Companies Act, 1994
Part 2 of 3 · provisions 201–400
This section says the Act may be cited as the Companies Act.
- Jurisdiction
- Zambia
- Instrument
- Act or statute
- Citation
- Act 26 of 1994
- Version
- 15 Jul 2011
- Language
- en
- Official source
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access to company records account balances accounting accounting changes accounting date accounting dates accounting records accounts accounts reporting accreditation acquired businesses adjournment administration of legislation agency governance alternate directors amalgamation annual accounts annual general meeting annual meetings annual return annual return filing annual returns annual/company returns appeals +703 more
Statute overview
About this statute
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.
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Provisions of Companies Act, 1994
Showing 200 of 594
Part
Part IX – Management and administration
- 193 Verify source ↗
Inspection by members and others ........................................................................................................................................... 89
Companies must let required records be inspected during business hours and provide copies on request, with limits on charges and inspection hours.
193. Inspection by members and others (1) Subject to this Act, where this Act requires any record, register or book kept by a company to be made available for inspection by a person, the record, register or book shall, during business hours, be open to inspection by the person at the company's registered records office. (2) Where an inspection is made under subsection (1)— (a) by a member, director, or auditor of the company, or by the Registrar or his delegate, no charge may be made by the company; and (b) by any other person, the company may make a charge not exceeding one monetary units, or such larger amount as may be prescribed, for each inspection. (3) The company may by ordinary resolution restrict the hours during which a record, book or register shall be available for inspection provided that it is available for inspection during not less than two hours in any working day. (4) Any person who is entitled to inspect any such record, register or book may require a copy of the whole or any part thereof on payment of a charge not exceeding one monetary unit, or such larger amount as may be prescribed, for every hundred words or part thereof required to be copied. (5) The company shall cause any copy so required by any person to be sent to that person not more than ten days after the day on which the requirement is received by the company. (6) If the company fails to comply with this section— (a) the court, on the application of a person aggrieved, may order— (i) that the company comply immediately; and (ii) that the company, and any officer in default, shall be liable to pay all costs of and incidental to the application for the order; whether or not any person has been convicted under paragraph (b); and (b) the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 89 Companies Act, 1994 (Chapter 388) - 194 Verify source ↗
Publication of name of company ............................................................................................................................................... 90
A company must display its name at specified places and show its name and number correctly on business documents and negotiable instruments.
194. Publication of name of company (1) A company shall— Zambia Repealed (a) paint or affix, and keep painted or affixed, its name, in easily legible Roman letters above or adjacent to the principal entrance to its registered office, its registered records office and to every other office or place in which its business is carried on; and (b) have its— (i) name in Roman letters; and (ii) designating number in Arabic numerals; (2) (3) accurately stated in all business letters, invoices, receipts, notices and other publications of the company, and in all negotiable instruments or orders for money, goods or services purporting to be signed or endorsed by or on behalf of the company. If a company fails to comply with subsection (1), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. If any officer of the company or other person signs, endorses or authorises the signing or endorsement on behalf of the company of any negotiable instrument or order for money, goods or services that does not comply with paragraph (b) of subsection (1), the person shall be personally liable to discharge the obligation thereby incurred unless it is duly discharged by the company or otherwise, but without prejudice to any right of indemnity which the person may have against the company or any other person. - 195 Verify source ↗
Seal of company ............................................................................................................................................................................... 90
A company must have a common seal with its name and the words “common seal” in legible Roman letters, and it must not use the seal unless authorised by a directors’ resolution or a specifically empowered directors’ committee.
195. Seal of company (1) A company shall have a common seal bearing its name and the words "common seal" thereon in legible Roman letters. (2) The common seal shall not be used except with the authority of a resolution of the directors of a committee of the directors specifically empowered to authorise the affixing of the seal. - 196 Verify source ↗
Official seal for use abroad .......................................................................................................................................................... 90
A company may use an official seal outside Zambia if allowed by its articles, may authorise an agent to affix it, and the person affixing the seal must certify the date and place.
196. Official seal for use abroad (1) A company may, subject to its articles, have for use in any place outside Zambia an official seal, which shall be a facsimile of the common seal of the company with the addition on its face of the name of the places where it is to be used. (2) Every document to which an official seal is duly affixed shall bind the company as if it had been sealed with the common seal of the company. (3) The company may, by writing under its common seal, authorise any agent appointed for that purpose to affix the official seal to any document to which the company is a party in that place. (4) Any person dealing with such an agent in reliance on the writing conferring the authority shall be entitled to assume that the authority of the agent continues during the period, if any, specified in the writing or, if no period is therein specified, until that person has actual notice of the revocation or determination of the authority. (5) The person affixing any such official seal shall, by writing under his hand, certify on the document to which the seal is affixed the date on which and the place at which it is affixed. - 197 Verify source ↗
Form of contracts and instruments ............................................................................................................................................ 90
A company may execute certain contracts or instruments without a seal, through its secretary, a director, or another director-authorised person.
197. Form of contracts and instruments (1) Any contract or instrument which, if entered into by a person other than a body corporate, would not be required to be under seal may be entered into or executed without seal on behalf of a By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 90 Companies Act, 1994 (Chapter 388) Zambia Repealed company by the secretary, a director, or any person generally or specifically authorised by the directors to do so. (2) Any document purporting to be a document under the seal of a company, or issued on behalf of the company, shall be received in evidence and shall be presumed to be duly executed or issued. - 198 Verify source ↗
Bills of exchange and promissory notes .................................................................................................................................. 91
A bill of exchange or promissory note is treated as made, accepted, or endorsed on behalf of a company when it is done in the company’s name or on its behalf by a person acting under the company’s express or implied authority.
198. Bills of exchange and promissory notes A bill of exchange or promissory note shall be deemed to have been made, accepted or endorsed on behalf of a company if made, accepted or endorsed in the name of, or by or on behalf or on account of, the company by any person acting under its authority, express or implied. - 199 Verify source ↗
Execution of deeds abroad ........................................................................................................................................................... 91
A company may authorize a person, by writing under its common seal, to sign deeds on its behalf outside Zambia.
199. Execution of deeds abroad (1) A company may, by writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf in any place outside Zambia. (2) A deed signed by such an attorney on behalf of the company and under his seal shall bind the company and have the same effect as if is were under its common seal of the company. - 200 Verify source ↗
Service of documents on company ............................................................................................................................................ 91
A document may be served on a company by leaving it at the company’s registered office or by personal service on a director or secretary.
200. Service of documents on company (1) A document may be served on a company by— (a) leaving it at the registered office of the company; or (b) personal service on a director or secretary. (2) A document sent by post to the registered postal address of the company shall be deemed to have been served on the company if it is proved, by a receipt issued or otherwise, that the document, or a post office notification of the document, was delivered to the registered postal address. (3) Nothing in the section shall affect any provision in this Act relating to the service of any document, or detract from the power of any court to direct how service shall be effected of any document relating to legal proceedings before the court. - 201 Verify source ↗
Service of documents by company ............................................................................................................................................ 91
A company may serve documents on certain members and related persons, using personal delivery, registered post, or leaving the document with an adult at the address.
201. 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 him at his registered postal address or at any other address supplied by him to the company for the giving of notices to him; or (c) by leaving it for him at his registered address with some person apparently over the age of eighteen years. (2) A document may be served by a company on the joint holders of any share of debenture of the company by serving it on the joint holder named first in the register of members of debenture holders in respect of the share of debenture. (3) A document may be served by a company on the person upon whom the ownership of any share or debenture has devolved by reason of his being a legal personal representative, receiver, or trustee in bankruptcy of a member of debenture holder— (a) personally; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 91 Companies Act, 1994 (Chapter 388) Zambia Repealed (b) by sending it by registered post in a prepaid letter addressed to him at a postal address notified by him to the company; (c) by serving 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; or (d) by leaving it for him at a place the address of which has been notified by him to the company, with some person apparently over the age of eighteen years. (4) Where a document is sent by registered post, service shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the document and to have been effected at the expiration of seven days or, if it is sent to an address outside Zambia, twenty-one days, after the letter containing the same is posted. (5) For the purposes of subsection (4), where a letter is sent to an address outside Zambia, it shall be despatched by airmail. - 202 Verify source ↗
Liability of company not affected by officer's fraud or forgery ....................................................................................... 92
A company remains liable for an officer’s or agent’s acts even if the officer or agent acted fraudulently or forged a document.
202. Liability of company not affected by officer's fraud or forgery Where a company would be liable for the acts of any officer or agent, the company shall be liable notwithstanding that the officer or agent has acted fraudulently or forged a document purporting to be sealed by or signed on behalf of the company. Part X – Directors and secretary
Part
Part X – Directors and secretary
- 203 Verify source ↗
The directors of a company ................................................................................................................................................... 92
This section defines who counts as a company director and sets rules for collective action and signing. It also makes it an offence for an unappointed person or a company to hold someone out as a director in certain cases, with a fine of up to 500 monetary units on conviction.
203. The directors of a company (1) For the purposes of this Act, any person who is appointed by the members of a company to direct and administer the business of the company shall be deemed to be a director of the company, whether or not he is called a director. (2) In this Act, unless the context otherwise requires— (a) a reference to "the directors" is a reference to the directors acting collectively; (b) where a decision of the directors is required for them so to act, the decision shall be made by resolution of the directors; (c) a requirement that a document be signed by the directors shall be read as a requirement that a majority of the directors sign the document. (3) A person, not being a duly appointed director of the company, who holds himself out, or knowingly allows himself to be held out, as a director of the company— (a) (b) shall be deemed to be a director for the purposes of all duties and liabilities (including liabilities for criminal penalties) imposed on directors by this Act; and shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. (4) A person, not being a duly appointed director of a company, on whose directions or instructions the duly appointed directors are accustomed to act shall be deemed to be a director for the purposes of all duties and liabilities (including liabilities for criminal penalties) imposed on directors by this Act. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 92 Companies Act, 1994 (Chapter 388) Zambia Repealed (5) If a company— (a) holds out a person; or (b) allows a person to hold himself out; as a director of the company, knowing that the person is not a duly appointed director, the company shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. (6) No limitation upon the authority of a director of a company, whether imposed by the articles or otherwise, shall be effective against a person who does not have knowledge of the limitation unless, taking into account his relationship with the company, he ought to have had such knowledge. (7) For the purposes of this section, a person shall not be considered to be a person in accordance with whose directions or instructions the directors of a company are accustomed to act, by reason only that the directors of the company act on advice given by him in a professional capacity. - 204 Verify source ↗
Company to have at least two directors ........................................................................................................................... 93
A company must have at least two directors.
204. Company to have at least two directors (1) A company shall have at least two directors. (2) If a company carries on business for a period of more than two months with fewer than two directors, the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day after that period of two months that the company carries on business. - 205 Verify source ↗
The secretary ............................................................................................................................................................................... 93
A company must have a secretary, and the secretary must meet the residency or incorporation requirement in Zambia.
205. The secretary (1) A company shall have a secretary. (2) The persons named in the application for incorporation as the first secretary or joint secretaries of a company shall, on the incorporation of the company, be deemed to have been appointed as such for a term of one year. (3) Unless the articles provide otherwise, the secretary, other than the first secretary, shall be appointed by the directors for such a term as they think fit. (4) A secretary shall be appointed on such remuneration and other conditions as the directors think fit, and may be removed by them, subject to his right to claim damages from the company if removed in breach of contract. (5) The secretary may be a body corporate. (6) Two or more persons may act jointly as the secretary of a company. (7) The secretary of a company shall be— (a) resident in Zambia, if an individual; (b) incorporated in Zambia, if a body corporate. (8) Anything required or authorised to be done by or to the secretary may, if the office is vacant or there is for any other reason no secretary capable of acting, be done by or to any assistant or deputy secretary or, if there is no assistant or deputy secretary capable of acting, by or to any officer of the company authorised generally or specially for that purpose by the directors. (9) If a company carries on business for more than two months without a secretary or in contravention of subsection (7), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day after that period of two months that the business is carried on. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 93 Companies Act, 1994 (Chapter 388) - 206 Verify source ↗
Appointment of directors ....................................................................................................................................................... 94
This section sets rules for appointing, retiring, replacing, and paying company directors.
206. Appointment of directors Zambia Repealed (1) The number of directors of a company shall be the number of first directors named in the application for incorporation, or such other number as the company may decide by ordinary resolution. (2) The persons named in the application for incorporation as the first directors of a company shall, on the incorporation of the company, be deemed to have been appointed as such with a term of office that expires at the end of the first annual general meeting. (3) Subsections (4) to (16) apply to a company unless the articles provide otherwise. (4) Where the company changes the number of directors it may, by ordinary resolution, determine in what rotation the increased or decreased number is to retire from office. (5) At all annual general meetings held by the company, other than the first annual general meeting, one third of the directors, or, if one third is not a whole number, the whole number next largest than one third, shall retire from office. (6) The directors to retire under subsection (5) shall be those who have been longest in office, but, as between those who were appointed on the same day, those to retire shall (unless they agree otherwise among themselves) be determined by lot. (7) The company may, at the meeting at which a director retires under subsection (2) or (5), appoint a person to fill the office by ordinary resolution. (8) A retiring director is eligible for re-appointment. (9) If an office is not filled under subsection (7), and the retiring director offers himself for re- appointment and is not disqualified under this Act from holding office as a director, the retiring director shall be deemed to have been re-appointment unless at the meeting— (a) it is expressly resolved not to fill the vacated office; or (b) a resolution for the re-appointment of the director is put and lost. (10) If there are fewer directors than the number set in accordance with this section, the directors may appoint a person to be a director. (11) A director appointed under subsection (10) holds office only until the next annual general meeting held by the company, and at that meeting shall not be taken into account in determining the number of directors to retire. (12) A director appointed under subsection (10) shall be eligible for re-appointment as a director at the next annual general meeting. (13) Where a director's office becomes vacant otherwise than under subsection (5), the company may, by ordinary resolution, appoint a replacement, who shall be subject to retirement as if he had become a director on the day on which the person he replaced as director had last been appointed or re- appointed. (14) The directors shall be paid such remuneration as is from time to time determined by the company by ordinary resolution. (15) The remuneration shall accrue from day to day. (16) If the company by ordinary resolution so decides, the directors shall be paid, subject to the resolution, all travelling and other expenses properly incurred by them in attending and returning from meetings of the directors, or any committee of the directors or general meetings of the company, or otherwise in connection with the business of the company. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 94 Companies Act, 1994 (Chapter 388) Zambia Repealed - 207 Verify source ↗
Eligibility of persons to be directors .................................................................................................................................. 95
A person cannot be appointed or remain a company director if disqualified, under disability, bankrupt, or barred by a court order, and written consent is required before appointment.
207. Eligibility of persons to be directors (1) A person shall not be appointed as or continue to hold office as a director of a company if the person is— (a) a body corporate; (b) an infant or any other person under legal disability; (c) any person prohibited or disqualified from so acting by any order of a court; or (d) an undischarged bankrupt. (2) A director of a company shall cease to hold office as such if— (a) he is adjudged bankrupt; or (b) he is removed by order of a court from an office of trust on account of misconduct. (3) A person who, in contravention of subsection (1) or (2), takes office, or continues to hold office, as a director of a company shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units or to imprisonment for a period not exceeding six months, or to both. (4) The articles of a company may provide further restrictions or qualifications on the appointment or continuation in office of its directors. (5) A person shall not be appointed as a director of a company unless he has consented in writing to be so appointed. (6) A contravention of this section shall not invalidate any transaction entered into by a company. - 208 Verify source ↗
Residential requirements of directors ................................................................................................................................ 95
A company registered in Zambia must have at least half of its directors resident in Zambia.
208. Residential requirements of directors Where a company is registered in Zambia, at least half of the directors of a company, including— (a) the managing director, if the company has a managing director; and (b) at least one executive director, if the company has executive directors; shall be resident in Zambia. [section 208 amended by section 2 of Act 1 of 2000 and substituted by section 17 of Act 24 of 2011] - 209 Verify source ↗
Directors' share qualification ................................................................................................................................................ 95
A director usually does not need to be a company member or hold shares, but if the articles require a share qualification, the director must obtain it within the stated time or lose office.
209. Directors' share qualification (1) Unless the company's articles otherwise provide, a director need not be a member of the company or hold any shares therein. (2) Where the articles require a director to hold a specified share qualification, a person appointed as a director shall obtain his qualification within two months after his appointment or such shorter period as may be fixed by the articles. (3) If a company amends its articles so as to introduce or increase the requirement of a share qualification, every director holding office at the date of the amendment shall obtain his qualification within two months after the amendment or such shorter period as may be fixed by the articles. (4) A director who— (a) fails to comply with subsection (2) or (3); or By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 95 Companies Act, 1994 (Chapter 388) Zambia Repealed (b) ceases to hold the specified share qualification, at any time after so complying; shall cease to hold office. (5) A person who ceases to hold office under subsection (4) shall not be re-appointed as a director of the company until he has obtained his qualification. - 210 Verify source ↗
Vacation office of director ...................................................................................................................................................... 96
A director may resign by written notice to the company, and a director’s office becomes vacant in specified circumstances.
210. Vacation office of director (1) A director may resign his office by notice in writing to the company. (2) In addition to the other circumstances specified in this Act, an office of director shall become vacant if the director— (a) is absent from meetings of the directors held during a period of six months, without the consent of the directors; (b) holds any office of profit under the company, except that of managing director or principal executive officer, without the consent of the company by ordinary resolution; or (c) is directly or indirectly interested in any contract or proposed contract with the company and fails to declare his interest as required by this Act. (3) The articles of a company may provide for the termination or vacation of office in circumstances additional to those specified in this Act. - 211 Verify source ↗
Removal of director .................................................................................................................................................................. 96
A company may remove directors by ordinary resolution, but only with advance notice and with the director given certain rights to be heard and to circulate a statement.
211. Removal of director (1) A company may, by ordinary resolution at a general meeting of the company remove from office all or any of the directors, subject to their rights to claim damages from the company if removed in breach of contract. (2) A resolution to remove a director shall not be moved at any general meeting unless notice of the intention to move it has been given to the company not less than twenty-eight days before the meeting. (3) On receipt of notice of an intended resolution to remove a director under this section, the company shall forthwith send a copy thereof to the director concerned and the director (whether or not he is a member of the company) shall be entitled— (a) to be heard on the resolution at the meeting; (b) to send to the company a written statement (in this section called "the director's statement"), copies of which the company shall, subject to this section, send with every notice of the general meeting or, if the statement is received too late, shall forthwith circulate to every person entitled to notice of the meeting in the same manner as notices of meetings are required to be given; and (c) to require that the director's statement be read to the meeting. (4) The company shall not be obliged to send or circulate the director's statement if it is received by the company less than seven days before the meeting. (5) The court, on application by the company or any other person who claims to be aggrieved and on being satisfied that the director's statement is unreasonably long or that the rights conferred by this section are being abused to secure publicity for defamatory matter, may order— (a) (b) that the company shall not send or circulate the director's statement and that the statement not be read at the meeting; and that the costs of the applicant are to be paid in whole or in part by the director, notwithstanding that he is not a party to the application. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 96 Companies Act, 1994 (Chapter 388) Zambia Repealed (6) On a resolution to remove a director no share shall, on a poll, carry a greater number of votes than it would carry in relation to the generality of matters to be voted on at a general meeting of the company. (7) A vacancy created by the removal of any director under this section, if not filled at the meeting at which he is removed, may be filled as a casual vacancy. 212. No directions or instructions to be given to directors by a person not eligible to be a director (1) A person shall not give directions or instructions to the duly appointed directors of a company if the person is not eligible to be a director of the company. (2) A person who contravenes this section shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units or imprisonment for a period not exceeding six months, or to both. - 213 Verify source ↗
Alternate directors ..................................................................................................................................................................... 97
A director may appoint a non-director as an alternate director, subject to the articles and directors’ approval. The appointment must be in writing and lodged with the company. The alternate gets meeting attendance and one vote when the appointing director is absent, but there are limits on multiple appointments, re-appointment, remuneration, shares, and resignation or termination.
213. Alternate directors (1) Subject to any restriction in the articles of a company, a director may— (a) either generally, or in respect of a specified period or specified circumstances; and (b) with the approval of the directors; appoint a person who is not a director as his alternate director. (2) An appointment as alternate director shall be in writing signed by the director making the appointment and the person appointed and lodged with the company. (3) A person shall not be appointed as an alternate director by more than one director. (4) Subject to this section, this Act, including the provisions on registration of directors' particulars and interests, shall apply to an alternate director as if he were a director and not the agent of the director who appointed him. (5) An appointment of a person as an alternate director shall confer on him— (a) the right to attend any meeting of the directors or any committee of directors at which the director who appointed him is not present; and (b) one vote at such a meeting or committee. (6) Except in relation to meetings, both the director who appointed an alternate director and the alternate director may act as director of the company. (7) An alternate director shall not be required to hold any shares. (8) An alternate director shall not himself appoint an alternate director. (9) The company shall not be liable to pay additional remuneration by reason of the appointment of an alternate director. (10) The articles may provide that an alternate director shall be entitled to receive from the company during the currency of his appointment the remuneration to which the director who appointed him would, but for the appointment, have been entitled, and that the director who appointed him shall not be entitled to that remuneration, but, in the absence of such a provision, the alternate shall not be entitled to be remunerated otherwise than by the director who appointed him. (11) The appointment of an alternate director shall cease— (a) at the expiration of the period, if any, for which he was appointed; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 97 Companies Act, 1994 (Chapter 388) Zambia Repealed (b) if the director who appointed him gives written notice to that effect to the company; (c) if the director who appointed him ceases for any reason to be a director; or (d) if the alternate resigns by notice in writing to the company. - 214 Verify source ↗
Managing director ..................................................................................................................................................................... 98
The directors may appoint a managing director from among themselves, and may revoke the appointment subject to any agreement. The managing director is not subject to retirement by rotation while in office, but the appointment ends automatically if the person stops being a director. The managing director is entitled to remuneration as determined by the directors, subject to any agreement.
214. Managing director (1) This section applies to a company unless the articles provide otherwise. (2) The directors may from time to time appoint one or more of their number to the office of managing director for such period and on such terms as they think fit, and subject to the terms of any agreement entered into in a particular case, may revoke any such appointment. (3) The managing director shall not, while holding that office, be subject to retirement by rotation or be taken into account in determining the rotation of retirement of directors, but his appointment shall terminate automatically if he ceases for any reason to be a director. (4) The managing director shall receive remuneration, subject to the terms of any agreement entered into in a particular case, as determined by the directors. - 215 Verify source ↗
Powers and duties of directors ............................................................................................................................................. 98
Directors manage the company’s business and have several powers over company operations and instruments.
215. Powers and duties of directors (1) Subject to this Act, the business of a company shall be managed by the directors, who may pay all expenses incurred in promoting and forming the company, and may exercise all such powers of the company as are not, by this Act or the articles, required to be exercised by the company by resolution. (2) Subsections (2) to (6) shall apply to a company unless the articles provide otherwise. (3) Without limiting the generality of subsection (1), the directors may exercise the powers of the company to borrow money, to charge any property or business of the company or all or any of its uncalled capital and to issue debentures or give any other security for a debt, liability or obligation of the company or of any other person. (4) The directors may, by power of attorney, appoint any person or persons to be the attorney or attorneys of the company for such purposes, with such powers, authorities and discretions (being powers, authorities and discretions vested in or exercisable by the directors), for such periods and subject to such conditions as they think fit. (5) A power of attorney under subsection (5) may contain such provisions for the protection and convenience of persons dealing with the attorney as the directors think fit and may also authorise the attorney to delegate all or any of the powers, authorities and discretions vested in him. (6) All cheques, promissory notes, bankers drafts, bills of exchange and other negotiable instruments, and all receipts for money paid to the company, shall be signed, drawn, accepted, endorsed or otherwise executed, by any two directors or in such other manner as the directors determine. - 216 Verify source ↗
Limitations on powers of directors ..................................................................................................................................... 98
Company directors must not sell substantial company assets, issue new shares, or create share acquisition rights unless approved by ordinary resolution, with stated exceptions.
216. Limitations on powers of directors (1) The directors of a company shall not, without the approval in accordance with this section of an ordinary resolution of the company— (a) sell, lease or otherwise dispose of the whole, or substantially the whole, of the undertaking or of the assets of the company; (b) issue any new or unissued shares in the company; or (c) create or grant any rights or options entitling the holders thereof to acquire shares of any class in the company. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 98 Companies Act, 1994 (Chapter 388) Zambia Repealed (2) The approval for a transaction referred to in paragraph (a) of subsection (1) shall be an approval of the specific transaction proposed by the directors. (3) [subsection (3) deleted by section 3 of Act 1 of 2000] (4) This section shall not prohibit— (a) the issue of any shares under a bona fide underwriting agreement; or (b) the issue to a director of such shares, if any, as, under the articles of the company, he is required to hold by way of share qualification. (5) The validity of any transfer or disposition of property to a person dealing with the company in good faith shall not be affected by a failure to comply with this section. (6) This section shall not limit the powers of any liquidator or receiver of the property of a company. - 217 Verify source ↗
Proceedings of directors .......................................................................................................................................................... 99
This section sets rules for directors’ meetings, voting, delegation, and written resolutions.
217. Proceedings of directors (1) This section shall apply to a company unless the articles provide otherwise. (2) The directors may meet together for the despatch of business and adjourn and otherwise regulate their meetings as they think fit. (3) A director may at any time, and a secretary shall on the requisition of a director, convene a meeting of the directors. (4) A question arising at a meeting of directors shall be decided by a majority of votes of directors present and voting, and any such decision shall for all purposes be deemed a decision of the directors. (5) In case of an equality of votes, the chairman of the meeting, in addition to his deliberative vote (if any), has a casting vote. (6) The directors may delegate any of their powers to a committee or committees of directors, and such a power duly exercised by the committee shall be deemed to have been exercised by the directors. (7) If all the directors eligible to vote on a resolution sign a document or documents containing the terms of the resolution and a statement that they are in favour of the resolution, the resolution shall be deemed to have been passed at the time at which the document is signed by the last director to sign. - 218 Verify source ↗
Contracts in which directors are interested .................................................................................................................... 99
Directors with an interest in a company contract must disclose the nature and extent of that interest at the required meeting, and they cannot count in the quorum or vote on that business.
218. Contracts in which directors are interested (1) For the purposes of this section, a director has an interest in a contract of the company if— (a) he will derive any material benefit, whether direct or indirect, from the contract; or (b) another party to the contract is a firm or body corporate and he has a material interest, whether direct or indirect, in the firm or body corporate; but he shall not be considered to have a material interest in a body corporate by reason only that— (i) he holds debentures of the body corporate; or (ii) he holds shares in the body corporate comprising less than five per centum of the shares, or, where the company has classes of shares, less than five per centum of the shares in each class. (2) For the purposes of paragraph (a) of subsection (1), a benefit accruing to a spouse of the director or to a child under the age of twenty-one shall be deemed to be a benefit accruing to the director. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 99 Companies Act, 1994 (Chapter 388) Zambia Repealed (3) Unless the articles of a company provide otherwise, a director shall be entitled, subject to this Act, to enter into a contract with the company, and such a contract shall not be voidable, nor shall the director be liable to account for any profit made thereby, by reason only of his being a director or of the fiduciary relationship thereby established. (4) A director who is interested in any contract or proposed contract of the company shall declare the nature and extent of his interest at a meeting of the directors or shareholders of the company. (5) (6) If the director is interested in a proposed contract at the time that it is first considered at a meeting of the directors or shareholders, the declaration shall be made at that meeting or an earlier one. If the director becomes interested in a contract or proposed contract at some later time, the declaration shall be made at the next meeting after he becomes so interested. (7) For the purposes of this section, a general declaration in writing by a director that— (a) states that he has an interest in a specified body corporate or firm; (b) specifies the nature and extent of the interest; and (c) states that he is to be regarded as interested in any contract which may, after the date of the notice, be made with that body corporate or firm; shall be a sufficient declaration of interest in relation to any contract so made unless, at the time the question of confirming or entering into any contract is first taken into consideration by the company, the extent of his interest in the body corporate or firm is greater than is stated in the declaration. (8) Subject to this section and the Articles, where a contract or arrangement in which a director is interested is considered at a meeting— (a) the director shall not be counted in the quorum required for that business; (b) the director shall not vote in respect of that business; (c) one director shall not approve the contract until it has been evaluated by an external auditor and verified to be a contract that is being concluded in a transparent manner and on equitable terms; and (d) one director shall cause a report of the evaluation conducted under paragraph (c) to be included in the auditor's annual report. [subsection (8) substituted by section 18(a) of Act 24 of 2011] (9) Subsection (8) shall not apply in respect of— (a) an arrangement for giving the director any security or indemnity in respect of money lent by him to, or obligation undertaken by him for the benefit of, the company; (b) an arrangement for the giving by the company of any security to a third party in respect of a debt or obligation of the company for which the director has assumed responsibility in whole or in part under a guarantee or indemnity, or by the deposit of a security; or (c) a contract by the director to subscribe for or underwrite shares or debentures of the company. (10) Where a member or director or any interested party to a party related transaction is of the view that the transaction is not in the interest of the company, the member, director or interested party may petition the court in accordance with section two hundred and thirty-nine. [subsection (10) inserted by section 18(b) of Act 24 of 2011] By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 100 Companies Act, 1994 (Chapter 388) Zambia Repealed (11) A director who fails to comply with this section shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. [subsection (11), previously subsection (10), renumbered by section 18(c) of Act 24 of 2011] - 218A Verify source ↗
Third party declarations .................................................................................................................................................... 101
A third party may disclose conflicts of interest when entering a transaction with a company.
218A. Third party declarations (1) A third party may, where the third party intends to enter into a transaction with a company disclose — (a) any possible conflict ofinterest that may arise as a result of the person transacting with the company in the proposed manner; (b) (c) the nature of the conflict of interest and the director or directors to whom such a conflict of interest applies; and the extent to which the parties to the transaction stand to gain personally from the actions of the company. (2) A disclosure of interest made by a third party shall be treated in the same manner that a disclosure made by a director would be treated. [section 218A inserted by section 19 of Act 24 of 2011] - 218B Verify source ↗
Shareholder approval for certain transactions .......................................................................................................... 101
A company may enter certain higher-value transactions only if approved by a simple majority of members.
218B. Shareholder approval for certain transactions Where a company wishes to enter into a transaction that is subject to a declaration under sections two hundred and eighteen and two hundred and eighteen A for which the value exceeds the threshold prescribed by the Articles, the transaction shall only be entered into with the approval of a simple majority of the members. [section 218B inserted by section 19 of Act 24 of 2011] - 219 Verify source ↗
Prohibition of loans by companies to directors ........................................................................................................... 101
Companies in scope generally must not lend to directors or give guarantees or security for directors’ loans, subject to stated exceptions.
219. Prohibition of loans by companies to directors (1) This section shall apply to the following companies: (a) a public company; (b) a company related to a public company; (c) a company in a prescribed class of company. (2) A company to which this section applies shall not— (a) make a loan to a director of the company or of a related body corporate; (b) enter into any guarantee or provide any security in connection with a loan made by any other person to a director of the company or of a related body corporate; or (c) subject to this section— (i) make a loan to; or (ii) enter into any guarantee or provide any security in connection with a loan made by any other person to; a body corporate in which a director or directors of the company, or their nominees, hold shares having in total one-fifth or more of the value of its issued share capital. (3) This section shall not prohibit a company from making a loan to a related body corporate, or entering into a guarantee or providing security in connection with a loan made by any other person to a related body corporate. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 101 Companies Act, 1994 (Chapter 388) Zambia Repealed (4) This section shall not prohibit a company whose ordinary business includes the lending of money, or the giving of guarantees in connection with loans made by other persons, from making a loan to, or entering into a guarantee or providing security in connection with, a director or a body corporate referred to in paragraph (c) of subsection (2)— (a) if the prior approval of the company has been given at a general meeting at which the purposes of the expenditure and the amount of the loan, or the extent of the guarantee or security, were disclosed; or (b) on condition that the loan shall be repaid, or the liability under the guarantee or security shall be discharged, within eighteen months, if approval is not given by the company within twelve months at a general meeting at which the purposes of the expenditure and the amount of the loan, or the extent of the guarantee or security, are disclosed. (5) A company may advance to director of the company or of a related body corporate funds to meet expenditure incurred or to be incurred by him for the purposes of the company or for the purposes of enabling him properly to perform his duties as an officer or employee of the company, provided that the total amount advanced to such persons does not exceed one per centum of the assets of the company less the liabilities of the company as shown in the last audited balance sheet of the company. (6) If a company fails to comply with this section— (a) (b) the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units; and the directors who authorised the making of the loan or the entering into the guarantee or the providing of the security shall be jointly and severally liable to indemnify the company against any loss arising therefrom. (7) This section shall not apply in relation to a loan, guarantee or security made or provided before the commencement of this Act. - 220 Verify source ↗
Duties of directors in connection with sales or purchases of the company's securities ................................ 102
A director who has inside information about the value of the company’s shares or debentures must disclose it before buying or selling them, or the deal may be voidable.
220. Duties of directors in connection with sales or purchases of the company's securities (1) If a director of a company, having acquired in that capacity any special information which may substantially affect the value of the share or debentures of the company or any related body corporate, buys or sells any such shares or debentures without disclosing such information to the seller or purchaser thereof, the purchase or sale shall be voidable at the option of the seller or purchaser within twelve months after the date of the agreement to sell or buy. (2) For the purposes of this section, any shares or debentures bought or sold shall be deemed to have been bought or sold by a director if he held before or after the transaction, directly or indirectly, any beneficial interest therein, unless it is proved that the sale or purchase was not made by him or on his instructions or advice or on the instructions or advice of any other person to whom he had imparted any special information affecting the value of the shares or debentures obtained by him in the capacity of director. (3) Nothing in this section shall derogate from any right or remedy which may be available under any other law. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 102 Companies Act, 1994 (Chapter 388) Zambia Repealed - 221 Verify source ↗
Interpretation ............................................................................................................................................................................ 103
This section defines “payment” for this Division and sets presumptions about service agreements and payments linked to transfers or offers.
221. Interpretation (1) For the purposes of this Division "payment"— (a) does not include the payment of damages awarded or approved by any court for breach of an independent service agreement or the bona fide payment of any pension or superannuation benefit in respect of past services in accordance with a service agreement; and (b) includes any other benefit or advantage whether in cash or in kind. (2) For the purposes of this Division— (a) a service agreement shall be considered independent only if it was not entered into in contemplation of such a transfer as is referred to in subsection (1) of section two hundred and twenty-two or such an offer as is referred to in section two hundred and twenty-three; (b) a service agreement shall be presumed to have been entered into in contemplation of such a transfer or offer unless it was made more than one year before the date of the agreement to transfer or the making of the offer, and (c) if— (i) any payment (not being remuneration properly payable) is received by a director or former director within a period of one year before or two years after the date of the agreement to make such a transfer or offer; and (ii) the company or the person to whom the transfer or by whom the offer was made was privy to the making of the payment; the payment shall be presumed to have been received by him in connection with the transfer or offer. - 222 Verify source ↗
Payments to directors for loss of office or on transfer of undertaking ............................................................... 103
A company or person must not make certain payments to directors or former directors unless the payment details are disclosed to members and approved by ordinary resolution.
222. Payments to directors for loss of office or on transfer of undertaking (1) A company shall not make to any director or former director of the company or of a related body corporate any payment by way of compensation for loss of any office in the company or in a related body corporate, or as consideration for or in connection with his retirement from office, unless the particulars relating to the proposed payment (including the amount thereof) have been disclosed to the members of the company and the proposal has been approved by an ordinary resolution of the company. (2) A person shall not make a payment to a director or former director of a company in connection with the transfer of the whole or any part of the undertaking or property of the company or of a related body corporate, whether the payment is expressed to be by way of compensation for loss of office or otherwise, unless the particulars relating to the proposed payment, including the amount thereof, have been disclosed to the members of the company and the proposal has been approved by an ordinary resolution of the company. (3) If a payment is made in contravention of this section, the amount of the payment shall be deemed to have been received in trust for the company. - 223 Verify source ↗
Payments to directors in connection with takeover bids ......................................................................................... 103
In takeover-bid share offers, a director or former director receiving a related payment must help ensure the payment details go with the offer notice; failure can be an offence with a fine.
223. Payments to directors in connection with takeover bids (1) Where— (a) an offer is made for the acquisition of any shares of a company on the terms that the offer is available for acceptance— (i) by all the shareholders of the company or by all the holders of shares of the class to which the offer related; or By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 103 Companies Act, 1994 (Chapter 388) Zambia Repealed (ii) by the holders of shares which, together with any shares already beneficially owned by the person making the offer or any body corporate in which that person is a controlling shareholder, confer the right to exercise or control the exercise of not less than one-third of the votes at any general meeting of the company; and (b) in connection with the offer a payment (in this section called "the relevant payment") is made, or has been made or is proposed to be made to a person (in this section called the "payee director") who is a director or former director of the company or of a related body corporate, being a payment other than payment to purchase shares held by the payee director at the same price receivable under the offer by other holders of shares in that class; the director or former director shall take all reasonable steps to ensure that particulars of the relevant payment are included in or sent with any notice of the offer made for their shares which is given to any shareholders. (2) (3) If the payee director fails to comply with subsection (1), he shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. If a person who has been properly directed by the payee director to include in, or send with, a notice of offer referred to in subsection (1) the particulars referred to in that subsection fails to do so, he shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two hundred and fifty monetary units. (4) If the relevant payment, or a part thereof, is made to the payee director, then subsection (5) shall apply unless— (a) the payee director has complied with subsection (1); and (b) the making of the relevant payment has been— (i) agreed to by all the holders of the shares to which the offer relates; or (ii) approved by an ordinary resolution passed at a meeting of such holders, summoned for the purpose. (5) If this subsection applies, then, subject to this section— (a) (b) (c) the person making the payment and the payee director shall be jointly and severally liable to distribute the amount of the relevant payment among any persons who have sold their shares as a result of the offer in proportion to the number of shares sold by them; the payee director shall hold any amounts received by him in connection with the relevant payment on trust for such persons; and the expenses incurred in distributing the payment shall be borne by the persons liable to make the distribution and not retained out of the payment. (6) If, in proceedings instituted less than three months after the first transfer of any shares in pursuance of the offer, the court awards or approves the payment of damages to the payee director for breach of an independent service agreement, the amount of the damages, and of any costs awarded to the payee director in the proceedings, shall be paid to or retained by the payee director out of the amount of the relevant payment and subsection (5) shall apply only to the balance thereof, if any. (7) If the offer does not apply to all the shareholders or to all shareholders of a class, a meeting called for the purposes of subparagraph (b) (ii) of subsection (4) shall be convened, held and conducted as nearly as may be as if it were a meeting of the shareholders or of a class of shareholders. (8) The notices convening a meeting called for the purposes of subparagraph (b) (ii) of subsection (4) shall include a statement to the effect that, if the resolution approving the payment is not passed, the payment will be distributable among the persons who have sold their shares in pursuance of the By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 104 Companies Act, 1994 (Chapter 388) Zambia Repealed offer, except to the extent that the court may award or approve the payment to the payee director of damages for breach of an independent service agreement. (9) The offer shall not include any provision that the offer is conditional upon approval of the relevant payment, and any provision purporting to have that effect shall be void. (10) For the purposes of this section— (a) shares shall be deemed to be beneficially owned by a body corporate if they are owned beneficially by— (i) the body corporate; (ii) another body corporate related to the body corporate; (iii) a controlling shareholder of a body corporate referred to in paragraph (i) or (ii); (b) a person shall be deemed to be a controlling shareholder of a body corporate if— (i) the body corporate or its directors are accustomed to act in accordance with the directions or instructions of the person or his nominee; or (ii) at a general meeting of the body corporate, the person is entitled to exercise or control the exercise of one-third or more of the votes. - 224 Verify source ↗
Register of directors and secretaries ............................................................................................................................... 105
Section heading for a register of directors and secretaries.
224. Register of directors and secretaries - 10 Verify source ↗
Certificates of incorporation and of share capital .............................................................................................................. 8
Companies must keep a register of directors and secretaries, and directors or secretaries must give written notice to the Registrar of relevant matters.
10.4 – Registers (1) A company shall keep a register of its directors and secretaries in the prescribed form. (2) The Register shall be available for inspection by any person. (3) If a company fails to comply with this section, the company and each officer in default commits an offence and is liable, upon conviction, to a fine not exceeding ten thousand penalty units for every day during which the default continues. (4) A director or secretary of a company shall give notice, in writing, to the Registrar of such matters relating to the director or secretary as may be necessary for the purposes of this section, and a person who fails to do so commits an offence and is liable, upon conviction, to a fine not exceeding ten thousand penalty units for every day during which the default continues. [section 224 substituted by section 20 of Act 24 of 2011] - 225 Verify source ↗
Register of shares and debentures held by or in trust for directors and secretary .......................................... 105
Companies must keep a register of directors’ and the secretary’s share and debenture interests, and directors must supply the needed information.
225. Register of shares and debentures held by or in trust for directors and secretary (1) A company shall keep a register showing in respect of each director and of the secretary the number, description and amount of any shares in or debentures of the company or any related body corporate which are held by or in trust for him or of which he has any right to become the holder (whether on payment or not). (2) The register need not include shares in a body corporate which is the wholly-owned subsidiary of another body corporate. (3) Where a transaction involving any shares results in change in the register, the register shall also show the date of, and price or other consideration for, the agreement for the transaction. (4) The nature and extent of a director's interest or right in or over any shares or debentures recorded in relation to him in the register shall, if he so requires, be indicated in the register. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 105 Companies Act, 1994 (Chapter 388) Zambia Repealed (5) For the purposes of this section— (a) a director shall supply the company with the information relating to himself required to be registered; and (b) the company shall be entitled to rely on the information provided by the director. (6) This section shall not require the company to make any inquiry into the rights of any person in relation to any shares, nor shall the company be taken to have, as a result of anything done under this section, any notice of a matter relating to the rights of any person in relation to the shares other than actual notice. (7) The register shall be open to inspection— (a) by any member or holder of debentures of the company during the period beginning fourteen days before the date of the company's annual general meeting and ending three days after the date of its conclusion; and (b) by any person acting on behalf of the Registrar, at that or any other time. (8) The register shall be produced at the commencement of the company's annual general meeting and remain open and accessible throughout the meeting to any person attending the meeting. (9) If the company fails to comply with a provision of this section, the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. (10) A director who fails to comply with subsection (5) shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. (11) If the company fails to allow inspection of the register in accordance with this section, the court may order an immediate inspection of the register. (12) For the purposes of this section— (a) any person in accordance with whose directions or instructions the directors of a company are accustomed to act shall be deemed to be a director of the company; and (b) a director of a company shall be deemed to hold or have an interest or right in or over, any shares or debentures if a body corporate other than the company holds them or has that interest or right in or over them, and either— (i) that body corporate or its directors are accustomed to act in accordance with his directions or instructions; or (ii) he is entitled to exercise or control the exercise of one third or more of the voting power at any general meeting of that body corporate. - 226 Verify source ↗
Registration of particulars of directors and secretaries ............................................................................................ 106
A company must notify the Registrar within 21 days after changes to directors, the secretary, or the register details, and must state that any new director or secretary has given written consent.
226. Registration of particulars of directors and secretaries (1) A company shall, within twenty-one days after any change occurs among its directors or in its secretary or in any of the particulars contained in the register of directors and secretaries, lodge with the Registrar notice of the change in the prescribed form, specifying the date of the change. (2) Any notification of a person's having become a director or secretary of the company shall state that the person has consented in writing to act in the relevant capacity. (3) If the company fails to comply with this section, the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding three monetary units for each day that the failure continues. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 106 Companies Act, 1994 (Chapter 388) Zambia Repealed - 227 Verify source ↗
Where one director is named in letters, etc, all are to be named ......................................................................... 107
If one director is named in letters or similar documents, all directors must be named.
227. Where one director is named in letters, etc, all are to be named - 10 Verify source ↗
Certificates of incorporation and of share capital .............................................................................................................. 8
A company covered by this section must not put directors’ names on certain business documents unless it also shows each director’s Christian name or initial and surname in legible characters.
10.5 – Miscellaneous (1) A company to which this section applies shall not state, in any form, the name of any of its directors (otherwise than in the text or as a signatory) on any business letter, trade catalogue, circular or showcard on which the company's name appears unless it also states in legible characters the Christian name, or the initial thereof, and surname of every director (other than an alternate director) of the company. (2) For the purposes of this section— "Christian name" includes a recognised abbreviation of a Christian name; "director" includes any person in accordance with whose directions or instructions the directors of the company are accustomed to act; "showcard" means a card or pamphlet containing or exhibiting articles dealt with or samples of representations thereof. - 228 Verify source ↗
Limited company may have directors with unlimited liability ............................................................................... 107
A limited company’s articles may make directors’ or managers’ liability unlimited, and anyone taking that office must first sign a statement accepting that risk.
228. Limited company may have directors with unlimited liability (1) (2) In a limited company, the liability of the directors and managers may, if the articles so provide, be unlimited. In a limited company in which the liability of directors or managers is unlimited, a person shall not be elected or appointed to the office of director or manager unless he has signed a statement that he understands and accepts that the liability of the person holding that office will be unlimited. (3) If a person is elected or appointed to the office of director or manager in contravention of this section— (a) the person will have unlimited liability; (b) the member who proposed the person for election or appointment to the office or director or manager, the promoters of the company, the directors of the company, any managers of the company and the secretary of the company shall indemnify the person against his liability under paragraph (a); and (c) the persons referred to in paragraph (b) shall each be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. - 229 Verify source ↗
Avoidance of acts in dual capacity as director and secretary ................................................................................. 107
A requirement or authorization to act by or to a director and the secretary is not met if the same person acts as both.
229. Avoidance of acts in dual capacity as director and secretary A provision requiring or authorising a thing to be done by or to a director and the secretary shall not be satisfied by its being done by or to the same person acting both as director and as, or in place of, the secretary. - 230 Verify source ↗
Restraining fraudulent persons from managing companies .................................................................................... 107
The court may bar certain convicted or culpable persons from managing a company for up to five years, unless the court later gives leave.
230. Restraining fraudulent persons from managing companies (1) Where— (a) a person is convicted, whether in Zambia or elsewhere, on an indictment, or on any other process analogous to or in substitution of indictment— (i) of any offence involving fraud or dishonesty; or (ii) of any offence in connection with the promotion, formation or management of a body corporate; or By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 107 Companies Act, 1994 (Chapter 388) Zambia Repealed (b) in the course of winding-up a body corporate, whether in Zambia or elsewhere, a person has been found guilty of— (i) any fraud in relation to the body corporate; or (ii) any breach of duty in relation to the body corporate; the court, on its own motion or on the application of any of the persons referred to in subsection (3), may order that the person shall not, without leave of the court, be a director of or in any way, whether directly or indirectly, be concerned or take part in the management of any company, or act as secretary, auditor or liquidator of any company, or as receiver of the property or as trustee for the debenture holders of any company, for such period not exceeding five years as may be specified in the order. (2) In subsection (1), "the court" means the High Court for Zambia or— (a) in relation to the making of an order against a person under paragraph (a) thereof, the court before which he [Please note: incomplete paragraph as in original.] (b) (c) in relation to the making of an order against a person under paragraph (b) thereof, the court having jurisdiction to wind-up the body corporate, if that court is in Zambia; or in relation to the granting of leave, the court which made the order from which leave is sought. (3) An application for an order under this section may be made by— (a) the Registrar; (b) the trustee in bankruptcy of the person concerned; or (c) the liquidator of any body corporate. (4) A person intending to apply for the making of an order under this section shall give not less than twenty-eight days' written notice of his intention to the person against whom the order is sought. (5) A person against whom an order has been made under this section who intends to apply for leave to act as a director or in any other capacity in relation to the property or affairs of a company shall, unless the court otherwise orders, give at least twenty-eight days' written notice of his intention to any person on whose application the order was made, and that person may be a party to the proceedings. (6) Where any order is made or leave is granted under this section— (a) the person who sought the order or leave shall lodge a copy thereof with the Registrar; and (b) the Registrar shall cause a summary thereof to be published in the Gazette. (7) A person who contravenes an order made under this section shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two thousand monetary units or imprisonment for a term not exceeding two years, or to both. - 231 Verify source ↗
Prohibition of assignment of offices ................................................................................................................................ 108
A company director or other officer must not assign their office to another person.
231. Prohibition of assignment of offices A director or other officer of a company shall not assign his office to another person, and any purported assignment of the office shall be void. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 108 Companies Act, 1994 (Chapter 388) - 232 Verify source ↗
Validity of acts of officers .................................................................................................................................................... 109
An act done by a director, the directors, or the secretary is not invalid just because a director, secretary, or committee member had a defect in appointment or qualification.
232. Validity of acts of officers Zambia Repealed An act done by a director, the directors or the secretary shall not be invalid only because it is afterwards discovered that there was some defect in the appointment or qualification of a person to be a director or secretary or a member of a committee of directors, or to act as a director or secretary. - 233 Verify source ↗
Company may not indemnify officers .............................................................................................................................. 109
A company must not indemnify or compensate its directors or other officers for liability from negligence, default, breach of duty, or breach of trust, except for certain defence costs or liabilities in successful or acquitted proceedings.
233. Company may not indemnify officers (1) Subject to this Act, a company shall not indemnify a director or other officer of the company or a related body corporate against, or compensate him for, any liability which under law would otherwise attach to him in respect of any civil or criminal liability for any negligence, default, breach of duty or breach of trust which he may commit in relation to the company or a related body corporate after the commencement of this Act. (2) Any provision in a contract between the company and such a director or officer purporting to indemnify or compensate him in contravention of subsection (1) shall be void. (3) This section shall not prevent a company from indemnifying or compensating such a director or officer from any costs or liability incurred by him in defending any proceedings, whether civil or criminal, in which— (a) judgement is given in his favour; (b) he is acquitted; or (c) relief is granted to him by the court. Part XI – Schemes of arrangement, take-overs and the protection of minorities
Part
Part XI – Schemes of arrangement, take-overs and the protection of minorities
- 234 Verify source ↗
Power to compromise with creditors and members ......................................................................................................... 109
The court may order meetings to consider a compromise or arrangement between a company and its creditors or members, and if approved the company must file and circulate the order and may face fines for non-compliance.
234. Power to compromise with creditors and members (1) In this section, "arrangement" includes a reorganisation of the share capital of the company by the consolidation of shares of different classes or by the division of shares in shares of different classes or by both methods. (2) Where a compromise or arrangement is proposed between— (a) a company and its creditors or any class of its creditors; or (b) a company and its members or any class of its members; the court may, on the application of the company or of any creditor or member of the company, or, in the case of a company being wound-up, of the liquidator, order a meeting of the creditors, the class of creditors, the members or the class of members, as the case may be, to be convened, held and conducted in such manner as it thinks fit to consider the compromise or arrangement. (3) Subject to the order of the court, Part VII shall apply to a meeting of members or a class of members ordered to be convened pursuant to this section. (4) Subject to the order of the court, sections one hundred and forty-six to one hundred and fifty- two shall apply, with the necessary modifications, to a meeting of creditors or a class of creditors ordered to be convened pursuant to this section. (5) Unless the court orders otherwise, the voting power at the meeting of creditors ordered to be convened pursuant to this section shall be assigned to the creditors in proportion to the amount of the debt outstanding from the company to each creditor. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 109 Companies Act, 1994 (Chapter 388) Zambia Repealed (6) If a meeting, by extraordinary resolution, agrees to any compromise or arrangement, the compromise or arrangement— (a) shall be binding on all the creditors or the class of creditors, or on the members or class of members, as the case may be; and (b) shall be binding on the company if and when— (i) it has been approved by order of the court; and (ii) a copy of the order has been lodged with the Registrar. (7) Where an extraordinary resolution agreeing to a compromise or arrangement has been passed at a meeting convened pursuant to this section, the company or any person who was entitled to vote at the meeting may apply to the court for approval of the compromise or arrangement. (8) At the hearing by the court of the application for approval of the compromise or arrangement, any member or creditor of the company claiming to be affected thereby shall be entitled to be represented and to object. (9) The court may prescribe such terms as it thinks fit as a condition of its approval, including a condition that any member shall have the right to require the company to purchase his shares at a price fixed by the court or to be determined in a manner provided in the order, and, in that case, for the reduction of the company's capital accordingly. (10) Where an order is made approving the compromise or arrangement— (a) the company shall lodge a copy with the Registrar within twenty-one days after the making of the order; and (b) a copy of the order shall be annexed to or incorporated in every copy of the articles issued after the order has been made. (11) Where an order under this section has the effect of altering the share capital of the company, the Registrar, on lodgement of the copy of the order, shall issue a replacement certificate of share capital for the company, worded to meet the circumstances of the case. (12) (13) If the company fails to comply with paragraph (a) of subsection (10), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues. If the company issues a copy of the articles that fails to comply with paragraph (b) of subsection (10), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding three monetary units in respect of each copy issued. - 235 Verify source ↗
Information as to compromises with creditors and members ....................................................................................... 110
The company must prepare and send a statement about a compromise or arrangement, and some notices must include or mention how to get that statement.
235. Information as to compromises with creditors and members (1) In this section, "arrangement" has the same meaning as in section two hundred and thirty-four. (2) Where a meeting of creditors or any class of creditors or of members or any class of members is convened under section two hundred and thirty-four the company shall prepare a statement explaining the effect of the compromise or arrangement and in particular stating any material interests of the directors in the company or a related body corporate, whether as directors or as members or as creditors of the company or otherwise, and the effect thereon of the compromise or arrangement, in so far as it is different from the effect on the like interests of other persons. (3) Where the compromise or arrangement affects the rights of debenture holders of the company, the statement shall give the same explanation as respects the debenture holders of the company or any trustees of any instrument for securing the issue of the debentures as it is required to give as respects the company's directors. (4) A copy of the statement shall be sent to every creditor or member with the notice of the meeting. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 110 Companies Act, 1994 (Chapter 388) Zambia Repealed (5) Every notice of the meeting given by advertisement shall include either a copy of the statement or notice of the way in which the members or creditors entitled to attend the meeting may obtain copies of the statement. (6) Where notice of the meeting is given by advertisement, the company shall supply a copy of the statement, free of charge, to any creditor or member who applies in the way indicated in the advertisement. (7) (8) If the company fails to comply with this section, the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. It shall be a defence to a prosecution under subsection (7) to show that failure was due to the refusal of any other person to supply the necessary particulars as to his interests in the company or a related body corporate. (9) A person who is director of the company or a trustee for debenture holders of the company shall give notice to the company of such matters relating to himself as may be necessary for the purposes of this section, and a person who fails to do so shall be guilty of an offence, and shall be liable on conviction to a fine of five hundred monetary units. - 236 Verify source ↗
Reconstruction and amalgamation of companies .............................................................................................................. 111
If a court-approved reconstruction or amalgamation order is made, affected companies must lodge a copy with the Registrar within 15 days. Failure to comply is an offence and can lead to a fine.
236. Reconstruction and amalgamation of companies (1) Where an application is made to the court under section two hundred and thirty-four to approve a compromise or arrangement referred to in that section, and it is shown to the court that— (a) the compromise or arrangement has been proposed for the purposes of or in connection with a scheme for— (i) the reconstruction of any company or companies; or (ii) the amalgamation of any two or more companies; and (b) under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme (in this section referred to as "the transferor company") is to be transferred to another company (in this section referred to as "the transferee company"); the court may, either by the order approving the compromise or arrangement or by a subsequent order, provide for all or any of the following: (i) (ii) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of the transferor company; the allotment or appropriation by the transferee company of any shares, debentures, policies or other like interests in the transferor company which under the compromise or arrangement are to be allotted or appropriated by the transferor company to or for any person; (iii) the continuation by or against the transferee company of any legal proceedings pending by or against the transferor company; (iv) the dissolution, without winding-up, of the transferor company; (v) the provision to be made for any persons who, within such time and in such manner as the court directs, dissent from the compromise or arrangement; (vi) such incidental, consequential and supplementary matters as are necessary to secure that the reconstruction or amalgamation is fully and effectively carried out. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 111 Companies Act, 1994 (Chapter 388) Zambia Repealed (2) Where an order under this section provides for the transfer of property or liabilities— (a) the property shall, by virtue of the order, be transferred to and vest in the transferee company and shall, if the order so directs, be freed from any charge which is under the compromise or arrangement to cease to have effect; and (b) the liabilities shall, by virtue of the order, be transferred to and become the liabilities of, the transferee company. (3) Where an order is made under this section, every company in relation to which the order is made shall cause a copy thereof to be lodged with the Registrar within fifteen days after the making of the order. (4) If a company fails to comply with subsection (3), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues. (5) In this section— (a) "property" includes property rights and powers of every description; and (b) "liabilities" includes duties of every description; notwithstanding that such rights, powers or duties are of such a character that under the common law they could not be assigned or performed vicariously. - 237 Verify source ↗
Power to acquire shares of minority on take-over ............................................................................................................. 112
This section lets a transferee company compulsorily acquire minority shares after a qualifying takeover offer, if the stated conditions and ownership threshold are met.
237. Power to acquire shares of minority on take-over (1) This section shall apply where body corporate, whether a company within the meaning of this Act or not, (in this section referred to as "the transferee company"), has made an offer to the holders of shares in a company (in this section referred to as "the transferor company") and each of the following conditions is satisfied: (a) the offer by the transferee company is made to the holders of the whole of the shares in the transferor company, other than those already held by the transferee company or any of its related companies or by nominees for the transferee company or any of its related companies; (b) the consideration for the acquisition or a substantial part thereof is either— (i) the allotment of shares in the transferee company; or (ii) the allotment of shares in the transferee company or, at the option of the holders, a payment of cash; (c) the same terms are offered to all the holders of the shares to whom the offer is made or, where there are different classes of shares, to all the holders of shares of the same class; (d) the notice of the offer sent to the shareholders included— (i) a description of the effect of this section; (ii) a statement that, if paragraph (e) is satisfied, the transferee company intends to take advantage of this section; and (iii) a statement that the shareholder may apply to the court under subsection (3); (e) within four months after the making of the offer it has been accepted in respect of sufficient shares in each class to make up, together with any shares held by the transferee company, nine-tenths of the shares of that class. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 112 Companies Act, 1994 (Chapter 388) Zambia Repealed (2) If this section applies, the transferee company may, within the period of two months beginning when subsection (1) is satisfied, give to each shareholder who has not accepted the offer in respect of all his shares a notice stating— (a) that it desires to acquire his shares; (b) (c) that if no action is taken by the shareholder, the shares will be compulsorily acquired under this section; the alternative that will apply unless the shareholder directs otherwise, if the offer consists of alternatives. (3) A copy of the notice referred to in subsection (2) shall be sent to the transferor company. (4) At any time within the period beginning when the offer is made and ending three months after subsection (1) is satisfied, the shareholder may apply to the court for an order that— (a) the shares may not be compulsorily acquired under this section; or (b) the terms of the offer applying to the shareholder in respect of the shares, or of the shares of a particular class, shall be varied as specified by the court; and the court may make such an order. (5) Where the court makes an order that the terms of the offer shall be varied, then, unless the court orders otherwise, the transferee company shall give notice of the varied terms to all other holders of shares of the same class and to all former holders of shares of the same class who accepted the original offer, and at any time within two months after receiving the notice— (a) a holder of shares of that class shall be entitled to accept either the original offer or the offer as varied by the court; and (b) a former holder of shares of that class who accepted the original offer shall be entitled to require the transferee company to pay or transfer to him any additional consideration to which he would have been entitled, had his shares been acquired under the offer as varied by the court. (6) If a shareholder has not accepted the offer by the end of the acquisition day, the transferee company shall, unless the court has directed otherwise, within seven days after that day send to the transferor company an instrument of transfer of the shares of that shareholder executed— (a) on behalf of the shareholder by a person appointed by the transferee company; and (b) on its own behalf by the transferee company; and transfer to the transferor company the consideration (whether shares, cash or any other consideration) payable by the transferee company for the shares, and the transferor company shall thereupon register the transferee company as the holder of those shares. (7) For the purposes of this section, the acquisition day is the day— (a) three months after the day on which subsection (1) is satisfied: or (b) on which the last of any applications under subsection (4) is disposed of; whichever is the later. (8) Any sums received by the transferor company under subsection (6) shall be paid into a separate bank account and any such sums and all shares or other consideration so received shall be held by the transferor company in trust for the several persons entitled to them. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 113 Companies Act, 1994 (Chapter 388) - 238 Verify source ↗
Rights of minority on take-over ............................................................................................................................................... 114
After a takeover share transfer, the transferee company must notify remaining shareholders if it ends up holding more than three-fourths of the shares, and those shareholders may require it to buy their shares.
238. Rights of minority on take-over (1) Where— Zambia Repealed (a) an offer is made to the shareholders of a company (in this section called "the transferor company") or any of them for the purchase of their shares; (b) in pursuance of the offer, shares in the transferor company are transferred to another body corporate (referred to in this section as "the transferee company"), whether the body corporate is a company within the meaning of this Act or not; and (c) after the transfer of shares, the transferee company holds more than three-fourths of the shares in the transferor company or in a class of those shares; then— (i) the transferee company shall within one month after the date of the transfer, unless after a previous transfer it has already complied with this requirement, give notice of that fact to the holders of the remaining shares or of the remaining shares of that class, as the case may be; and (ii) any such holder may, within three months after the giving to him of the notice require the transferee company to acquire all or any of his shares. (2) For the purposes of subsection (1), where a share is transferred to or held by— (a) a body corporate related to the transferee company; or (b) a nomince of the transferee company or of a body corporate related to the transferee company; the share shall be deemed to be transferred to or held by the transferee company. (3) Where a shareholder under subsection (1) requires the transferee company to acquire any shares, the transferee company shall be entitled and bound to acquire those shares on the terms of the offer or on such other terms as may be agreed or as the court, on the application of either the transferee company or the shareholder, thinks fit to order. - 239 Verify source ↗
Remedy against oppression ....................................................................................................................................................... 114
A member can ask the court for orders if company conduct is oppressive; the court may grant remedies, and later non-compliance can be an offence.
239. Remedy against oppression (1) In this section, "oppressive" means— (i) oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members of a company; or (ii) contrary to the interests of the members as a whole; whether in the capacity of the member or members concerned as a member or members of the company, or otherwise. (2) The court may, on the application of a member of a company, make an order or orders under this section if it is of the opinion— (a) that the affairs of the company are being conducted, or the powers of the directors are being exercised, in a manner that is oppressive; or (b) that— (i) some act or omission, or proposed act or omission, by or on behalf of the company has been done or is threatened; or (ii) some resolution of the members, or any class of them, has been passed or is proposed; which was or would be oppressive; for the purpose of remedying the situation of the member or members concerned. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 114 Companies Act, 1994 (Chapter 388) Zambia Repealed (3) Subject to this section, an order or orders under this section may include, but is not limited to, one or more of the following; (a) an order directing or prohibiting any act or cancelling or varying any transaction or resolution; (b) an order regulating the conduct of the company's affairs in the future; (c) an order for the purchase of the shares of any members of the company by other members or by the company itself and, in the case of a purchase by the company itself, for the reduction of the company's capital accordingly; (d) an order that the company be wound-up; (e) an order appointing a receiver of property of the company. (4) Where an order under this section makes any alteration to the company's share capital or articles then, notwithstanding anything in any other provision of this Act but subject to any provisions of the order, the company shall not without the leave of the court make any further alteration to the share capital or articles inconsistent with the order. (5) Where an order is made under this section that a company be wound-up, Part XIII shall apply to the winding-up, with any necessary modifications, as if the order had been made upon an application duly filed by the company for a winding-up by the court. (6) A copy of any order under this section altering the company's share capital or articles shall be lodged by the company with the Registrar within fifteen days after the making of the order. (7) Where the order alters the company's share capital, the Registrar, on the lodgement of the order, shall issue a replacement certificate of share capital for the company, worded to meet the circumstances of the case. (8) A person who contravenes an order under this section that is applicable to the person shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding one thousand monetary units or to imprisonment for a period not exceeding twelve months, or to both. (9) If the company fails to comply with subsection (6), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues. Part XII – Foreign companies
Part
Part XII – Foreign companies
- 240 Verify source ↗
Interpretation ................................................................................................................................................................................... 115
This section defines several terms used in this Part, including documentary agent, established place of business, existing foreign company, foreign company, local director, and registered principal office.
240. Interpretation (1) In this Part, unless the context otherwise requires— "documentary agent" means a person appointed as a documentary agent of a foreign company for the purposes of section two hundred and forty-five; "established place of business" means a place of business of a foreign company that is an established place of business under section two hundred and forty-one; "existing foreign company" means a body corporate incorporated outside Zambia which immediately before the commencement of this Act was registered as a foreign company under the former Act; "foreign company" means— (a) a body corporate formed outside Zambia that has registered under this Part; or (b) an existing foreign company, subject to section two hundred and forty-three; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 115 Companies Act, 1994 (Chapter 388) Zambia Repealed "local director" means a local director of a foreign company appointed under section two hundred and forty-eight; "registered principal office" means the office of a foreign company registered under section two hundred and forty-five as its principal place of business. - 241 Verify source ↗
Established place of business ................................................................................................................................................... 116
This section defines when a foreign body corporate has an established place of business in Zambia, and when certain agency, broker, or subsidiary offices do not count as one.
241. Established place of business (1) For the purposes of this Part, and subject to this section, a body corporate formed outside Zambia has an "established place of business" if it has any of the following in Zambia; (a) a branch or management office; (b) an office for the registration of transfer of shares; (c) a factory or mine; or (d) any other fixed place of business. (2) An agency in Zambia of a body corporate formed outside Zambia in which the agent— (a) does not have, or does not habitually exercise, a general authority to negotiate and conclude contracts on behalf of the body corporate; and (b) does not maintain a stock of merchandise belonging to that body corporate from which he regularly fills orders on its behalf; is not an established place of business of the body corporate for the purpose of this Part. (3) If a body corporate formed outside Zambia carries on business dealings in Zambia through a broker or general commission agent acting in the ordinary course of his business as such, the office of the broker or agent is not an established place of business of the body corporate for the purposes of this Part. (4) If a body corporate formed outside Zambia has a subsidiary which is incorporated in Zambia or has an established place of business in Zambia, then— (a) an office of the subsidiary; or (b) an established place of business of the subsidiary; shall not be regarded for that reason only as an established place of business of the body corporate. - 242 Verify source ↗
Financial year of a foreign company ...................................................................................................................................... 116
This section defines a foreign company’s financial year and accounting dates, and lets a foreign company change an accounting date if it files notice with the Registrar and keeps the financial year within fifteen months.
242. Financial year of a foreign company (1) For the purposes of this Act, the "financial year" of a foreign company is the period, whether or not a period of one year, that begins on one accounting date of the company and ends on the day before the next. (2) The first "accounting date" of a foreign company is (a) the date of its registration as a foreign company; or (b) the date on which it first had an established place of business; whichever is earlier. (3) Subject to this section, the subsequent accounting dates of a foreign company are— (a) the date specified in the application for its registration as the date on which the second financial year of the company will begin, and anniversaries of that date, if the application for registration specified such a date; or By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 116 Companies Act, 1994 (Chapter 388) Zambia Repealed (b) the anniversaries of the date of its incorporation, if the application for registration did not specify such a date. (4) A foreign company may change an accounting date by lodging a notice of the change in the prescribed form with the Registrar, provided that the change does not result in a financial year's being longer than fifteen months. (5) Where a foreign company changes an accounting date under this section, the subsequent accounting dates of the company are unless changed under this section, the anniversaries of that date. - 243 Verify source ↗
Application Part to listing foreign companies .................................................................................................................... 117
This section says the Act applies to an existing foreign company as though it had been registered under the Act.
243. Application Part to listing foreign companies (1) Subject to this Act, this Act applies to an existing foreign company as if (a) it had been duly registered under this Act as a foreign company; and (b) any document that, in accordance with the former Act, was duly lodged by it with the Registrar, or duly registered by the Registrar, had been duly lodged or registered under this Act. - 244 Verify source ↗
Register of foreign companies .................................................................................................................................................. 117
The Registrar must maintain a register of foreign companies.
244. Register of foreign companies The Registrar shall maintain a register of foreign companies for the purposes of this Part. - 245 Verify source ↗
Registration of a foreign company .......................................................................................................................................... 117
An external company may register as a foreign company by lodging the required application and documents with the Registrar.
245. Registration of a foreign company (1) A body corporate formed outside Zambia (in this section called an "external company") may register under this section as a foreign company by lodging with the Registrar the application for registration and the other documents required to accompany it under this section. (2) The application shall be in the prescribed form and contain the following particulars relating to the company: (a) its name; (b) the nature of its business or businesses or other main objects; (c) (d) (e) the relevant particulars of each of one or more individuals resident in Zambia, or bodies corporate incorporated in Zambia, authorised to accept on behalf of the company service of process or any notice required to be served on the company (in this Part called "documentary agents"); the relevant particulars of the persons who are to be local directors of the company, specifying which is to be the local chairman; if the company has shares, the number and nominal value, if any, of its authorised and issued shares, and the amount paid thereon, distinguishing between the amounts paid and payable in cash and the amounts paid and payable otherwise than in cash; (f) the address of the company's registered or principal office in the country of its incorporation; (g) subject to subsection (5), the physical address of an office in Zambia to be its registered office; (h) a postal address in Zambia. (3) The application may also specify a date, being a date, not more than fifteen months after the date of lodgement of the application, on which the second financial year of the company will begin. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 117 Companies Act, 1994 (Chapter 388) Zambia Repealed (4) The application shall be accompanied by— (a) a certified copy of the charter, statutes, regulations, memorandum and articles, or other instrument constituting, or defining the constitution of, the company; (b) (c) in relation to each documentary agent and local director, a statement signed by him accepting appointment as such; and the particulars and documents referred to in subsection (2) of section ninety-nine relating to any charge on any property in Zambia acquired by the company more than fourteen days before the lodgement of the application, of, if there are no such charges, a statement in the prescribed form to that effect. (5) If an external company has not set up or acquired an established place of business when it lodges an application for registration as a foreign company, it shall do so within twenty-eight days after the lodgement. (6) For the purposes of this section, the relevant particulars of a person are the following: (a) in the case of an individual— (i) his present forenames or surname; (ii) any former forename or surname; (iii) his residential and postal address; (iv) his business occupation (if any); (b) in the case of a body corporate— (i) its name and, if a company, its designating number; (ii) its registered office; and (iii) its registered postal address. - 246 Verify source ↗
External company must register if it has an established place of business ............................................................. 118
A company formed outside Zambia must apply for registration as a foreign company within 28 days after it sets up or acquires a business place in Zambia.
246. External company must register if it has an established place of business (1) (2) If a body corporate formed outside Zambia sets up or acquires an established place of business in Zambia, it shall, within twenty-eight days after so doing, apply for registration as a foreign company under section two hundred and forty-five. If a body corporate fails to comply with subsection (1), the body corporate, and any officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues. - 247 Verify source ↗
Returns required on alteration of registered particulars ................................................................................................. 118
A foreign company must file a prescribed notice with the Registrar when specified registered particulars change, and sometimes attach the affected person’s signed consent.
247. Returns required on alteration of registered particulars (1) (2) (3) If any alteration is made in the charter, statutes, regulations, memorandum and articles, or other instrument relating to a foreign company referred to in paragraph (4)(a) of section two hundred and forty-five the company shall, within two months after the date on which that alteration takes effect, lodge with the Registrar a notice in the prescribed form giving details of the alteration. If any alteration is made in any of the particulars contained in the application referred to in subsection (2) of section two hundred and forty-five the company shall, in accordance with this section, lodge with the Registrar a notice in the prescribed form giving details of the alteration. In the case of any alteration in any of the particulars referred to in paragraphs(a), (b), (e) or (f) of subsection (2) of section two hundred and forty-five the notice required by subsection (2) shall be lodged within two months after the date of effect of the alteration. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 118 Companies Act, 1994 (Chapter 388) Zambia Repealed (4) In the case of any alteration in any of the particulars referred to in subparagraphs (c), (d), (g) or (h) of subsection (2) of section two hundred and forty-five the notice required by subsection (2) shall be lodged within twenty-eight days after the date of the alteration. (5) Where the particulars lodged pursuant to this section include the name of a person appointed as a documentary agent or as a local director or manager, the notice shall be accompanied by a consent signed by the person to act in that capacity. - 248 Verify source ↗
Foreign company to appoint local director .......................................................................................................................... 119
A foreign company must keep at least one local director in Zambia and the company must not appoint an unqualified person as local director.
248. Foreign company to appoint local director (1) A foreign company shall have at all times at least one individual, in this Act referred to as a "local director", empowered and authorised to conduct and manage all the affairs, properties, business and other operations of the company in Zambia. (2) A local director of the company shall be resident in Zambia, and if the company has more than one local director, at least one of them shall be a resident of Zambia. (3) A contravention of subsection (2) which continues for more than two months shall constitute grounds for windingup of the company by the court on the application of the Registrar. (4) A company which intends to decrease the number of its local directors shall notify the Registrar in writing. (5) A company shall designate the director referred to in subsection (1), as the local chairperson. (6) A company shall not appoint as a local director, a person who, under Part X, is not qualified to be a director of a company incorporated under this Act. [section 248 substituted by section 21 of Act 24 of 2011] - 249 Verify source ↗
Responsibilities of local directors ............................................................................................................................................ 119
A foreign company must identify each local director in specified business documents, keep a register of local directors, and the Registrar may exempt the company from the document-identification rule by Gazette notice.
249. Responsibilities of local directors (1) If a person registered as a local director of a foreign company does an act ostensibly on behalf of the company in the course of carrying on the business of the company in Zambia, the act shall bind the company unless— (a) the local director has no authority so to act; and (b) the person with whom he is dealing has actual knowledge of the absence of authority, or, having regard to his position with, or relationship to, the company, ought to know of the absence of authority. (2) The company shall, in all trade circulars and business correspondence on or in which the company's name appears, and which are despatched by or on behalf of the company— (a) in Zambia, whether to persons in Zambia or not; (b) outside Zambia exclusively to persons in Zambia; or (c) exclusively for the purposes of the company's operations in Zambia; state in legible Roman characters in respect of each local director— (i) his forenames or the initials thereof and his surname; and (ii) any former forename or surname. (3) The Registrar may, if in his opinion special circumstances exist which justify it, by notice published in the Gazette, and subject to any conditions specified in the notice, exempt the company from the requirements of subsection (2). By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 119 Companies Act, 1994 (Chapter 388) Zambia Repealed (4) The company shall maintain a register of its local directors, to be kept at its registered office or the office notified to the Registrar for the purposes of section two hundred and fifty-two, and section two hundred and twenty-four shall apply to the register with the necessary modifications. - 250 Verify source ↗
Service on foreign company ...................................................................................................................................................... 120
A foreign company may be served documents in several specified ways, and service generally remains effective for two years after it stops being registered as a foreign company (except paragraph (d)). Courts keep their own power to direct how service is done for court proceedings.
250. Service on foreign company (1) A document may be served on a foreign company by— (a) leaving it at an address registered as the address of a documentary agent of the company; (b) personal service on a documentary agent of a company, if the agent is an individual; (c) (d) service in accordance with this Act on the documentary agent, if the documentary agent is a company; leaving it at the registered office of the company, if the company has no registered documentary agent, or no registered address for such an agent; (e) personal service on a local director; (f) leaving it at the registered office or principal place of business of the company in the country of its incorporation; or (g) personal service on a director or secretary of a company in the country of its incorporation. (2) A document sent by registered or other receipted post to the address registered as the postal address of a documentary agent of the company shall be deemed to have been served on the company if it is proved, by a receipt issued or otherwise, that the document, or a post office notification of the document, was delivered to the registered postal address. (3) Service in accordance with subsection (1), other than paragraph (d), shall continue to be effective in relation to the company for a period of two years after the company ceases to be registered as a foreign company. (4) Nothing in this section shall derogate from the power of any court to direct how service shall be affected of any document relating to legal proceedings before the court. - 251 Verify source ↗
Annual accounts of foreign company ..................................................................................................................................... 120
Foreign companies must file annual accounts and an auditors’ report with the Registrar within three months after each financial year, and may need to file a certified copy and English translation within 28 days after member circulation requirements are met.
251. Annual accounts of foreign company (1) A foreign company shall, within three months after the end of each financial year of the company, lodge with the Registrar annual accounts and an auditors' report corresponding as nearly as practicable with the annual accounts and auditors' report in relation to the operations and assets in Zambia of the company that would be required under Part VIII if those operations and assets were the whole operations and assets of a public company incorporated under this Act. (2) For the purposes of subsection (1), the foreign company shall appoint an auditor or auditors. (3) An auditor of a foreign company shall be— (a) a registered accountant having a practice certificate issued by the Zambia Institute of Certified Accountants under the Accountants Act, 1982; or [Cap. 391] (b) a firm of such registered accountants. (4) If the foreign company is required under its articles or other provisions of the constitution regulating its conduct, or under the laws of the country in which it is incorporated, to circulate annual accounts to its members or lay them before its members in general meeting, the company shall, within twenty-eight days after complying with those requirements, lodge with the Registrar a certified copy of the accounts together with, if the accounts are in a language other than English, a certified translation of them into English. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 120 Companies Act, 1994 (Chapter 388) Zambia Repealed (5) (6) In the profit and loss account in the accounts referred to in subsection (1), the company may make such apportionments and add such notes and explanations as are, in its opinion, necessary or desirable in order to give a true and fair view of the profit or loss on its operations in Zambia, and for this purpose may debit a reasonable rate of interest on capital employed in Zambia. In relation to the accounts and reports referred to in subsection (1), the Registrar may, on the application or with the consent of the local directors of the company, modify, in relation to the company, any of the requirements of this section or Part VIII to suit the circumstances of the company, provided that the accounts and reports give a true and fairview of the profit or loss on the operations of the company, and of the state of affairs of the company, in Zambia. - 252 Verify source ↗
Keeping of accounting records by foreign company ......................................................................................................... 121
A foreign company must keep, retain, format, store, and make available its accounting records in the required way, and may be exempted by the Registrar in special circumstances.
252. Keeping of accounting records by foreign company (1) A foreign company shall— (a) keep such accounting records as correctly record and explain the transactions of the company relating to its operations and assets in Zambia (including any transactions as trustee) and the financial position of the company in relation to those operations and assets; and (b) keep its accounting records in such a manner as will enable— (i) (ii) the preparation from time to time of true and fair accounts of those operations and assets of the company; and those accounts of the company to be conveniently and properly audited in accordance with this Part. (2) The company shall retain the accounting records for a period of ten years after the completion of the transactions to which they relate. (3) The company shall keep at its registered office, or at another office notified to the Register in writing, such statements and records with respect to the matters dealt with in its accounting records as would enable the company to prepare true and fair accounts together with any documents required by this Part to be attached to the accounts. (4) The accounting records of the company shall be kept in writing or in any form that enables the accounting records to be readily accessible and readily convertible into writing. (5) The accounting records of the company shall be kept in English, unless the use of another language is approved in writing by the Registrar. (6) The company shall make its accounting records available in writing at all reasonable times for inspection without charge by the local directors and auditors of the company and by the Registrar or his delegate. (7) If the company fails to comply with this section— (a) (b) the Registrar may apply for an order that the company be wound-up in accordance with section two hundred and fifty-seven; and the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two thousand monetary units or to a term of imprisonment not exceeding two years, or to both. (8) The Registrar may, if he considers that the special circumstances of the company justify it, exempt the company, generally or in respect of any particular financial year, from any of the provisions of this section. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 121 Companies Act, 1994 (Chapter 388) Zambia Repealed - 253 Verify source ↗
Name of foreign company .......................................................................................................................................................... 122
Foreign companies must use a Zambia name rule tied to their incorporation name, unless the Registrar permits a different one or directs a new name.
253. Name of foreign company (1) Subject to this section, the name of a foreign company in Zambia shall be— (a) the name of the company in the country of its incorporation, if that name is in English; or (b) the name of the company in the country of its incorporation or a translation thereof, as the company chooses, if that name is in Roman characters in a language other than English; (c) a translation or transliteration of the name of the company in the country of its incorporation, as the company chooses, if that name is not in Roman characters. (2) The Registrar may, on the application of the foreign company, whether before or after registration of the company, permit the company to have a different name in Zambia. (3) (4) (5) If, in the opinion of the Registrar, whether formed before or after the registration of a foreign company, the name of the foreign company is likely to cause confusion with the name of another body corporate or is otherwise undesirable, the Registrar may direct that the foreign company shall adopt another name for use in Zambia, being a name approved by the Registrar. If the Registrar makes a direction under subsection (3) in the case of a body corporate applying for registration as a foreign company, he shall not register the body corporate until it adopts such a new name. If the Registrar makes a direction under subsection (3) in the case of a foreign company already registered, and it does not adopt such a name within forty-two days after the issue of the direction, he shall register the designating number of the company, together with the words "Foreign Company", as the name of the company. (6) A change of name under this section, or the use of a name different from the name used by the foreign company in the country of its incorporation shall not affect any rights or obligations of the company, or render defective any legal proceedings instituted or to be instituted by or against the company, and any legal proceedings may be continued or commenced by or against the company by its new name that might have been continued or commenced by or against the company by its former name. - 254 Verify source ↗
Publication of name of foreign company ............................................................................................................................. 122
A foreign company’s name is treated as including specified words about incorporation and limited liability, except for business correspondence sent outside Zambia.
254. Publication of name of foreign company (1) Section one hundred and ninety-four shall apply to a foreign company as if its name included at the end— (a) the words "incorporated in "followed by the country of its incorporation; and (b) the words "with limited liability", if the liability of the members is limited; but shall not apply in relation to business correspondence of the company despatched outside Zambia. - 255 Verify source ↗
Registration of charges by foreign company ....................................................................................................................... 122
Section 99 applies to a foreign company with specified wording changes.
255. Registration of charges by foreign company Section ninety-nine shall apply in relation to a foreign company as if— (a) a reference to a company were a reference to the foreign company; (b) a reference to a charge were a reference to a charge over property of the company situated in Zambia; and (c) a reference to the acquisition of property by the company included a reference to the acquisition of property before it registration as a foreign company. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 122 Companies Act, 1994 (Chapter 388) Zambia Repealed - 256 Verify source ↗
Notification of winding-up of foreign company ................................................................................................................. 123
A foreign company must notify the Registrar within 28 days if it is wound up, enters voluntary winding-up steps, or ceases to exist; if dissolved, its documentary agents and local directors must file the notice. After winding-up starts, the company must mark later Zambian invoices, orders, and business letters with a statement that it is being wound up. A person who keeps doing business in Zambia for a dissolved foreign company commits an offence and faces a daily fine.
256. Notification of winding-up of foreign company (1) Where, in the case of a foreign company— (a) a winding-up order is made by a court of the country of its incorporation; (b) a resolution is passed or other appropriate proceedings are taken in that country to lead to the voluntary winding-up of the company; or (c) the company is dissolved or otherwise has ceased to exist according to the law of the country of its incorporation. the company, or, if the company is dissolved, the documentary agents and local directors of the company, shall lodge a notice thereof with the Registrar within twenty-eight days after the event. (2) Where an event referred to in paragraph (a) or (b) of subsection (1) has occurred, the company shall cause a statement to appear in legible Roman characters on every invoice, order or business letter thereafter issued in Zambia by or on behalf of the company, being a document on or in which the company's name appears, to the effect that the company is being wound-up in the country of its incorporation. (3) A person who carries on, or purports to carry on, in Zambia business on behalf of a foreign company after the date on which it was dissolved or otherwise ceased to exist in the country of its incorporation shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding thirty monetary units for each day that he carries on or purports to carry on the business. (4) Nothing in this action shall derogate from the provisions of section two hundred and fifty-seven. - 257 Verify source ↗
Winding-up of foreign company in Zambia .......................................................................................................................... 123
A foreign company’s undertaking in Zambia may be wound up under this section, and the court can order winding-up on specified grounds and validate transactions in Zambia in some cases.
257. Winding-up of foreign company in Zambia (1) The undertaking in Zambia of a foreign company may be wound-up in accordance with this section whether or not the company has been dissolved or has otherwise ceased to exist according to the law of the country of its incorporation. (2) For the purposes of a winding-up under this section, the foreign company shall be treated as if it were a company incorporated in Zambia whose whole operations and assets were the operations and assets in Zambia of the foreign company. (3) Subject to this section, Part XIII shall apply, with any necessary modifications, to the winding-up of a foreign company. (4) A foreign company may be wound-up by the court on the following grounds in addition to those referred to in section two hundred and seventy-two; (a) (b) (c) if it is in the course of being wound-up, voluntarily or otherwise, in the country of its incorporation; if it is dissolved in the country of its incorporation or has ceased to carry on business in Zambia, or is carrying on business for the purposes only of winding-up its affairs; if the court is of the opinion that the company is being operated in Zambia for any unlawful purpose. (5) The court may, in the winding-up order or on subsequent application by the liquidator, direct that all transactions in Zambia by or with the foreign company shall be deemed to be or have been validly done notwithstanding that they occurred after the date when the company was dissolved or otherwise ceased to exist according to the law of the country of its incorporation, and may make the order on such terms and conditions as it deems fit. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 123 Companies Act, 1994 (Chapter 388) Zambia Repealed - 258 Verify source ↗
Cessation of business of foreign company ........................................................................................................................... 124
A foreign company that stops having an established place of business in Zambia must file a notice with the Registrar within 28 days and keep a documentary agent for two years.
258. Cessation of business of foreign company (1) If a foreign company ceases to have an established place of business in Zambia, it shall, within twenty-eight days after so ceasing, lodge a notice of that fact in the prescribed form with the Registrar. (2) The Registrar shall register the notice and the company shall, subject to this section, thereupon cease to be registered as a foreign company. (3) The company shall maintain a documentary agent, and continue to notify the Registrar of the particulars of its documentary agents, for a period of two years after lodging the notice of its ceasing to have an established place of business. (4) Where the Registrar has reason to believe that a foreign company has ceased to have an established place of business in Zambia, he shall serve a notice on the company of that fact and stating the effect of subsection (5). (5) If, at the end of three months after the giving of a notice under subsection (4), the Registrar is not satisfied that the foreign company is maintaining an established place of business in Zambia, the company shall be deemed to have lodged a notice under subsection (1) on that day. (6) Any person who, while a body corporate was registered as foreign company, would have had the right to inspect a document or register held by the Registrar in relation to the company, shall have the right to do so during the period of two years following the lodging of a notice by the company under subsection (1). - 259 Verify source ↗
Penalties and disabilities ............................................................................................................................................................ 124
Foreign companies, and some related officers or agents, can commit an offence if they fail to comply with obligations under this Part; fines can reach 500 monetary units, and a court may relieve a disability from failure to lodge documents.
259. Penalties and disabilities (1) (2) If a foreign company fails to comply with any of the obligations imposed upon it by this Part, the foreign company and any officer or documentary agent in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. If a local director or a documentary agent of a foreign company wilfully fails to comply with any of the obligations imposed upon him by this Part, the local director or documentary agent shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. (3) Subsections (1) and (2) shall not apply in respect of any act or omission which constitutes an offence under another provision of this Part, or of this Act as applied by this Part. (4) Subject to this section, if a foreign company fails to lodge with the Registrar any document required by this Part to be so lodged, the rights of the foreign company under or arising out of or incidental to any contract made in Zambia while the failure continues shall not be enforceable by action or other legal proceedings. (5) A court may, on the application of a foreign company to which subsection (4) applies and if it is satisfied that it is just and equitable to do so, grant relief, either generally or on conditions, from any disability imposed by subsection (4). (6) Nothing in this section shall prejudice the rights of any other parties against the foreign company in respect of a contract referred to in subsection (4). (7) If another party commences an action or proceedings against a foreign company to which subsection (4) applies, this section shall not preclude the foreign company from enforcing in the action or proceedings by way of counter-claim, set-off or otherwise, such rights as it may have against the party in respect of that contract. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 124 Companies Act, 1994 (Chapter 388) Zambia Repealed - 260 Verify source ↗
Invitations to the public relating to foreign companies ................................................................................................. 125
Foreign companies are covered by Part VI, and their registered public-offer prospectuses must include specified company details; the Registrar may waive or modify Part VI on request.
260. Invitations to the public relating to foreign companies (1) Part VI shall apply in relation to foreign companies, with the necessary modifications, as if a foreign company were a public company. (2) At the request of a foreign company, the Registrar may, if he thinks fit, waive or modify the provisions of Part VI in relation to the company. (3) Any prospectus registered by a foreign company for the purposes of an invitation to the public to acquire shares or debentures shall, in addition to complying with Part VI and subject to any modifications made under subsection (2), also contain particulars of— (a) the instrument constituting or defining the constitution of the company; (b) the law, or provisions having the the force of law, by or under which the incorporation of the company was effected; (c) an address in Zambia where copies of the foregoing, or, if the same are in a language other than English, certified translations thereof, can be inspected; (d) the date on which and the country in which the company was incorporated; and (e) whether the liability of the members is limited. (4) A breach of subsection (3) shall be deemed to be a breach of section one hundred and thirty. - 261 Verify source ↗
Invitations to the public relating to other external bodies corporate ........................................................................ 125
A non-Zambian company’s prospectus for a public invitation to buy shares or debentures must include specified company details; the Registrar may also waive or modify Part VI on request.
261. Invitations to the public relating to other external bodies corporate (1) In this section, "non-Zambian company" means any body corporate formed or proposed to be formed outside Zambia, other than a foreign company. (2) Part VI shall apply, with the necessary modifications, in relation a non-Zambian company as if it were a public company. (3) At the request of a non-Zambian company, the Registrar may, if he thinks fit, waive or modify the provisions of Part VI in relation to the company. (4) Any prospectus registered by a non-Zambian company for the purposes of an invitation to the public to acquire shares or debentures shall, in addition to complying with Part VI and subject to any modifications made under subsection (2), also contain particulars of— (a) the instrument constituting or defining the constitution of the company; (b) the law, or provisions having the force of law, by or under which the incorporation of the company was effected; (c) an address in Zambia where copies of the foregoing, or, if the same are in a language other than English, certified translations thereof, can be inspected; (d) the date on which and the country in which the company was incorporated; and (e) whether the liability of the members is limited. (5) A breach of subsection (4) shall be deemed to be a breach of section one hundred and thirty. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 125 Companies Act, 1994 (Chapter 388) Zambia Repealed Part XIII – Winding-up
Part
Part XIII – Winding-up
- 262 Verify source ↗
Interpretation ............................................................................................................................................................................ 126
For this Part, “member of a company” also includes a person claimed or alleged to be liable to contribute to the company’s assets in a winding up, unless the context requires otherwise.
262. Interpretation For the purposes of this Part, a reference to a member of a company includes, unless the context otherwise requires, a reference to a person claiming or alleged to be liable to contribute to the assets of the company in a winding up, for the purpose of any proceedings for determining, and of all proceedings prior to the final determination of, the persons who are so liable (including the presentation of a winding-up petition). - 263 Verify source ↗
Modes of winding-up ............................................................................................................................................................ 126
A company wound up under this Part may be wound up by the court or voluntarily.
263. Modes of winding-up (1) The winding-up of a company under this Part shall be— (a) a winding-up by the court; or (b) a voluntary winding-up, being— (i) a members' voluntary winding-up; or (ii) a creditors' voluntary winding-up. - 264 Verify source ↗
Application of repealed Act ................................................................................................................................................ 126
The winding-up rules in this Act do not apply to a winding-up that began before the Act started.
264. Application of repealed Act The provisions of this Act relating to the winding-up of a company shall not apply in relation to a winding-up that was commenced before the commencement of this Act, and such a winding-up shall be continued as if this Act had not been passed. - 265 Verify source ↗
Liability of members on winding-up ............................................................................................................................... 126
On winding-up, members may have to contribute to the company’s assets to cover debts, winding-up costs, and adjustment of members’ rights, subject to section 266.
265. Liability of members on winding-up (1) This section shall apply only in the case of a company limited by guarantee, an unlimited company and a company having shares which are not fully paid up. (2) When a company is wound-up, every member at the time of the commencement of the winding- up shall, subject to section two hundred and sixty-six, be liable to contribute to the assets of the company an amount sufficient for payment of its debts and liabilities and the costs, charges and expenses of the winding-up and for the adjustment of the rights of the members among themselves. (3) A sum due to any member in his capacity as a member by way of dividends or otherwise— (a) shall not be regarded as a debt of the company payable to that member in a case of competition between himself and any other creditor not a member; and (b) may be taken into account for the purpose of the final adjustment of the rights of the members among themselves. - 266 Verify source ↗
Limitation of liability ............................................................................................................................................................. 126
Members cannot be required to contribute more than the unpaid amount on their shares, or more than the amount promised in a guarantee, depending on the company type.
266. Limitation of liability (1) (2) In the case of a public company or a private company limited by shares, section two hundred and sixty-five shall not require from any member a contribution exceeding the amount, if any, unpaid on the shares in respect of which he is liable as a member. In the case of a company limited by guarantee, section two hundred and sixty-five shall not require from any member a contribution exceeding the amount that he undertook, in the declaration of guarantee, to contribute to the assets of the company in the event of its being wound-up. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 126 Companies Act, 1994 (Chapter 388) Zambia Repealed - 267 Verify source ↗
Nature of liability of a member ......................................................................................................................................... 127
A member’s liability becomes a debt when the liability starts, and payment is due when calls are made to enforce it.
267. Nature of liability of a member The liability of a member shall create a debt in the nature of a specially accruing debt due from him at the time when his liability commenced, but payable at the times when calls are made for enforcing the liability. - 268 Verify source ↗
Liability in case of death of bankruptcy of a member .............................................................................................. 127
If a member dies or becomes bankrupt, the personal representative or trustee must handle the member’s liability to contribute to the company, and payment can be enforced against the estate if needed.
268. Liability in case of death of bankruptcy of a member (1) If a member dies, whether before or after he has been placed on the list of those liable to contribute to the assets of the company, his personal representatives shall be so liable in due course of administration and, if they fail to pay any money ordered to be paid by them, proceedings may be taken for administering the estate of the deceased member and for compelling payment therefrom of the money due. (2) If a member becomes bankrupt, either before or after he has been placed on the list of those liable to contribute to the assets of the company— (a) his trustee in bankruptcy shall represent him for all the purposes of the winding-up, and shall be liable to contribute accordingly; and (b) there may be proved against the estate of the bankrupt the estimated value of his liability to future calls as well as to calls already made. - 269 Verify source ↗
Jurisdiction to wind-up companies ................................................................................................................................... 127
The court may wind up Zambian companies and certain foreign companies that are registered in Zambia or have business, undertakings, or assets in Zambia.
269. Jurisdiction to wind-up companies (1) The court shall have jurisdiction to wind-up, in accordance with this Act— (a) a body corporate incorporated in Zambia; (b) a body corporate incorporated in a foreign country and— (i) registered as a foreign company; or (ii) having any business or undertaking or assets in Zambia. - 270 Verify source ↗
Application of Division ......................................................................................................................................................... 127
This Division applies when a company is being wound up by the court.
270. Application of Division This Division shall apply in the case of the winding-up of a company by the court. - 271 Verify source ↗
Persons who may petition for a company to be wound-up by the court ........................................................... 127
This section says who may petition the court to wind up a company, and it limits when a member or contingent/prospective creditor can do so.
271. Persons who may petition for a company to be wound-up by the court (1) Subject to this section, a company may be wound-up by the court on the petition of— (a) the company; (b) any creditor, including a contingent or prospective creditor, of the company; (c) a member; (d) any person who is the personal representative of a deceased member; (e) the trustee in bankruptcy of a bankrupt member; (f) any liquidator of the company appointed in a voluntary liquidation; or (g) the Registrar. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 127 Companies Act, 1994 (Chapter 388) Zambia Repealed (2) In the case of a public company or a private company limited by shares, a member shall not be entitled to present a winding-up petition unless his shares, or some of them— (a) were originally allotted to him; (b) have been held by him, and registered in his name for at least six months; or (c) have devolved on him by operation of law. (3) The court shall not hear a winding-up petition presented by a contingent or prospective creditor until— (a) such security for costs has been given as the court thinks reasonable; and (b) A prima facie case for winding-up has been established to the satisfaction of the court. (4) Where a company is being wound-up voluntarily, the court shall not make a winding-up order unless it is satisfied that the voluntary winding-up cannot be continued with due respect to the interests of the creditors or members. - 272 Verify source ↗
Circumstances in which company may be wound up by court .............................................................................. 128
The court may order a company wound up on certain grounds, including insolvency, inactivity, member numbers falling below two, or it being just and equitable.
272. Circumstances in which company may be wound up by court (1) The court may order the winding-up of a company on the petition of a person other than the Registrar if— (a) the company has by special resolution resolved that it be wound-up by the court; (b) the company does not commence its business within twelve months after its incorporation or suspends its business for twelve months; (c) the company is unable to pay its debts; (d) the period, if any, fixed for the duration of the company by the articles expires of the event, if any, occurs on the occurrence of which the articles provide that the company is to be dissolved; (e) the number of members is reduced below two; or (f) in the opinion of the court, it is just and equitable that the company should be wound-up. (2) The court may order the winding-up of a company on the petition of the Registrar on the grounds specified in paragraph (b), (d), (e or f) of subsection (1) or on the ground that the company has persistently failed to comply with any of the provisions of this Act. (3) For the purposes of this section, a company is unable to pay its debts if— (a) there is due from the company to any creditor (including a creditor by assignment) an amount exceeding fifty monetary units, and— (i) (ii) the creditor has, more than twenty-one days previously, served on the company a written demand under his hand requiring the company to pay the amount so due; and the company has failed to pay the sum or to secure or compound it to the reasonable satisfaction of the creditor; (b) execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part; or (c) the company is unable to pay its debts as they fall due. (4) In determining whether a company is unable to pay its debts, the court shall take into account the contingent and prospective liabilities of the company. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 128 Companies Act, 1994 (Chapter 388) Zambia Repealed - 273 Verify source ↗
Commencement of winding-up by court ........................................................................................................................ 129
This section sets when a company winding-up is treated as having started.
273. Commencement of winding-up by court (1) Where, before the presentation of the petition for the winding-up of a company by the court, a resolution has been passed by the company for voluntary winding-up, the winding-up of the company shall be deemed to have commenced at the time of the passing of the resolution, and, unless the court otherwise directs, all proceedings taken in the voluntary winding-up shall be deemed to have been validly taken. (2) In any other case the winding-up shall be deemed to have commenced at the time of the presentation of the petition for the winding-up of the company by the court. - 274 Verify source ↗
Payment of preliminary costs ............................................................................................................................................. 129
A petitioner for a winding-up order must, at their own cost, carry on the winding-up proceedings until a liquidator is appointed; the liquidator generally must reimburse taxed costs from company assets unless the court orders otherwise.
274. Payment of preliminary costs (1) The person, other than the company itself or the liquidator thereof, on whose petition a winding- up order is made shall at his own cost prosecute all proceedings in the winding-up until a liquidator has been appointed. (2) The liquidator shall, unless the court orders otherwise, reimburse to the petitioner, out of the assets of the company, the taxed costs incurred by the petitioner in any such proceedings. (3) Where any winding-up order is made upon the petition of the company or the liquidator thereof, the costs incurred shall, subject to any order of the court, be paid out of the assets of the company in like manner as if they were the costs of any other petitioner. - 275 Verify source ↗
Powers of court on hearing petition ............................................................................................................................... 129
The court may take several actions when hearing a winding-up petition, and it cannot refuse a winding-up order only because the company’s assets are mortgaged, exhausted, or unavailable for members.
275. Powers of court on hearing petition (1) On hearing a winding-up petition, the court may— (a) dismiss it with or without costs; (b) adjourn the hearing conditionally or unconditionally; or (c) make any interim order or other order that it thinks fit; but the court shall not refuse to make a winding-up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets or that the company has no assets or, in the case of a petition by a member, that there will be no assets available for distribution amongst the members. (2) The court may, on the petition's coming on for hearing or at any time on the application of the petitioner, the company, or any person who has given notice that he intends to appear on the hearing of the petition— (a) direct that any notices be given or any steps taken before or after the hearing of the petition; (b) dispense with any notices being given or steps being taken which are required by or under this Act, or by any prior order of the court; (c) direct that oral evidence be taken on the petition or any matter relating thereto; (d) direct a speedy hearing or trial of the petition or any issue or matter; (e) allow the petition to be amended or withdrawn; and (f) give such directions as to the proceedings as the court thinks fit. (3) Where the petition is presented by members on the ground that it is just and equitable that the company should be wound-up, and the court is of opinion that— (a) the petitioners are entitled to relief either by winding-up the company or by some other means; and By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 129 Companies Act, 1994 (Chapter 388) Zambia Repealed (b) in the absence of any other remedy, it would be just and equitable that the company should be wound-up; the court shall make a winding-up order unless it is also of the opinion both that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound-up instead of pursuing that other remedy. - 276 Verify source ↗
Power to stay or restrain proceedings against company .......................................................................................... 130
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, and the court may grant that relief on terms it thinks fit.
276. Power to stay or restrain proceedings against company At any time after the presentation of a winding-up petition and before a winding-up order has been made, the company or the creditor or member may, where any action or proceeding against the company is pending, apply to the court to stay or restrain further proceedings in the action or proceeding, and the court may stay or restrain the proceedings accordingly on such terms as it thinks fit. - 277 Verify source ↗
Avoidance of dispositions ..................................................................................................................................................... 130
After winding-up begins, dispositions of company property, transfers of shares, and changes in members’ status are void unless the court orders otherwise.
277. Avoidance of dispositions Any disposition of the property of the company including things in action, and any transfer of shares or alteration in the status of the members of the company made after the commencement of winding-up by the court shall be void unless the court otherwise orders. - 278 Verify source ↗
Avoidance of attachments ................................................................................................................................................... 130
Attachments, sequestration, distress, or execution against a company's estate or effects after a court winding-up begins are void.
278. Avoidance of attachments Any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of a winding-up by the court shall be void. - 279 Verify source ↗
Copy of order to be registered .......................................................................................................................................... 130
The petitioner must file, serve, and deliver copies of a winding-up order within 15 days, and the Registrar must publish notice in the Gazette within 15 days after receiving the order copy.
279. Copy of order to be registered (1) Within fifteen days after the making of a winding-up order the petitioner shall— (a) lodge a copy of the order with the Registrar; (b) cause a copy to be served upon the secretary of the company or upon such other person or in such manner as the court directs; (c) deliver a copy to the official receiver, if the official receiver has not been appointed as liquidator or if no liquidator has been appointed; and (d) deliver a copy to the liquidator (if any) with a statement that the requirements of this subsection have been complied with. (2) Within fifteen days after receiving a copy of a winding-up order under subsection (1), the Registrar shall cause a notice of the making of the order to be published in the Gazette. (3) If the petitioner fails to comply with subsection (1), he shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding three monetary units for each day that the failure continues. - 280 Verify source ↗
Provisional liquidator ............................................................................................................................................................. 130
The court may appoint a provisional liquidator after a winding-up petition is presented and before a winding-up order is made.
280. Provisional liquidator (1) The court may appoint the official receiver or any other person to be liquidator provisionally at any time after the presentation of a winding-up petition and before the making of a winding-up order. (2) The provisional liquidator shall have and may exercise all the functions and powers of a liquidator subject to such limitations and restrictions as may be prescribed, or as the court specifies in the order appointing him. - 281 Verify source ↗
Stay of actions ......................................................................................................................................................................... 130
After a winding-up order is made or a provisional liquidator is appointed, actions or proceedings against the company may only continue or start with court leave.
281. Stay of actions When a winding-up order has been made or a provisional liquidator has been appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 130 Companies Act, 1994 (Chapter 388) - 282 Verify source ↗
Appointment and style of liquidator ............................................................................................................................... 131
The court can appoint or direct the appointment of a liquidator, and the official receiver becomes liquidator in some default situations.
282. Appointment and style of liquidator Zambia Repealed (1) The court may in the winding-up order appoint a liquidator, or may give directions as to the appointment of a liquidator, by the members or creditors of a company or otherwise as it thinks fit. (2) If the order makes no direction as to the liquidator, the official receiver shall be the liquidator of the company. (3) Where a provisional liquidator has been appointed before the making of the winding-up order, he shall continue to act as such until he or another person becomes liquidator and is capable of acting as such. (4) Where no provisional liquidator has been appointed before the making of the winding-up order, the official receiver shall become the provisional liquidator and shall continue to act as such until he or another person becomes liquidator and is capable of acting as such. (5) The official receiver shall be the liquidator during any vacancy or at any time when there is no liquidator capable of acting. (6) Any vacancy in the office of the liquidator appointed by the court may be filled by the court. (7) A liquidator appointed by the court may resign or on cause shown be removed by the court. (8) A liquidator shall be described, where a person other than the official receiver is liquidator, by the style of "the liquidator" or where the official receiver is liquidator, by the style of "the official receiver and liquidator", of the particular company in respect of which he is appointed, and not by his individual name. (9) If more than one liquidator is appointed by the court, the court shall declare whether anything by this Act required or authorised to be done by the liquidator is to be done by all or any one or more of the persons appointed. (10) The Registrar shall, where a liquidator is appointed under subsection (1) or is released under section two hundred and ninety-one, cause the name, business address and details of appointment or release of the liquidator to be notified in the Gazette for public information. [subsection (10) added by section 22 of Act 24 of 2011] - 283 Verify source ↗
Provisions where a person other than official receiver is appointed liquidator ............................................... 131
A non-official-receiver liquidator cannot act until they notify the Registrar and provide required security, and must help the official receiver with information and access.
283. Provisions where a person other than official receiver is appointed liquidator (1) If a person other than the official receiver is appointed liquidator in the winding-up of a company by the court, that person— (a) (b) shall not be capable of acting as liquidator until he has lodged a notice of his appointment with the Registrar and given such security as may be directed by the court, or by the offical receiver, to the satisfaction of the official receiver; and shall give the official receiver such information and such access to and facilities for inspecting the books and documents of the company, and generally such aid as may be requisite for enabling the official receiver to perform his duties under this Act. (2) Paragraph (a) of subsection (1) shall not apply in the case of a provisional liquidator unless the court so orders. - 284 Verify source ↗
Control of liquidators by official receiver ...................................................................................................................... 131
The official receiver supervises liquidators in court windings-up and can investigate, question, and recommend further action.
284. Control of liquidators by official receiver (1) Where, in the winding-up of a company by the court, a person other than the official receiver is the liquidator, the official receiver shall take cognizance of his conduct and if the liquidator does not faithfully perform his duties and duly observe all the respect to the performance of his duties, or if any complaint is made to the official receiver by any creditor or member in regard thereto, the official receiver shall inquire into the matter, and take such action as he thinks fit. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 131 Companies Act, 1994 (Chapter 388) Zambia Repealed (2) The official receiver may at any time require any liquidator of a company which is being wound-up by the court to answer any inquiry in relation to any winding-up in which he is engaged, and may apply to the court to examine him or any other person on oath concerning the winding-up. (3) An official receiver may— (a) direct an investigation to be made of the books and vouchers of a liquidator; (b) recommend the prosecution of a liquidator, where the official receiver reasonably believes that the liquidator has committed an offence under this Act; or (c) recommend the disqualification of a person from carrying out the functions of a liquidator. [subsection (3) substituted by section 23 of Act 24 of 2011] - 285 Verify source ↗
Remuneration of liquidators ............................................................................................................................................... 132
Liquidators are entitled to remuneration, set by agreement, creditor resolution, or the court; the official receiver may also be paid when acting as liquidator or provisional liquidator.
285. Remuneration of liquidators (1) Subject to section three hundred and forty-six A, a liquidator, other than the official receiver, shall be entitled to receive such salary or remuneration by way of commission or otherwise as is determined— (a) by agreement between the liquidator and the committee of inspection, if any; (b) by an extraordinary resolution passed at a meeting of creditors convened by the liquidator by a notice to each creditor to which was attached a statement of all receipts and expenditure by the liquidator and the amount of remuneration sought by the liquidator, failing an agreement or where there is no committee of inspection; or (c) by the court, failing a determination under paragraph (a) or (b). [subsection (1) substituted by section 24 of Act 24 of 2011] (2) Where the salary or remuneration of a liquidator is determined under paragraph (a) of subsection (1), the court may, on the application of one or more members whose shareholdings represent in total not less than five per centum of the issued capital of the company (or who, in the case of a company having no share capital, constitute not less than five per centum of the members), confirm or vary the determination. (3) Where the salary or remuneration of a liquidator is determined under paragraph (b) of subsection (1), the court may, on the application of the liquidator or one or more members as described in subsection (2), confirm or vary the determination. (4) Subject to any order of the court, the official receiver when acting as a liquidator or provisional liquidator of a company shall be entitled to receive such remuneration by way of commission or otherwise as may be prescribed. - 286 Verify source ↗
Custody and vesting of company's property ................................................................................................................. 132
When a winding-up order is made or a provisional liquidator is appointed, the 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 lodge or deliver copies of the order within 15 days. Failure to comply is an offence punishable by a daily fine.
286. Custody and vesting of company's property (1) Where a winding-up order has been made or a provisional liquidator has been appointed, the liquidator or provisional liquidator shall take into his custody or under his control all the property and things in action to which the company is or appears to be entitled. (2) The court may, on the application of the liquidator, by order direct that all or any part of the property of whatsoever description belonging to the company or held by trustees on its behalf shall vest in the liquidator, and thereupon the property to which the order relates shall vest accordingly and the liquidator may, after giving such indemnity, if any, as the court directs, bring or defend any action or other legal proceedings which relates to that property or which it is necessary to bring or defend for the purpose of effectually winding-up the company and recovering its property. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 132 Companies Act, 1994 (Chapter 388) Zambia Repealed (3) Where an order is made under this section, the liquidator of a company in relation to which the order is made shall within fifteen days after the making of the order— (a) lodge a copy of the order with the Registrar; and (b) in the case of property vested in the liquidator in respect of the transfer of which any written law provides for registration, deliver a copy of the order to the proper officer of the appropriate authority for the registration of the transfer, together with a written application to the officer for the registration of the order. (4) A liquidator who fails to comply with subsection (3) shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding three monetary units for each day that the failure continues. (5) No vesting order referred to in this section shall have any effect or operation in transferring or otherwise vesting any such property as is referred to in paragraph (b) of subsection (3) until delivered to the appropriate authority as required by the written law. - 287 Verify source ↗
Statement of company's affairs .......................................................................................................................................... 133
The company must prepare and submit a statement of its affairs to the liquidator within 3 months of the liquidator’s appointment, unless the court directs otherwise.
287. Statement of company's affairs (1) Unless the court directs otherwise, the company shall, within three months of the appointment of a liquidator, prepare and submit to the liquidator a statement as to the affairs of the company as at the date of the winding-up order showing— (a) the particulars of its assets, debts and liabilities; (b) the names and addresses of its creditors; (c) the securities held by each of the creditors; (d) the dates when the securities were respectively given; and (e) such further information as may be prescribed or as the liquidator requires. [subsection (1) amended by section 25 of Act 24 of 2011] (2) The statement shall be verified by the statutory declaration of— (a) at least one director as at the date of the winding-up order or; (b) the secretary of the company at that date. (3) The liquidator, subject to the direction of the court, may by notice in writing, require a person— (a) who is, or was within two years before the date of the winding-up order, an officer of the company; or (b) who took part in the formation of the company, if the company was formed less than two years before the date of the winding-up order; to verify, by statutory declaration, such parts of the statement as he is in a position to verify. (4) The liquidator may serve a notice on a person under subsection (3) either personally or by sending it by post to the address of that person last known to the liquidator. (5) A person required to verify the statement shall, within fourteen days after receiving the notice or within such extended time as the liquidator or the court for special reasons specifies, submit a statutory declaration verifying those matters in the statement which he is in a position to verify and specifying any matters in the statement which in his opinion are incorrect. (6) Within seven days after receiving the statement or any statutory declaration under subsection (3), the liquidator shall cause copies to be— (a) filed with the court; (b) lodged with the Registrar; and By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 133 Companies Act, 1994 (Chapter 388) Zambia Repealed (c) delivered to the official receiver, if the official receiver is not the liquidator. (7) Any person required under this section to verify the statement may be allowed, and be paid out of the assets of the company, such costs and expenses incurred in and relating to doing so as the liquidator considers reasonable, subject to an appeal to the court. (8) If a company fails to comply with subsection (1), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. (9) A person who fails to comply with subsection (5) shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two hundred and fifty monetary units or to imprisonment for a period not exceeding three months, or to both. (10) A statement made under this section may be used as evidence in any proceedings against any person making it. (11) A liquidator who fails to comply with subsection (6) shall be guilty of an offence, and shall be liable to a fine of three monetary units for each day that the failure continues. - 288 Verify source ↗
Report by liquidator ............................................................................................................................................................... 134
A liquidator must report on the company’s affairs and property in liquidation within six months after receiving the statement of company affairs, unless the court allows more time.
288. Report by liquidator (1) A liquidator shall, not later than six months or such longer period as the court may allow after receipt of the statement of company affairs, submit to the court, the Registrar, the official receiver, the holder of the charge by virtue of which the liquidator was appointed and to any trustees for secured creditors of the company and, so far as the liquidator is aware of their address, a report on the state of affairs with respect to the property in liquidation, including— (a) the amount of capital issued, subscribed and paid up and the estimated amount of assets and liabilities; (b) the cause of the failure of the company, if it has failed; (c) whether, in the opinion of the liquidator, further inquiry is desirable as to any matter relating to the promotion, formation or failure of the company or the conduct of its business; (d) particulars of assets comprising the property in liquidation; (e) particulars of the debts and liabilities to be satisfied from the property in liquidation; (f) the names and addresses of the creditors with an interest in the property in liquidation; (g) particulars of any encumbrance over the property in liquidation held by any creditor including the date on which it was created; (h) particulars of any default by the grantor in making relevant information available; (i) (j) the events leading up to the liquidator's appointment, so far as the liquidator is aware of them; the disposal or proposed disposal, by the liquidator, ofany property ofthe company and the carrying on or proposed carrying on, by the liquidator, of any business of the company; (k) the amount of the principal and interest payable to preferential creditors; (l) the amount, if any, likely to be available for the payment of other creditors; and (m) such other information as may be prescribed. [subsection (1) substituted by section 26(a) of Act 24 of 2011] (2) The liquidator may also make further reports stating— (a) the manner in which the company was formed; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 134 Companies Act, 1994 (Chapter 388) Zambia Repealed (b) whether in his opinion any fraud has been committed or any material fact has been concealed— (i) by any person in its promotion or formation; or (ii) by any officer in relation to the company since its formation; (c) whether any officer of the company has contravened or failed to comply with any of the provisions of this Act; and (d) any other matter which in his opinion it is desirable to bring to the notice of the court. (3) The Registrar may, where a liquidator— (a) does not submit a report under subsection (1), issue a reminder to the liquidator to submit the report within fourteen days of the receipt of the reminder; or (b) does not comply with the notice issued by the Registrar under paragraph (a), cause the liquidator to be disqualified from acting as a liquidator by removing the liquidator from the register of liquidators. [subsection (3) added by section 26(a) of Act 24 of 2011] - 289 Verify source ↗
Powers of liquidator ............................................................................................................................................................... 135
The liquidator may carry on the company’s business and take a wide range of steps needed to wind it up, sometimes only with court or committee authority and under court control.
289. Powers of liquidator (1) The liquidator may, during the four weeks following the date of the winding-up order, carry on the business of the company so far as is necessary for the satisfactory winding-up thereof. (2) The liquidator may, with the authority either of the court or of the committee of inspection— (a) carry on the business of the company, so far as is necessary for the beneficial winding-up thereof, after the four weeks following the date of the winding-up order; (b) pay any class of creditors in full, subject to section three hundred and forty-six; (c) make any compromise or arrangement with creditors, persons claiming to be creditors, or persons having or alleging themselves to have any claim against the company, whether present or future, certain or contingent, ascertained or sounding only in damages or whereby the company may be rendered liable; (d) compromise any debts and liabilities capable of resulting in debts and any claims of any kind, whether present or future, certain or contingent, ascertained or sounding only in damages, that subsist or are supposed to subsist between the company on the one hand and a member, a debtor or person apprehending liability on the other; (e) make agreements on all questions in any way relating to or affecting the assets or the winding-up of the company; and (f) take any security for the discharge of any such debt, liability or claim, and give a complete discharge in respect thereof. (3) For the purpose of winding-up the affairs of the company and distributing its assets the liquidator may— (a) bring or defend any action or other legal proceeding in the name and on behalf of the company; (b) (c) compromise any debt due to the company, other than a debt due from a member, where the amount claimed by the company to be due to it does not exceed fifty monetary units; sell the real and personal property and things in action of the company by public auction, public tender or private contract either by transferring the whole thereof to any person or company or selling the same in parcels; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 135 Companies Act, 1994 (Chapter 388) Zambia Repealed (d) execute, in the name and on behalf of the company, all deeds, receipts and other documents, and for that purpose use when necessary the company's seal; (e) prove, rank and claim in the bankruptcy of any member or debtor for any balance against his estate, and receive dividends in the bankruptcy in respect of that balance as a separate debt due from the bankrupt and rateably with the other separate creditors; (f) draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of the company with the same effect with respect to the liability of the company as if the bill or note had been drawn, accepted, made or endorsed by or on behalf of the company in the course of its business; (g) raise on the security of the assets of the company any money necessary; (h) take out letters of administration of the estate of any deceased member or debtor, and do any act necessary for obtaining payment of any money due from a member or debtor or his estate which cannot be conveniently done in the name of the company, in which case, for the purposes of enabling the liquidator to take out the letters of administration or recover the money, the money due shall be deemed due to the liquidator himself; (i) appoint a legal practitioner to assist him in his duties; (j) appoint an agent to do any business which the liquidator is unable to do himself; (k) give notice of the winding-up in any jurisdiction where the company does business; and (l) do all such other things as are necessary for winding-up the affairs of the company and distributing its assets. (4) The exercise by the liquidator of the powers conferred by this section shall be subject to the control of the court, and any creditor or member may apply to the court with respect to any excercise or proposed exercise of any of these powers. - 290 Verify source ↗
Exercise and control of liquidator's powers .................................................................................................................. 136
The liquidator must follow creditor or member directions when administering and distributing company assets, may summon meetings, and may ask the court for directions.
290. Exercise and control of liquidator's powers (1) Subject to this Act, the liquidator shall, in the administration of the assets of the company and in the distribution thereof among its creditors, have regard to any directions given by resolution of the creditors or members at any general meeting or by the committee of inspection, and any directions so given by the creditors or members shall in case of conflict override any directions given by the committee of inspection. (2) The liquidator may summon general meetings of the creditors or members for the purpose of ascertaining their wishes, and he shall summon meetings at such times as the creditors or members by resolution direct or whenever requested in writing to do so by— (a) members whose shareholdings represent in total not less than one twentieth of the issued capital of the company, in the case of a company with share capital; (b) not fewer than one tenth of the members, in the case of a company limited by guarantees; or (c) creditors representing in the aggregate not less than one twentieth of the value of the creditors of the company. (3) The liquidator may apply to the court for directions in relation to any particular matter arising under the winding-up. (4) Subject to this Act, the liquidator shall use his own discretion in the management of the affairs and property of the company and the distribution of its assets. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 136 Companies Act, 1994 (Chapter 388) Zambia Repealed - 291 Verify source ↗
Release of liquidator and dissolution of company ..................................................................................................... 137
A liquidator may apply to court to be released, or to be released and have the company dissolved, once the listed liquidation steps are completed or if the liquidator has resigned or been removed.
291. Release of liquidator and dissolution of company When the liquidator— (a) has realised all the property of the company or so much thereof as can in his opinion be realised without needlessly protracting the liquidation, and has distributed a final dividend, if any, to the creditors and adjusted the rights of the members among themselves and made a final return, if any, to the members; or (b) has resigned or has been removed from his office; he may apply to the court for an order— (i) that he be released; or (ii) that he be released and that the company be dissolved. - 292 Verify source ↗
Orders for release or dissolution ...................................................................................................................................... 137
The court may deal with a liquidator’s release or dissolution order, and the liquidator must lodge a copy of the order within 21 days with the Registrar and official receiver.
292. Orders for release or dissolution (1) In deciding whether to grant an application under section two hundred and ninety-one, the court— (a) may cause a report on the accounts of a liquidator (not being the official receiver) to be prepared by the official receiver or by an auditor appointed by the court; and (b) shall take into consideration— (i) the report; (ii) any objection which is made against the release of the liquidator by the official receiver, auditor or any creditor or member or other person interested; and (iii) whether the liquidator has complied with all the requirements of the court. (2) If the court does not grant the release of a liquidator, the court may, on the application of any creditor or member or person interested, if it thinks it just and equitable, make an order that the liquidator shall be liable to the person or persons concerned for any damages caused to them by any act or omission, or specified acts or omissions, the liquidator may have done or made contrary to his duty. (3) An order of the court releasing the liquidator shall discharge him from all liability in respect of any act done or default made by him in the administration of the affairs of the company or otherwise in relation to his conduct as liquidator, but any such order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact. (4) Where the liquidator has not previously resigned or been removed, his release shall operate as a removal from office. (5) Where the court has made— (a) an order that the liquidator be released; or (b) an order that the liquidator be released and that the company be dissolved; a copy of the order shall within twenty-one days after the making thereof be lodged by the liquidator— (i) with the Registrar; and (ii) with the official receiver, of the liquidator. (6) A liquidator who fails to comply with subsection (5) shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding three monetary units for each day that the failure continues. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 137 Companies Act, 1994 (Chapter 388) - 293 Verify source ↗
Dissolution of the company ................................................................................................................................................ 138
If the court orders a company to be dissolved, the Registrar must remove its name from the register and publish notice in the Gazette; the company is then dissolved when that notice is published.
293. Dissolution of the company Zambia Repealed Where the court has made an order that the company be dissolved, the Registrar shall, upon lodgement with him of a copy of the order, strike the name of the company off the register and notify the same in the Gazette, and the company shall thereupon be dissolved as at the date of the publication of the notice in the Gazette. - 294 Verify source ↗
Meetings to determine whether committee of inspection to be appointed ...................................................... 138
The liquidator may call separate meetings of creditors and members, and must do so if any creditor or member requests it.
294. Meetings to determine whether committee of inspection to be appointed (1) The liquidator may, and if requested by any creditor or member shall, summon separate meetings of the creditors and members for the purpose of— (a) determining whether or not the creditors or members require a committee of inspection to act with the liquidator; (b) appointed members of the committee, if a committee is required. (2) If there is a difference between the determinations of the meetings of the creditors and members, the court shall decide the matter and make such order as it thinks fit. - 295 Verify source ↗
Constitution and proceedings of committee of inspection ...................................................................................... 138
This section sets out how the committee of inspection is formed, how it meets, how it may act, and how members can resign, be removed, or be replaced.
295. Constitution and proceedings of committee of inspection (1) The committee of inspection shall consist of creditors and members of the company or persons holding— (a) general powers of attorney from creditors or members; or (b) special authorities from creditors or members authorising the persons named therein to act on such a committee; and shall be appointed by the meetings of creditors and members in such proportions as are agreed or, if there is no agreement, as are determined by the court. (2) The committee shall meet at such times and places as they from time to time decide, and the liquidator or any member of the committee may also call a meeting of the committee as he thinks necessary. (3) The committee may act by a majority of members present at a meeting, but shall not act unless a majority of the committee is present. (4) A member of the committee may resign by notice in writing signed by him and delivered to the liquidator. (5) If a member of the committee— (a) becomes bankrupt; (b) assigns his estate for the benefit of his creditors or makes an arrangement with his creditors pursuant to any written law relating to bankruptcy; or (c) is absent from five consecutive meetings of the committee without the prior leave or subsequent consent of a majority of those members who together with himself represent the creditors or members, as the case may be; his office shall thereupon become vacant. (6) A member of the committee may be removed by an ordinary resolution at a meeting of creditors, if he represents creditors, or of members, if he represents members, of which meeting seven days' notice in writing has been given stating the object of the meeting. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 138 Companies Act, 1994 (Chapter 388) Zambia Repealed (7) A vacancy in the committee may be filled by the appoinment by the committee of the same or another creditor or member or person holding a general power or special authority as referred to in subsection (1). (8) The liquidator may at any time of his own motion, and shall within seven days after the request in writing of a creditor or member, summon a meeting of creditors or of members, as the case requires, to consider any appointment made under subsection (7), and the meeting may— (a) confirm the appointment; or (b) revoke the appointment and make another appointment. (9) The continuing members of the committee, if not fewer than two, may act notwithstanding any vacancy in the committee. - 296 Verify source ↗
Power to stay winding-up .................................................................................................................................................... 139
The court may stay winding-up proceedings on application, and the company must lodge a copy of any stay order within 21 days.
296. Power to stay winding-up (1) At any time after an order for winding-up has been made, the court may, on the application of the liquidator or of any creditor or member and if it is satisfied that all proceedings in relation to the winding-up ought to be stayed, make an order staying the proceedings either altogether or for a specified time on such terms and conditions as the court thinks fit. (2) On any such application the court may, before making an order, require the liquidator to furnish a report with respect to any facts or matters which are in his opinion relevant. (3) A copy of an order made under this section shall be lodged by the company with— (a) the Registrar, and (b) the official receiver; within twenty-one days after the making of the order. (4) If the company fails to comply with subsection (3), the company, and each officer in default, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues. - 297 Verify source ↗
Appointment of special manager ...................................................................................................................................... 139
A liquidator may ask the court to appoint a special manager. The special manager must give security and account as the court directs, is paid as the court fixes, may resign with one month’s written notice to the liquidator, and may be removed by the court for cause.
297. Appointment of special manager (1) The liquidator may, if satisfied that the nature of the estate or business of the company, or the interests of the creditors or members generally, require the appointment of a special manager of the estate or business of the company other than himself, request the court to appoint a special manager of the estate or business to act during such time as the court directs with such powers, including any of the powers of a receiver or receiver and manager, as are entrusted to him by the court. (2) The special manager— (a) shall give such security and account in such a manner as the court directs; (b) shall receive such remuneration as is fixed by the court; (c) may at any time resign after giving not less than one month's notice in writing to the liquidator of his intention to resign; and (d) may, on cause shown, be removed by the court. - 298 Verify source ↗
Claims of creditors and distribution of assets ............................................................................................................. 139
The court may set a deadline for creditors to prove claims, must adjust members’ rights and distribute any surplus, and may order how winding-up costs are paid if assets are insufficient.
298. Claims of creditors and distribution of assets (1) The court may fix a date on or before which creditors are to prove their debts or claims and after which they will be excluded from the benefit of any distribution made. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 139 Companies Act, 1994 (Chapter 388) Zambia Repealed (2) The court shall adjust the rights of the members among themselves and distribute any surplus among the persons entitled thereto. (3) The court may, in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the costs, charges and expenses incurred in the winding-up in such order of priority as the court thinks fit. - 299 Verify source ↗
Inspection of books by creditors and members .......................................................................................................... 140
After a winding-up order, the court may order inspection of a company’s books and papers by creditors and members.
299. Inspection of books by creditors and members The court may, at any time after making a winding-up order, make any order for inspection of the books and papers of the company by creditors and members that the court thinks fit, and any books and papers in the possession of the company may be inspected by creditors or members in accordance with the order. - 300 Verify source ↗
Power to summon persons connected with company ............................................................................................... 140
The court may summon and examine people connected with a company, require production of company-related books and papers, and in some cases order a person to be brought before the court.
300. Power to summon persons connected with company (1) The court may summon before it any officer of the company or person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or any person whom the court thinks capable of giving information concerning the promotion, formation, trade, dealings, affairs or property of the company. (2) The court may examine the officer or person on oath concerning the matters referred to in subsection (1) either orally or on written interrogatories and may reduce his answers to writing and require him to sign them. (3) Any writing so signed may be used in evidence in any legal proceedings against the officer or person. (4) The court may require him to produce any books and papers in his custody or power relating to the company, but, if he claims any lien on books or papers, the production shall be without prejudice to that lien, and the court shall have jurisdiction to determine all questions relating to that lien. (5) An examination under this section may, if the court so directs, be held before the Registrar of the High Court. (6) Any person summoned for examination under this section may at his own cost employ a legal practitioner who shall be at liberty to put to him such questions as the court thinks just for the purpose of enabling him to explain or qualify any answers given by him. (7) If any person so summoned, after being tendered a reasonable sum for his expenses, refuses to come before the court at the time appointed, not having a lawful excuse made known to the court at the time of its sitting and allowed by it, the court may cause him to be apprehended and brought before the court for examination. - 301 Verify source ↗
Power to order public examination ................................................................................................................................. 140
The court may order a public examination in a liquidation, and the person examined must answer the court’s questions on oath.
301. Power to order public examination (1) Where the liquidator has made a report stating that, in his opinion— (a) a fraud has been committed; (b) any material fact has been suppressed or concealed by any person in the promotion or formation of the company or by any officer in relation to the company since its formation; or (c) any officer of the company has failed to act honestly or diligently or has been guilty of any impropriety or recklessness in relation to the affairs of the company; the court may, after consideration of the report, direct that— (i) the person or officer; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 140 Companies Act, 1994 (Chapter 388) Zambia Repealed (ii) any other person who was previously an officer of the company, or who is known or suspected to have in his possession any property of the company or is supposed to be indebted to the company; or (iii) any person whom the court thinks capable of giving information concerning the promotion, formation, trade, dealings, affairs or property of the company; shall attend before the court on a day appointed and be publicly examined as to the promotion or formation or the conduct of the business of the company, and, in the case of an officer or former officer, as to his conduct and dealings as an officer thereof. (2) The liquidator and any creditor or member may take part in the examination either personally or by a legal practitioner. (3) The court may put or allow to be put such questions to the person examined as the court thinks fit. (4) The person examined shall be examined on oath and shall answer all such questions as the court puts or allows to be put to him. (5) If a person directed to attend before the court under this section applies to the court to be exculpated from any charges made or suggested against him, the liquidator shall appear on the hearing of the application and call the attention of the court to any matters which appear to him to be relevant, and if the court, after hearing any evidence given or witnesses called by the liquidator, grants the application, the court may allow the applicant such costs as it thinks just. (6) A person ordered to be examined under this section— (a) shall before his examination be furnished with a copy of the liquidator's report; and (b) may at his own cost engage a legal practitioner, who shall be at liberty to put to him or any other person giving evidence such questions as the court thinks just. (7) Notes of the examination— (a) shall be reduced to writing; (b) shall be read over to or by and signed by the person examined; (c) may thereafter be used in evidence in any legal proceedings against him; and (d) shall at all reasonable times, be open to the inspection of any creditor or member. (8) The court may, if it thinks fit, adjourn the examination from time to time. (9) An examination under this section may, if the court so directs, be held before the Registrar of the High Court. (10) For the purposes of this section, "officer" includes a banker, legal practitioner or auditor of the company. - 302 Verify source ↗
Power to arrest absconding member or officer ........................................................................................................... 141
The court may order arrest and seizure of a company member, officer, former member, or former officer who appears likely to leave Zambia, abscond, or hide property to avoid payment or examination.
302. Power to arrest absconding member or officer (1) The court, at any time before or after the making of a winding-up order, on proof of probable cause for believing that a member or officer or former member or officer of the company is about to— (a) quit Zambia; (b) otherwise to abscond; or By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 141 Companies Act, 1994 (Chapter 388) Zambia Repealed (c) remove or conceal any of his property for the purpose of evading payment of any money due to the company or of avoiding examination respecting the affairs of the company; may cause the member, officer or former member or officer to be arrested and his books and papers and movable personal property to be seized and him and them to be kept safely until such time as the court orders. (2) For the purposes of this section, "officer" includes a banker, legal practitioner or auditor of the company. - 303 Verify source ↗
Powers of court cumulative ................................................................................................................................................ 142
Court powers under this Act add to, and do not limit, other powers to start proceedings to recover debts or other sums from a company member, debtor, or their estate.
303. Powers of court cumulative Any powers by this Act conferred on the court shall be in addition to and not in derogation of any power of instituting proceedings against any member or debtor of a company or the estate of any member or debtor for the recovery of any debt or other sum. - 304 Verify source ↗
Voluntary winding-up ............................................................................................................................................................ 142
This Division applies to every voluntary winding-up of a company.
304. Voluntary winding-up This Division shall apply to every voluntary winding-up of a company. - 305 Verify source ↗
Circumstances in which a company may be wound-up voluntarily ..................................................................... 142
A company may be wound up voluntarily if it resolves to do so, but it must file the resolution with the Registrar within 7 days, and the Registrar must publish notice in the Gazette within 7 days after lodgement.
305. Circumstances in which a company may be wound-up voluntarily (1) A company may be wound-up voluntarily if the company so resolves. (2) The resolution shall be a special resolution unless the period, if any, fixed by the articles for the duration of the company has expired or the event, if any, has occurred, on the occurrence of which the articles provide that the company is to be dissolved. (3) Upon the passing of a resolution for voluntary winding-up, the company shall within seven days thereafter lodge a copy of the resolution with the Registrar, and the Registrar shall within seven days after the lodgement cause notice thereof to be published in the Gazette. (4) If the company fails to comply with subsection (3), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding three monetary units for each day that the failure continues. - 306 Verify source ↗
Commencement of voluntary winding-up ..................................................................................................................... 142
A voluntary winding-up starts when the resolution for voluntary winding-up is passed.
306. Commencement of voluntary winding-up For the purposes of this Act, a voluntary winding-up commences at the time of the passing of the resolution for voluntary winding-up. - 307 Verify source ↗
Effect of voluntary winding-up .......................................................................................................................................... 142
When a winding-up starts, the company must stop carrying on business unless the liquidator thinks continued business is needed for the beneficial winding-up.
307. Effect of voluntary winding-up (1) The company shall from the commencement of the winding-up cease to carry on its business, except so far as in the opinion of the liquidator is required for the beneficial winding-up thereof, but the corporate state and corporate powers of the company shall continue until it is dissolved. (2) Any transfer of shares, not being a transfer made to or with the sanction of the liquidator, and any alteration in the status of the members after the commencement of the winding-up, shall be void. - 308 Verify source ↗
Declaration of solvency ........................................................................................................................................................ 142
Directors may make a written declaration of solvency before notice of a voluntary winding-up meeting is sent, but the declaration only works if timing and lodging conditions are met.
308. Declaration of solvency (1) Where it is proposed to wind-up a company voluntarily, the directors of the company may, before the date on which notices of the meeting at which the resolution for the winding-up of the company is to be proposed are sent out, at a meeting of directors make a written declaration to the effect that they have made a full inquiry into the affairs of the company, and have formed the By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 142 Companies Act, 1994 (Chapter 388) Zambia Repealed opinion that the company will be able to pay its debts and liabilities in full within a period specified in the declaration, being a period of not more than twelve months after the commencement of the winding-up. (2) There shall be attached to the declaration a statement of affairs of the company showing— (a) the assets of the company, and the total amount expected to be realised therefrom; (b) the liabilities of the company; and (c) the estimated expenses of winding-up, made up to the latest practicable date before the making of the declaration. (3) The declaration shall have no effect for the purposes of this Act unless— (a) it is made at the meeting of directors referred to in subsection (1); (b) (c) it is made less than five weeks before the passing of the resolution for voluntary winding-up; and it is lodged with the Registrar on or before the date on which the notices of the meeting at which the resolution for the winding-up of the company is to be proposed are sent out. (4) A director who makes a declaration under this section without having reasonable grounds for the opinion that the company will be able to pay its debts in full within the period stated in the declaration shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units or to imprisonment for a period not exceeding six months, or to both. (5) If the company is wound-up in pursuance of a resolution for voluntary winding-up passed within a period of five weeks after the making of the declaration, but its debts are not paid or provided for in full within the period stated in the declaration, it shall be presumed that the director did not have reasonable grounds for his opinion. - 13 Verify source ↗
Types of company ........................................................................................................................................................................... 9
This section is titled “Provisions applicable only to members' voluntary winding-up.”
13.4 – Provisions applicable only to members' voluntary winding-up - 309 Verify source ↗
Provisions applicable only to members' voluntary winding-up ............................................................................. 143
This Division applies only to a company’s members’ voluntary winding-up.
309. Provisions applicable only to members' voluntary winding-up This Division shall apply to a members' voluntary winding-up of a company. - 310 Verify source ↗
Appointment of liquidator ................................................................................................................................................... 143
After winding-up starts, the company must appoint one or more liquidators, and it may set their pay.
310. Appointment of liquidator (1) After the commencement of the winding-up of the company, the company shall by ordinary resolution appoint one or more liquidators for the purposes of winding-up the affairs and distributing the assets of the company, and may fix the remuneration to be paid to him or them. (2) On the appointment of the liquidator, all the powers of the directors shall cease except so far as the liquidator, or the company by ordinary resolution with the consent of the liquidator, approves the continuance thereof. (3) Subject to any direction of the court on the application of any member, creditor or liquidator, the company may, by special resolution, of which the requisite notice has been given not only to the members but also to the creditors and the liquidator, remove any liquidator. (4) If a vacancy occurs by resignation, removal or otherwise in the office of a liquidator, the company by ordinary resolution may fill the vacancy and for that purpose a general meeting may be convened by any member, or, if there were more liquidators than one, by the continuing liquidators. - 311 Verify source ↗
Duty of liquidator to call creditors .................................................................................................................................. 143
If the liquidator thinks the company cannot pay its debts in full in time, the liquidator must call a creditors’ meeting, present the company’s assets and liabilities, and later notify the Registrar and official receiver of the meeting and its decisions. Creditors may choose a different liquidator at that meeting.
311. Duty of liquidator to call creditors (1) If the liquidator is at any time of the opinion that the company will not be able to pay or provide for the payment of its debts in full within the period stated in the solvency declaration, he shall By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 143 Companies Act, 1994 (Chapter 388) Zambia Repealed forthwith convene a meeting of the creditors and lay before the meeting a statement of the assets and liabilities of the company. (2) The notice of the meeting shall draw the attention of the creditors to the right conferred upon them by subsection (3). (3) The creditors may, at the meeting convened under subsection (1), appoint some other person to be liquidator of the company instead of the liquidator appointed by the company. (4) Within seven days after a meeting has been held pursuant to subsection (1), the liquidator shall lodge with— (a) the Registrar; and (b) the official receiver; a notice that the meeting has been held, stating the decisions, if any, taken at the meeting. (5) Where the liquidator has convened a meeting under subsection (1), the winding-up shall thereafter proceed as if the winding-up were a creditors' voluntary winding-up, but the liquidator shall not be required to summon an annual meeting of creditors at the end of the first year from the commencement of the winding-up if the meeting held under subsection (1) was held less than three months before the end of that year. (6) A liquidator who fails to comply with subsection (1) or (4) shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding three monetary units for each day that the failure continues. - 312 Verify source ↗
Staying of members' voluntary winding-up .................................................................................................................. 144
This section lets a company in voluntary winding-up seek a court stay, requires notices and filing steps, and gives affected parties a hearing right.
312. Staying of members' voluntary winding-up (1) At any time during the course of a voluntary winding-up prior to the dissolution of the company, the company may, by special resolution, resolve that the winding-up proceedings be stayed. (2) After the passing of the special resolution, application may be made to the court by the liquidator or any member of the company and the court may, in its discretion and subject to such terms and conditions as it thinks fit, order that the winding-up be stayed, that the liquidator be discharged, and that the directors resume the management of the company. (3) Not less than twenty-eight days' written notice of the hearing of any application to the court under subsection (2) shall be given by the applicant to the official receiver, to every director of the company, and to any liquidator of the company, and the official receiver shall cause a copy of the notice to be published in the Gazette not later than seven days before the hearing. (4) The official receiver and any director, liquidator, member or creditor of the company shall be entitled to appear on the hearing of the application and to call witnesses and give evidence. (5) If the court makes an order confirming the resolution, the company shall within twenty-one days thereafter lodge a copy of the order and resolution with the Registrar, who shall cause a notice thereof to be published in the Gazette. (6) On the publication of the notice, the winding-up shall cease and the company shall continue as a going concern subject to any terms or conditions in the order. (7) If the company fails to comply with subsection (5), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues. - 13 Verify source ↗
Types of company ........................................................................................................................................................................... 9
This section concerns provisions that apply only to a creditors’ voluntary winding-up.
13.5 – Provisions applicable only to creditors' voluntary winding-up - 313 Verify source ↗
Provisions applicable only to creditors' voluntary winding-up .............................................................................. 144
This Division applies only to a company’s creditors' voluntary winding-up.
313. Provisions applicable only to creditors' voluntary winding-up This Division shall apply to a creditors' voluntary winding-up of a company. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 144 Companies Act, 1994 (Chapter 388) - 314 Verify source ↗
Meetings of creditors ............................................................................................................................................................. 145
When a company is going into voluntary winding-up without a declaration of solvency, it must convene and notify a creditors’ meeting and provide specified information.
314. Meetings of creditors Zambia Repealed (1) Where a resolution for the voluntary winding-up of a company has been proposed, and no declaration of solvency made, the company shall cause a meeting of the creditors of the company (in this section called "the meeting") to be convened for the day, or the day after the day, on which the meeting is to be held at which the resolution for voluntary winding-up is to put, or on which the resolution is expected to be passed under section one hundred and fifty-seven. (2) The company shall cause notice of the meeting of creditors to be sent to each creditor, being notice — (a) not less than the notice to members of any meeting for the purposes of the resolution for voluntary winding-up; and (b) in any case, of not less than seven days. (3) The notice to the creditors shall be accompanied by a statement showing the names of all creditors and the amounts of their claims. (4) The company shall cause notice of the meeting of the creditors to be published at least seven days before the date of the meeting in the Gazette and in any newspaper circulating generally in Zambia. (5) The company shall— (a) cause a full statement of the company's affairs to be laid before the meeting of creditors, showing in respect of assets the method and manner in which the valuation of the assets was arrived at, together with a list of the creditors and the estimated amount of their claims; and (b) appoint a director to attend the meeting. (6) The director so appointed and the secretary shall attend the meeting and disclose to the meeting the company's affairs and the circumstances leading up to the proposed winding-up. (7) The creditors at the meeting may appoint one of their number, or the director appointed under subsection (5), to preside at the meeting. (8) If the meeting of the company is adjourned and the resolution for winding-up is passed at an adjourned meeting, any resolution passed at the meeting of the creditors shall have effect as if it had been passed immediately after the passing of the resolution for winding-up. (9) The company shall nominate a liquidator for the company. (10) The creditors may, by ordinary resolution, nominate at the meeting a liquidator for the company. (11) (12) If the creditors and the company nominate different persons, the person nominated by the creditors shall be liquidator. If no person is nominated by the creditors, the person nominated by the company shall be liquidator. (13) Where different persons are nominated as liquidator, any director, member or creditor may, within seven days after the date on which the nomination was made by the creditors, apply to the court for an order directing that the person nominated as liquidator by the company shall be liquidator instead of or jointly with the person nominated by the creditors. (14) (15) If a liquidator, other than a liquidator appointed by or by the direction of the court, resigns or otherwise vacates that office, the creditors may fill the vacancy and, for that purpose, a meeting of the creditors may be summoned by any two of their number. If the company fails to comply with subsection (1), (2), (3), (4) or (5), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 145 Companies Act, 1994 (Chapter 388) Zambia Repealed (16) If the nominated director or the secretary of the company fails to comply with subsection (6), he shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two hundred and fifty monetary units. - 315 Verify source ↗
Appointment of committee of inspection ...................................................................................................................... 146
Creditors may create a committee of inspection for a company winding-up, and the company may also appoint members, each up to five people.
315. Appointment of committee of inspection (1) There shall be a committee of inspection for the winding-up of a company if the creditors, at the meeting convened under section three hundred and eleven or three hundred and fourteen or at any subsequent meeting, so decide by ordinary resolution and appoint not more than five persons, whether creditors or not, to be members of the committee. (2) The company may, at the time of the passing of the resolution for voluntary winding-up is passed or at any time subsequently, by ordinary resolution, appoint not more than five persons to be, subject to this section, members of any committee of inspection. (3) The creditors may resolve that all or any of the persons so appointed by the company ought not to be members of the committee of inspection and, if the creditors so resolve, the persons mentioned in the resolution shall not, unless the court otherwise directs, be qualified to act as members of the committee, and on any application to the court under this subsection the court may, if it thinks fit, appoint other persons to act as such members in place of the persons mentioned in the resolution. (4) Subject to this section, section two hundred and ninety-five shall apply with respect to a committee of inspection appointed under this section. - 316 Verify source ↗
Fixing of liquidator's remuneration and vesting of directors' powers in liquidator ........................................ 146
The committee of inspection, or the creditors if there is no committee, may set the liquidator’s remuneration. When a liquidator is appointed, the directors’ powers pass to the liquidator and the directors’ powers and authority stop, unless continuation is sanctioned.
316. Fixing of liquidator's remuneration and vesting of directors' powers in liquidator (1) The committee of inspection, or, if there is no such committee, the creditors, may fix the remuneration to be paid to the liquidator. (2) On the appointment of a liquidator, all the powers of the directors shall vest in the liquidator, and the powers and authority of every director shall cease, except so far as the committee of inspection, or, if there is no such committee, the creditors, sanction the continuance thereof. - 317 Verify source ↗
Stay of proceedings ................................................................................................................................................................ 146
After winding-up starts, certain actions against the company stop, and court leave is needed for any action or proceeding to continue or begin.
317. Stay of proceedings (1) Any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of a creditors' voluntary winding-up shall be void. (2) After the commencement of the winding-up, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court directs. - 13 Verify source ↗
Types of company ........................................................................................................................................................................... 9
This section is titled “Provisions applicable to every voluntary winding-up.”
13.6 – Provisions applicable to every voluntary winding-up - 318 Verify source ↗
Provisions applicable to every voluntary winding-up ............................................................................................... 146
This Division applies to every voluntary winding-up of a company.
318. Provisions applicable to every voluntary winding-up This Division shall apply to every voluntary winding-up of a company. - 319 Verify source ↗
Distribution of property of company ............................................................................................................................... 146
When a company is wound up, its property must first be used to pay liabilities pari passu, then any remaining property is distributed to members according to their rights and interests, unless the articles provide otherwise.
319. Distribution of property of company Subject to the provisions of this Act as to preferential payments, the property of a company shall, on its winding-up, be applied pari passu in satisfaction of its liabilities, and subject to that application shall, unless the articles otherwise provide, be distributed among the members according to their rights and interests in the company. - 320 Verify source ↗
Review by court of liquidators appointment and remuneration ............................................................................ 146
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.
320. Review by court of liquidators appointment and remuneration (1) If for any reason there is no liquidator acting, the court may appoint a liquidator. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 146 Companies Act, 1994 (Chapter 388) Zambia Repealed (2) The court may on cause shown remove a liquidator and appoint another liquidator. (3) Any member or creditor or the liquidator may at any time before the dissolution of the company apply to the court to review the remuneration of the liquidator, and the decision of the court shall be conclusive. - 321 Verify source ↗
Powers and duties of liquidators ...................................................................................................................................... 147
Liquidators may exercise certain court-winding-up powers, but some actions need approval depending on the type of voluntary winding-up.
321. Powers and duties of liquidators (1) The liquidator may— (a) with the approval of— (i) a resolution of the company, in the case of a members' voluntary winding-up; or (ii) the court or the committee of inspection, in the case of a creditors' voluntary winding- up; exercise any of the powers given by section two hundred and eighty-nine to a liquidator in a winding-up by the court; (b) exercise any of the other powers by this Act given to the liquidator in a winding-up by the court; and (c) convene meetings of the company for the purpose of obtaining the sanction of the company in respect of any matter or for any other purpose he thinks fit. (2) When several liquidators are appointed, any power given by this Act may be exercised by such one or more of them as is determined at the time of their appointment, or in default of such a determination, by any number not less than two. - 322 Verify source ↗
Power of liquidator to accept shares, etc., as consideration for sale of property of company ..................... 147
A liquidator may, with the required approval, take shares or similar interests instead of cash for a sale of company property, and may make other member-benefit arrangements.
322. Power of liquidator to accept shares, etc., as consideration for sale of property of company (1) Where it is proposed that the whole or part of the business or property of a company (in this section called "the company") be transferred or sold to another body corporate (in this section called "the corporation"), the liquidator may, with the approval of— (a) a special resolution of the company, in the case of a members' voluntary winding-up; or (b) the court or the committee of inspection, in the case of a creditors' voluntary winding-up; receive, in compensation or part compensation for the transfer or sale, fully paid shares, debentures or other like interests in the corporation for distribution among the members of the company or may enter into any other arrangement whereby the members of the company may, in lieu of receiving cash, shares, debentures or other like interests or in addition thereto, participate in the profits of or receive any other benefit from the corporation. (2) If, within one year after the date of the passing of such a special resolution, the winding-up becomes a winding-up by the court because of an order made under section two hundred and seventy-two, the transfer or sale and distribution or arrangement shall not be valid unless approved by the court. (3) Subject to this section, any transfer or sale and distribution of arrangement under this section shall be binding on the company and all the members thereof and each member shall be deemed to have agreed with the corporation to accept the fully-paid shares, debentures, or other like interests to which he is entitled under the distribution or arrangement. (4) If any member of the company, in respect of any shares held by him, expresses his dissent in writing addressed to the liquidator and served upon the liquidator within twenty-eight days after the passing of the special resolution, he may require the liquidator either to abstain from carrying the resolution into effect or to purchase the shares that he holds at a price to be determined by agreement or by arbitration in the manner provided by subsection (7). By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 147 Companies Act, 1994 (Chapter 388) Zambia Repealed (5) If the liquidator elects to purchase the member's shares, the purchase money shall be paid before the company is dissolved and be raised by the liquidator in such manner as is determined by special resolution. (6) A special resolution shall not be valid for the purposes of this section unless it is passed before or concurrently with the resolution for voluntary winding-up. (7) For the purposes of an arbitration under this section— (a) the Arbitration Act shall apply as if there were a submission for reference to two arbitrators, one to be appointed by each party. [Cap. 41] (b) (c) the appointment of an arbitrator may be made under the hand of the liquidator, or if there is more than one liquidator then under the hands of any two or more of the liquidators; and the court may give any directions necessary for the initiation and conduct of the arbitration and the directions shall be binding on the parties. (8) Nothing in this section shall authorise any variation or abrogation of the rights of any creditors of the company. - 323 Verify source ↗
Annual meetings of members and creditors ................................................................................................................. 148
If a winding-up lasts more than one year, the liquidator must call the required annual meetings and present an account of actions and dealings; if the liquidator fails to comply, there is an offence and a daily fine may apply.
323. Annual meetings of members and creditors (1) If a winding-up continues for more than one year, the liquidator shall convene— (a) a general meeting of the company, in the case of a members' voluntary winding-up; and (b) separate meetings of the creditors and of the company, in the case of a creditors' voluntary winding-up; within three months after the end of the first year after the commencement of the winding-up and of each succeeding year, and shall lay before every such meeting an account of his acts and dealings and of the conduct of the winding-up during the preceding year. (2) In the case of a creditors' voluntary winding-up, the meeting of the company shall be held after, but not more than one month after, the meeting of the creditors. (3) A liquidator who fails to comply with this section shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding three monetary units for each day that the failure continues. - 324 Verify source ↗
Final meeting and dissolution of company ................................................................................................................... 148
After a company is fully wound up, the liquidator must prepare a report, call the required meetings, publish notice of those meetings, and file a return. If the liquidator does not comply, the liquidator commits an offence and may be fined.
324. Final meeting and dissolution of company (1) As soon as the affairs of the company are fully wound-up, the liquidator shall make up a report showing how the winding-up has been conducted and the property of the company has been disposed of, and thereupon shall convene— (a) a general meeting of the company, in the case of a members' voluntary winding-up; and (b) separate meetings of the creditors and of the company, in the case of a creditors' voluntary winding-up; for the purpose of laying before the meetings the report and giving any explanation thereof. (2) In the case of a creditors' voluntary winding-up, the meeting of the company shall be held after, but not more than one month after, the meeting of the creditors. (3) A notice of the meetings shall be published in one issue of the Gazette and in one issue of a newspaper in general circulation throughout Zambia, which notice shall specify the time, place and object of each meeting and shall be published one month at least before each such meeting. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 148 Companies Act, 1994 (Chapter 388) Zambia Repealed (4) The liquidator shall, within seven days after the meeting or the later of the meetings, lodge with the Registrar and with the official receiver a return in the prescribed form of the holding of the meetings or meeting and of the date or dates thereof, with a copy of the report attached to the return. (5) The quorum at a meeting of the company shall be two members and at a meeting of the creditors shall be two creditors. (6) If a quorum is not present at a meeting, the liquidator shall, in lieu of the return referred to in subsection (4), lodge with the Registrar and the official receiver a return (with account attached) that the meeting or meetings were duly summoned and that no quorum was present thereat. (7) Upon the lodgement of the return, the Registrar shall strike the name of the company off the register and cause notice thereof to be published in the Gazette, and the company shall thereupon be dissolved as at the date of the publication of the notification in the Gazette. (8) A liquidator who fails to comply with this section shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding three monetary units for each day that the failure continues. - 325 Verify source ↗
When an arrangement is binding on creditors ............................................................................................................ 149
A winding-up arrangement binds the company and creditors if approved by the required special resolutions; creditors or members may appeal within 21 days, and the court may settle disputes or change the arrangement.
325. When an arrangement is binding on creditors (1) Any arrangement entered into between a company about to be or in the course of being wound-up and its creditors shall, subject to the right of appeal under this section, be binding on the company if approved by a special resolution, and on the creditors if approved by a special resolution of the creditors. (2) Any dispute with regard to the value of any security or lien or the amount of a debt or set-off the subject of the arrangement may be settled by the court on the application of the company, the liquidator, or the creditor. (3) Any creditor or member may, within twenty-one days after the completion of the arrangement, appeal to the court against it, and the court may thereupon amend, vary or confirm the arrangement, as it thinks just. - 326 Verify source ↗
Application to court to have questions determined or powers exercised .......................................................... 149
The liquidator, a member, or a creditor may apply to court about winding-up questions or powers; the court may grant the request if it thinks the result would be just or beneficial.
326. Application to court to have questions determined or powers exercised (1) The liquidator or any member or creditor may apply to the court— (a) to determine any question arising in the winding-up of a company; or (b) to exercise all or any of the powers which the court might exercise if the company were being wound-up by the court. (2) The court, if satisfied that the determination of the question or the exercise of power will be just or beneficial, may accede wholly or partially to any such application on such terms and conditions as it thinks fit, or may make such other order on the application as it thinks just. - 327 Verify source ↗
Costs ............................................................................................................................................................................................. 149
Proper winding-up costs, including the liquidator’s remuneration, must be paid from the company’s assets before other claims.
327. Costs All proper costs, charges and expenses of and incidental to the winding-up, including the remuneration of the liquidator, shall be payable out of the assets of the company in priority to all other claims. - 328 Verify source ↗
Limitation on right to wind-up voluntarily ................................................................................................................... 149
If a court petition has already been filed to wind up a company because it cannot pay its debts, the company cannot choose voluntary winding-up unless the court allows it.
328. Limitation on right to wind-up voluntarily Where a petition has been presented to the court to wind-up a company on the ground that it is unable to pay its debts, the company shall not resolve that it be wound-up voluntarily, except with the leave of the court. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 149 Companies Act, 1994 (Chapter 388) Zambia Repealed - 13 Verify source ↗
Types of company ........................................................................................................................................................................... 9
Heading for provisions that apply to every mode of winding-up.
13.7 – Provisions applicable to every mode of winding-up - 329 Verify source ↗
Provisions applicable to every mode of winding-up ................................................................................................. 150
This Division applies to every winding-up of a company.
329. Provisions applicable to every mode of winding-up This Division shall apply to every winding-up of a company. - 330 Verify source ↗
Meetings of creditors ............................................................................................................................................................. 150
During a winding-up, the court may order a creditors’ meeting to be held and run as it sees fit.
330. Meetings of creditors The court may at any time during the course of a winding-up direct a meeting of the creditors of any class to be held and conducted in such manner as it thinks fit to consider such matters as it shall direct, and may give such ancillary or consequential directions as it thinks fit. - 331 Verify source ↗
Conduct of meetings of creditors ..................................................................................................................................... 150
This section says who counts as a creditor for a creditors’ meeting, how creditor votes are allocated, and that 14 days’ notice of the meeting must be given.
331. Conduct of meetings of creditors (1) A person shall be accounted a creditor of a company for the purposes of a meeting of creditors under this Part if, upon an account fairly stated, after allowing the value of security or liens held by him and the amount of any debt or set-off owing by him to the company, there appears to be a balance due to him. (2) At a meeting of creditors, unless the court directs otherwise— (a) each creditor shall have votes in proportion to amount of the balance apparently due to him by the company upon an account fairly stated, after allowing the value of security or liens held by him and the amount of any debt or set-off owing by him to the company; and (b) sections one hundred and forty-six to one hundred and fifty-two shall apply with the necessary modifications. (3) Subject to this Part and to any direction by the court, fourteen days' notice of a meeting of creditors shall be given either personally or in a newspaper circulating generally in Zambia. - 332 Verify source ↗
Eligibility for appointment as liquidator ........................................................................................................................ 150
A person who wants to act as a liquidator must apply to the Registrar for accreditation, and the Minister must set the qualifications and certificate process.
332. Eligibility for appointment as liquidator (1) An individual who wishes to perform the function of a liquidator shall apply for accreditation with the Registrar in the prescribed manner and form. (2) The Minister shall prescribe— (a) the qualifications for persons to be accredited under subsection (1); and (b) the form of and procedure for issuance of accreditation certificates. (3) A person shall not be appointed to act or continue to act as a liquidator of the property or undertaking of a company if the person— (a) is under the age of eighteen years; (b) is under any legal disability; (c) is prohibited or disqualified from so acting by any order of a court of competent jurisdiction; (d) is a body corporate; (e) is a mortgagee or chargee of the company or an employee or officer of the mortgagee or chargee; (f) is an undischarged bankrupt; (g) is a person who is, or has been within the previous two years, a director or officer of the company or any related body corporate, except with the leave of court; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 150 Companies Act, 1994 (Chapter 388) Zambia Repealed (h) has been a receiver of the company during the preceding three years; (i) is removed from the register of liquidators kept by the Registrar in accordance with subsection (4); or (j) is not eligible to be a liquidator or receiver under this Act. (4) The Registrar shall— (a) cause to be kept a register of liquidators in the prescribed manner and form; and (b) notify a professional body of any misconduct of a liquidator or of any removal of a liquidator from the register of liquidators. [section 332 substituted by section 27 of Act 24 of 2011] - 333 Verify source ↗
Acts of liquidator valid ......................................................................................................................................................... 151
A liquidator’s acts remain valid even if a later-discovered defect exists in the liquidator’s appointment or qualification.
333. Acts of liquidator valid (1) Subject to this Act, the acts of a liquidator shall be valid notwithstanding any defect that may afterwards be discovered in his appointment or qualification. (2) Any conveyance, assignment, transfer, mortgage, charge or other disposition of a company's property made by a liquidator shall, notwithstanding any defect or irregularity affecting the validity of the winding-up or the appointment of the liquidator, be valid in favour of any person taking such property bona fide and for value and without notice of the defect or irregularity. (3) Every person making or permitting any disposition of property to any liquidator shall be protected and indemnified in so doing notwithstanding any defect or irregularity affecting the validity of the winding-up or the appointment of the liquidator not then known to the person. (4) For the purposes of this section a disposition of property includes a payment of money. - 334 Verify source ↗
General provisions as to liquidators ................................................................................................................................ 151
A liquidator must keep proper books, act in good faith, avoid secret profit and conflicts, and give advance notice before disposing of company assets unless directed otherwise.
334. General provisions as to liquidators (1) A liquidator shall keep proper books at his office in which he shall cause to be made entries or minutes of proceedings at meetings and of such other matters, if any, as may be prescribed. (2) Any creditor or member may, subject to the control of the court, personally or by his agent inspect the liquidator's books at his office in accordance with section one hundred and ninety-three. (3) The court shall take cognizance of the conduct of liquidators, and if a liquidator does not faithfully perform his duties and observe the prescribed requirements or the requirements of the court, or if any complaint is made to the court by any creditor or member or by the official receiver in regard thereto, the court shall inquire into the matter and take such action as it thinks fit. (4) The Registrar or the official receiver may report to the court any matter which in his opinion is misfeasance, neglect or omission on the part of the liquidator, and the court may order the liquidator to make good any loss which the estate of the company has sustained thereby and make such other order as it thinks fit. (5) The court may at any time require a liquidator to answer any inquiry in relation to the winding-up and may examine him or any other person on oath concerning the winding-up, and may direct an investigation to be made of the books and vouchers of the liquidator. (6) The court may require any member, trustee, receiver, banker, agent or officer of the company to pay, deliver, convey, surrender or transfer to the liquidator or provisional liquidator forthwith, or within such time as the court directs, any money, property, books and papers in his hands to which the company is prima facie entitled. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 151 Companies Act, 1994 (Chapter 388) Zambia Repealed (7) Subject to the provisions of this Act, a liquidator shall act in good faith, not make a secret profit and avoid any conflict of interest. [subsection (7) added by section 28 of Act 24 of 2011] (8) Except as otherwise directed by the court or by a resolution of creditors or members passed at a general meeting or by a committee of inspection, a liquidator shall— (a) dispose of company assets by public tender or the most transparent manner under the circumstances; and (b) not less than twenty-one days before such disposal, furnish the Registrar with a notice, in the prescribed manner and form, of the intention to dispose of the assets. [subsection (8) added by section 28 of Act 24 of 2011] - 335 Verify source ↗
Powers of official receiver where no committee of inspection .............................................................................. 152
The official receiver may, in certain liquidation cases with no committee of inspection, do acts or give directions or permissions that the committee would otherwise handle.
335. Powers of official receiver where no committee of inspection (1) Where a person other than the official receiver is the liquidator and there is no committee of inspection, the official receiver may, on the application of the liquidator, do any act or thing or give any direction or permission which is by this Act authorised or required to be done or given by the committee. (2) Where the official receiver is the liquidator and there is no committee of inspection, the official receiver may in his discretion do any act or thing which is by this Act required to be done by, or subject to any direction or permission given by, the committee. - 336 Verify source ↗
Appeal against decision of liquidator ............................................................................................................................. 152
A person aggrieved by a liquidator’s act or decision may apply to court, and the court may confirm, reverse, or modify it and make any just order.
336. Appeal against decision of liquidator Any person aggrieved by any act or decision of the liquidator may apply to the court, which may confirm, reverse, or modify the act or decision complained of and make such order as it thinks just. - 337 Verify source ↗
Notice of appointment and address ................................................................................................................................. 152
A liquidator must notify the Registrar and official receiver of the appointment, office address, postal address, any changes to those details, and resignation or removal.
337. Notice of appointment and address (1) A liquidator shall, within fourteen days after his appointment, lodge with the Registrar and with the official receiver notice of his appointment and of the situation of his office and of his postal address and, in the event of any change in the situation of his office or in his postal address, shall within twenty-one days after the change lodge with the Registrar and with the official receiver notice of the change. (2) Service made by leaving any document at the office of the liquidator given in such a notice, or by sending it in a properly addressed and prepaid registered letter posted to the postal address given in such a notice, shall be good service upon the liquidator and upon the company. (3) A liquidator shall, within twenty-one days after his resignation or removal from office, lodge notice thereof with the Registrar and with the official receiver. (4) If a liquidator fails to comply with this section, he shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding three monetary units for each day that the failure continues. - 338 Verify source ↗
Liquidator's accounts ............................................................................................................................................................. 152
A liquidator must file periodic accounts and a winding-up statement, keep copies available for inspection, notify creditors and members, and cooperate with audits.
338. Liquidator's accounts (1) A liquidator shall, within one month after— (a) the end of the period of six months from the date of his appointment; (b) the end of every subsequent period of six months; and By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 152 Companies Act, 1994 (Chapter 388) Zambia Repealed (c) ceasing to act as liquidator or obtaining an order of release; lodge with the Registrar and, if the liquidator is not the official receiver, with the official receiver, accounts of his receipts and payments and a statement of the position in the wind-up, verified by a statutory declaration. (2) The official receiver may cause the accounts of any liquidation to be audited by an auditor approved by him, and for the purpose of the audit the liquidator shall furnish the auditor with such vouchers and information as he requires, and the auditor may at any time require the production of and inspect any books or accounts kept by the liquidator. (3) A copy of the accounts or, if audited, a copy of the audited accounts, shall be kept by the liquidator at his office and shall there be open to the inspection of any member or creditor or of any other person interested in accordance with section one hundred and ninety-three. (4) The liquidator shall, when he is next forwarding any report or notice to the creditors and members generally— (a) give notice to every member and creditor that the accounts have been prepared; and (b) in the notice inform members and creditors that the accounts may be inspected at his office and state the times during which inspection may be made. (5) The cost of an audit under this section shall be fixed by the official receiver and be part of the expenses of winding-up. (6) A liquidator other than the official receiver who fails to comply with this section shall be guilty of an offence, and shall be liable to a fine not exceeding five hundred monetary units. - 339 Verify source ↗
Notification that a company is in liquidation .............................................................................................................. 153
When a company is being wound up, relevant invoices, goods orders, and business letters must include the words “in liquidation” after the company name the first time it appears.
339. Notification that a company is in liquidation (1) Where a company is being wound-up, every invoice, order of goods or business letter issued by or on behalf of the company or a liquidator of the company or a receiver of any property of the company, being a document on or in which the name of the company appears, shall have the words, "in liquidation" added after the name of the company where it first appears therein. (2) If the company fails to comply with subsection (1), the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding three monetary units in respect of each document. - 340 Verify source ↗
Books of company .................................................................................................................................................................. 153
If a company is wound up, the liquidator must keep certain books and papers for seven years after dissolution, and some of them may be destroyed only under specified directions.
340. Books of company (1) Where a company is being wound-up, all books and papers of the company and of the liquidator that are relevant to the affairs of the company at or subsequent to the commencement of the winding-up of the company shall, as between the members and creditors of the company, be prima facie evidence of the truth of all matters purporting to be therein recorded. (2) Subject to this section, when a company has been wound-up, the liquidator shall retain the books and papers referred to in subsection (1) (other than vouchers) for a period of seven years from the date of dissolution of the company. (3) The books and papers referred to in subsection (1) may be destroyed within a period of seven years after dissolution of the company— (a) in accordance with the directions of the court, in the case of a winding-up by the court; (b) as the company by resolution directs, in the case of a members' voluntary winding-up; and (c) as the committee of inspection, or, if there is no such committee, as the creditors of the company direct, in the case of a creditors' voluntary winding-up. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 153 Companies Act, 1994 (Chapter 388) Zambia Repealed (4) A liquidator who fails to comply with subsection (2) shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units. (5) No responsibility shall rest on the company or the liquidator by reason of any such book or paper not being forthcoming to any person claiming to be interested therein if the book or paper has been destroyed in accordance with this section. - 341 Verify source ↗
Investment of surplus funds ............................................................................................................................................... 154
If a company in liquidation has surplus cash, the committee of inspection may let the liquidator invest it or place it on deposit, unless the court orders otherwise.
341. Investment of surplus funds (1) Whenever the cash balance standing to the credit of a company in liquidation is in excess of the amount which, in the opinion of the committee of inspection, is required for the time being to answer demands on the company, the committee may authorise the liquidator, unless the court on application by any creditor directs otherwise, to invest the sum or any part thereof in securities issued by the Government of Zambia or place it on deposit at interest with any bank, and any interest received in respect thereof shall form part of the assets of the company. (2) Where there is no committee of inspection, the liquidator, may form the opinion for the purposes of subsection (1), and the authorisation of the committee referred to in that section shall be dispensed with. (3) Whenever any part of the money so invested is, in the opinion of the committee of inspection, required to answer any demands in respect of the company's estate, the committee of inspection may direct the sale or realisation of such part of the securities as is necessary. (4) If there is no committee of inspection, subsection (2) shall apply as if a reference to the committee were a reference to the liquidator. - 342 Verify source ↗
Unclaimed assets .................................................................................................................................................................... 154
A liquidator must pay certain unclaimed company money to the official receiver; the court can also order accounts, audits, and payment, and claims can be reviewed or appealed.
342. Unclaimed assets (1) Where a liquidator has in his hands or under his control— (a) any unclaimed dividend or other moneys which have remained unclaimed for more than six months from the date when the dividend or other moneys became payable; or (b) any unclaimed or undistributed moneys arising from the property of the company after making final distribution; he shall forthwith pay those moneys to the official receiver to be placed to the credit of the Companies Liquidation Account and shall be entitled to a certificate or receipt for the moneys so paid, which certificate shall be an effectual discharge to him in respect thereof. (2) The court may at any time— (a) on the application of the official receiver, order any liquidator to submit to it accounts of any unclaimed or undistributed funds, dividends or other moneys in his hands or under his control, verified by affidavit; (b) direct an audit thereof; and (c) direct the liquidator to pay those moneys to the official receiver to be placed to the credit of the Companies Liquidation Account. (3) This section shall not deprive any person of any other right or remedy to which he is entitled against the liquidator or any other person. (4) If a claimant makes any demand for any moneys placed to the credit of the Companies Liquidation Account, the official receiver, upon being satisfied that the claimant is the owner of the money, shall authorise payment thereof to be made to him out of the Account. (5) A person dissatisfied with the decision of the official receiver in respect of a claim made in pursuance of subsection (5) may appeal to the court, which may confirm, disallow or vary the decision. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 154 Companies Act, 1994 (Chapter 388) Zambia Repealed (6) Where any unclaimed moneys paid to any claimant are afterwards claimed by any other person, that other person shall not be entitled to any payment out of the Account, but such a person may have recourse against the claimant to whom the unclaimed moneys have been paid. (7) Any unclaimed moneys paid to the credit of the Companies Liquidation Account, to the extent to which they have not been under this section paid out of the Account, shall, on the expiration of six years from the date of the payment of the moneys to the credit of the account, be paid into the General Revenues of the Republic. - 343 Verify source ↗
Expenses of winding-up where assets insufficient .................................................................................................... 155
A liquidator must not incur winding-up expenses unless there are sufficient available assets, unless the official receiver directs otherwise.
343. Expenses of winding-up where assets insufficient (1) Unless expressly directed to do so by the official receiver pursuant to subsection (2), a liquidator shall not incur any expense in relation to the winding-up of a company unless there are sufficient available assets. (2) The official receiver may, on the application of any creditor or member, direct a liquidator to incur a particular expense on condition that the creditor or member indemnify the liquidator in respect of the recovery of the amount expended and, if the official receiver so directs, gives such security to secure the amount of the indemnity as the official receiver thinks reasonable. - 344 Verify source ↗
Meetings to ascertain wishes of members or creditors ............................................................................................ 155
The court may consider members’ or creditors’ wishes in a company winding-up and may call and manage meetings to find out those wishes.
344. Meetings to ascertain wishes of members or creditors (1) The court may, as to all matters relating to the winding-up of a company, have regard to the wishes of the members or creditors as proved to it by any sufficient evidence, and may if it thinks fit for the purpose of ascertaining those wishes, direct meetings of the members or creditors to be convened, held and conducted in such manner as the court directs, and may appoint a person to act as chairman of any such meeting and to report the result thereof to the court. (2) In the case of creditors, regard shall be had to the value of each creditor's debt. (3) In the case of members, regard shall be had to the number of votes held by each member under this Act or the articles. - 345 Verify source ↗
Proof of debts ........................................................................................................................................................................... 155
In a winding-up, contingent debts and claims against the company can be proved, with a just estimate of uncertain value. The same rules also apply, subject to section 346, in the winding-up of an insolvent company.
345. Proof of debts (1) In every winding-up, subject to this section, debts payable on a contingency, and all claims against the company, present or future, certain or contingent, ascertained or sounding only in damages, shall be admissible to proof against the company, a just estimate being made so far as possible of the value of such debts or claims as are subject to any contingency or sound only in damages or for some other reason do not bear a certain value. (2) Subject to section three hundred and forty-six, the same rules shall apply in the winding-up of an insolvent company with regard to the respective rights of secured and unsecured creditors and debts provable and the valuation of annuities and future and contingent liabilities as apply in relation to the estates of bankrupt persons under the law relating to bankruptcy. - 346 Verify source ↗
Preferential debts .................................................................................................................................................................... 155
In a winding-up, certain debts must be paid ahead of other unsecured debts, including liquidation costs, employee amounts, some taxes and rates, and related insured third-party payments.
346. Preferential debts (1) Subject to this Act, in a winding-up there shall be paid in priority to all other unsecured debts— (a) the costs and expenses of the winding-up including the taxed costs of a petitioner payable under section two hundred and seventy-four, the remuneration of the liquidator, and the costs of any audit carried out pursuant to section three hundred and thirty-eight; (b) all amounts due— (i) by way of wages or salary (whether or not earned wholly or in part by way of commission) accruing to any employee within the period of three months before the commencement of the winding-up; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 155 Companies Act, 1994 (Chapter 388) Zambia Repealed (ii) in respect of leave accruing to any employee within the period of two years before the commencement of the winding-up; (iii) in respect of any paid absence (not being leave) accruing to any employee within the period of three months before the commencement of the winding-up; (iv) by way of recruitment expenses or other amounts reimbursable under any contract of employment; (c) an amount equal to three months' wages or salary, by way of severance pay, to each employee; (d) all amounts due in respect of workers' compensation under any written law relating to workers' compensation accrued before the commencement of the winding-up; (e) any tax, duty or rate payable by the company in respect of any period prior to the commencement of the winding-up, whether or not payment has become due after that date; (f) all Government rents not more than five years in arrears at the commencement of the winding-up; and (g) all rates from the company to a local authority having become due and payable within the period of three years before the date of commencement of the winding-up. (2) Debts having priority shall rank as follows— (a) firstly, the debts referred to in paragraph (a); (b) secondly, the debts referred to in paragraphs (b), (c) and (d); (c) thirdly, the debts referred to in paragraphs (e) and (f); (d) fourthly, the debts referred to in paragraph (g); of subsection (1). (3) Debts having the same priority shall rank equally between themselves, and shall be paid in full, unless the property of the company is insufficient to meet them, in which case they shall abate in equal proportions between themselves. (4) Where a payment has been made to any employee of the company on account of wages or salary out of money advanced by a person for that purpose, the person by whom the money was advanced shall, in a winding-up, have a right of priority in respect of the money so advanced and paid, up to the amount by which the sum in respect of which the employee would have been entitled to priority in the winding-up has been diminished by reason of the payment, and shall have the same right of priority in respect of that amount as the employee would have had if the payment had not been made. (5) So far as the assets of the company available for payment of general creditors are insufficient to meet any preferential debts specified in subsection (1) and any amount payable in priority by virtue of subsection (3), those debts shall have priority over the claims of the holders of debentures under any floating charge created by the company, and shall be paid accordingly out of any property comprised in or subject to that charge. (6) Where the company is, under a contract of insurance entered into before the commencement of the winding-up, insured against liability to third parties, then if any such liability is incurred by the company (either before or after commencement of the winding-up) and an amount in respect of that liability is or has been received by the company or the liquidator from the insurer, the amount shall, after deducting any expenses of or incidental to getting the amount, be paid by the liquidator to the third party in respect of whom the liability was incurred to the extent necessary to discharge that liability or any part of that liability remaining undischarged in priority to all payments in respect of the debts referred to in subsection (1). By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 156 Companies Act, 1994 (Chapter 388) Zambia Repealed (7) If the liability of the insurer to the company is less than the liability of the company to the third party nothing in subsection (5) shall limit the third party in respect of the balance. (8) Subsections (5) and (6) shall have effect notwithstanding any agreement to the contrary entered into after the commencement of this Act. (9) Notwithstanding anything in subsection (1)— (a) paragraph (d) of that subsection shall not apply in relation to the winding-up of a company in any case where— (i) (ii) the company has entered into a contract with an insurer in respect of any liability under any law relating to workmen's compensation; the company is being wound-up voluntarily merely for the purpose of reconstruction or of amalgamation with another company; and (iii) the right to the compensation has, on the reconstruction or amalgamation, been preserved to the person entitled thereto; and (b) where a company has given security for the payment or repayment of any amount to which paragraph (e), (f) or (g) of that subsection relates, that paragraph shall apply only in relation to the balance of any such amount remaining due after deducting therefrom the net amount realised from the security. (10) Where, in any winding-up— (a) assets have been recovered under an indemnity for costs of litigation given by certain creditors; (b) assets have been protected or preserved by the payment of moneys or the giving of indemnity by creditors; or (c) expenses in relation to which a creditor has indemnified a liquidator have been recovered; the court may make such order as it thinks just with respect to the distribution of those assets and the amount of those expenses so recovered with a view to giving those creditors an advantage over others in consideration of the risk run by them in so doing. (11) Subject to this Act, all debts proved in the winding-up shall be paid pari passu. (12) An amount paid to an employee under paragraph (c) of subsection (1) shall be deducted from any amount payable as severance pay due to the employee under any law or agreement. (13) This section shall be deemed to have commenced on 1st November, 1994. [As amended by Act No. 6 of 1995] - 346A Verify source ↗
Remuneration of liquidator .............................................................................................................................................. 157
A liquidator is entitled to a fee based on a percentage of the company’s gross liquidation proceeds, subject to any prescribed cap.
346A. Remuneration of liquidator (1) A liquidator shall be entitled to the payment of a fee which shall be a percentage of the gross proceeds of the realisation of the liquidation of the company. (2) Notwithstanding the generality of subsection (1), the rates payable to a liquidator shall not exceed such amount as may be prescribed. (3) A liquidator who collects a fee in excess of the prescribed fees shall be personally liable to reimburse the amount of the excess fees so collected. [section 346A inserted by section 29 of Act 24 of 2011] By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 157 Companies Act, 1994 (Chapter 388) - 347 Verify source ↗
Avoidance of preference ....................................................................................................................................................... 158
When a company is wound up, certain property-related transactions may be void or voidable in the same way they would be in an individual bankruptcy, and a transfer of all company property to trustees for all creditors is void.
347. Avoidance of preference Zambia Repealed (1) Any conveyance, transfer, mortgage, delivery of goods, payment, execution or other act relating to property made or done by or against a company which, had it been made or done by or against an individual, would in his bankruptcy under the law of bankruptcy be void or voidable, shall, if the company is wound-up, be void or voidable in the same way. (2) For the purposes of this section, the date which corresponds with the date of presentation of the bankruptcy petition in the case of an individual shall be the date upon which the winding-up commenced. (3) Any transfer or assignment by a company of all its property to trustees for the benefit of all its creditors shall be void. - 348 Verify source ↗
Avoidance of floating charge .............................................................................................................................................. 158
A floating charge created within 12 months before winding-up is invalid unless the company was immediately solvent after the charge was created.
348. Avoidance of floating charge A floating charge on the undertaking or property of the company created within twelve months before the commencement of the winding-up shall, unless it is proved that the company immediately after the creation of the charge was solvent, be invalid except to the amount of any cash paid to the company at the time, or subsequently, in consideration for the charge, together with interest on that amount at the rate fixed by the terms of the charge. - 349 Verify source ↗
Liquidator's right to recover in respect of certain sales to or by company ........................................................ 158
A liquidator may recover an overvalue amount for certain company purchases or sales made with a director-related person or company within two years before winding-up starts.
349. Liquidator's right to recover in respect of certain sales to or by company (1) Where any property, business or undertaking has been acquired by a company within the period of two years before the commencement of the winding-up of the company— (a) from a person who was at the time of the acquisition a director of the company; or (b) from a second company of which, at the time of the acquisition, a person was a director who was also a director of the first company; the liquidator may recover from the person or company from which the property, business or undertaking was acquired any amount by which the value of the consideration given exceeded the value of the property, business or undertaking at the time of its acquisition. (2) Where any property, business or undertaking has been sold by a company within the period of two years before the commencement of the winding-up of the company— (a) to a person who was at the time of the sale a director of the company; or (b) to a second company of which at the time of the sale a person was a director who was also a director of the first company; the liquidator may recover from the person or company to which the property, business or undertaking was sold any amount by which the value of the property, business or undertaking at the time of the sale exceeded the value of the consideration received. (3) For the purposes of this section the value of the property, business or undertaking includes the value of any goodwill or profits which might have been made from the business or undertaking and any similar consideration. - 350 Verify source ↗
Disclaimer of onerous property ......................................................................................................................................... 158
A liquidator may disclaim certain burdensome company property with leave of the court or committee of inspection, but must follow notice and time limits.
350. Disclaimer of onerous property (1) Where any part of the property of a company consists of— (a) any estate or interest in land which is burdened with onerous covenants; (b) shares in any body corporate that are subject to restrictions on transfer; (c) unprofitable contracts; or By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 158 Companies Act, 1994 (Chapter 388) Zambia Repealed (d) any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act, or to the payment of any sum of money; the liquidator of the company, notwithstanding that he has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation thereto, may, with the leave of the court or the committee of inspection and subject to this section, by writing signed by him, disclaim the property at any time within twelve months after— (i) the commencement of the winding-up; or (ii) the property in question came to the knowledge of the liquidator, if it did not do so within one month after the commencement of the winding-up; or within such extended period as is allowed by the court. (2) The disclaimer shall operate to determine, as from the date of disclaimer, the rights, interests and liabilities of the company and the property of the company in or in respect of the property disclaimed, but shall not, except so far as is necessary for the purpose of releasing the company and the property of the company from liability, alter the rights or liabilities of any other person. (3) The court or committee of inspection, before or on granting leave to disclaim, may require such notices to be given to persons interested, and impose such terms as a condition of granting leave, and make such other orders in the matter, as the court or committee thinks just. (4) The liquidator shall not disclaim if an application in writing has been made to him by any person interested in the property requiring him to decide whether he will or will not disclaim, and the liquidator has not, within a period of twenty-eight days after the receipt of the application or such further period as is allowed by the court, given notice to the applicant that he intends to apply to the court or the committee for leave to disclaim. (5) In the case of a contract, if the liquidator, after an application referred to in subsection (4), does not within that period or further period disclaim the contract, the liquidator shall be deemed to have adopted it. (6) The court may, on the application of a person who is, as against the liquidator, entitled to the benefit or subject to the burden of a contract made with the company, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise, as the court thinks just, and any damages payable under the order to that person may be proved by him as a debt in the winding-up. (7) The court may, on the application of a person who claims an interest in any disclaimed property or is under any liability not discharged by this Act in respect of any disclaimed property, and on hearing such persons as it thinks fit, make an order for the vesting of the property in or the delivery of the property to— (a) any person entitled thereto; (b) any person to whom it seems just that the property should be delivered by way of compensation for such liability; or (c) a trustee for such a person; on such terms as the court thinks just. (8) On any such vesting order being made and a copy thereof being lodged with— (a) the Registrar; (b) the official receiver; and By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 159 Companies Act, 1994 (Chapter 388) Zambia Repealed (c) the appropriate authority concerned with the recording or registration of dealings in the land, if the order relates to land; the property shall vest accordingly without any further conveyance, transfer or assignment. (9) Notwithstanding anything in subsection (7), where the property disclaimed is of a leasehold nature, the court shall not make a vesting order in favour of any person claiming under the company, whether as under-lessee or as mortgagee, except upon the terms of making that person— (a) (b) subject to the same liabilities and obligations as those to which the company was subject under the lease in respect of the property at the commencement of the winding-up; or if the court thinks fit, subject only to the same liabilities and obligations as if the lease had been assigned to that person at that date; and in either event, if the case so requires, as if the lease had comprised only the property comprised in the vesting order. (10) A mortgagee or under-lessee who declines to accept a vesting order on the terms referred to in subsection (9) shall be excluded from all interests in and security upon the property, and, if there is no person claiming under the company who is willing to accept an order upon such terms, the court may vest the estate and interest of the company in the property in any person liable personally or in a representative capacity and either alone or jointly with the company to perform the lessee's covenants in the lease, freed and discharged from all estates, incumbrances and interests created therein by the company. (11) Any person injured by the operation of a disclaimer under this section shall be deemed to be a creditor of the company to the amount of the injury, and may accordingly prove the amount as a debt in the winding-up. - 351 Verify source ↗
Restriction of rights of creditor as to execution or attachment ............................................................................ 160
A creditor who has levied execution or attached a debt before a company is wound up may lose the benefit against the liquidator unless the execution or attachment was completed in time; a buyer in good faith at a sheriff’s sale gets good title, and the court may relax the liquidator’s rights in the creditor’s favour.
351. Restriction of rights of creditor as to execution or attachment (1) Where a creditor has issued execution against the goods or land of a company or has attached any debt due to the company and the company is subsequently wound-up, he shall not be entitled to retain the benefit of the execution or attachment against the liquidator unless he has completed the execution or attachment before— (a) the date on which he had any notice of a meeting at which a resolution for voluntary winding-up was to be proposed; or (b) the date of the commencement of the winding-up, if he had no such notice. (2) A person who purchases in goods faith under a sale by the sheriff any goods of a company on which an execution has been levied shall, in all cases, acquire a good title to them against the liquidator. (3) The rights conferred by subsection (1) on the liquidator may be set aside by the court in favour of the creditor to such extent and subject to such terms as the court thinks just. (4) For the purposes of this section— (a) an execution against goods is completed by seizure and sale; (b) an attachment of a debt is completed by receipt of the debt; and (c) an execution against land is completed by sale or, in the case of an equitable interest, by the appointment of a receiver. (5) For the purposes of this section, "goods" includes all chattels personal. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 160 Companies Act, 1994 (Chapter 388) Zambia Repealed - 352 Verify source ↗
Duties of sheriff as to goods taken in execution ........................................................................................................ 161
The sheriff must handle a company’s goods taken in execution according to the section’s winding-up rules, including delivering them to the liquidator in some cases, deducting execution costs, and paying over the balance after a short holding period.
352. Duties of sheriff as to goods taken in execution (1) Subject to subsection (3), where any goods of a company are taken in execution and, before the sale thereof or the completion of the execution by the receipt or recovery of the full amount of the levy, notice is served on the sheriff that— (a) a provisional liquidator has been appointed; (b) a winding-up order has been made; or (c) a resolution for voluntary winding-up has been passed; the sheriff shall, on being required, deliver to the liquidator the goods and any money seized or received in part satisfaction of the execution. (2) The costs of the execution shall be a first charge on the goods or moneys so delivered, and the liquidator may sell the goods, or a sufficient part thereof, for the purpose of satisfying that charge. (3) Subject to this section, where, under an execution in respect of a judgement for a sum exceeding fifty monetary units, the goods of a company are sold or money is paid in order to avoid sale, the sheriff shall deduct the costs of the execution from the proceeds of the sale or the money paid, and shall retain the balance for fourteen days. (4) If, within that period of fourteen days, notice is served on him of an application for the winding- up of the company having been presented or of a meeting having been called at which there is to be proposed a resolution for the voluntary winding-up, the sheriff shall, when an order is made or a resolution is passed for the winding-up, pay the balance to the liquidator who shall be entitled to retain it as against the execution creditor. (5) The rights conferred by this section on the liquidator may be set aside by the court in favour of the creditor to such extent and subject to such terms as the court thinks fit. (6) For the purposes of this section, "goods" includes all chattels personal. - 353 Verify source ↗
Offences by officers of companies in liquidation ........................................................................................................ 161
Certain company officers or members involved in a winding-up commit an offence if they fail to disclose or hand over company property and records, conceal or falsify assets or documents, or commit related fraud; receivers of property in offending circumstances are also guilty.
353. Offences by officers of companies in liquidation (1) A person who, being a past or present officer or a past or present member of a company which is being wound-up— (a) does not to the best of his knowledge and belief fully and truly reveal to the liquidator all the property real and personal of the company, and how and to whom and for what consideration and when the company disposed of any part thereof, except such part as has been disposed of in the ordinary way of the business of the company; (b) does not deliver up to the liquidator, or as he directs— (i) all the real and personal property of the company in his custody or under his control and which he is required by law to deliver up; or (ii) all books and documents in his custody or under his control belonging to the company and which he is required by law to deliver up; (c) within twelve months before the commencement of the winding-up or at any time thereafter — (i) has concealed any part of the property of the company having a value of more than ten monetary units, or has concealed any debt due to or from the company; (ii) has fraudulently removed any part of the property of the company having a value of more than ten monetary units; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 161 Companies Act, 1994 (Chapter 388) Zambia Repealed (iii) has concealed, destroyed, mutilated or falsified, or has been privy to the concealment, destruction, mutilation or falsification of, any book or document affecting or relating to the property or affairs of the company; (iv) has made or has been privy to the making of any false entry in any book or document affecting or relating to the property or affairs of the company; (v) has fraudulently parted with, altered or made any omission in, or has been privy to fraudulent parting with, altering or making any omission in, any document affecting or relating to the property or affairs of the company; (vi) by any false representation or other fraud, has obtained any property for or on behalf of the company on credit which the company has not subsequently paid for; (vii) has obtained on credit, or for or on behalf of the company, under the false pretence that the company is carrying on business, any property which the company has not subsequently paid for; or (viii) has pawned, pledged or disposed of any property of the company which has been obtained on credit and has not been paid for, except where the pawning, pledging or disposing was in the ordinary way of the business of the company; (d) makes any material omission in any statement relating to the affairs of the company; (e) knowing or believing that a false debt has been proved by any person, fails for a period of one month to inform the liquidator thereof; (f) prevents the production of any book or paper affecting or relating to the property or affairs of the company; (g) within the period of twelve months before the commencement of the winding-up or at any time thereafter has attempted to account for any part of the property of the company by fictitious losses or expenses; or (h) within the period of twelve months before the commencement of the winding-up or at any time thereafter has made any false representation or committed any other fraud for the purpose of obtaining the consent of the creditors of the company or any of them to an agreement with reference to the affairs of the company or to the winding-up; shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two thousand monetary units or to imprisonment for a period not exceeding two years, or to both. (2) It shall be a defence to a charge under paragraph (a), (b) or (d) or subparagraph (i), (vii) or (viii) of paragraph (c) of subsection (1) if the accused proves that he had no intent to defraud, and to a charge under paragraph (f) or subparagraph (iii) or (iv) of paragraph (c) of subsection (1) if he proves that he had no intent to conceal the state of affairs of the company or to defeat the law. (3) Where a person pawns, pledges or disposes of any property in circumstances which amount to an offence under subparagraph (viii) of paragraph (c) of subsection (1), every person who takes in pawn or pledge or otherwise receives the property, knowing it to be pawned, pledged or disposed of in those circumstances shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units or to imprisonment for a period not exceeding six months, or to both. - 354 Verify source ↗
Inducement to be appointed liquidator ......................................................................................................................... 162
A person must not give, agree to give, or offer valuable consideration to a company member or creditor to secure appointment as liquidator.
354. Inducement to be appointed liquidator Any person who gives or agrees or offers to give to any member or creditor of a company any valuable consideration with a view to securing the appointment of the person, or of any other person, as the company's liquidator shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding five hundred monetary units or to imprisonment for a period not exceeding six months, or to both. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 162 Companies Act, 1994 (Chapter 388) Zambia Repealed - 355 Verify source ↗
Penalty for falsification of books ...................................................................................................................................... 163
Officers or members of a company being wound up must not destroy, alter, falsify, or make false entries in company records with intent to defraud or deceive; doing so is an offence punishable on conviction by a fine, imprisonment, or both.
355. Penalty for falsification of books Every officer or member of any company being wound-up who destroys, mutilates, alters or falsifies any books, documents or securities, or makes or is privy to the making of any false or fraudulent entry in any register, book or document belonging to the company with intent to defraud or deceive any person shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two thousand monetary units or to imprisonment for a period not exceeding two years, or to both. - 356 Verify source ↗
Liability where proper accounts not kept ...................................................................................................................... 163
If a company is wound up and it failed to keep required accounting records in the two years before winding-up, each defaulting officer commits an offence unless the failure was honestly excusable.
356. Liability where proper accounts not kept If, when a company is wound-up, it is shown that the company failed to keep accounting records in accordance with section one hundred and sixty-two for any period during the period of two years before the commencement of the winding-up, each officer in default, unless he acted honestly and shows that in the circumstances in which the business of the company was carried on the failure was excusable, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding one thousand monetary units or to imprisonment for a period not exceeding twelve months, or to both. - 357 Verify source ↗
Liability for contracting debt .............................................................................................................................................. 163
An officer of a company commits an offence if they help the company take on a debt while having no reasonable basis to think the company can pay it.
357. Liability for contracting debt (1) If an officer of a company who is knowingly a party to the contracting of a debt by the company has, at the time the debt is contracted, no reasonable or probable ground of expectation (after taking into consideration the other liabilities, if any, of the company at the time) of the company's being able to pay the debt, the officer shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two hundred and fifty monetary units or to imprisonment for a period not exceeding three months, or to both. (2) Where a person has been convicted of an offence against this section, the court, on the application of the liquidator or any creditor or member of the company, may make an order that the person shall be personally responsible, without any limitation of liability, for the debts or other liabilities of the company or for such of those debts or other liabilities as the court directs. (3) An order under this section may provide for measures to give effect to the liabilities of the person under the order, and in particular may provide that those liabilities shall be a charge on any debt or obligation due from the company to him, or on any interest in the company of which he has, directly or indirectly, the benefit. (4) The court may make such further orders as it thinks necessary to enforce any charge imposed under this section. - 358 Verify source ↗
Power of court to assess damages against delinquent officers ............................................................................. 163
During winding-up, the court may investigate delinquent officers and related persons and order repayment, restoration, interest, or compensation.
358. Power of court to assess damages against delinquent officers (1) If, in the course of winding-up, it appears that any person who has taken part in the formation or promotion of the company, or any past or present liquidator or officer— (a) has misapplied or retained, or become liable or accountable for, any money or property of the company; or (b) has been guilty of any misfeasance or breach of trust or duty in relation to the company; the court may, on the application of the liquidator or of any creditor or member, inquire into the conduct of that person, liquidator or officer and compel him to repay or restore the money or property, or any part thereof, with interest at such rate as the court thinks just, or to contribute such a sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust or duty as the court thinks just. (2) This section shall apply to and in respect of the receipt of any money or property by an officer of the company during the two years preceding the commencement of the winding-up, whether by way of salary or otherwise, that appears to the court to be unfair or unjust. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 163 Companies Act, 1994 (Chapter 388) Zambia Repealed (3) This section shall apply to the conduct of a person notwithstanding that the person is criminally liable for the conduct. - 359 Verify source ↗
Prosecution of delinquent officer and members ......................................................................................................... 164
In a winding-up, the liquidator and certain company insiders must report suspected criminal offences to the Director of Public Prosecutions, and they may have to assist any prosecution.
359. Prosecution of delinquent officer and members (1) If it appears to the court, in the course of either a winding-up by the court or a voluntary winding- up, that any past or present officer, or any member, of the company has been guilty of an offence in relation to the company for which he is criminally liable, the court may, either on the application of any person interested in the winding-up or of its own motion, direct the liquidator to report the matter to the Director of Public Prosecutions. (2) If— (a) it appears to the liquidator, in the course of a voluntary winding-up, that any past or present officer, or any member, of the company has been guilty of any offence in relation to the company for which he is criminally liable; or (b) the liquidator in any winding-up is given a direction under subsection (1); he shall forthwith report the matter to the Director of Public Prosecutions and shall, in respect of information or documents in his possession or under his control which relate to the matter in question, furnish the Director of Public Prosecutions with such information and give to him such access to and facilities for inspecting and taking copies of any documents as he may require. (3) Where the Director of Public Prosecutions receives a report under this section, he may refer the matter to the Registrar for further inquiry, and the Registrar shall thereupon investigate the matter, and may apply to the court for an order conferring on any person designated by the court for the purpose, with respect to the company concerned, all such powers of investigating the affairs of the company as are provided by this Act in the case of a winding-up by the court. (4) If the Director of Public Prosecutions institutes proceedings in a matter reported to him under this section, the liquidator and every officer and agent of the company past and present, other than the defendant in the proceedings, shall give the Director of Public Prosecutions all assistance in connection with the prosecution which he is reasonably able to give. (5) For the purposes of subsection (4) "agent of the company" includes any banker or legal practitioner of the company and any person appointed by the company as auditor. (6) If any person fails to comply with subsection (4), the court may, on the application of the Director of Public Prosecutions, direct that person to comply with that subsection, and where any application is made under this subsection with respect to a liquidator, the court may, unless it appears that the failure or neglect to comply was due to the liquidator not having in his hands sufficient assets of the company to enable him so to do, direct that the costs of the application shall be borne by the liquidator personally. - 360 Verify source ↗
Frauds by officers of companies which have gone into liquidation ..................................................................... 164
An officer of a company that later goes into winding-up commits an offence if they use fraud against creditors or company property.
360. Frauds by officers of companies which have gone into liquidation A person who, while an officer of a company which is subsequently ordered to be wound-up by the court or which subsequently passes a resolution for voluntary winding-up— (a) induced any person to give credit to the company by false pretences or by means of any other fraud; (b) with intent to defraud creditors of the company, made or caused to be made any gift or transfer of charges on, or caused or connived at the levying of any execution against, the property of the company; or By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 164 Companies Act, 1994 (Chapter 388) Zambia Repealed (c) with intent to defraud creditors of the company, concealed or removed any part of the property of the company within two months before the date of any unsatisfied judgement or order for payment of money obtained against the company; shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two thousand monetary units or to imprisonment for a period not exceeding two years, or to both. - 361 Verify source ↗
Power of Registrar to strike defunct company off register ...................................................................................... 165
The Registrar may strike a defunct company off the register after notice and waiting periods if the company does not show cause.
361. Power of Registrar to strike defunct company off register (1) Where the Registrar has reasonabe cause to believe that a company is not carrying on business or is not in operation, he may send to the company by registered post a letter to that effect and also stating that, if an answer showing cause to the contrary is not received within one month from the date of the letter, a notice will be published in the Gazette with a view to dissolving the company under this section. (2) If the Registrar, at the expiration of the period of one month after the sending of the letter, is not satisfied that the company is carrying on business or is in operation, he may at any time thereafter cause to be published in the Gazette and send to the company by registered post a notice that at the expiration of three months from the date of that notice, unless cause is shown to the contrary, the company will be dissolved. (3) Where a company is being wound-up and the Registrar has reasonably cause to believe that— (a) no liquidator is acting; (b) (c) the affairs of the company are fully wound-up and for a period of six months the liquidator has been in default in lodging any return required to be made by him; the affairs of the company have been fully wound-up and there are no assets, or the assets available are not sufficient to pay the costs of obtaining an order of the court dissolving the company; or (d) the affairs of the company have been fully wound-up and that it is not necessary in the circumstances of the case to obtain an order of the court dissolving the company; he may cause to be published in the Gazette and send to the company or the liquidator, if any, a notice to the same effect as that referred to in subsection (2). (4) Where a company— (a) by ordinary resolution requests the Registrar to strike it off the register; and (b) lodges with the Registrar a copy of the resolution, summary of accounts, and a statutory declaration of two or more directors showing what disposition the company has made of its assets and that the company has no debts or liabilities; the Registrar shall cause to be published in the Gazette a notice to the same effect as that referred to in subsection (2). (5) After the expiration of three months from the publication in the Gazette of a notice under this section, the Registrar shall, unless cause to the contrary is shown, strike the name of the company off the register, and shall cause notice thereof to be published in the Gazette. (6) On the publication in the Gazette of the notice that name of the company has been struck off the register, the company shall be dissolved, but— (a) the liability, if any, of every officer and member of the company shall continue and may be enforced as if the company had not been dissolved; and By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 165 Companies Act, 1994 (Chapter 388) Zambia Repealed (b) nothing in this subsection shall affect the power of the court to wind-up a company which has been dissolved under this section. (7) A notice to be sent under this section to a liquidator may be addressed to the liquidator at his last known place of business. (8) The fees of the Registrar in respect of the dissolution of a company under this section and the costs incurred by him in publishing notices in the Gazette shall be payable by the company and recoverable from it. (9) The Registrar may, not less than five years after striking a defunct company off the register, re-issue the name of the company where a person seeks to apply for the registration of a company with the name that was struck off the register, in accordance with this Act. [subsection (9) added by section 30 of Act 24 of 2011] - 362 Verify source ↗
Power of court to declare dissolution of company void ........................................................................................... 166
The court may declare a company’s dissolution void within two years, and the applicant must file the order with the Registrar and official receiver within seven days unless the court allows more time.
362. Power of court to declare dissolution of company void (1) Where a company has been dissolved under section two hundred and ninety-three, three hundred and twenty-four or three hundred and sixty-one, the court may at any time within two years after the date of dissolution, on application by the liquidator of the company or by any other person who appears to the court to be interested, make an order upon such terms as the court thinks fit declaring the dissolution to have been void, and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved, except that, for the purposes of any period of limitation, time shall not be deemed to run during the period between the dissolution and the date of the order, or of such other date as the order specifies. (2) The court may by the order give such directions and make such provisions as it thinks just for placing the company and all other persons in the same position as nearly as may be as if the company had never been dissolved. (3) The person on whose application the order is made shall, within seven days after the making of the order or such further time as the court may allow, lodge with the Registrar and with the official receiver a copy of the order, and the Registrar shall thereupon cause notice thereof to be published in the Gazette or otherwise as the court may direct. (4) If the person fails to comply with subsection (3), he shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding three monetary units for each day that the failure continues. - 363 Verify source ↗
Registrar to act as representative of defunct company in certain events .......................................................... 166
After a company is dissolved, the Registrar may act for it in limited administrative matters and may sign relevant documents.
363. Registrar to act as representative of defunct company in certain events (1) Where, after a company has been dissolved, the Registrar is satisfied— (a) (b) that the company, if still existing, would be legally or equitably bound to carry out, complete or give effect to some dealing, transaction or matter; and that in order to carry out, complete or give effect thereto, some purely administrative and not discretionary act should have been done by or on behalf of the company, or should be done by or on behalf of the company if it were still existing; the Registrar may, as representing the company or its liquidator; do or cause to be done any such act. (2) The powers of the Registrar under subsection (1) shall include the powers to execute or sign any relevant instrument or document, and the Registrar shall, when so executing or signing an instrument or document, endorse thereon a note or memorandum to the effect that he has done so under this section, and such an execution or signature shall have the same force, validity and effect as if the company had been in existence and had executed the instrument or document. (3) Neither the Registrar nor the Government shall incur any liability to any person by reason of any act done or caused to be done by the Registrar under this section. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 166 Companies Act, 1994 (Chapter 388) Zambia Repealed - 13 Verify source ↗
Types of company ........................................................................................................................................................................... 9
This provision is about winding up other bodies corporate.
13.9 – Winding-up of other bodies corporate - 364 Verify source ↗
Winding-up of other Zambian bodies corporate ......................................................................................................... 167
This section applies the Part, with necessary modifications, to non-company bodies corporate incorporated in Zambia, except where another Zambian written law already makes specific winding-up rules for them.
364. Winding-up of other Zambian bodies corporate (1) Subject to this section, this Part shall apply, with the necessary modifications, to any body corporate incorporated in Zambia, not being a company. (2) This section shall not apply to a body corporate incorporated by or under any written law of Zambia if the law makes specific provisions for the winding-up of bodies corporate formed by or under it. (3) A winding-up by the court under this section may be made only on the petition of the body corporate. - 365 Verify source ↗
Winding-up of other foreign bodies corporate ............................................................................................................ 167
Defines “external company” and lets the court in a winding-up order, or on the liquidator’s later application, validate transactions in Zambia and set terms and conditions.
365. Winding-up of other foreign bodies corporate (1) In this section, "external company" means a body corporate incorporated in a foreign country, not being a foreign company, that has assets or an undertaking in Zambia. (2) Subject to this section, this Part shall apply with the necessary modifications to the operations and business and assets in Zambia of an external company, as if it were a company incorporated in Zambia, carrying on the operations or business of the external company in Zambia, whose only assets are the assets of the external company in Zambia. (3) An external company may be wound-up under this section whether or not it has been dissolved or has otherwise ceased to exist according to the law of the country of its incorporation. (4) An external company may be wound-up under this section on the following grounds in addition to those referred to in section two hundred and seventy-two: (a) (b) (c) if it is in the course of being wound-up, voluntarily or otherwise, in the country of its incorporation; if it is dissolved in the country of its incorporation or has ceased to carry on business in Zambia, or is carrying on business for the purposes only of winding-up its affairs; if the court is of the opinion that the company is being operated in Zambia for any unlawful purposes. (5) The court may, in the winding-up order or on subsequent application by the liquidator, direct that all transactions in Zambia by or with the external company shall be deemed to be, or have been, validly done notwithstanding that they occurred after the date when the body corporate was dissolved or otherwise ceased to exist according to the law of the country of its incorporation, and may make the order on such terms and conditions as it deems fit. Part XIV – Miscellaneous
Part
Part XIV – Miscellaneous
- 366 Verify source ↗
Administration of Act ............................................................................................................................................................ 167
The Agency administers this Act.
366. Administration of Act This Act shall be administered by the Agency. [section 366 substituted by section 5 of Act 12 of 2010] By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 167 Companies Act, 1994 (Chapter 388) - 367 Verify source ↗
Registrar ...................................................................................................................................................................................... 168
The Registrar must carry out the powers and duties assigned by this Act and the Patents and Companies Registration Agency Act, 2010.
367. Registrar Zambia Repealed The Registrar shall exercise the powers and perfonn the duties assigned to the Registrar by this Act and the Patents and Companies Registration Agency Act, 2010. [Act No. 15 of 2010] [section 367 substituted by section 6 of Act 12 of 2010] - 368 Verify source ↗
Seal ............................................................................................................................................................................................... 168
The Agency’s seal must be used for this Act, and impressions of that seal are to be treated as judicially noticed.
368. Seal (1) The seal of the Agency kept in tenns of the Patents and Companies Registration Agency Act, 2010, shall be used for the purposes of this Act and the impression thereof made for such purposes shall be judicially noticed. (2) On the commencement of this Act, any impression of a seal made for the purposes of this Act before the commencement of this Act shall be deemed to be an impression of the seal of the Agency [Act No. 15 of 2010] [section 368 substituted by section 7 of Act 12 of 2010] - 369 Verify source ↗
Keeping of registers and lodged documents ................................................................................................................ 168
The Registrar must keep the required registers and lodged documents, and make company records available on request within two hours as far as practicable.
369. Keeping of registers and lodged documents (1) The Registrar shall maintain the registers required under this Act together with any other registers that he thinks necessary or convenient for the purposes of this Act. (2) Where a document is lodged under this Act, the Registrar shall keep the document, or a copy thereof, and register it. (3) The registers and other documents may be recorded or stored in written or printed form or by electronic or photographic process or otherwise. (4) The Registrar shall ensure that, as far as practicable— (a) all the particulars in the registers; and (b) all the documents, or the copies thereof, lodged with the Registrar, in respect of a particular company can be made available to a person who requests them within two hours after the making of the request. (5) For the purposes of this section— (a) the information in any register kept under the former Act shall, if it is information that would have been required to be kept on a register had this Act been in force, be deemed to be information required to be kept on a register under this Act; and (b) any document lodged for the purposes of the former Act shall be deemed to be a document lodged under this Act. - 370 Verify source ↗
Registration of documents .................................................................................................................................................. 168
The Registrar must register required filings, but only after any prescribed fee is paid and the filing meets the Act’s formatting and lodging requirements.
370. Registration of documents (1) Where this Act requires any document or particulars to be lodged with the Registrar, the Registrar shall register them in the manner prescribed or, if no manner is prescribed for the document or particulars, as determined by the Registrar. (2) For the purposes of this Act, a document or particulars shall be deemed not to have been lodged with the Registrar until any fee prescribed under section three hundred and seventy-seven has been paid to the Registrar. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 168 Companies Act, 1994 (Chapter 388) Zambia Repealed (3) Subject to this Act, where this Act requires a document or particulars to be lodged under this Act, each company concerned shall lodge a separate document or set of particulars. (4) All documents and particulars which are lodged with the Registrar shall be printed or typewritten on good quality paper to the satisfaction of the Registrar. (5) If the Registrar is of opinion that any document or particulars lodged with him— (a) contain matter or matters contrary to law; (b) by reason of any error, omission or misdescription have not been duly completed; (c) are insufficiently legible; (d) are written on paper insufficiently durable; or (e) otherwise do not comply with the requirements of this Act; he may refuse to register the document or particulars in that state and direct that they be amended or completed in a specified manner and re-submitted. (6) If the Registrar gives a direction under subsection (5), the document or particulars shall be deemed not to have been lodged. (7) The Registrar may require that a document or a fact stated in a document lodged with him shall be verified by statutory declaration. (8) Where the Registrar is required or permitted under this Act to cause a copy or particulars of a document lodged with him to be published in the Gazette, he may require the lodgement with him of any such document in duplicate, or the provision of any such particulars, and may withhold registration of the document until the requirement has been complied with. (9) The Registrar may alter a document if so authorised by the person who lodged the document or his representative. - 371 Verify source ↗
Extension of time for lodgement ...................................................................................................................................... 169
The Registrar can extend lodgement time limits, accept late filings on payment of a prescribed additional fee, and may reduce or waive that fee in some cases.
371. Extension of time for lodgement (1) Where under this Act a document is required to be lodged with the Registrar within a specified period, the period shall be extended by fourteen days in relation to a document executed or made in a place outside Zambia. (2) The Registrar may, before the end of any period fixed for the lodgement of a document or particulars, at the request of the person concerned, extend the period for lodgement by such a period, and on such terms, as he thinks reasonable in the circumstances. (3) Subject to this section, where any document or particulars are lodged with the Registrar after the end of the period fixed for its lodgement, the Registrar shall accept it for registration upon payment of such additional fee as may be prescribed. (4) The Registrar may reduce or waive any additional fee imposed under subsection (3) if he is satisfied that the failure to lodge the document or particulars was caused or continued solely through administrative oversight and that no person is likely to have suffered damage or to have been prejudiced as a result of the failure. - 372 Verify source ↗
Documents to be in approved language ........................................................................................................................ 169
Documents or registers that this Act requires to be prepared, kept, maintained, or lodged must be in English. If the Registrar approves lodgement of a document that is partly or fully in another language, the Registrar may require a certified English translation to be attached.
372. Documents to be in approved language (1) Subject to this Act, where this Act requires a document or register to be prepared, kept, maintained or lodged, the document shall be in English. (2) Where the Registrar approves the lodgement of a document all or part of which is in a language other than English, he may require a certified translation into English to be annexed to it. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 169 Companies Act, 1994 (Chapter 388) - 372A Verify source ↗
Notice by Registrar .............................................................................................................................................................. 170
The Registrar may issue notices for this Act and must take reasonable steps to make them reach the widest possible audience.
372A. Notice by Registrar Zambia Repealed (1) The Registrar may issue such notices in connection with matters under this Act for which notice is required to be given in order to give effect to this Act. (2) The Registrar shall take reasonable steps to ensure that a notice under subsection (1) is issued using a method that will ensure the widest possible circulation to the persons to which the notice is directed. (3) Unless otherwise provided, a notice issued by the Registrar under subsection (1) may be effected by — (a) serving the notice at the address of the person to be notified; (b) publication in a daily newspaper of general circulation in Zambia; (c) display in a prominent public place; (d) publication on the website of the Agency or any other appropriate third party website; or (e) publication in the Gazette. [section 372A inserted by section 31 of Act 24 of 2011] - 373 Verify source ↗
Prescribed forms ...................................................................................................................................................................... 170
If a document must be in the prescribed form, the Registrar must accept it for filing and registration if it has all required information and only inessential differences from the prescribed form.
373. Prescribed forms (1) Where this Act provides that a document to be lodged shall be "in the prescribed form", the Registrar shall accept for lodgement and registration a document that contains all the information required and varies from the prescribed form in inessential respects only. (2) In the period of six months from the commencement of this Act, where this Act provides that a document to be lodged shall be "in the prescribed form" and no form has been prescribed by the regulations for the purposes of the provision, the document shall be in a form approved by the Registrar. - 374 Verify source ↗
Inspection copies and evidence ......................................................................................................................................... 170
A person may inspect registered documents by paying the prescribed fee, and the Registrar must provide certified incorporation/share-capital certificates or copies of registered documents on payment of the appropriate prescribed fee.
374. Inspection copies and evidence (1) A person may inspect any document registered by the Registrar upon payment of such fee as may be prescribed for each inspection of the documents relating to one company. (2) On the payment of the appropriate prescribed fee, the Registrar shall provide a person with— (a) a certificate of incorporation of a company; (b) a certificate of share capital of a company; or (c) a copy of any other document, or any part of any other document, registered by the Registrar; certified under the hand of the Registrar. (3) A document kept by the Registrar shall not be required to be produced for the purpose of any proceedings except by an order of the court. - 375 Verify source ↗
Evidentiary provisions ........................................................................................................................................................... 170
Courts must accept certified copies or extracts from Registrar-registered documents as equally valid to the originals, and must take judicial notice of the Registrar’s office.
375. Evidentiary provisions (1) A copy of, or extract from, any document registered by the Registrar, being a copy or extract certified by the Registrar to be a true copy or extract, shall be admitted in any proceedings as of equal validity to the original document. (2) In any proceedings, a court shall take judicial notice of the office of the Registrar. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 170 Companies Act, 1994 (Chapter 388) (3) A document purporting— (a) to be— Zambia Repealed (i) an order, certificate, licence or approval made or issued by the Registrar for the purposes of this Act; or (ii) a revocation of such an order, certificate, licence or approval; and (b) to be sealed with the seal of the Registrar or to be signed by him, or on his behalf by a Deputy Registrar or other authorised officer; shall be presumed to be such a document, or to be duly sealed or signed. (4) A certificate signed by the Registrar that an order made, certificate issued, or act done is the order, certificate, or act of the Registrar shall be conclusive evidence or the fact certified. - 376 Verify source ↗
Enforcement of duty to make returns ............................................................................................................................. 171
The Registrar may inspect a company’s required books after 14 days’ written notice, and the court may order compliance if a body corporate or certain officers keep failing to lodge required returns, accounts, documents, or notices.
376. Enforcement of duty to make returns (1) For the purpose of ascertaining whether a company or an officer is complying with this Act or any regulations made under this Act, the Registrar may, on giving fourteen days written notice to the company, call for the production of or inspect any book required to be kept by the company. (2) If a body corporate or any officer, receiver or liquidator of a body corporate; (a) (b) fails to comply with any provision of this Act which requires it, or him, to lodge or deliver any return, account, or other document, or to give notice of any matter; continues to fail to comply with the provision for the period of fourteen days after the service of a notice on it or him requiring him to do so; the court may, on an application by the Registrar or by any member or creditor of the body corporate, or by any other person claiming an interest which the court thinks sufficient, make an order directing the body corporate and any officer thereof, or the receiver or liquidator, to comply with the provision within such time as may be specified in the order, and may provide that all costs of and incidental to the application shall be borne by the body corporate or by any officer, receiver or liquidator of the body corporate responsible for the failure. - 377 Verify source ↗
Fees ............................................................................................................................................................................................... 171
Regulations may set fees for the Registrar’s work and document inspections, the Registrar may remit late-fee amounts, and the Minister may exempt payment of prescribed fees by statutory instrument.
377. Fees (1) The regulations may prescribe fees in respect of— (a) the performance by the Registrar of his functions under this Act, including the receipt by him of any notice or other document which under this Act is required to be lodged with him; and (b) the inspection of documents kept by him under this Act. (2) Where the regulations provide that an additional fee is payable, by reason of the late lodgement of a document for registration or otherwise, the Registrar may in his discretion remit the whole or any part of the additional fee. (3) Where the regulations provide that an additional fee is payable, by reason of the late lodgement of a document for registration or otherwise, the additional fee shall be payable notwithstanding that the company or any other person may be criminally liable in respect of the same act or omission. (4) Where a provision in this Act refers to a prescribed fee and no fee has been prescribed for the purposes of the provision, the provision shall be read as if the reference were omitted. (5) The Minister may, by statutory instrument exempt the payment of any fees, prescribed by regulations pursuant to subsection (1) in respect of any person or company lodging documents for By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 171 Companies Act, 1994 (Chapter 388) Zambia Repealed registration under this Act if such person or company has entered into a Development Agreement under section nine of the Mines and Minerals Act. [Cap. 213] [subsection (5) added by section 4 of Act 1 of 2000]
Part
part of the additional fee.
- 378 Verify source ↗
*** .................................................................................................................................................................................................. 172
Section 378 has been repealed.
378. *** [section 378 repealed by section 8 of Act 12 of 2010] - 379 Verify source ↗
Appeal against a decision of the Registrar ................................................................................................................... 172
A person aggrieved by a Registrar’s decision may appeal to the court within 14 days after notification, and the court may confirm, reverse, vary, or make other orders or directions.
379. Appeal against a decision of the Registrar Subject to this Act, a person aggrieved by a decision of the Registrar may within fourteen days after the date on which he is notified of the decision, appeal to the court against the decision, and the court may confirm, reverse or vary the decision or make such order or give such directions in the matter as it thinks fit. - 380 Verify source ↗
Collection of information and statistics from companies ........................................................................................ 172
The Registrar may order companies or certain related persons to provide specified information or statistics, and the response must not be due earlier than 14 days after notification.
380. Collection of information and statistics from companies (1) The Registrar may issue an order requiring companies generally, or any class of companies, to furnish, by the time specified in the order, specified information or statistics with regard to their constitutions or working, in relation to periods specified in the order. (2) The Registrar may issue an order requiring a person, being a company or a person who is, or has at any time been, an officer or employee of the company, to furnish, by the time specified in the order, specified information or statistics with regard to the company's constitution or working, in relation to periods specified in the order. (3) An order under this section shall not have the effect of requiring a person to furnish any information less than fourteen days after the date on which the person was notified of the order. (4) An order under subsection (1) shall be published in the Gazette and may, as the Registrar thinks fit, be published in a newspaper or newspapers circulating generally in Zambia or served on individual companies. (5) An order under subsection (2) shall be served on the person subject to the order. (6) A person shall be deemed to have been notified of an order on the earliest of the following dates: (a) the date on which the order was served on the person; (b) the date on which the order was published in the Gazette; (c) the date on which the order was published in a newspaper circulating generally in Zambia. (7) For the purpose of satisfying himself that any information or statistics furnished in pursuance of an order under this section is correct and complete, the Registrar may require a person subject to the order— (a) to produce specified records or documents in his possession or under his control for inspection, before a specified officer and at a specified time; or (b) to furnish specified further information or statistics within a specified time. (8) The Registrar may, in writing, authorise a person to make an inquiry— (a) for the purpose of obtaining any information or statistics which a company has failed to furnish as required of it by an order under subsection (1); or By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 172 Companies Act, 1994 (Chapter 388) (b) for the purpose of— Zambia Repealed (i) satisfying the Registrar that any information or statistics furnished by a company in pursuance of an order made under subsection (1) is correct and complete; and (ii) obtaining such information or statistics as may be necessary or make the information or statistics furnished correct and complete; and the person authorised shall, for the purposes of such an inquiry, have such powers as may be prescribed. (9) If a company fails to comply with an order under this section to provide information and statistics about itself, or knowingly furnishes any information or statistics which is incorrect or incomplete in any material respect, the company, and each officer in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two hundred and fifty monetary units or to imprisonment for a period not exceeding three months, or to both. (10) A person who wilfully fails to comply with an order under this section shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two hundred and fifty monetary units or to imprisonment for a period not exceeding three months, or to both. (11) For the purposes of this section, where a body corporate incorporated outside Zambia carries on business in Zambia having established an office within Zambia, a reference to a company in this section includes a reference to the body corporate in relation, and only in relation, to that business. - 381 Verify source ↗
Penalty for false statements ............................................................................................................................................... 173
A person who knowingly makes a false material statement in a required return, report, certificate, account, or similar document commits an offence and can be fined, imprisoned, or both.
381. Penalty for false statements (1) A person who, in any return, report, certificate, account or other document required by or for the purposes of this Act makes a statement that he knows to be false in any material particular shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding two thousand monetary units or to imprisonment for a term not exceeding two years, or to both. (2) This section shall not affect the liability of a body corporate or other person under another section of this Act or any other written law, but the penalties imposed by this section shall be alternative, and not additional, to any penalties imposed by the other section or written law. - 382 Verify source ↗
Penalty for improper use of "Incorporated" or "Limited" .......................................................................................... 173
A person who is not a qualifying body corporate must not trade or do business in Zambia using certain names like "incorporated", "corporation", or "limited" (or similar forms).
382. Penalty for improper use of "Incorporated" or "Limited" (1) A person who, not being a body corporate, trades or carries on business in Zambia under a name or title which includes the word "incorporated", "corporation" or any contraction or imitation thereof, or any equivalent in a language other than English shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that he trades or carries on business under that name or title. (2) A person who, not being a body corporate whose members have limited liability under the laws of the country of its incorporation, trades or carries on business in Zambia under a name or title the last word of which is "limited" or any contraction or imitation thereof, or any equivalent in a language other than English, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that he trades or carries on business under that name or title.
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