Companies Act, 1994

This section says the Act may be cited as the Companies Act.

This section defines key terms used in the Act.

A declaration made for the purposes of section 2(b)’s definition of certified copy is treated as a statutory declaration.

This Act applies to an existing company as if it had been incorporated under the Act.

Large non-body-corporate associations or partnerships with more than twenty persons must not carry on business for gain.

People can apply to incorporate a company by signing the application and paying the prescribed fee. Certain individuals must not sign, including minors, bankrupt persons, people of unsound mind, and recent fraud or dishonesty offenders.

A company may have articles, and those articles may regulate the company’s conduct and business restrictions. The articles may adopt Standard Articles regulations, and they must be divided into consecutively numbered paragraphs.

A company may amend its articles if it passes a special resolution, but it must lodge the resolution and affected articles with the Registrar within 21 days.

An incorporation application must include a statutory declaration of compliance made by the specified legal practitioner or the named first director/secretary, and the Registrar may accept it as prima facie evidence.

The Registrar must issue incorporation certificates, and if the company has share capital, also issue a certificate showing the share capital details.

An incorporated company comes into existence on the incorporation date stated in its certificate of incorporation, subject to the Act.

The Registrar must keep a register of companies and enter specified company records and lodged documents in it.

This section says a company incorporated under the Act must be either a public company or a private company.

Public companies must have share capital, their articles must state key share rights and director authority, and they generally cannot restrict share transfers except in listed cases.

Section 15 has been repealed.

Private company articles must cap membership at a specified number of no more than 50, and they cannot restrict share transfers after issue unless all shareholders agree in writing.

A private company’s articles must set out share-class rights and related director authority, and members may have to contribute unpaid share amounts if the company is wound up.

Section 18 was repealed.

Companies limited by guarantee must sign guarantee declarations, notify the Registrar of membership changes within 7 days, and must not run the business for profit.

Unlimited companies must have share capital, their articles must set out share rights and related director authority, all shares rank equally except by class or series, and members are liable to contribute without limitation if the company is wound up.

Incorporating a company has the same effect as a contract under seal between the company and its members.

A company has broad capacity and powers, but must follow this Act and its articles, and cannot act against restrictions in its articles.

A company’s acts, including transfers of property, are not invalid just because they conflict with the company’s articles or this Act.

People dealing with a company are not treated as knowing a document’s contents just because it was lodged with the Registrar or kept by the company for inspection.

If a company drops below two members and keeps trading for over six months, an aware member or director can become personally liable for later debts. A court may reduce or remove that liability in some cases. A member is also not bound by article changes that increase obligations unless they agree in writing.

Pre-incorporation contracts can bind the person who signs them, and a company can later adopt them within 15 months after incorporation.

A company must give a member copies of specified incorporation documents on request, after payment, within 7 days.

Section heading on converting a company from one type to another.

A private company limited by shares may convert to a company limited by guarantee if all stated conditions are met.

A private company limited by shares may convert into an unlimited company if all members agree in writing.

A company limited by guarantee may be converted into a company limited by shares or an unlimited company if all members agree in writing and each member agrees to take up a specified number of shares.

An unlimited company may be converted into a private company limited by shares or by guarantee if the members agree in writing and the required special resolution is passed; a guarantee conversion also needs each member’s declaration.

A public company may convert to a private company limited by shares if a special resolution approves the conversion and the articles are amended as required.

A private company limited by shares may convert into a public company if a special resolution approves the conversion and, when needed, amends the articles to meet section fourteen.

A company that meets the conversion requirements must file a conversion application with the Registrar within 21 days, and the Registrar must issue a replacement certificate and make register entries.

Public companies must end their names with “PLC”; certain private companies must end their names with “Limited”.

People who plan to form a company may reserve a company name by applying to the Registrar. If the name is acceptable and certain conditions are met, the Registrar must reserve it for three months, and the applicants may then incorporate under that name.

The Registrar may let a company limited by guarantee drop the word “Limited” from its name, subject to conditions and possible later revocation.

A company may change its name by special resolution, but it must notify the Registrar within 21 days and, if the new name is accepted, lodge the required documents within 21 days.

The Registrar may refuse a proposed company name and can require the company to change its name.

This section defines a company’s financial year and accounting dates, and lets a company change an accounting date if it gives notice and the change does not make the financial year longer than 15 months.

This section defines company, holding company, subsidiary, wholly owned subsidiary, related company, and when one company controls another’s board.

A company must file notice with the Registrar within one month after another body corporate becomes related to it.

This section says who counts as a member of a company, depending on the company type and timing.

A company generally cannot be a member of itself or its holding company, but there are limited exceptions; a subsidiary continuing under those exceptions has voting and share-acquisition limits.

A private company that does not follow its articles on the number of members commits an offence, and the company plus any defaulting officer or member can be fined up to 500 monetary units on conviction.

A company must keep a register of members and record the listed member details; if it has more than 50 members, the register must also include an index.

Company register records must be available for inspection by members or other persons, and the company may close the register temporarily with newspaper notice.

The court can order a company’s register to be corrected, and the company must file a certified copy of that order with the Registrar within 21 days.

A company with share capital may keep a branch register in a specified foreign country, but it must follow filing, recordkeeping, and inspection rules.

An instrument transferring a share in a branch register is treated as transferring property outside Zambia, and it is exempt from Zambia duty unless executed anywhere in Zambia.

Regulations may let sections 48 and 49 apply, with modifications, to certain foreign-incorporated bodies keeping a members’ register in Zambia. A company is not bound to enforce trusts over its shares, and trust notices need not be entered on the register or received by the company or Registrar.

The register of members is prima facie evidence of matters this Act requires or allows to be entered in it.

In this Part, "company" means a company with share capital unless the context otherwise requires.

Shares in a company are transferable in writing, and the company must not refuse registration of a fully paid share transfer just because of the form used if the stated conditions are met.

Issued shares in a company must be given distinguishing numbers, unless all the issued shares or all shares of a particular class are fully paid up.

Companies may issue redeemable shares, but only subject to the section’s conditions and notice requirement.

A company must transfer certain share redemption amounts into a capital redemption reserve, and it may use that reserve to pay up unissued bonus shares.

A company that issues shares at a premium must transfer the premium amount to a share premium account. The company may then use that account only for the listed purposes.

This section says when changing class rights counts as a variation and sets the consent, court, filing, and penalty rules for doing so.

A company that allots shares must lodge a return and related details with the Registrar within one month, and if a relevant contract is not in writing it must lodge the contract particulars instead.

A company may register a share transfer only if the required transfer instrument has been delivered or the share right has passed by law; if it refuses, it must notify the parties within two months.

A company can refuse a share transfer to a person under 18 or declared of unsound mind, and a private company’s articles cannot add transfer restrictions after shares are issued unless all shareholders agree in writing.

A company must issue a share certificate to the registered holder within two months after shares are allotted or transferred, and must renew a lost, destroyed, or defaced certificate on request subject to a fee and reasonable terms.

A shareholder who wants to transfer only part of shares represented by certificates may deliver the transfer instrument and the relevant certificates to the company and ask for endorsement.

A share certificate is prima facie evidence of who holds the shares and of the amounts paid and still payable on them.

A company may issue share warrants for fully paid-up shares, and the bearer gets the shares and can transfer them by delivering the warrant.

When a shareholder dies, the company must recognise the surviving joint holder(s) or the deceased’s legal personal representative as the shareholder, and the representative may register the share or transfer it. The company cannot refuse to register the representative himself, but may suspend dividends if the representative ignores a notice for three months.

A company must accept certain legal documents as sufficient evidence that a share has been transmitted by operation of law.

A company cannot claim a lien on shares with no unpaid liability, and any lien cannot reach other sums owed by the shareholder except unpaid liability on the shares.

A company may issue share rights or options to directors, officers, employees, or a subsidiary’s staff, but the terms, approvals, and payment rules in this section must be followed.

A company may alter its share capital by special resolution unless its articles say otherwise, and must lodge a prescribed notice and the authorising resolution with the Registrar within one month.

A company may, by special resolution, return accumulated profits to shareholders in reduction of paid up capital, and it must lodge a return with the Registrar within 21 days.

A company may reduce its share capital by special resolution if its articles allow it and the court confirms it.

A company that resolves to reduce share capital must apply to court within 21 days, and affected creditors may object.

The court may confirm a company’s reduction if creditor objections are dealt with, and it may impose extra conditions such as publication or adding “and reduced” to the company name.

The Registrar must issue a replacement share capital certificate when a court order confirming the reduction of a company’s share capital, together with the approved minute, is lodged.

If a company reduces share capital, members are generally not liable beyond the unpaid difference on the share, but some members may be made liable to contribute if a creditor was left off the creditors’ list and the company cannot pay the debt.

If a company is reducing share capital, a company officer must not conceal or misstate a creditor’s name or debt, and can be fined and personally liable to pay unpaid amounts.

4.4 – Restrictions on financial assistance

A company and its subsidiaries generally must not give financial assistance for buying the company’s shares or for paying off related acquisition liability, subject to listed exceptions.

Private companies may give financial assistance for share acquisitions only if the section’s conditions are met.

A company may pay dividends to shareholders only out of profits from the business.

Company shares listed on any stock exchange in Zambia are exempt from the Property Transfer Tax Act, 1984.

A company may borrow by issuing debentures, and debentures may be secured or unsecured.

A company must deliver debentures or a debenture stock certificate to the registered holder within two months after allotment or transfer registration.

A company must not indemnify or compensate a debenture trustee for certain trust-related liability. The court can remove and replace a trustee in some cases, and may require security for costs.

Some people cannot be appointed or act as trustee for debenture holders, and violating this rule is an offence punishable by a daily fine.

A company must give a debenture holder a copy of the trust deed on request, if the holder pays the required fee, within 7 days.

A company may issue an unsecured debenture, debenture stock certificate, or related prospectus only if the word used for the debenture is qualified by “unsecured”.

Companies that issue debentures must keep a debenture holders register and give holder details to a trustee on request within 7 days.

For debentures secured by a trust deed, sections 139 to 155 apply with necessary modifications, and registered debenture holders have votes in proportion to the value of their debentures unless the trust deed says otherwise.

Debenture terms may allow meetings and binding resolutions; the court can also order a meeting and give directions, and registered debenture holders normally vote in proportion to the value of debentures they hold.

A company must not re-issue a redeemed debenture, and must not issue a new debenture in its place on the same priority terms.

A charge securing an indeterminate or fluctuating amount is not treated as redeemed just because the current account is no longer in debit or nothing is owed.

Companies with charged property must keep a register of charges, record specified details when charges arise or property is acquired subject to a charge, and allow inspection on the stated terms.

The Registrar must keep a register of company charges and include a chronological index for each company.

Companies must register certain charges with the Registrar within 21 days, and late lodgement can make the charge void against liquidators and creditors and accelerate the debt.

If the required charge documents are lodged on time, the Registrar must issue a certificate of registration.

Registered charges take priority according to the time they were lodged, subject to consent and other written law exceptions.

If a prescribed statement is lodged and signed, the Registrar must record the fact in the register of charges.

If a registered charge is varied, particulars of the variation must be lodged with the Registrar within 21 days, unless the change is a satisfaction or release covered elsewhere.

A mortgagee who takes possession of a company’s property must file a notice with the Registrar within 7 days, and must file another notice within 14 days after giving up possession.

A company issuing certain debentures must endorse them with a statement that registration has been effected and the registration date.

The Division binds the State for charges the State is entitled to.

This Division applies to a company receiver appointed after commencement, even if the appointment came from an earlier transaction.

The court may appoint a receiver, or a receiver and manager, on the chargee’s application in specified charge enforcement cases.

People who appoint or become a receiver must file notices with the Registrar within set time limits, and the Registrar must publish notice in the Gazette.

Directors must prepare and submit a statement of the company’s affairs to the receiver within three months after a receiver is appointed, unless the court directs otherwise.

A person, company, or officer in default who contravenes section 109A commits an offence and may be fined, imprisoned, or both; a continuing failure can attract a daily fine.

If a receiver is appointed, or possession is taken, over property under a floating charge, preferential debts must be paid from the assets before claims for principal or interest on the debentures.

To act as a receiver, a person must apply for accreditation with the Registrar, and the Minister must prescribe qualifications and the accreditation process.

A receiver is entitled to a fee based on a percentage of the gross proceeds, subject to any statutory-instrument limit.

A court-appointed receiver must follow the court’s directions and instructions, and is treated as an officer of the court rather than an officer of the company for the relevant property or undertaking.

A receiver appointed outside court under an instrument must follow that instrument and any court directions; the court can also make orders and set or change the receiver’s remuneration on application.

A receiver is personally liable on contracts made as receiver unless the contract says otherwise.

If a receiver has been appointed for a company’s property or undertaking, invoices, orders, and business letters with the company name must state that a receiver has been appointed.

If a receiver is appointed over all or most of a company’s undertaking for debenture holders with a floating charge, the receiver must submit a statement of affairs and periodic accounts.

Receivers must file periodic abstracts of receipts and payments with the Registrar, and may be required to produce documents or information.

A receiver must report certain company-law breaches to the Registrar in writing as soon as practicable if the issue has not been, and is not likely to be, adequately dealt with by telling the company’s directors. The court may also order a receiver to submit a report to the Registrar.

A receiver’s office ends on death, disqualification, court removal, or removal from the register. The receiver may resign with one month’s written notice, and the charge holder must notify the Registrar within 14 days if the receiver stops acting or is removed. Violations are offences.

This section defines when an offer or invitation to acquire company shares or debentures counts as an “invitation to the public,” and excludes certain smaller or internal offers.

If a company allots or agrees to allot shares or debentures for public acquisition, the invitation and resulting acquisition are treated as made by or from the company; in some cases the law also presumes the allotment was made with that public invitation in view.

This section says the first publication date of a prospectus is normally treated as the registration date.

This section is titled “Invitations to the public and prospectuses.”

A person generally cannot invite the public to buy shares, debentures, or equity shares in a company unless the stated conditions are met or the court supervises the invitation.

A person may invite the public to buy shares or debentures only if a qualifying prospectus was registered within the prior six months, a true copy is given to each recipient when first invited, and each copy shows the registration details.

A prospectus cannot be lodged with the Registrar unless it is not misleading, includes required information, and satisfies either the Fourth Schedule report requirements or the existing-members/debenture-holders exception.

Experts must promptly tell the Registrar and prospectus issuers if they withdraw consent, and prospectus issuers must stop issuing the prospectus after notice.

The Registrar must not register a prospectus unless the lodged copy complies with this section.

A company cannot take in more debenture subscriptions than the prospectus allows unless the prospectus expressly reserves that right and sets a money limit.

If a prospectus says listing permission has been or will be sought, shares or debentures generally cannot be allotted unless the section’s conditions are met.

People listed in subsection (2) may have to pay compensation to investors for losses caused by untrue or misleading statements, material omissions, or missing required prospectus details.

A person who authorises publication of a prospectus, advertisement, or circular with an untrue statement or a required omission commits an offence.

If a registered prospectus appears false, misleading, materially noncompliant, or conceals a material fact, the Registrar may go to court and the court may order the prospectus withdrawn or cancelled, require repayments, or make other protective orders.

If the public is invited to buy shares or debentures, agreements made before the waiting period ends are not enforceable by the company or the promoters, except bona fide underwriting agreements.

For public offers of company shares or debentures, the application cannot be revoked for 7 days after the waiting period ends, unless a prospectus responsibility notice is given in time.

A company cannot allot public shares unless minimum subscription and application money conditions are met, and several repayment, liability, and timing rules apply.

A public company that does not issue a prospectus on formation must lodge a statement in lieu of a prospectus with the Registrar before it can allot shares or debentures.

A condition that makes a person waive compliance with this Part, or treats them as having notice of an unstated document or matter, is void.

In this Part, “meeting” includes an annual general meeting, an extraordinary general meeting, and a class meeting, unless the context requires otherwise.

A company must hold an annual general meeting within three months after each financial year ends.

An extraordinary general meeting may be convened under this Act, by directors whenever they think fit, or by another person if the articles allow.

Section 140 says class meetings may be convened by directors, or by at least two members of the class who hold at least one-twentieth of the class voting rights, unless the articles say otherwise.

Members with enough voting rights may requisition a general meeting, and directors must convene it.

Certain people are entitled to receive notice of a company meeting.

A company must give written notice of a meeting within the stated minimum and maximum periods.

If a company meeting cannot be convened or conducted in compliance with the Act and the articles, the court may order how the meeting is held.

A company meeting must be held in Zambia unless the articles say otherwise or all voting members agree in writing to hold it outside Zambia.

Some people are entitled to attend and speak at a company meeting.

This section sets voting rights, quorum, and meeting powers for company meetings.

The chairman’s statement that a motion or resolution passed by a specified majority is conclusive evidence of that result, unless the company’s articles say otherwise or a poll was demanded.

At a company meeting, a poll may be demanded on most questions by qualifying members, subject to member-count and voting-rights thresholds.

At a poll, a member with more than one vote does not have to use all votes or use them all the same way.

This section lets eligible company members appoint proxies to attend and vote for them, and it sets rules for proxy forms, meeting notices, proxy invitations, and timing.

A company member that is a body corporate or unincorporated association may appoint a person to represent it at company meetings.

A qualifying member may require the company to circulate a resolution notice and a statement of up to 500 words, and the company must do so at its expense.

A company must circulate a member’s statement about meeting business if a qualifying member requests it in writing.

A company can avoid circulating a resolution or statement if the court is satisfied the rights are being abused to spread defamatory material. The court may also order the company’s costs to be paid by the requesting member, and a company is not liable just for complying with the related sections.

This section defines when a company resolution is ordinary, extraordinary, or special based on the voting threshold used at a duly convened and held meeting.

Private company members may pass a written resolution without a meeting, but it must be signed as required and does not apply to removing an auditor or director.

Companies must lodge certified copies of special resolutions with the Registrar within 15 days, and issued copies of the articles must include special resolutions then in force.

A resolution passed on a poll is treated as passed on the day the poll result is declared; for an adjourned meeting, the resolution is treated as passed on the date of that adjourned meeting.

A company must keep minutes of meetings of the company, its directors and committees, and its debenture holders or other creditors, in books kept for that purpose.

The company must keep certain minute books at its registered records office, and specified people may inspect them.

A company must keep proper accounting records, retain them for 10 years, and make them available for inspection in the ways and times described here.

Directors of a holding company must take whatever steps are needed to make each subsidiary’s financial year match the holding company’s financial year, unless they lodge a statutory declaration with the Registrar showing unreasonable expense or difficulty and no disadvantage to members.

Directors must prepare annual accounts after each financial year, ensure they are audited on time, attach the auditors' report, and provide additional information or statements where needed.

A holding company had to prepare group accounts for its annual accounts, unless it was a wholly-owned subsidiary of a Zambia-incorporated body corporate; in some cases, a subsidiary could be omitted with director declarations lodged and the Registrar’s written approval.

Directors of a subsidiary must give required information to the holding company’s directors on request, and holding company directors must use reasonable steps to get the information they need for group accounts.

A company’s annual accounts must disclose amounts paid to or receivable by directors for emoluments, pensions, and compensation for loss of office.

A company’s annual accounts must disclose relevant loans to officers, including repaid loans and loans still outstanding at year-end.

Directors or officers (including former ones within the last five years) must give the company requested information needed for sections 167 and 168.

Balance sheets and certain copies must be signed by the required directors, and banking companies have a special signature rule.

Companies must appoint and keep an auditor, file notice changes with the Registrar, and may face an offence and daily fine for non-compliance.

Companies may appoint certain auditors, but disqualified individuals or firms must not consent or act as auditors.

Auditors must prepare and deliver an auditors' report, state specified opinions about the accounts and records, and report certain issues to the Registrar.

This section says references to annexed documents in annual accounts do not include the directors' report or auditors' report, except as this section allows.

This section defines “subsidiary” for this Division: it only covers subsidiaries the holding company must include in its group accounts.

Directors must prepare a directors' report with the annual accounts, and the report must cover specified changes and financial recommendations.

Directors’ reports must include specified information about the company, its subsidiaries, share/debenture issues, important events, future developments, research and development, and certain health and safety arrangements.

If a company runs two or more substantially different kinds of business in a financial year, the directors’ report must explain how turnover is split between them and how each class affected profit or loss before tax.

A company’s directors’ report must state average monthly employee numbers and total remuneration for the financial year, with extra reporting for subsidiaries, unless the company is a wholly owned subsidiary of a Zambia-incorporated company.

If a company gives or donates more than 50 monetary units in a financial year, the yearly directors’ report must state the total value.

Some companies must include export details in the directors' report for the financial year, unless turnover is 500 monetary units or less.

This section concerns provision of accounts and reports to members.

Companies must send annual accounts, auditors’ reports, and directors’ reports to certain recipients on time, and they may have to provide copies free of charge on request.

At a company’s annual general meeting, the annual accounts, auditors’ report, and directors’ report for the previous financial year must be presented, kept open for attendees during the meeting, and read if a member asks.

A company must file an annual return with the Registrar after each financial year, and the return must be signed by a director and the company secretary.

A public company must make its annual return in the prescribed form and include the matters listed in the Third Schedule.

A public company must lodge specified certified financial and report documents with its annual return.

A private company must make an annual return that states specified company details and includes a statement about its mortgage and charge indebtedness.

A private company must file certain certificates with its annual return, and the certificates must be signed by a director and the company secretary.

A company whose status has not changed must file a "no change" return, using the prescribed form and paying the prescribed fee.

If a company is in receivership or being wound up under Part XIII, the receiver or liquidator must file an annual return until the winding up is finished.

If a company fails to lodge an annual return or other required documents, or lodges non-compliant documents, the company and each officer in default commits an offence and may be fined up to 10,000 penalty units on conviction.

The Registrar may strike a non-complying company off the register or disqualify its officer for five years, and must give notices before doing so.

A company’s registered office and registered postal address are set by the addresses stated in its incorporation application, and the company may later change either address by filing a prescribed notice with the Registrar.

This section says a company’s registered records office is the place named in a lodged, unrevoked notice to the Registrar, or otherwise the company’s registered office.

Companies may keep required records in bound, loose-leaf, mechanical, electronic, or other form, but must protect them and make electronically stored information available in English for lawful inspection.