timing, security, and pay.

The court may set a deadline for creditors to prove claims, must adjust members’ rights and distribute any surplus to entitled persons, and may decide how winding-up costs are paid if assets are insufficient.

After a winding-up order, the court may allow creditors and members to inspect a company’s books and papers, but this does not apply to companies registered under the Banking Act, 1989.

The court may summon company officers and other connected persons, examine them on oath, require company-related documents, and order attendance before the Registrar. A person who does not attend without a lawful excuse after receiving expenses may be apprehended and brought before the court.

A court may order certain people connected to a company to attend and be publicly examined after a liquidator’s report of fraud, concealment, or officer misconduct.

The court may order the arrest of a member, officer, former member, or former officer and seize their books, papers, and movable personal property if there is probable cause to think they are trying to leave Malawi or hide assets to avoid paying the company or being examined.

Court powers under this Act are additional and do not replace other powers to sue a member or debtor for recovery of a debt or other sum.

Sections 245 to 248 apply to every voluntary winding-up.

A company may be voluntarily wound up if its term or dissolution event occurs and the company passes an ordinary resolution, or if it passes a special resolution.

A voluntary winding-up starts when the resolution for voluntary winding-up is passed.

During voluntary winding-up, the company must stop carrying on business, except where the liquidator considers business is needed for the beneficial winding-up. Share transfers and changes in members’ status after the winding-up starts are void unless made to or with the liquidator’s sanction.

Directors may make a written declaration of solvency before notice of a voluntary winding up meeting, but only if the declaration is properly made and delivered; a director who makes it without reasonable grounds can be fined and imprisoned.

This section says sections 250 to 252 apply to every members’ voluntary winding-up.

The company in general meeting must appoint liquidator(s) for winding up, and may set their pay.

If a liquidator thinks the company cannot pay its debts in full, the liquidator must call a creditors’ meeting and present the company’s assets and liabilities.

A company in voluntary winding-up may ask the court to stay the winding-up, and if the court confirms the resolution the company must give notices, publish them, and register the order.

Sections 254 to 258 apply to every creditors’ voluntary winding-up.

The company must convene and notify creditors’ meetings for a proposed voluntary winding-up, provide creditor and claim details, publish notice, and have company officers attend and disclose the company’s affairs.

The company and creditors may nominate a liquidator at their meetings, with creditor-nominated candidates taking priority in some cases.

Creditors may appoint a committee of inspection, and the company may also appoint members to it, subject to a five-person limit.

The committee of inspection, or if there is none the creditors, may set the liquidator’s remuneration. When a liquidator is appointed, the board of directors’ powers pass to the liquidator and the directors’ powers end unless their continuation is sanctioned.

After a creditors’ voluntary winding-up begins, enforcement steps against the company’s property are void, and no action or proceeding may continue or start against the company without court leave.

Sections 260 to 269 apply to every voluntary winding-up.

When a company is wound up, its property is applied to pay its liabilities first, pari passu, subject to preferential payments and any different rule in the memorandum or articles.

The court may appoint or replace a liquidator, and members, creditors, or the liquidator may ask the court to review the liquidator’s remuneration before the company is dissolved.

A liquidator may exercise certain powers, and may summon company meetings, subject to the approvals stated for different kinds of voluntary winding-up.

A liquidator may, with special-resolution approval, take shares or similar interests instead of cash when selling a company’s business or property, and members who dissent in writing within 28 days may require the liquidator to stop or buy their shares.

If a winding-up lasts more than one year, the liquidator must call annual meetings and present an account of the liquidation; failure costs ten Kwacha per day.

After winding up, the liquidator must prepare an account, call and notify the required meetings, and file returns; the registrar then strikes the company off and the company is dissolved.

An arrangement made with creditors while a company is being wound up can bind the company and the creditors if the stated approval thresholds are met, and affected creditors or members may appeal within 21 days.

The liquidator, a company member, or a creditor may apply to court about questions or powers in a winding-up, and the court may grant the request if it is just and beneficial.

Proper winding-up costs, charges, expenses, and the liquidator’s remuneration are paid from the company’s assets before other claims.

If a petition has been filed to wind up a company because it cannot pay its debts, the company may not resolve to wind up voluntarily unless the court allows it.

Sections 271 to 301 apply to every mode of winding-up.

Most listed persons cannot be appointed or act as a company liquidator; an auditor may be appointed, and breach can void the appointment and trigger imprisonment and a fine.

A liquidator’s acts remain valid even if a defect in appointment or qualification is later found.

Liquidators must keep proper books, and creditors or members may inspect them subject to the court and section 129.

If there is no committee of inspection, the official receiver may exercise committee powers in the stated liquidation situations.

A person aggrieved by a liquidator’s act or decision may apply to the court.

A liquidator must notify the registrar and the official receiver of appointment details, office address changes, and resignation or removal within the stated time limits.

Liquidators must file accounts and statements on a six-monthly basis, keep copies available for inspection, notify members and creditors, and may face a daily fine for non-compliance.

When a company is being wound up, its invoices, orders for goods, and business letters must show the words "in liquidation" after the company name.

When a company is wound up, the liquidator must keep the relevant books and papers for seven years after dissolution, and may then destroy them.

The official receiver must keep a Companies Liquidation Account and pay relevant money into it. Other liquidators must pay received money into the bank account specified by the court or the official receiver, and may face interest and other penalties if they hold or pay funds incorrectly.

A liquidator may invest surplus cash from a company in liquidation, unless the court directs otherwise.

Liquidators must pay certain unclaimed company money to the official receiver; claimants may be paid if they prove ownership, and some disputes can be appealed to court.

A liquidator must not incur winding-up expenses unless there are sufficient available assets or the official receiver directs otherwise. The official receiver may direct a particular expense on application by a creditor or member, but the creditor or member must indemnify the liquidator and may have to provide security.

A resolution passed at an adjourned meeting is treated as passed on the actual date it was passed, not any earlier date, subject to section 254.

The court may call and manage meetings of members or creditors to find out their wishes in a winding up.

In a winding up, debts and claims may be proved against the company, including contingent or damages-based claims, with their value estimated as far as possible.

This section ranks certain debts and payments in a company winding-up ahead of other unsecured debts, including some wages, taxes, Government rents, and rates, with special rules and exceptions.

Certain company transactions can be void or voidable when the company is wound up, if they would be void or voidable in an individual bankruptcy.

A floating charge created within 12 months before winding-up may be invalid unless the company was solvent immediately after the charge was created.

A liquidator may recover an amount from certain director-related buyers or sellers when a company acquired or sold property, business, or undertaking within two years before winding-up.

A liquidator may disclaim onerous company property only with leave of the court or committee of inspection and within the stated time limits.

A creditor generally cannot keep the benefit of execution or attachment against a liquidator once the company is wound up, unless the execution or attachment was completed in time.

If company goods are seized in execution and a winding-up notice is served, the sheriff must deliver or later pay the goods or balance to the liquidator, subject to costs and a court override.

Officers or members of a company being wound up commit offences if they hide, withhold, alter, falsely state, or fraudulently deal with company property, records, debts, or creditor-consent matters; a person who knowingly receives such property in pawn or pledge also commits an offence.

A person must not give, agree to give, or offer valuable consideration to a company member or creditor to influence who is appointed liquidator.

Officers or members of a company being wound up must not destroy, alter, falsify, or make false entries in the company’s records with intent to defraud or deceive.

If a company is wound up and proper books of account were not kept, any officer in default may be liable to one year’s imprisonment and a fine of two thousand Kwacha, unless the officer acted honestly and the default was excusable.

An officer of a company may be fined and imprisoned if, during winding-up or proceedings against the company, they knowingly helped contract a debt without reasonable grounds to expect the company could pay it.

During winding-up, the court may investigate delinquent company officers and related persons and order repayment, restoration, or compensation if company money or property was misused or if there was misfeasance or breach of duty.

In winding-up cases, the liquidator or court must refer suspected company-related offences to the Attorney General, and the liquidator and company officers/agents must assist any prosecution.

Company officers who fraudulently deal with company property during winding-up may be fined and imprisoned.

The court may declare a company’s dissolution void within two years, and the applicant must file the order copy and publish notice within seven days unless the court allows more time.

The registrar may strike a defunct company off the register after notice, and the company is dissolved when the Gazette notice is published.

After a company is dissolved, the registrar may carry out certain purely administrative, non-discretionary acts on the company’s behalf, and may execute or sign relevant documents.

Some bodies corporate with assets in Malawi may be wound up under this Act, but certain bodies corporate are excluded.

This section says Part applies to all external companies and defines what counts as an external company and an established place of business.

An external company that opens a place of business in Malawi must file specified documents with the registrar within 28 days.

A company must file notice with the registrar when certain registered particulars change, and sometimes include signed consent forms for local director roles.

External companies have the same power to hold land in Malawi as companies incorporated under the Act.

An external company may not appoint someone as a local director unless that person is qualified to be a director under section 142.

This section says how a writ or document may be validly served on an external company, including by delivery or post to the registered documentary agent or, in some cases, to the company’s business or home office address.

External companies must file annual accounts and related statements with the registrar, usually no more than 15 months apart.

External companies covered by section 312 must keep proper accounting records for their Malawi operations, in an acceptable language, at the proper place in Malawi, and keep them open to inspection; defaults can lead to fines, imprisonment, winding up, or exemption by the registrar.

External companies must appoint 3 to 9 local directors in Malawi before filing registration documents, keep a majority of local directors resident in Malawi, and list directors’ names in specified correspondence. The Minister can exempt companies in some cases.

If the Minister thinks a company’s name is misleading or undesirable, the Minister may direct it to change its registered name or register under another name, and the company must comply within six weeks unless a longer period is allowed.

Every external company in Malawi must display its name and country of incorporation at each place of business, and state them on business correspondence, in legible Roman characters, with limited-liability wording if applicable.

Sections 86 to 95 apply, with necessary changes, to certain charges on property in Malawi held by an external company.

If an external company is wound up, dissolved, or has ceased to exist, its local directors and documentary agent must notify the registrar within 28 days; local directors must also add a winding-up statement to later invoices, orders, and business letters issued in Malawi. Anyone carrying on the company’s business in Malawi after dissolution faces a fine and possible imprisonment.

An external company can be wound up under this Act, but only on a petition to the court, and the court may order winding-up in specified cases.

If an external company stops having an established place of business in Malawi, it must notify the registrar within 28 days, and the registrar must then strike the company off the Register of External Companies.

An external company, or its local director or documentary agent, can be fined for default, and an external company in default on registration documents may be unable to enforce related Malawi contracts while the default continues.

Public invitations in Malawi for external company shares, debentures, or deposits trigger prospectus rules, unless the registrar waives or modifies them.

A person making a public invitation in Malawi about a non-Malawian company’s shares, debentures, or deposits must follow the prospectus rules and include specific company details in related documents.

This section sets up a Registrar of Companies, allows Deputy and Assistant Registrars, lets them act for the registrar, and requires the registrar to have an official seal.

Documents that must be registered must be filed in the prescribed way, or as directed by the Minister, and the registration fee must be paid before filing is treated as delivered.

Late registration can still be accepted, and the registrar can extend time or reduce a fee in some cases.

Documents that must be prepared, kept, or registered under the Act must be in English or another language acceptable to the registrar, unless another section says otherwise.

Documents required to be in a prescribed form must follow the form set by Minister-made regulations, but the registrar can allow and accept a substantially appropriate alternative form.

Any person may inspect registered company documents and request certified certificates or copies from the registrar, but fees may be prescribed.

Documents that appear to be issued by the registrar or the Minister are admissible as evidence without further proof of validity unless contrary evidence is shown.

If a body corporate or its officer, receiver, or liquidator stays in default after notice, the court may order compliance and may make the body corporate or responsible officer/liquidator pay costs.

The registrar may ask the court for directions about matters arising from his functions under the Act, and the court may give directions or make any order it thinks fit.

Fees prescribed by regulations must be paid to the registrar for the registrar’s functions and for inspecting documents; the Minister may remit all or part of an additional late fee.

Registered documents are generally exempt from stamp duty in addition to the registration fee, but a document may still be liable for stamp duty when only its copy or particulars must be registered.

A person who knowingly makes a false statement in a required return or similar document can be fined or imprisoned.

A person trading or doing business in Malawi must not use a name with “incorporated,” “corporation,” or similar wording, or use “limited” as the last word, unless properly incorporated; otherwise a daily fine applies.

If a company was run to defraud creditors or for another fraudulent purpose during winding-up, the court can make people knowingly involved personally liable, and it can also order imprisonment and a fine.

This section says an officer or other person counts as being “in default” if they knowingly and wilfully authorize or permit the relevant default, refusal, or contravention.

If a limited-liability body corporate sues, the court may require security for the defendant’s costs and may pause the case until that security is provided.

People who are jointly liable under this Act have a right to contribution from each other, and the court can decide the terms.

The court may relieve certain company officers and related persons from liability, in whole or in part, if they acted honestly and reasonably and should fairly be excused.

Partnerships, companies, or associations with more than fifty persons generally cannot be formed in Malawi for gain-making business unless they are incorporated under this Act or another written law.

A person is not treated as having notice or knowledge of a company document just because it was registered or is available for inspection.

This Act does not override any special legislation that applies to companies carrying on banking, insurance, or other businesses covered by special legislation.

The Minister may make regulations by notice published in the Gazette to carry this Act into effect and to deal with listed related matters.

The Chief Justice may make court rules for company winding-up and related court applications, and may allow the registrar, official receiver, or liquidator to carry out court powers and duties under court control.

The Minister may, by Gazette order, make the Act apply to certain Malawi bodies corporate and may also exempt named bodies corporate from those provisions.

This section says the Act applies to existing companies as if they were incorporated under it, unless the Act specifically provides otherwise.