Companies Act, 1994
Part 3 of 3 · provisions 401–594
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
- View official record ↗
- Complete work
- View statute overview
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.
Search within this statute
Search all stored provisions in this version.
Legal text
Provisions of Companies Act, 1994
Showing 194 of 594
Part
part of the additional fee.
- 383 Verify source ↗
Civil liability for fraudulent trading ................................................................................................................................. 173
During winding-up or proceedings against a company, the court may order a person who knowingly helped carry on the business for a fraudulent purpose to be personally liable for company debts or liabilities.
383. Civil liability for fraudulent trading (1) In the course of the winding-up of a company or any proceedings against a company, the court may, on the application of the liquidator or any creditor or member of the company, if it is satisfied that a person was knowingly a party to the carrying on of any business of the company for a fraudulent purpose, make an order that the person shall be personally responsible, without any limitation By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 173 Companies Act, 1994 (Chapter 388) Zambia Repealed of liability, for the debts or other liabilities of the company or for such of those debts or other liabilities as the court directs. (2) An order under this section may provide for measures to give effect to the liabilities of the person under the order, and in particular may provide that those liabilities shall be a charge on any debt or obligation due from the company to him or on any interest in the company of which he has, directly or indirectly, the benefit. (3) The court may make such further orders as it thinks necessary to enforce any charge imposed under this section. (4) This section shall apply whether or not the person concerned has been convicted of an offence against section three hundred and eighty-four or of any other offence in respect of the matters on the ground of which the order is made. - 384 Verify source ↗
Offence of fraudulent trading ............................................................................................................................................ 174
A person who knowingly takes part in carrying on a company’s business for a fraudulent purpose commits an offence.
384. Offence of fraudulent trading A person who is knowingly a party to the carrying on of any business of the company for a fraudulent purpose shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding one thousand monetary units or to imprisonment for a period not exceeding twelve months, or to both. - 385 Verify source ↗
Imprisonment for failure to pay fine ............................................................................................................................... 174
If a court issues a warrant for prison commitment because a fine under this Act was not paid, the imprisonment period must not exceed one day for every three unpaid monetary units of the fine.
385. Imprisonment for failure to pay fine Where a court issues a warrant under section three hundred and eleven of the Criminal Procedure Code for the commitment of a person to prison for a failure by him to pay a fine imposed on him for an offence under this Act, the period of imprisonment specified in the warrant shall not exceed one day for every three monetary units of the fine that remain unpaid. [Cap. 160] - 386 Verify source ↗
Costs in actions by limited companies ........................................................................................................................... 174
If a limited-liability body corporate sues, the court may order security for the defendant’s costs and may pause the case until that security is provided.
386. Costs in actions by limited companies Where a body corporate with limited liability is a plaintiff in any legal proceedings, the court may, if the court is satisfied that there is reason to believe that the body corporate will be unable to pay the costs of the defendant if the defendant is successful in his defence, require sufficient security to be given for those costs, and may stay all proceedings until the security is given. - 387 Verify source ↗
Contributions between joint wrongdoers ....................................................................................................................... 174
People who are jointly liable can seek contribution from each other, and the court can set the terms, exempt someone, or order complete indemnity.
387. Contributions between joint wrongdoers Where more than one person is liable (whether as an officer of a body corporate or otherwise) to pay any damages, costs, compensation, debt or monetary penalty to an aggrieved party under, or in respect of any breach of, any section of this Act— (a) the persons shall have a right of contribution amongst themselves; and (b) in any action to enforce liability or in an action to recover contribution, the court may— (i) award contribution on such terms as it considers equitable in all the circumstances; and (ii) exempt any person from liability to make contribution or direct that the contribution to be recovered from any other person shall amount to a complete indemnity. - 388 Verify source ↗
Power to grant relief from civil liability ........................................................................................................................ 174
The court may relieve certain company-related people from civil liability, in whole or in part, if they acted honestly and reasonably and deserve to be excused.
388. Power to grant relief from civil liability (1) If the court is satisfied that a member, officer, receiver, liquidator, auditor, or trustee for debentures of a company might be civilly liable under this Act in respect of some matter, but that he had acted honestly and reasonably in the matter and that, having regard to all the circumstances or the case, he ought fairly to be excused, the court may relieve him in whole or in part from his liability on such terms as the court thinks fit. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 174 Companies Act, 1994 (Chapter 388) Zambia Repealed (2) Relief of a person under this section may be granted— (a) in proceedings against the person in relation to the matter, or (b) on the application of the person, if he has reason to apprehend that such proceedings may be instituted. - 389 Verify source ↗
Exemption from liability for acts or omissions of public officers ......................................................................... 175
Public officers are protected from damages claims for acts or omissions done under powers conferred by the Act, unless the act or omission was in bad faith or lacked reasonable care or diligence.
389. Exemption from liability for acts or omissions of public officers No person shall be liable to any action in damages for anything done or omitted to be done by any person in the exercise or performance of any power or function conferred or imposed on him by or under this Act unless the act or omission was in bad faith or was due to a want of reasonable care of diligence. - 390 Verify source ↗
Certificates and documents made or lodged under former Act ............................................................................. 175
Certain certificates and documents from the former Act continue to count under this Act.
390. Certificates and documents made or lodged under former Act (1) Any certificate or document made, executed, or issued under the former Act and in force and operative at the commencement of this Act, shall so far as it could have been made, executed, or issued under this Act, have effect as if made, executed or issued under this Act. (2) Any document that, in accordance with the former Act, was duly lodged by it with the Registrar, or duly registered by the Registrar, shall be deemed to have been duly lodged or registered under this Act. - 391 Verify source ↗
Articles of existing companies ........................................................................................................................................... 175
Existing companies get deemed articles, must update them by the deadline, and cannot amend them unless consistent with the Act.
391. Articles of existing companies (1) An existing company shall be deemed to have, on and from the commencement of this Act, articles consisting of— (a) those provisions of the memorandum of association and articles of association of the company, within the meaning of the former Act, which regulate the operation of the company and are not inconsistent with the former Act; and (b) any provisions of Table A of the former Act which, under the former Act, applied to the company; whether or not the articles so deemed are consistent with this Act. (2) The articles of an existing company under subsection (1) shall be valid, and this Act shall not apply to the company to the extent of any inconsistency with them, until— (a) the company adopts new articles in accordance with subsection (3); or (b) the last day of the first financial year of the company to commence after the commencement of this Act; whichever is earlier. (3) An existing company shall, not later than the last day of the first financial year of the company to commence after the commencement of this Act, in accordance with section eight, adopt articles expressed in terms of and consistent with this Act. (4) Where an existing company has lodged with the Registrar new articles for the purposes of subsection (3), the Registrar shall issue to the company— (a) a replacement certificate of incorporation; and (b) a replacement certificate of share capital, in the case of a company with share capital; worded to meet the circumstances of the case. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 175 Companies Act, 1994 (Chapter 388) Zambia Repealed (5) An existing company shall not amend its articles unless, after the amendment, the articles are expressed in terms of and consistent with this Act. (6) Until subsection (3) has been complied with, an existing company may satisfy the requirements of section twenty-nine in relation to the articles of the company and the certificate of share capital by supplying to a member a copy of its memorandum of association and articles of association within the meaning of the former Act. (7) If an existing company fails to comply with subsection (3), the company, and each officer of the company in default, shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding ten monetary units for each day that the failure continues. - 392 Verify source ↗
Minimum capital for existing companies ....................................................................................................................... 176
Existing public companies get a temporary carve-out from section 15, and some existing companies are deemed to satisfy section 18.
392. Minimum capital for existing companies (1) Section fifteen shall not apply to an existing company that is a public company from the commencement of this Act until— (a) the end of the period of six months after the commencement of this Act; or (b) it receives a certificate under subsection (2) of section fifteen; whichever is earlier, but the provisions of the former Act relating to minimum capital shall continue to apply to it during that period while it remains a public company. (2) An existing company that, immediately before the commencement of this Act, satisfied the provisions of that Act applying to the company relating to minimum capital, shall be deemed to satisfy section eighteen. - 393 Verify source ↗
Registers, accounts etc., of existing companies .......................................................................................................... 176
Existing companies may treat certain records kept under the former Act as satisfying this Act’s matching requirements.
393. Registers, accounts etc., of existing companies (1) The register of members of an existing company kept for the purposes of the former Act shall be deemed to be part of the register of members for the purposes of this Act. (2) Where both a provision of the former Act and a corresponding provision of this Act require a fund or account to be kept or opened, such a fund or account kept or opened by an existing company to satisfy the provision of the former Act shall be deemed to satisfy the corresponding provision of this Act. - 394 Verify source ↗
Registration of charges ......................................................................................................................................................... 176
An existing company with property subject to any charge before commencement must, within three months after commencement, record charge particulars in the section 97 register and lodge a statement with the Registrar.
394. Registration of charges Where an existing company has, immediately before the commencement of this Act, property which is subject to a charge of any kind, the company shall, within three months after the commencement of this Act— (a) enter in the register referred to in section ninety-seven the particulars referred to in that section in relation to each such charge; and (b) lodge with the Registrar a statement containing the particulars referred to in section ninety-nine in relation to each such charge to which that section applies. - 395 Verify source ↗
Director's reports for existing companies ...................................................................................................................... 176
Sections 177 to 181 do not apply to directors' reports for financial years of existing companies that began before the Act commenced.
395. Director's reports for existing companies Sections one hundred and seventy-seven to one hundred and eighty-one shall not apply to a directors' report in respect of a financial year of an existing company that began before the commencement of this Act. - 396 Verify source ↗
Related bodies corporate of existing companies ........................................................................................................ 176
Section 44 does not apply to an existing company until it must lodge its first annual return after the Act starts.
396. Related bodies corporate of existing companies Section forty-four shall not apply to an existing company until the date on which it is required to lodge its first annual return after the commencement of this Act. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 176 Companies Act, 1994 (Chapter 388) - 397 Verify source ↗
Directors of existing companies ........................................................................................................................................ 177
A corporation that is acting as a director of an existing company stops holding that office when this Act commences. A company with only one director at commencement does not have to appoint a second director until the director leaves office or three months after the end of the first financial year completed after commencement.
397. Directors of existing companies Zambia Repealed (1) A corporation which holds office as a director of an existing company immediately before the commencement of this Act shall, on that commencement, cease to hold office and the vacancy may be filled as a casual vacancy in accordance with this Act and the articles. (2) Where an existing company has, immediately before the commencement of this Act, a single director, the company shall not be required to appoint a second director until— (a) the director vacates his office; or (b) three months after the end of the first financial year of the company to be completed after the commencement of this Act. - 398 Verify source ↗
Bodies corporate formed outside Zambia with existing business in Zambia .................................................... 177
A foreign body corporate that already had a business place in Zambia is treated as having established that place on the Act’s commencement date.
398. Bodies corporate formed outside Zambia with existing business in Zambia For the purposes of section two hundred and forty-six, a body corporate incorporated outside Zambia, being a body corporate which was not registered as a foreign company under the former Act but which, immediately before the commencement of this Act, had an established place of business in Zambia, shall be deemed to have established that place of business on the date of commencement of this Act. - 399 Verify source ↗
Companies subject to other legislation .......................................................................................................................... 177
This section says the Act does not override or change special legislation for companies carrying on banking, insurance, or similar business.
399. Companies subject to other legislation Nothing in this Act shall abrogate or affect any special legislation relating to companies carrying on the business of banking, insurance or any other business. - 400 Verify source ↗
Regulations ................................................................................................................................................................................ 177
The Minister may make regulations by statutory instrument for matters this Act says must or may be prescribed, or that are needed to carry out the Act.
400. Regulations (1) The Minister may, by statutory instrument, make regulations for or with respect to any matter that by this Act is required or permitted to be prescribed, or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act, other than a matter required or permitted to be prescribed by the Minister or any other person or body. (2) Without limiting the generality of subsection (1), such regulations may be made on the following matters; (a) the conduct of the business of the office of the Registrar; (b) (c) (d) the form and content of any application, notice, return, account, book, record, certificate, licence or other document required for the purposes of this Act; the payment of fees and charges in respect of any matter or anything done or supplied under this Act; the procedure to be followed in connection with any application or request to the Registrar or any proceeding before him; (e) the provision of copies of any documents under this Act, and the certification of such copies; (f) the making of inspections and searches under this Act, including the times when they may be made; (g) the conduct of any winding-up or other proceeding or transaction under this Act; (h) the service of notices and other documents under this Act; (i) any matter necessary or convenient to be provided for in relation to the transition between the former Act and this Act. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 177 Companies Act, 1994 (Chapter 388) Zambia Repealed (3) The regulations may be made so as— (a) to make prescription vary depending on the circumstances; (b) to be of general or specifically limited application; or (c) to permit any matter to be determined from time to time by any person or body specified in the regulations. - 401 Verify source ↗
Rules of court ........................................................................................................................................................................... 178
The Chief Justice may make court rules for company winding-up and related applications under the Act.
401. Rules of court The Chief Justice may make Rules of Court governing the practice and procedure for the winding-up of companies in Zambia and with respect to the procedure in any application to the court under this Act, and enabling all or any of the powers and duties conferred and imposed on the court in respect of the winding-up of companies to be exercised or performed by the Registrar or by the official receiver, or by the liquidator as an officer of the court and subject to the control of the court. - 402 Verify source ↗
Repeal of former Act ............................................................................................................................................................. 178
This section repeals the Companies Act.
402. Repeal of former Act The Companies Act is hereby repealed. [Cap. 686 of the former edition] First Schedule (Section 2) Standard Articles Regulations for management of a company limited by shares - 1 Verify source ↗
Short title .................................................................................................................................................................................................... 1
This section defines key terms used in the regulations.
1. (1) In these regulations, unless the context otherwise requires: "Act" means the Companies Act, 1994; "prescribed rate of interest" means the rate of interest prescribed in regulations made under the Act for the purposes of the Standard Articles; "seal" means the common seal of the company and includes any official seal of the company; "resolution" means an ordinary resolution of the company; "secretary" means any person appointed to perform the duties of a secretary of the company. (2) Unless the context otherwise requires an expression, if used in a provision of these regulations that deals with a matter dealt with by a particular provision of the Act, has the same meaning as in that provisions of the Act. - 2 Verify source ↗
Interpretation ............................................................................................................................................................................................. 1
Section 2 is titled “Share capital and variation of rights.”
2 - Share capital and variation of rights - 2 Verify source ↗
Interpretation ............................................................................................................................................................................................. 1
Directors may issue company shares, subject to the Act and a resolution, and may attach special rights or restrictions.
2. Without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, but subject to the Act, shares in the company may be issued by the directors and any such share may be issued with such preferred deferred or other special rights or such restrictions, whether with regard to dividend, voting, return of capital or otherwise, as the director, subject to a resolution, determine. - 3 Verify source ↗
Effect of declaration in certified copy .............................................................................................................................................. 6
Directors must not issue rights or options to shares unless the issue has first been authorised at a general meeting by special resolution.
3. The directors shall not issue any rights or options to shares in favour of any persons unless the issue has been authorised at a general meeting by a special resolution. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 178 Companies Act, 1994 (Chapter 388) Zambia Repealed - 4 Verify source ↗
Application of Act to existing companies ....................................................................................................................................... 7
Preference shares may be issued only with a resolution, and they may be redeemable.
4. Subject to the Act, any preference shares may, with the sanction of a resolution, be issued on the terms that they are, or at the option of the company are liable to be redeemed. - 5 Verify source ↗
Prohibition of large partnerships ....................................................................................................................................................... 7
Class rights can be changed only with the required shareholder consent or a special resolution, and any class shareholder present in person or by proxy may demand a poll.
5. (1) If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the company is being wound-up, be varied with the consent in writing of the holders of three- quarters of the issued shares of that class, or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of the class. (2) The provisions of the Act and these regulations relating to general meetings apply so far as they are capable of application and with the necessary modifications to every such class meeting except that — (a) where a class has only one member-that member shall constitute a meeting; (b) in any other case- a quorum shall be constituted by two persons who, between them, hold or represent by proxy one-third of the issued shares of the class; and (c) any holder of shares of the class, present in person or by proxy, may demand a poll. (3) The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall, unless otherwise expressly provided by the terms of issue of the shares of that class, be varied by the creation or issue of further shares ranking equally with the first-mentioned shares. - 6 Verify source ↗
Application for incorporation ....................................................................................................................................................... 7
The company may pay brokerage or commission when shares are issued, but the payments must not exceed 10% of the share issue price.
6. (1) The Company may make payments by way of brokerage or commission on the issue of shares. (2) Such payments shall not exceed the rate of 10 per cent of the price at which the shares are issued or an amount equal to 10 per cent of that price, as the case may be. (3) Such payments may be made in cash, by the allotment of fully or partly paid shares or partly by the payment of cash and partly by the allotment of fully or partly paid shares. - 7 Verify source ↗
The articles of a company ............................................................................................................................................................. 8
The company must not recognise shares as held on trust, or recognise certain equitable or partial interests in a share, except where the law or the regulations allow it.
7. (1) Except as required by law, the company shall not recognise a person as holding a share upon any trust. (2) The company shall not be bound by or compelled in any way to recognise (whether or not it has notice of the interest or rights concerned) any equitable, contingent, future or partial interest in any share or unit of a share or (except as otherwise provided by these regulations or by law) any other right in respect of a share except an absolute right of ownership in the registered holder. - 8 Verify source ↗
Amendment of articles ................................................................................................................................................................... 8
A registered member is entitled to receive a share certificate without payment; joint holders are limited to one certificate, and a lost, defaced, or destroyed certificate may be renewed on payment of the allowed fee and any terms the directors decide.
8. (1) A person whose name is entered as a member in the register of members shall be entitled without payment to receive a certificate in respect of the share under the seal of the company in accordance with the Act but, in respect of a share or shares held jointly by several persons, the company shall not be bound to issue more than one certificate. (2) Delivery of a certificate for a share to one of several joint holders shall be sufficient delivery to all such holders. (3) If a share certificate is defaced, lost or destroyed, it may be renewed on payment of the fee allowed by the Act, or such lesser sum, and on such terms (if any) as to evidence and the payment of costs to the company of investigating evidence as the directors decide. - 9 Verify source ↗
Statutory declaration as to compliance with the Act .......................................................................................................... 8
Directors may call unpaid share money from members, but a call cannot exceed one-quarter of the shares’ nominal value or be due less than one month after the previous call; members must pay after at least 14 days’ notice.
9. (1) The directors may make calls upon the members in respect of any money unpaid on the shares of the members (whether on account of the nominal value of the shares or by way of premium) and not by the terms of issue of those shares made payable at fixed times, except that no call shall exceed one-quarter of the sum of nominal values of the shares or be payable earlier than one month from the date fixed for the payment of the last preceding call. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 179 Companies Act, 1994 (Chapter 388) Zambia Repealed (2) Each member shall, upon receiving at least fourteen days notice specifying the time or times and place of payment, pay to the company, at the time or times and place so specified the amount called on his shares. (3) The directors may revoke or postpone a call. - 10 Verify source ↗
Certificates of incorporation and of share capital .............................................................................................................. 8
A call is treated as made when the directors pass the resolution authorising it, and it may be payable by instalments.
10. A call shall be deemed to have been made at the time when the resolution of the directors authorising the call was passed and may be required to be paid by instalments. - 11 Verify source ↗
Incorporation of the company ................................................................................................................................................... 9
Joint holders of a share must pay all calls on that share.
11. The joint holders of a share are jointly and severally liable to pay all calls in respect of the share. - 12 Verify source ↗
Register of companies .................................................................................................................................................................. 9
If a share-related sum is unpaid by the due day, the person owing it must pay interest until payment; the directors may waive all or part of that interest.
12. If a sum called in respect of a share is not paid before or on the day appointed for payment of the sum, the person from whom the sum is due shall pay interest on the sum from the day appointed for payment of the sum to the time of actual payment at such rate not exceeding the prescribed rate of interest as the directors determine, but the directors may waive payment of that interest wholly or in part. - 13 Verify source ↗
Types of company ........................................................................................................................................................................... 9
If a share issue makes a sum payable on allotment or on a fixed date, that sum is treated as a duly made call and payable on that date.
13. Any sum that, by the terms of issue of a share, becomes payable on allotment or at a fixed date, whether on account of the nominal value of the share or by way of premium, shall for the purposes of these regulations be deemed to be a call duly made and payable on the date on which by the terms of issue the sum becomes payable, and, in case of non-payment, all the relevant provisions of these regulations as to payment of interest and expenses, forfeiture or otherwise apply as if the sum had become payable by virtue of a call duly made and notified. - 14 Verify source ↗
Public companies ............................................................................................................................................................................ 9
Directors may, when shares are issued, treat holders differently about how much is called up and when payment is due.
14. The directors may, on the issue of shares, differentiate between the holders as to the amount of calls to be paid and the times of payment. - 15 Verify source ↗
*** ....................................................................................................................................................................................................... 10
Directors may accept unpaid share amounts from a member, and may authorise the company to pay interest on accepted amounts, subject to a maximum interest rate.
15. (1) The directors may accept from a member the whole or a part of the amount unpaid on a share although no part of that amount has been called up. (2) The directors may authorise payment by the company of interest upon the whole or any part of an amount so accepted, until the amount becomes payable, at a rate agreed upon between the directors and the member paying the sum subject to subregulation (3). (3) For the purposes of subregulation (2), the rate of interest shall not be greater than— (a) if the company has, by resolution, fixed a rate-rate the so fixed; and (b) in any other case the prescribed rate of interest. - 16 Verify source ↗
Private companies ........................................................................................................................................................................ 10
The company has a lien over certain shares and related dividends, and directors may exempt a share from this rule.
16. (1) The company has a first and paramount lien on every share (not being a fully paid share) for all money (whether presently payable or not) called or payable at a fixed time in respect of that share. (2) The company also has a first and paramount lien on all shares (other than fully paid shares) registered in the name of a sole holder for all money presently payable by him or his estate to the company. (3) The directors may at any time exempt a share wholly or in part from the provisions of this regulation. (4) The company's lien (if any) on a share extends to all dividends payable in respect of the share. - 17 Verify source ↗
Private companies limited by shares .................................................................................................................................... 11
If a member does not pay a call when due, the directors may later serve a notice demanding payment of the unpaid amount plus accrued interest.
17. (1) If a member fails to pay a call or instalment of a call on the day appointed for payment of the call or instalment, the directors may, at any time thereafter during such time as any part of the call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest that has accrued. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 180 Companies Act, 1994 (Chapter 388) Zambia Repealed (2) The notice shall name a further day (not earlier than the expiration of fourteen days from the date of service of the notice) on or before which the payment required by the notice is to be made and shall state that, in the event of non-payment at or before the time appointed, the shares in respect of which the call was made will be liable to be forfeited. - 18 Verify source ↗
*** ....................................................................................................................................................................................................... 11
Directors may forfeit shares if a notice under regulation 17 is not complied with and the required payment has not been made.
18. (1) If the requirements of a notice served under regulation 17 are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the directors to that effect. (2) Such a forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture. - 19 Verify source ↗
Companies limited by guarantee ........................................................................................................................................... 11
Directors may sell or otherwise dispose of a forfeited share, and may cancel the forfeiture before any sale or disposition.
19. A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the directors think fit, and, at any time before a sale or disposition, the forfeiture may be cancelled on such terms as the directors think fit. - 20 Verify source ↗
Unlimited companies .................................................................................................................................................................. 12
If shares are forfeited, the person stops being a member for those shares but must still pay the company the amounts due on them, plus any interest the directors choose to enforce.
20. A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but shall remain liable to pay to the company all money that, at the date of forfeiture, was payable by him to the company in respect of the shares (including interest at the prescribed rate of interest from the date of forfeiture on the money for the time being unpaid if the directors think fit to enforce payment of the interest), but his liability shall cease if and when the company receives payment in full of all the money (including interest) so payable in respect of the shares. - 21 Verify source ↗
Contractual effect of indorporation ....................................................................................................................................... 12
A written statement can serve as prima facie evidence that the signer is a director or secretary and that a share was forfeited on the stated date.
21. A statement in writing declaring that the person making the statement is a director or a secretary of the company, and that a share in the company has been duly forfeited on a date stated in the statement, shall be prima facie evidence of the facts stated in the statement as against all persons claiming to be entitled to the share. - 22 Verify source ↗
Capacity and powers of a company ...................................................................................................................................... 12
A company may accept consideration for a forfeited share, transfer it to the buyer, and must register the transferee once the transfer is executed.
22. (1) The company may receive the consideration (if any) given for a forfeited share on any sale or disposition of the share and may execute a transfer of the share in favour of the person to whom the share is sold or disposed of. (2) Upon the execution of the transfer, the company shall register the transferee as the holder of the share. (3) The transferee shall not be bound to see to the application of any money paid as consideration. (4) The title of the transferee to the share shall not be affected by any irregularity or invalidity in connection with the forfeiture, sale or disposal of the share. - 23 Verify source ↗
Validity of acts .............................................................................................................................................................................. 12
The company must use the consideration referred to in regulation 22 to pay the presently payable part of the amount subject to the lien, and pay any remaining balance to the person entitled to the shares immediately before transfer.
23. The consideration referred in regulation 22 shall be applied by the company in payment of such part of the amount in respect of which the lien exists as is presently payable, and the residue (if any) shall (subject to any like lien for sums not presently payable that existed upon the shares before the sale) be paid to the person entitled to the shares immediately before the transfer. - 24 Verify source ↗
Notice not presumed .................................................................................................................................................................. 12
Forfeiture rules apply when a share-related sum payable at a fixed time is not paid.
24. The provisions of these regulations as to forfeiture shall apply in the case of non-payment of any sum that, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the nominal value of the shares or by way of premium, as if that sum had been payable by virtue of a call duly made and notified. - 25 Verify source ↗
No disclaimer allowed ............................................................................................................................................................... 12
A member may transfer shares in writing, subject to the regulations and any form approved by the directors.
25. (1) Subject to these regulations, a member may transfer all or any of his shares by instrument in writing in a form prescribed for the purposes of section fifty-seven of the Act or in any other form that the directors approve. (2) An instrument of transfer referred to in subregulation (1) shall be executed by or on behalf of both the transferor and the transferee. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 181 Companies Act, 1994 (Chapter 388) Zambia Repealed - 26 Verify source ↗
Companies ceasing to have at least two members ......................................................................................................... 13
To register a share transfer, the transfer instrument must be lodged at the company’s registered office with the share certificate and any information the directors properly require; the company must then register the transferee as a shareholder, subject to the directors’ powers.
26. The instrument of transfer shall be left for registration at the registered office of the company, together with such fee (if any) not exceeding two monetary units as the directors require, accompanied by the the certificate of the shares to which it relates and such other information as the directors properly require to show the right of the transferor to make the transfer, and thereupon the company shall subject to the powers vested in the directors by these regulations, register the transferee as a shareholder. - 27 Verify source ↗
No increase in a member's liability or contribution without consent ....................................................................... 13
Directors may refuse to register certain share transfers.
27. The directors may decline to register a transfer of shares, not being fully paid shares, to a person of whom they do not approve and may also decline to register any transfer of shares on which the company has a lien. - 28 Verify source ↗
Pre-incorporation contracts ...................................................................................................................................................... 13
Directors may refuse to register a share transfer if it is not accompanied by the appropriate share certificate.
28. The directors may refuse to register any transfer that is not accompanied by the appropriate share certificate, unless the company has not yet issued the share certificate or is bound to issue a renewal or copy of the share certificate. - 29 Verify source ↗
Copies of certificate of incorporation, certificate of share capital and articles to be given to members ...... 14
Directors may suspend registration of transfers, but only for periods they determine and only up to 30 days in total in any year.
29. The registration of transfers may be suspended at such times and for such periods as the directors from time to time determine, provided that the periods do not exceed in the aggregate thirty days in any year. - 30 Verify source ↗
Conversion of a private company limited by shares to company limited by guarantee ..................................... 14
If a member dies, the company must treat the survivor of a joint holding, or the deceased member’s legal personal representatives if the member was a sole holder, as the only people with title to the shares.
30. In the case of the death of a member, the survivor where the deceased was a joint holder, and the legal personal representatives of the deceased where he was a sole holder, shall be the only persons recognised by the company as having any title to his interest in the shares, but this regulation does not release the estate of a deceased joint holder from any liability in respect of a share that had been jointly held by him with other persons. - 31 Verify source ↗
Conversion of private company limited by shares to unlimited company ............................................................... 15
A person entitled to a share because of a member’s death or bankruptcy may choose to be registered personally or nominate another transferee, but must provide the required written notice or transfer if they make that choice.
31. (1) Subject to any written law relating to bankruptcy, a person becoming entitled to a share in consequence of the death or bankruptcy of a member may, upon such information being produced as is properly required by the directors, elect either to be registered himself as holder of the share or to have some other person nominated by him registered as the transferee of the share. (2) (3) If the person becoming entitled elects to be registered himself, he shall deliver or send to the company a notice in writing signed by him stating that he so elects. If he elects to have another person registered, he shall execute a transfer of the share to that other person. (4) All the limitations, restrictions and provisions of these regulations relating to the right to transfer, and the registration of the transfer of share are applicable to any such notice or transfer as if the death or bankruptcy of the member had not occurred and the notice or transfer were a transfer signed by that member. - 32 Verify source ↗
Conversion of company limited by guarantee to company limited by shares or unlimited company ............ 15
If a share’s registered holder dies or becomes bankrupt, the personal representatives or trustee can receive the same dividends and other shareholder rights, if they provide information the directors properly require.
32. (1) Where the registered holder of a share dies or becomes bankrupt, his personal representatives or the trustee of his estate, as the case may be, shall be upon the production of such information as is properly required by the directors, entitled to the same dividends and other advantages, and to the same rights (whether in relation to meetings of the company, or to voting or otherwise), as the registered holder would have been entitled to if he had not died or become bankrupt. (2) Where two or more persons are jointly entitled to any share in consequence of the death of the registered holder, they shall, for the purposes of these regulations, be deemed to be joint holders of the shares. - 33 Verify source ↗
Conversion of unlimited company to private limited company .................................................................................. 15
A company may, by resolution, convert paid up shares into stock and convert stock back into paid up shares.
33. The company may, by resolution, convert all or any of its paid up shares into stock and reconvert any stock into paid up shares of any nominal value. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 182 Companies Act, 1994 (Chapter 388) Zambia Repealed - 34 Verify source ↗
Conversion of public company to private company limited by shares ..................................................................... 15
Directors may set the minimum amount of stock that can be transferred and may block or limit transfers of fractions of that minimum.
34. (1) Subject to subregulation (2), where shares have been converted into stock, the provisions of these rules relating to the transfer of shares apply, so far as they are capable of application, to the transfer of the stock or of any part of the stock. (2) The directors may fix the minimum amount of stock transferable and restrict or forbid the transfer of fractions of that minimum, but the minimum shall not exceed the aggregate of the nominal values of the shares from which the stock arose. - 35 Verify source ↗
Conversion of private company limited by shares to public company ..................................................................... 15
Holders of stock get the same rights and advantages, in proportion to the amount held, as if they held the underlying shares.
35. (1) The holders of stock shall have, according to the amount of the stock held by them, the same rights, privileges and advantages as regards dividends, voting at meetings of the company and other matters as they would have if they held the shares from which the stock arose. (2) No privilege or advantage shall be conferred by any amount of stock that would not, if existing in shares, have conferred that privilege or advantage. - 36 Verify source ↗
Method of conversion ................................................................................................................................................................. 16
Rules that apply to paid up shares also apply to stock, and references to shares and shareholders are read to include stock and stockholders.
36. The provisions of these regulations that are applicable to paid up shares shall apply to stock, and references in those provisions to share and shareholder shall be read as including references to stock and stockholder, respectively. - 37 Verify source ↗
Name of company ........................................................................................................................................................................ 17
A company may, by resolution, change its authorised share capital and share structure in several ways.
37. The company may by resolution— (a) (b) (c) (d) increase its authorised share capital by the creation of new shares of such amount as is specified in the resolution; consolidate and divide all or any of its authorised share capital into shares of larger amount than its existing shares; subdivide all or any of its shares into shares of smaller amount than is fixed by the certificate of share capital, but so that in the subdivision the proportion between the amount paid and the amount (if any) unpaid on each such share of a smaller amount is the same as it was in the case of the share from which the share of a smaller amount is derived; and cancel shares that, at the date of passing of the resolution, have not been taken or agreed to be taken by any person or have been forfeited, and reduce its authorised share capital by the amount of the shares so cancelled. - 38 Verify source ↗
Reservation of name ................................................................................................................................................................... 17
Before issuing unissued shares, the company must first offer them to eligible notice-recipients, and directors may later issue shares not taken up or not offerable proportionately.
38. (1) Subject to any resolution to the contrary, all unissued shares shall, before issue, be offered to such persons as at the date of the offer are entitled to receive notices from the company of general meetings in proportion, as nearly as the circumstances allow, to the sum of the nominal values of the shares already held by them. (2) The offer shall be made by notice specifying the number of shares offered and delimiting a period within which the offer, if not accepted, will be deemed to be declined. (3) After the expiration of that period or on being notified by the person to whom the offer is made that he declines to accept the shares offered, the directors may issue those shares in such manner as they think most beneficial to the company. (4) Where, by reason of the proportion that shares proposed to be issued bear to shares already held, some of the first-mentioned shares cannot be offered in accordance with sub-regulation (1), the directors may issue the shares that cannot be so offered in such manner as they think most beneficial to the company. - 39 Verify source ↗
Registrar may allow company to dispense with "Limited" in its name .................................................................... 18
A company may reduce its share capital, capital redemption reserve fund, or share premium account by special resolution, subject to the Act.
39. Subject to the Act, the company may, by special resolution, reduce its share capital, any capital redemption reserve fund or any share premium account. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 183 Companies Act, 1994 (Chapter 388) Zambia Repealed - 40 Verify source ↗
Change of name ........................................................................................................................................................................... 18
A director may convene a general meeting. If no director is present in Zambia, any two members may do so. General meetings must be held in Zambia unless all voting members agree in writing to meet elsewhere.
40. (1) A director may, whenever he thinks, fit, convene a general meeting. (2) If no director is present within Zambia, any two members may convene a general meeting in the same manner, or as nearly as possible, as that in which such meetings may be convened by a director. (3) A general meeting shall be held in Zambia unless all the members entitled to vote at that meeting agree in writing to a meeting at a place outside Zambia. - 41 Verify source ↗
Power of Registrar in relation to name ............................................................................................................................... 18
A notice of a general meeting must state the meeting’s place, day, and hour, and usually the general nature of the business to be transacted.
41. (1) A notice of a general meeting shall specify the place, the day and the hour of meeting and, except as provided by subregulation (2), shall state the general nature of the business to be transacted at the meeting. (2) It shall not be necessary for a notice of an annual general meeting to state that the business to be transacted at the meeting includes the declaring of a dividend, the consideration of annual accounts and the reports of the directors and auditors, the election of directors in the place of those retiring or the appointment and fixing of the remuneration of the auditors. - 42 Verify source ↗
Financial year of a company ................................................................................................................................................... 19
Business at a general meeting may not proceed unless a quorum of members is present.
42. (1) No business shall be transacted at any general meeting unless a quorum of members is present at the time when the meeting proceeds to business. (2) For the purpose of determining whether a quorum is present, a person attending as a proxy, or as representing a body corporate or association that is a member, shall be deemed to be a member. - 43 Verify source ↗
Holding companies, subsidiaries and related companies ............................................................................................. 20
If a quorum is not present within 30 minutes after the appointed meeting time, the meeting is dissolved or adjourned depending on how it was called.
43. If a quorum is not present within half an hour after the time appointed for the meeting— (a) where the meeting was convened upon the requisition of members-the meeting shall be dissolved; or (b) in any other case— (i) the meeting shall stand adjourned to such day, and at such time and place, as the directors determine or, if no determination is made by the directors, to the same day in the next week at the same time and place; and (ii) if a quorum is not present at the adjourned meeting within half an hour after the time appointed for the meeting— (a) two members shall constitute a quorum; or (b) the meeting shall be dissolved, if two members are not present. - 44 Verify source ↗
Registration of related bodies corporate ............................................................................................................................ 21
If directors have chosen a chairman, that person must preside at every general meeting. If no chairman was chosen, or the chairman is absent or unwilling to act, the members present must choose one of their number to chair the meeting.
44. (1) If the directors have elected one of their number as chairman of their meetings, he shall preside as chairman at every general meeting. (2) Where a general meeting is held and— (a) a chairman has not been elected as provided by sub-regulation (1); or (b) the chairman is not present within fifteen minutes after the time appointed for the holding of the meeting or is unwilling to act; the member present shall elect one of their number to be chairman of the meeting. - 45 Verify source ↗
Membership of company .................................................................................................................................................................. 21
The chairman may adjourn a meeting with consent, and must do so if the meeting directs it.
45. (1) The chairman may with the consent of any meeting at which a quorum is present, and shall if so directed by the meeting, adjourn the meeting from time to time and from place to place, but no By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 184 Companies Act, 1994 (Chapter 388) Zambia Repealed business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. (2) When a meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. (3) Except as provided by subregulation (2), it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting. - 46 Verify source ↗
Membership by company of itself or of holding company .................................................................................................. 21
At a general meeting, resolutions are decided by a show of hands unless a poll is properly demanded.
46. (1) At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded— (a) by the chairman; (b) by at least three members present in person or by proxy; (c) by a member or members present in person or by proxy and representing not less than one tenth of the total voting rights of all the members having the right to vote at the meeting; or (d) by a member or members holding shares in the company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right. (2) The demand for a poll may be withdrawn. - 47 Verify source ↗
Offence if membership of private company exceeds number specified in articles ...................................................... 22
If a poll is properly demanded, it must be taken as the chairman directs, but polls on electing a chairman or on adjournment questions must be taken immediately.
47. (1) If a poll is duly demanded, it shall be taken in such manner and (subject to sub-regulation (2) either at once or after an interval or adjournment or otherwise as the chairman directs, and the result of the poll shall be the resolution of the meeting at which the poll was demanded. (2) A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. - 48 Verify source ↗
Register of members .......................................................................................................................................................................... 22
If votes are equal, the chairman of the meeting has a casting vote.
48. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, in addition to his deliberative vote (if any), shall have a casting vote. - 49 Verify source ↗
Inspection of register ........................................................................................................................................................................ 22
This section is a proxy form for a registered member to appoint someone to vote on their behalf at a general meeting.
49. (1) Subject to any rights or restrictions for the time being attached to any class or classes of shares at meetings of members or classes of members— (a) each— (i) registered member, or registered member of that class; ______________________ (name of Company) I/we ___________________________, of ___________________________________________ being a member/members of the above named company, hereby ___________ of _____________ or, in his absence. _________________________________ of ___________________________ as my/our proxy to vote for me/us on my/our behalf at the annual/extraordinary general meeting of the company to be held on the _______________ day of 19 ___________ and at any adjournment of that meeting: *in favour of/against resolution No. _______________________ *in favour of/against resolution No. _______________________ By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 185 Companies Act, 1994 (Chapter 388) Zambia Repealed *in favour of/against resolution No. _______________________ Unless otherwise instructed, the proxy will vote as he thinks fit. Signed _________________________________ Date _________________________________ *Strike out whichever is not desired - 55 Verify source ↗
Register to be evidence .................................................................................................................................................................... 24
A proxy appointment is not valid unless it is deposited with any supporting authority within the required time limits.
55. An instrument appointing a proxy shall not be treated as valid unless the instrument, and the power of attorney or other authority (if any) under which the instrument is signed or a notarially certified copy of that power or authority, is or are deposited, not less than forty-eight hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote, or, in the case of a poll, not less than twenty-four hours before the time appointed for the taking of the poll, at the registered office of the company or at such other place in Zambia as is specified for that purpose in the notice convening the meeting. - 56 Verify source ↗
Interpretation ................................................................................................................................................................................. 24
A proxy or power-of-attorney vote stays valid even if the principal later dies, becomes of unsound mind, revokes the authority, or transfers the share, unless the company receives written notice before the meeting starts.
56. A vote given in accordance with the terms of an instrument of proxy or of a power of attorney shall be valid notwithstanding the previous death of unsoundness of mind of the principal, the revocation of the instrument (or of the authority under which the instrument was executed) or of the power, or the transfer of the share in respect of which the instrument or power is given, unless notice in writing of the death, unsoundness of mind, revocation or transfer has been received by the company at the registered office before the commencement of the meeting or adjourned meeting at which the instrument is used or the power is exercised. - 57 Verify source ↗
Nature and transferability of shares ..................................................................................................................................... 24
The company may set a share qualification for directors by ordinary resolution; otherwise, there is no share qualification.
57. The company may by ordinary resolution fix a share qualification for directors, but unless and until a qualification is so fixed, there shall be no share qualification. - 58 Verify source ↗
Numbering of shares .................................................................................................................................................................. 25
A director’s office becomes vacant if the director makes any arrangement or composition with creditors generally.
58. In addition to the circumstances in which the office of a director becomes vacant by virtue of the Act, the office of a director shall become vacant if the director makes any arrangement or composition with his creditors generally. - 59 Verify source ↗
Redeemable shares ...................................................................................................................................................................... 25
Directors may borrow money, charge company property or uncalled capital, and issue debentures or other security, but outstanding borrowings must not exceed the company’s issued share capital.
59. (1) Subject to subregulation (2), the directors may exercise the powers of the company to borrow money, to charge any property or business of the company or all, or any of its uncalled capital and to issue debentures or give any other security for a debt, liability or obligation of the company or of any other person. (2) The amount of any borrowings outstanding at any time shall not exceed the amount of issued share capital of the company at the time. - 60 Verify source ↗
Capital redemption reserve ...................................................................................................................................................... 26
A company may, by resolution, suspend or relax the rules in subsection (7) of section 218, either generally or for a particular transaction.
60. The provisions of subsection (7) of section two hundred and eighteen of the Act (providing that a director who is materially interested in a contract or arrangement to be considered at a meeting of the company or of the directors should not be counted in the quorum or vote on the matter) may be suspended or relaxed, whether generally or in respect of a particular transaction, by a resolution of the company. - 61 Verify source ↗
Share premium account ............................................................................................................................................................. 26
A director may appoint an alternate director if the other directors approve. An alternate director is entitled to notice of directors’ meetings and may exercise the appointer’s powers, subject to the appointment instrument.
61. (1) A director may, if the other directors approve, appoint a person as an alternate director in accordance with the Act. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 186 Companies Act, 1994 (Chapter 388) Zambia Repealed (2) An alternate director shall be entitled to notice of meetings of the directors. (3) An alternate director may, subject to the instrument of appointment, exercise any powers that the appointer may exercise. - 62 Verify source ↗
Variation of class rights ............................................................................................................................................................. 27
A directors’ meeting has a quorum of two, unless the company sets a larger number by resolution.
62. At a meeting of directors, the quorum shall be two, or such larger number as is determined by resolution of the company. - 63 Verify source ↗
Return as to allotment of shares ........................................................................................................................................... 28
If director vacancies leave the board short, the remaining directors may act, but if there is no quorum they may act only to restore the board to quorum or call a general meeting.
63. In the event of a vacancy or vacancies in the office of a director or offices of directors, the remaining directors may act but, if the number of remaining directors is not sufficient to constitute a quorum at a meeting of directors, they may act only for the purpose of increasing the number of directors to a number sufficient to constitute such a quorum or of convening a general meeting of the company. - 64 Verify source ↗
Transfer of shares ........................................................................................................................................................................ 28
Directors must choose one of their own as chairman of their meetings, and may set the chairman’s term of office.
64. (1) The directors shall elect one of their number as chairman of their meetings and may determine the period for which he shall hold office. (2) Where meeting of directors is held and— (a) a chairman has not been elected as provided by subregulation (1); or (b) the chairman is not present within ten minutes after the time appointed for the holding of the meeting or is unwilling to act; the directors present shall elect one of their number to be a chairman of the meeting. - 65 Verify source ↗
Restrictions on transferability ................................................................................................................................................. 28
Directors may delegate their powers to committees, and committees may manage meetings and voting as set out here.
65. (1) The directors may delegate any of their powers to a committee or committees consisting of such of their number as they think fit. (2) A committee to which any powers have been so delegated shall exercise the powers delegated in accordance with any directions of the directors and a power so exercised shall be deemed to have been exercised by the directors. (3) The members of such a committee may elect one of their number as chairman of their meetings. (4) Where such a meeting is held and— (a) a chairman has not been elected as provided by subregulation (3); or (b) the chairman is not present within ten minutes after the time appointed for the holding of the meeting or is unwilling to act; the members present may elect one of their number to be chairman of the meeting. (5) A committee may meet and adjourn as it thinks proper. (6) Questions arising at a meeting of a committee shall be determined by a majority of votes of the members present and voting. (7) In the case of an equality of votes, the chairman, in addition to his deliberative vote (if any), has a casting vote. - 66 Verify source ↗
Issue of share certificates ......................................................................................................................................................... 29
Directors may appoint a managing director and give that person some or all of the directors’ powers, subject to terms, conditions, and restrictions they choose.
66. (1) The directors may, upon such terms and conditions and with such restrictions as they think fit, appoint a managing director in accordance with the Act and confer upon him any of the powers exercisable by them. (2) Any powers so conferred may be concurrent with, or be to the exclusion of the powers of the directors. (3) The directors may at any time withdraw or vary any of the powers so conferred on a managing director. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 187 Companies Act, 1994 (Chapter 388) Zambia Repealed - 67 Verify source ↗
Endorsement of transfer ............................................................................................................................................................ 29
Directors may appoint or remove associate directors and set their powers, duties, and remuneration.
67. (1) The directors may from time to time appoint any person to be an associate director and may from time to time terminate any such appointment. (2) The directors may from time to time determine the powers, duties and remuneration of any person so appointed. (3) A person so appointed shall not be required to hold any shares to qualify him for appointment but, except by the invitation and with the consent of the directors, shall not have any right to attend or vote at any meeting of directors. - 68 Verify source ↗
Share certificates as evidence ................................................................................................................................................. 29
A company secretary must serve on the terms and conditions set by the directors.
68. A secretary of the company shall hold office on such terms and conditions, as to remuneration and otherwise, as the directors determine. - 69 Verify source ↗
Share warrants to bearer .......................................................................................................................................................... 29
Directors must provide for the safe custody of the seal.
69. (1) The directors shall provide for the safe custody of the seal. - 18 Verify source ↗
*** ....................................................................................................................................................................................................... 11
The seal may be used only with directors’ authority, and documents sealed must be signed by a director and countersigned by an authorised person.
18 - Seal (2) The seal shall be used only by the authority of the directors, or of a committee of the directors authorised by the directors to authorise the use of the seal, and every document to which the seal is affixed shall be signed by a director and be countersigned by another director, a secretary or another person appointed by the directors to countersign that document or a class of documents in which that document is included. - 70 Verify source ↗
Transmission of shares by operation of law ...................................................................................................................... 30
Directors decide when and on what terms company records and documents may be inspected by members other than directors; those members do not have a general right to inspect.
70. Subject to the Act, the directors shall determine whether and to what extent, and at what time and places and under what conditions, the accounting records and other documents of the company or any of them will be open to the inspection of members other than directors, and a member other than a director shall not have the right to inspect any document of the company except as provided by law or authorised by the directors or by a resolution of the company. - 71 Verify source ↗
Evidence of transmission of shares by operation of law .............................................................................................. 31
A company may declare a dividend only if the directors have recommended one, and the dividend must not exceed the recommended amount.
71. (1) The company by resolution may declare a dividend if, and only if, the directors have recommended a dividend. (2) A dividend shall not exceed the amount recommended by the directors. - 72 Verify source ↗
Company's lien on shares ......................................................................................................................................................... 31
Directors may authorise the company to pay interim dividends to members if the dividends appear justified by the company’s profits.
72. The directors may authorise the payment by the company to the members of such interim dividends as appear to the directors to be justified by the profits of the company. - 73 Verify source ↗
Rights and options to subscribe for share issue to directors, officers and employees ........................................ 31
The company must not pay interest in respect of any dividend.
73. Interests shall not be payable by the company in respect of any dividend. - 74 Verify source ↗
Alteration of share capital ........................................................................................................................................................ 32
A dividend may be paid only out of the company’s profits.
74. A dividend shall not be paid except out of profits of the company. - 75 Verify source ↗
Power to return accumulated profits in reduction of paid up share capital ........................................................... 32
Directors may set aside company profits as reserves before recommending a dividend, use or invest those reserves while pending application, and carry forward profits they think should not be paid as dividends.
75. (1) The directors may, before recommending any dividend, set aside out of the profits of the company such sums as they think proper as reserves, to be applied, at the discretion of the directors, for any purpose for which the profits of the company may be properly applied. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 188 Companies Act, 1994 (Chapter 388) Zambia Repealed (2) Pending any such application, the reserves may, at the discretion of the directors, be used in the business of the company or be invested in such investments as the directors think fit. (3) The directors may carry forward so much of the profits remaining as they consider ought not to be distributed as dividends without transferring those profits to a reserve. - 76 Verify source ↗
Special resolution for reduction of share capital ............................................................................................................ 33
Dividends must be declared and paid in proportion to amounts paid or credited on the shares, subject to special dividend rights and any share terms giving a dividend rank from a specified date.
76. (1) Subject to the rights of persons (if any) entitled to shares with special rights as to dividend, all dividends shall be declared and paid according to the amounts paid or credited as paid on the shares in respect of which the dividend is paid. (2) All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid, but, if any share is issued on terms providing that it will rank for dividend as from a particular date, that share shall rank for dividend accordingly. (3) An amount paid or credited as paid on a share in advance of a call shall not be taken for the purposes of this regulation to be paid or credited as paid on the share. - 77 Verify source ↗
Creditors may object to reduction in capital ..................................................................................................................... 33
The directors may deduct sums owed to the company from a dividend payable to a member.
77. The directors may deduct from any dividend payable to a member all sums of money (if any) presently payable by him to the company on account of calls or otherwise in relation to shares in the company. - 78 Verify source ↗
Order confirming reduction and powers of court in making such order .................................................................. 34
If the company declares a dividend, it may direct the directors to pay it partly or wholly with specific assets instead of cash.
78. (1) If the company declares a dividend it may by resolution direct the directors to pay the dividend wholly or partly by the distribution of specific assets, including paid up shares in, or debentures of, any other corporation. (2) Where a difficulty arises in regard to such a distribution, the directors may settle the matter as they consider expedient and in particular may issue fractional certificates and fix the value for distribution of the specific assets or any part of those assets, and may determine that cash payments will be made to any members on the basis of the value so fixed in order to adjust the rights of all parties, and may vest any such specific assets in trustees as the directors consider expedient. - 79 Verify source ↗
Lodgement of order and issue of replacement certificate of share capital ............................................................ 34
Dividend, interest, or other cash payable for shares may be paid by cheque sent by post to the holder’s registered address, or to another address the holder or joint holders direct in writing.
79. (1) Any dividend, interest or other money payable in cash in respect of shares may be paid by cheque sent through the post directed to— (a) the registered address of the holder or, in the case of joint holders, to the registered address of the joint holder named first in the register of members; or (b) to such other address as the holder or joint holders in writing directs or direct. (2) Any one of two or more joint holders may give effectual receipts for any dividends, interests or other money payable in respect of the shares held by them as joint holders. - 80 Verify source ↗
Liability of members in respect of reduced shares ......................................................................................................... 34
A company may capitalise distributable sums and apply them for members’ benefit, but only if the directors have recommended the resolution.
80. (1) Subject to subregulation (2), the company may resolve— (a) (b) to capitalise any sum, being the whole or a part of the amount for the time being standing to the credit of any reserve account or the profit and loss account or otherwise available for distribution to members; and to apply the sum, in any of the ways mentioned in subregulation (3), for the benefit of members in the proportions to which those members would have been entitled in a distribution of that sum by way of dividend. (2) The company shall not pass a resolution under subregulation (1) unless it has been recommended by the directors. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 189 Companies Act, 1994 (Chapter 388) Zambia Repealed (3) The ways in which a sum may be applied for the benefit of members under subregulation (1) shall be— (a) in paying up any amounts unpaid on shares held by members; (b) in paying up in full unissued shares or debentures to be issued to members as fully paid; or (c) partly under paragraph (a) and partly under paragraph (b). (4) The directors shall do all things necessary to give effect to the resolution and, in particular, to the extent necessary to adjust the rights of the members among themselves, may— (a) issue fractional certificates or make cash payments in cases where shares or debentures become issuable in fractions; and (b) authorise any person to make, on behalf of all the members entitled to any further shares or debentures upon the capitalisation, an agreement with the company providing for the issue to them, credited as fully paid up, of any such further shares or debentures or for the paying up by the company on their behalf of the amounts or any part of the amounts remaining unpaid on their existing shares by the application of their respective proportions of the sum resolved to be capitalised; and any agreement made under an authority referred to in paragraph (b) shall be effective and binding on all the members concerned. - 81 Verify source ↗
Offence of concealing name of creditor .............................................................................................................................. 35
A liquidator may, with a special resolution, distribute company property in kind, set a fair value on property for that purpose, decide how the division is carried out, or place the property in trustees for contributories.
81. (1) If the company is wound up, the liquidator may, with the sanction of a special resolution, divide among the members in kind the whole or any part of the property of the company and may for that purpose set such value as he considers fair upon any property to be so divided and may determine how the division is to be carried out as between the members or different classes of members. (2) The liquidator may, with the sanction of a special resolution, vest the whole or any part of any such properly in trustees upon such trusts for the benefit of the contributories as the liquidator thinks fit, but so that no member is compelled to accept any shares or other securities in respect of which there is any liability. - 82 Verify source ↗
Restrictions on financial assistance in acquisition of shares ....................................................................................... 35
The company must indemnify its officers, auditors, or agents from the company’s property for liabilities they incur in certain civil or criminal proceedings and related applications when they win, are acquitted, or get court-granted relief.
82. Every officer, auditor or agent of the company shall be indemnified out of the property of the company against any liability incurred by him in his capacity as officer, auditor or agent in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or in connection with any application in relation to any such proceedings in which relief is under the Act granted to him by the court. Second Schedule (Section 164) Annual accounts Preliminary - 1 Verify source ↗
Short title .................................................................................................................................................................................................... 1
A company’s annual accounts must give a true and fair view of the company’s affairs, operations, and results, including material matters that affect or are likely to affect the business.
1. The annual accounts of a company shall give a true and fair view of the state of affairs and the operation and results thereof of the company, together with any material matters not specifically described by the Act or this Schedule which have affected or are likely to affect the business of the company. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 190 Companies Act, 1994 (Chapter 388) Zambia Repealed - 2 Verify source ↗
Interpretation ............................................................................................................................................................................................. 1
The view must be given in figures and, where necessary, in a narrative report for financial statements.
2. The view shall be given both by way of figures, and by narrative report complementing and explaining, where necessary, figures in financial statements. - 3 Verify source ↗
Effect of declaration in certified copy .............................................................................................................................................. 6
A company may give information that this Schedule requires in a balance sheet or profit and loss account as a note or annexure if that would be more effective or convenient.
3. A company may, in addition to matter expressly permitted by this Schedule to be given in notes, give any information required by this Schedule to be stated in a balance sheet or profit and loss account in the form of a note or annexure thereto if such presentation would be more effective or convenient. - 4 Verify source ↗
Application of Act to existing companies ....................................................................................................................................... 7
Items that are not material do not have to be disclosed under this Schedule.
4. Nothing in this Schedule shall require disclosure of items that are not material. - 5 Verify source ↗
Prohibition of large partnerships ....................................................................................................................................................... 7
This section defines several accounting terms and says an auditor must specifically report if they disagree with directors about whether an excess amount should be treated as a reserve.
5. (1) In this Schedule, unless the context otherwise requires: Interpretation "distributable reserve" means, subject to subclause (2), any amount which has been carried to reserves and which may, in accordance with generally acceptable accounting practice and legal principles, be treated as income and distributed by way of dividend, and does not include any amount retained by way of providing for any known liability and "non distributable reserve" shall be construed accordingly; "listed investment" means an investment in regard to which permission has been granted to deal therein on any stock exchange of repute: and "unlisted investment" shall be construed accordingly; "material", in relation to an amount or a fact in respect of a company's accounts, means material from the point of view of the interests of the members of the company; "provision" means, subject to subclause (2), any amount— (a) written off or retained by way of providing for depreciation, renewals or diminution in the value of assets; or (b) retained by way of providing for any known liability, including the liability for income or any other tax; where the amount cannot be determined with substantial accuracy. (2) If the directors are of the opinion that— (a) any amount written off or retained by way of provision for depreciation, renewal or diminution in value of assets; or (b) any amount retained by way of provision for any known liability; is in excess of that which in the opinion of the directors and the auditor is reasonably necessary for the purpose, the excess shall be treated for the purposes of this Schedule as a reserve and not as a provision, but, if the auditor disagrees with the directors on the point, he shall report specifically on the subject in the auditor's report. Part A – Balance sheet Share capital and shares
Part
Part A – Balance sheet
- 6 Verify source ↗
Application for incorporation ....................................................................................................................................................... 7
The balance sheet must state specified share capital and convertible share information.
6. The balance sheet shall state— (a) the authorised and issued share capital; (b) (c) the classes of shares into which the authorised share capital is divided and their respective numbers and nominal values; the number of the issued shares and the amount of the issued shares capital in respect of each class of shares; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 191 Companies Act, 1994 (Chapter 388) Zambia Repealed (d) in respect of redeemable preference shares— (i) the earliest and latest dates on which the company has power to redeem them; (ii) whether they must be redeemed in any event or are liable to be redeemed at the option of the company; and (iii) the premium, if any, payable on redemption; and (e) in respect of preference shares or other shares or liabilities convertible into ordinary shares— (i) the conditions of conversion; and (ii) rights of conversion; or a place where these conditions may be inspected. Reserves and provisions - 7 Verify source ↗
The articles of a company ............................................................................................................................................................. 8
The balance sheet must show the aggregate amounts of reserves and provisions, if material, in separate headings and subheadings.
7. The balance sheet shall state the respective aggregate amounts, if material, of reserves and provisions (other than provisions for depreciation, or diminution in value of assets) under separate headings and subheadings indicating the types of reserves and provisions. - 8 Verify source ↗
Amendment of articles ................................................................................................................................................................... 8
The balance sheet must state certain transfers to and from reserves and provisions for the financial year, unless that information is already shown elsewhere or the amount is not material.
8. The balance sheet shall state, in respect of the financial year concerned— (a) the source of and the amount of any transfers to reserves and aforesaid provisions; and (b) the amount and the application of any transfer from reserves and aforesaid provisions. unless it is shown in the profit and loss account or a statement or report annexed thereto, or the amount involved is not material. Liabilities General - 9 Verify source ↗
Statutory declaration as to compliance with the Act .......................................................................................................... 8
Liabilities must be summarized with enough detail to show their general nature and grouped under headings and subheadings suited to the company’s business; current liabilities must be stated.
9. (1) The liabilities shall be summarised with such particulars as are necessary to disclose their general nature and shall be classified under headings and subheadings appropriate to the company's business (including a statement of current liabilities). (2) Where the amount of any class of liability is not material, it may be included under the same heading as some other class. - 10 Verify source ↗
Certificates of incorporation and of share capital .............................................................................................................. 8
A balance sheet must state specified debenture details, including issued amounts and classes, conversion and redemption terms, nominee-held amounts, and details of redeemed debentures.
10. The balance sheet shall state— Debentures (a) the amount and classes of debentures issued and, if convertible into shares, the conditions of conversion and the dates on which debentures may, or shall, be redeemed, or the place where these conditions may be inspected; (b) the nominal amount of any debentures held by a nominee and the amount at which they are stated in the books of the company; and (c) particulars of any redeemed debentures which the company has power to reissue. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 192 Companies Act, 1994 (Chapter 388) Zambia Repealed Overdrafts, loans and dividends - 11 Verify source ↗
Incorporation of the company ................................................................................................................................................... 9
Certain financial matters must be shown under separate headings, including bank borrowings, overdrafts, loan details, and dividend amounts; loan details may instead be set out in a note.
11. There shall be shown under separate headings— (a) the aggregate amount of bank borrowings and overdrafts; (b) in relation to each loan made to the company— (i) the amount; (ii) whether the date of repayment of the loan is more than one year after the accounting date; (iii) the dates of repayment and, if repayable in instalments, the amounts thereof; and (c) the aggregate amount which has been declared or is recommended for distribution by way of dividend. (2) The matters referred to in paragraph (b) of subclause (1) may be set out in a note. Secured liabilities - 12 Verify source ↗
Register of companies .................................................................................................................................................................. 9
A company must state when one of its liabilities is secured over its assets, except where the security arises by operation of law.
12. Where any liability of the company is secured over any assets of the company, otherwise than by operation of law, that fact shall be stated, specifying the liability and the assets over which it is secured, and the amount at which such assets are shown in the balance sheet. Indebtedness to related bodies corporate - 13 Verify source ↗
Types of company ........................................................................................................................................................................... 9
The section says certain indebtedness amounts must be shown under separate headings.
13. There shall be shown under separate headings— (a) (b) the amount of indebtedness (whether by way of loan or otherwise) to each of the company's subsidiaries; and the amount of the company's indebtedness to every other related body corporate, distinguishing between indebtedness in respect of debentures and otherwise. Assets General - 14 Verify source ↗
Public companies ............................................................................................................................................................................ 9
Assets must be summarised with enough detail to show their general nature and grouped under headings and subheadings that fit the company's business.
14. (1) The assets shall be summarised with such particulars as are necessary to disclose their general nature and shall be classified under headings and subheadings appropriate to the company's business. (2) Where the amount of any class of assets is not material, it may be included under the same heading as some other class. - 15 Verify source ↗
*** ....................................................................................................................................................................................................... 10
Fixed assets, current assets, and assets that are neither fixed nor current must be identified separately.
15. Fixed assets, current assets and assets that are neither fixed nor current shall be separately identified. - 16 Verify source ↗
Private companies ........................................................................................................................................................................ 10
The method or methods used to arrive at the stated asset amounts must be stated under each heading.
16. The method or methods used to arrive at the amount of the fixed assets and the assets which are neither fixed nor current, under each heading, shall be stated. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 193 Companies Act, 1994 (Chapter 388) Zambia Repealed Fixed assets - 17 Verify source ↗
Private companies limited by shares .................................................................................................................................... 11
A company must disclose how it calculates certain fixed-asset amounts and provide specified details about land and buildings; some items are excluded, and some details may be kept in a schedule or register instead.
17. (1) The method of arriving at the amount of any fixed asset (and asset neither fixed nor current) shall be, subject to subclause (2), to take the difference between— (a) (b) its cost, or if it stands at the company's books at a valuation, the amount of the valuation; and the aggregate amount provided or written off since the date of acquisition or valuation, as the case may be, by way of depreciation or diminution of value. (2) Subclause (1) shall not apply— (a) to any listed and unlisted investments; (b) to interests of the company in its subsidiaries; or (c) to goodwill or intellectual property. (3) In respect of the assets under each heading whose amount is arrived at in accordance with subclause (1), there shall be stated— (a) the aggregate of the amounts referred to in paragraph (1) (a); and (b) the aggregate of the amounts referred to in paragraph (1) (b). (4) As regards any land and buildings which are fixed assets, there shall also be stated— (a) a description of the land and buildings and the situation thereof, distinguishing between land owned absolutely and land owned for a term of years or other period; (b) the date of their acquisition by the company; (c) their purchase price; and (d) the costs of additions or improvements since the date of acquisition or valuation, which costs shall be analysed to indicate the years in which the additions and improvements to buildings were carried out. (5) The information required under subclause (4) may be provided in a schedule or register, in which case the balance sheet shall state that the schedule or register shall be open for inspection by members or their duly authorised agents at the registered records office of the company in accordance with section one hundred and ninety-three of the Act. Such a schedule or register shall be part of the company's accounting records. (6) As regards any fixed asset referred to in subclause (4), the amount of which is arrived at by reference to a valuation, the provisions of paragraphs (4) (b) and (c) shall not apply, but there shall be stated the years in which the assets were severally valued and the several values and, in the case of assets that have been valued during the financial year concerned, the names and qualifications of the persons who valued them and the basis of valuation used by them. (7) Where there are more than five different items of land and buildings which have over the years been severally valued for the purposes of subclause (6), a company may, if it considers that compliance with that subclause would be inconvenient or cumbersome, include the information in a schedule or register, in which case the balance sheet shall state that the schedule or register shall be open for inspection by members or their duly authorised agents at the registered records office of the company in accordance with section one hundred and ninety-three of this Act. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 194 Companies Act, 1994 (Chapter 388) Zambia Repealed Interests in subsidiaries - 18 Verify source ↗
*** ....................................................................................................................................................................................................... 11
If a company has subsidiaries, it must show certain interests in those subsidiaries separately in its balance sheet.
18. If the company has subsidiaries, the amount of interests of the company consisting of shares of its subsidiaries or amounts owed to it (whether by way of loan or otherwise) by its subsidiaries, distinguishing shares from indebtedness, shall be set out in the balance sheet separately from the other assets of the company. Indebtedness of related bodies corporate - 19 Verify source ↗
Companies limited by guarantee ........................................................................................................................................... 11
The text says the amount owed to the company by related bodies corporate must be stated separately for debenture debt and other debt.
19. The amount of the indebtedness to the company of all related bodies corporate, shall be set out, distinguishing between indebtedness in respect of debentures and otherwise. Loans to employees and other persons - 20 Verify source ↗
Unlimited companies .................................................................................................................................................................. 12
Outstanding loans under the specified sections must be shown under separate headings, and loans outstanding to any person who is or has been a director during the loan period must be shown separately.
20. The aggregate amounts of any outstanding loans under sections eighty-three and one hundred and sixty- eight of this Act shall be shown under separate headings. The amount outstanding of loans to each person who is, or at any time during the currency of the loan has been, a director shall be shown separately. Goodwill and intellectual property - 21 Verify source ↗
Contractual effect of indorporation ....................................................................................................................................... 12
Goodwill and intellectual property may have to be shown as a separate accounting item if their amount can be identified from records, contracts, or documents, unless it has been written off.
21. (1) If the amount of the goodwill and of any intellectual property, or part of that amount, is shown as a separate item in, or is otherwise ascertainable from, the accounting records, from any contract for the sale or purchase of any property to be acquired by the company, or from any documents in the possession of the company, the amount so shown or ascertainable, so far as it is not written off, shall be stated as a separate item. (2) Nothing in this clause shall require the amount of the goodwill and intellectual property to be stated otherwise than as a single item. Investments - 22 Verify source ↗
Capacity and powers of a company ...................................................................................................................................... 12
The company must disclose certain investment amounts on the balance sheet and, in some cases, add a note with extra valuation and profit/loss details.
22. (1) There shall be shown under separate headings the aggregate amounts respectively of the company's listed and unlisted investments, other than interests in those subsidiaries of the company covered by group accounts (if any). (2) There shall be shown— (a) (b) in respect of the company's listed investments, the aggregate market value where it differs from the amount of the investments as stated; and in respect of the company's unlisted investments and unless they are dealt with under subclause (3), the aggregate of the directors' valuation of the investments. (3) Where no directors' valuation is shown for the purposes of subclause (2), the following information shall be stated in a note to be annexed to the balance sheet: (a) (b) the aggregate amount of the company's income for the financial year concerned that is ascribable to the investments; the amounts of the company's share, before and after taxation, of the net aggregate profits or losses of the companies of which shares are held (and the extent by which such profits have been affected by abnormal items), being profits for the several financial years in respect of which they have issued accounts during the company's financial year concerned, after deducting those companies' losses for those periods; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 195 Companies Act, 1994 (Chapter 388) Zambia Repealed (c) the amount of the company's share of the aggregate of the share capital, distributable and non-distributable reserves and undistributed profits accumulated by the companies of which shares are held since the dates when the investments were acquired, after deducting the losses accumulated by them since that time; and (d) the manner in which any losses have been dealt with in the company's accounts. - 23 Verify source ↗
Validity of acts .............................................................................................................................................................................. 12
A company must disclose certain shareholdings in its balance sheet or an annexure, unless the amount involved is not material.
23. (1) There shall be shown in the balance sheet or in an annexure thereto, unless the aggregate amount of the interest of the company consisting of shares in other bodies corporate and amounts owing to it (whether by way of loan or otherwise) by other bodies corporate is not material, the names of all bodies corporate of which the company beneficially owns shares and, in each case, either the number of shares so held or the percentage of the amount of such shares in the aggregate amount of the listed or unlisted investments. (2) Where a percentage is so given there shall be a statement as to whether this is a percentage of the aggregate book value, market value or directors' valuation, as the case may be. (3) For the purposes of this clause, a company shall not be regarded as beneficially owning shares in a body corporate by reason only that it owns shares in a holding company of the body corporate. - 24 Verify source ↗
Notice not presumed .................................................................................................................................................................. 12
If proceeds or profits from selling investments are used to reduce the value of remaining investments, the balance sheet must state that fact and the amount used.
24. (1) Where the proceeds or any part of the profit made on the realisation of any investments is applied to write down the amount of the remaining investments, that fact and the amount so applied shall be stated in the balance sheet. (2) This clause shall not apply in respect of the proceeds or profits on the realisation of investments dealt with under paragraph 36 (1) (a). Current assets - 25 Verify source ↗
No disclaimer allowed ............................................................................................................................................................... 12
The provision requires companies to disclose stock separately, classify material stock and work in progress under suitable headings, and state key methods and assumptions used to value stock.
25. (1) For the purposes of this clause, "stock" includes any property, whether corporeal or incorporeal, which the company, in the ordinary course of its business, buys, manufacturers, processes, develops for sale or sells. (2) The amount of stock shall be shown as a separate item and, where the amount of stock and work in progress is material in relation to either the trading results or the financial position, it shall be classified under appropriate subheadings which shall include, where applicable— (a) raw materials (including component parts); (b) finished goods; (c) merchandise, including any form of stock not mentioned in subclause (1) and which may itself be shown under appropriate subheadings; (d) consumable stores (including maintenance spares); (e) work in progress (including standing crops); and (f) contracts in progress. (3) Where directors are of the opinion that classification into some or all of the categories referred to in subclause (2) would result in a failure to present a fair view, the classification should be reduced to those categories where a fair view would be obtained, and the reasons given for not indicating all categories. (4) In regard to the method of determining the value of stock, there shall be stated— (a) whether it is consistent with the method of the previous financial year; (b) whether it is the lower of cost or net realisable or replacement value or some other expressly specified value or values; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 196 Companies Act, 1994 (Chapter 388) Zambia Repealed (c) the accounting basis which has been used in determining the value of stock to have been used or, if the directors are of the opinion that a statement of all the bases used would be the little value to the shareholders, an intelligible summary of the bases used; (d) whether the value includes both direct costs and overheads; and (e) in the case of spares held for maintenance purposes, the method employed in providing for obsolescence. (5) There shall be stated any additional information required fairly to present the value of the stock including, in the case of contracts in progress, whether profits or losses have been taken into account and, if so, to what extent. (6) If the directors are of the opinion that any of the current assets do not have a value on realisation in the ordinary course of the company's business at least equal to the amount at which they are stated, the fact that the directors are of that opinion and the extent of the estimated shortfall shall be stated. Preliminary expenses, commission and discounts - 26 Verify source ↗
Companies ceasing to have at least two members ......................................................................................................... 13
Certain incorporation and securities-related expenses must be stated under separate subheadings, unless they have been written off.
26. There shall be stated under separate subheadings so far as they are not written off— (a) the preliminary expenses incurred in incorporation; (b) any expenses incurred in connection with any issue of shares or debentures; (c) any sums paid by way of commission in respect of any shares or debentures; and (d) any sums allowed by way of discount in respect of any debentures. Corresponding amounts of preceding year - 27 Verify source ↗
No increase in a member's liability or contribution without consent ....................................................................... 13
For balance sheets, corresponding amounts from the end of the previous financial year must be stated for all items, except for the first balance sheet.
27. Except in the case of the first balance sheet, the corresponding amounts at the end of the immediately preceding financial year in respect of all items shown in the balance sheet shall be stated. Notes to balance sheet - 28 Verify source ↗
Pre-incorporation contracts ...................................................................................................................................................... 13
Matters stated in clause 29 to 35 may be presented in a note or in a statement or report attached to the balance sheet.
28. The matters stated in clause 29 to 35 may be stated by way of a note or in a statement or report annexed to the balance sheet. Shares or debentures held by subsidiary or nominee - 29 Verify source ↗
Copies of certificate of incorporation, certificate of share capital and articles to be given to members ...... 14
The section requires stated disclosure of the number, description, and amounts of a company’s shares and debentures held by subsidiaries or their nominees, subject to an exclusion for certain trust or representative holdings.
29. There shall be stated the number, description and amounts of the shares and debentures of the company held by its subsidiaries or their nominees, but excluding any such shares or debentures which a subsidiary holds in a representative capacity or as a trustee under a trust in which neither the company nor any subsidiary is beneficially interested otherwise than by way of security for the purposes of a transaction entered into by it in the ordinary course of business which includes the lending of money. Options and preferential rights to shares - 30 Verify source ↗
Conversion of a private company limited by shares to company limited by guarantee ..................................... 14
The company’s share details must include any subscription options or preferential subscription rights, plus the exercise period and the share price or pricing formula.
30. The number, description and amount of any shares of the company which any person has an option to subscribe for or in respect of which any person has any preferential right of subscription, shall be stated together with the following particulars— (a) the period during which the option or right is exercisable; and By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 197 Companies Act, 1994 (Chapter 388) Zambia Repealed (b) the price, or the formula for fixing the price, to be paid for shares subscribed for under it. Directors' authority to issue shares - 31 Verify source ↗
Conversion of private company limited by shares to unlimited company ............................................................... 15
The provision says the amount of share capital or number of shares directors may issue, plus the terms and period of that authority, must be stated.
31. The amount of any share capital or the number of shares which the directors are authorised to issue by resolution of the shareholders, the terms of such authority and the period for which it was granted, shall be stated. Arrear dividends - 32 Verify source ↗
Conversion of company limited by guarantee to company limited by shares or unlimited company ............ 15
The amount of arrears of fixed cumulative dividends on each class of the company's shares, and the period of arrears, must be stated.
32. The amount of any arrears of fixed cumulative dividends on each class of the company's shares and the period for which the dividends are in arrears, shall be stated. Contingent liabilities - 33 Verify source ↗
Conversion of unlimited company to private limited company .................................................................................. 15
The company must state details of encumbrances securing another person’s liabilities and disclose contingent liabilities, including amounts where practicable.
33. (1) Particulars of any encumbrance on the assets of the company to secure the liabilities of any other person, including, where practicable, the amount secured, shall be stated. (2) The general nature of any other contingent liabilities not provided for and, where practicable, the aggregate or estimated amount of those liabilities if it is material, shall be stated. Contracts for capital expenditure - 34 Verify source ↗
Conversion of public company to private company limited by shares ..................................................................... 15
Where practicable, the section requires disclosure of material capital expenditure contract amounts, authorised but uncontracted capital expenditure, and the source of funds for that expenditure.
34. Where practicable, the aggregate amount or estimated amount, if it is material, of contracts for capital expenditure, not otherwise provided for and the aggregate amount or estimated amount, if it is material, of capital expenditure authorised by the directors which has not been contracted for, shall be stated. There shall also be stated the source from which funds to meet such expenditure will be provided. Basis for currency conversion - 35 Verify source ↗
Conversion of private company limited by shares to public company ..................................................................... 15
If material assets or liabilities are affected, the basis for converting foreign currencies into Zambian currency must be stated.
35. The basis on which foreign currencies have been converted into Zambian currency, where the amount of the assets or liabilities affected is material, shall be stated. Part B – Profit and loss account
Part
Part B – Profit and loss account
- 36 Verify source ↗
Method of conversion ................................................................................................................................................................. 16
The profit and loss account must separately show listed categories of income, expenses, provisions, taxes, reserves, interest, remuneration, and gifts or donations, unless an item is not material.
36. (1) The profit and loss account shall show separately— (a) profits or losses on share transactions, showing the application of profits or part thereof to write down the amount of the remaining investment, if not already dealt with under clause 24; (b) (c) (d) (e) the amount of income from investment, distinguishing between listed and unlisted investment; the aggregate amount of income from related bodies corporate, stating whether dividends, interest, fees or other specified income; the aggregate amount of the dividends paid and proposed, and if such dividends are provided partly or wholly from capital profits, a statement to that effect; the aggregate amount of profits and losses on the realisation, scrapping or other disposal of non-trading, fixed and other non-current assets; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 198 Companies Act, 1994 (Chapter 388) Zambia Repealed (f) (g) the amount charged to revenue by way of provisions (other than provisions for diminution in values of current assets, unless material to the understanding of the accounts) specifying the nature of each provision or the amount withdrawn from such provisions and not applied for the purpose thereof; the amount provided for taxation (specifying, where material, the origin and different classes of taxes) in respect of the financial year concerned and the amount, if any, so provided in respect of any other financial year; (h) the amounts respectively set above for redemption of shares and of loans; (i) the amount set aside or proposed to be set aside to, or withdrawn from, reserves; (j) (k) (l) the amount of any credit or charge arising in consequence of an event in a preceding financial year; the amount of interest (or other consideration) on any loans made to the company, including debentures and bank overdrafts; the amount paid by way of leasing charges for the use of any asset, other than immovable property, which would have been subject to a charge for depreciation if owned by the company; (m) the respective amounts paid as remuneration for managerial, technical, administrative or secretarial services, however described, other than to the bona fide employees of the company; (n) the amount of the remuneration of the auditor, distinguishing between the fee for the audit, the fee for other services and his expenses; and (o) the total amount of any gifts or donations made by the company. (2) Nothing in this clause shall require the separate listing of any item that is not material. - 37 Verify source ↗
Name of company ........................................................................................................................................................................ 17
Directors’ emoluments must be shown separately in the accounts, using the amounts required by this section.
37. (1) There shall be shown separately the information required by section one hundred and sixty-seven of this Act in relation to directors' emoluments. (2) The amounts to be shown for any financial year shall be the sums receivable in respect of that year whenever paid or, in the case of sums not receivable in respect of a period, the sums paid during that year, except that any sums paid in advance of the financial year to which they are expressed to relate shall be shown in the accounts for the financial year in which they are paid. (3) Where it is necessary so to do for the purpose of making any distinction required by this clause, the directors may apportion any payments in such manner as they think appropriate between the matter in respect of which they have been paid or are receivable. - 38 Verify source ↗
Reservation of name ................................................................................................................................................................... 17
The provision requires turnover information and related calculation details to be shown.
38. (1) There shall be shown— (a) the aggregate amount of the turnover for the financial year concerned; or (b) the increase or decrease of the aggregate turnover for the financial year concerned expressed as a percentage of the aggregate turnover for the preceding financial year. (2) If the nature of the business is such that there could be any doubt as to what is meant by turnover, there shall be indicated (by way of note) the basis upon which turnover has been determined. (3) The method employed to determine the amount of turnover shall be stated and, if a method different to that employed in the preceding financial year is used, that fact shall be stated. - 39 Verify source ↗
Registrar may allow company to dispense with "Limited" in its name .................................................................... 18
For profit and loss accounts, the corresponding amount for the immediately preceding financial year must be stated for all items, except in the first profit and loss account.
39. Except in the case of the first profit and loss account, the corresponding amount for the immediately preceding financial year for all items shown in the profit and loss account shall be stated. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 199 Companies Act, 1994 (Chapter 388) Zambia Repealed Notes to the profit and loss account - 40 Verify source ↗
Change of name ........................................................................................................................................................................... 18
The matters referred to in clauses 41 and 42 must be stated in a note or in a statement or report annexed to the balance sheet.
40. The matters referred to in clauses 41 and 42 shall be stated by way of a note, or in a statement or report annexed to the balance sheet. - 41 Verify source ↗
Power of Registrar in relation to name ............................................................................................................................... 18
If fixed assets are provided for by a method other than depreciation charge, or no provision is made, the method or absence of provision must be stated. Any item shown net of income tax or other tax must also be stated.
41. (1) If provision for depreciation, replacement or the diminution in value of fixed assets is made by some method other than a depreciation charge, or provision for renewals or diminution in value or is not provided for, the method by which it is provided for, or the fact that it is not provided for, shall be stated. (2) If any of the items are shown net of income or any other tax, that fact shall be stated. - 42 Verify source ↗
Financial year of a company ................................................................................................................................................... 19
Any material respects affecting items in the profit and loss account must be stated, including exceptional events, accounting-basis changes, and changes in methods used to determine asset amounts.
42. There shall be stated any material respects in which any items included in the profit and loss account (stating in each case the amount involved) are affected by— (a) transactions of a sort not usually undertaken by the company or otherwise by circumstances of an exceptional or non recurrent nature; (b) any change in the basis of accounting; or (c) any change in the methods for the determination of the amount of any assets. Part C – Statement of source and application of funds
Part
Part C – Statement of source and application of funds
- 43 Verify source ↗
Holding companies, subsidiaries and related companies ............................................................................................. 20
A balance sheet must include a statement showing where funds came from and how they were used during the financial year.
43. There shall be annexed to the balance sheet or separately contained therein a statement showing the source and the application of any funds received and applied during the financial year specifying— (a) funds derived from— (i) net income (before deduction of taxes, dividends paid and proposed, and internal provisions and retentions); (ii) the disposal of specified fixed and other non-current assets; (iii) the proceeds of loans raised and debentures issued; (iv) the proceeds of shares issued; (v) repayments received on loans and advances made; and (vi) any reduction in net working capital (being current assets less current liabilities); and (b) funds applied to— (i) meeting any loss; (ii) the acquisition of specified fixed and other non-current assets; (iii) the redemption of any loans and debentures; (iv) loans and advances made and the purposes for which they were made; (v) liability for taxes; (vi) dividends paid and proposed; and (vii) any increase in net working capital (being current assets less current liabilities). By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 200 Companies Act, 1994 (Chapter 388) Zambia Repealed Part D – Group accounts Preliminary
Part
Part D – Group accounts
- 44 Verify source ↗
Registration of related bodies corporate ............................................................................................................................ 21
Clauses 45 to 48 apply to all forms of group accounts, and clauses 54 to 57 also apply to subsidiaries not dealt with in group accounts.
44. Clauses 45 to 48 shall apply to all forms of group accounts and shall also apply in respect of the requirements of clauses 54 to 57 in relation to subsidiaries not dealt with in group accounts. - 45 Verify source ↗
Membership of company .................................................................................................................................................................. 21
Certain material profits or losses from non-arm's-length group transactions must be excluded when calculating total group profit or loss or the holding company's interest in a subsidiary.
45. Any material profit or loss arising from transactions within the group of companies (other than bona fide arm's-length transactions), insofar as those profits or losses were realised or incurred in respect of a transaction with a person outside the group, shall be excluded in determining the total group profit or loss, or the interest of the holding company in the profit or loss of any subsidiary. - 47 Verify source ↗
Offence if membership of private company exceeds number specified in articles ...................................................... 22
A holding company must not count certain subsidiary dividends from pre-acquisition profits as profits available for distribution, unless specified group-ownership conditions are met.
47. Inter-group balances, were shown, shall be excluded in determining the total assets and liabilities of the group. (1) Dividends declared by a subsidiary out of profits accrued prior to the date on which it became a subsidiary of the holding company, being pre-acquisition profits so far as they are material and reasonably ascertainable, shall not, in the hands of that holding company, form part of its profits available for distribution by way of dividends unless— (a) (b) the holding company is itself the subsidiary of another body corporate incorporated or registered in Zambia; the shares in the subsidiary were acquired by the holding company from the other body corporate; (c) the subsidiary was, before the acquisition, a subsidiary of the other body corporate; and (d) the profits out of which the dividend is declared accured after the subsidiary had become a subsidiary of the other body corporate. (2) For the purposes of establishing whether any profit accrued prior to the acquisition of the shares of the subsidiary, the profit or loss for any financial year of the subsidiary may, if it is not practicable to apportion it with reference to the facts, be treated as if it had accrued from day to day during that financial year and be apportioned accordingly. - 48 Verify source ↗
Register of members .......................................................................................................................................................................... 22
The provision requires certain qualifications and related notes or saving matters from subsidiary auditors’ reports and financial statements to be stated when they are material to members and not already covered by the holding company’s own accounts or group accounts.
48. There shall be stated any qualifications contained in the reports of the auditors of the subsidiaries on their financial statements and any note or saving contained in those financial statements to call attention to the matter which, apart from the note or saving, would properly have been referred to in such a qualification, insofar as the matter which is the subject of the qualification is not covered by the holding company's own accounts of the group accounts and is material from the point of view of its members. Group accounts in the form of consolidated accounts - 49 Verify source ↗
Inspection of register ........................................................................................................................................................................ 22
The consolidated balance sheet and consolidated profit and loss account must combine the information from the holding company and relevant subsidiaries, with necessary adjustments.
49. Subject to clauses 50 to 52, the consolidated balance sheet and the consolidated profit and loss account shall combine the information contained in the separate balance sheets and profit and loss accounts of the holding company and of the subsidiaries dealt with in the consolidated accounts, with such adjustment as may be appropriate and necessary to give a true and fair view of the state of affairs of the group of companies as at the end of the financial year and the results of the operations of the group of companies during the financial year. - 50 Verify source ↗
Power of court to rectify register ................................................................................................................................................. 23
The consolidated accounts must comply, as far as practicable, with the Act and Schedule when providing information, subject to clauses 51 and 52.
50. Subject to clauses 51 and 52 the consolidated accounts shall, in giving the information, comply as far as is practicable with the requirements of this Act and this Schedule as if they were the accounts of a single company. - 51 Verify source ↗
Company may keep branch register ............................................................................................................................................ 23
This section exempts consolidated accounts from having to disclose the remuneration of directors of subsidiary companies.
51. Section one hundred and sixty-seven of this Act shall not require the disclosure in consolidated accounts of the remuneration of directors of the subsidiaries of the holding company. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 201 Companies Act, 1994 (Chapter 388) Zambia Repealed - 52 Verify source ↗
Duties in case of securities registered in branch register ................................................................................................... 24
For subsidiaries not dealt with in consolidated accounts, clauses 13, 18, and 29 apply as if the consolidated accounts were those of a single company, and the information required by clauses 54 to 57 must be annexed with references read as referring to the consolidated accounts.
52. In relation to any subsidiaries of the holding company not dealt with in the consolidated accounts— (a) (b) clause 13 (concerning indebtedness to bodies corporate in the group), clause 18 (concerning interests in subsidiaries) and clause 29 (concerning shares or debentures held by subsidiaries), shall apply for the purposes of such consolidated accounts as if those accounts were the accounts of a single company of which they were the subsidiaries; and there shall be annexed the information required by clauses 54 to 57 in respect of subsidiaries not dealt with in group accounts but as if reference therein to a holding company's accounts were a reference to the consolidated accounts. - 53 Verify source ↗
Branch registers of foreign companies kept in Zambia ........................................................................................................ 24
If group accounts are not prepared as consolidated accounts, they must present equivalent group information as far as practicable.
53. (1) Where group accounts are prepared in a form other than consolidated accounts, they shall, as far as practicable, present the same or equivalent information concerning the state of affairs and the results of the operations of the group as would be contained in the consolidated accounts, including the aggregate amounts of— (a) the excess (if any) of the cost of the shares of the subsidiaries in the group over the net asset value of the shares at the date of acquisition and the non-distributable reserve (if any) arising in consequence of the excess of the net value of the assets at the date of acquisition over the cost of shares of the subsidiaries; (b) the holding company's shares of the non-distributable reserves of subsidiaries; (c) (d) the interest of outside shareholders, being shareholders other than the holding company and its subsidiaries or their nominees, in subsidiaries of the group; and the interest of the holding company, insofar as it has been disclosed in the group accounts in — (i) the accumulated revenue profits or losses and accumulated distributable reserves of subsidiaries for the period after the dates on which they respectively became subsidiaries to the end of the preceding financial year; and (ii) the revenue profits or losses of subsidiaries for the financial year. (2) For the purposes of paragraph (1) (a), non-distributable reserves arising from the acquisition of shares in a subsidiary may be set off against of shares of other subsidiaries over the net asset Requirements in respect of subsidiaries not dealt with in group accounts - 54 Verify source ↗
No notice of trust ............................................................................................................................................................................... 24
A holding company must include specified information in its accounts, or explain why it cannot be obtained, when a subsidiary is not covered in group accounts and the holding company’s interest in it is material.
54. Where a subsidiary is not dealt with in group accounts under subsection (3) of section one hundred and sixty-five of this Act and the interest in the subsidiary is material in relation to the financial position or the results of the holding company, there shall be included in the accounts of the holding company the information required to be stated under clauses 55 to 57 or, if any such information is not obtainable, the reasons why it is not obtainable. - 55 Verify source ↗
Register to be evidence .................................................................................................................................................................... 24
The reasons for not dealing with subsidiaries, or any of them, in the group accounts must be stated.
55. The reasons shall be stated why the subsidiaries or any of them are not dealt with in the group accounts. - 56 Verify source ↗
Interpretation ................................................................................................................................................................................. 24
The section lists amounts that must be stated about subsidiaries in group accounts, including investments, reserves, outside shareholders’ interests, loans, assets, and goodwill.
56. (1) In regard to the shareholders' equity, liabilities and assets of the subsidiaries not dealt with in group accounts, there shall be stated the aggregate amounts of— (a) the cost of the holding company's investment in shares of the subsidiaries; (b) the excess (if any) of the cost of the shares of the subsidiaries over the net asset value of the shares at the date of acquisition, and the non-distributable reserve (if any) arising in consequence of the excess of the net value of the assets at the date of acquisition over the cost of the shares of subsidiaries; (c) the holding company's shares of the non-distributable reserves of subsidiaries; By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 202 Companies Act, 1994 (Chapter 388) Zambia Repealed (d) the interest of outside shareholders, being shareholders other than the holding company and its subsidiaries or their nominees, in the subsidiaries; (e) long-term loans owing to the subsidiaries by the bodies corporate in the group; (f) fixed assets; (g) net current assets; (h) goodwill (if any) shown in the books of the subsidiaries insofar as it has not already been absorbed in the calculation referred to in paragraph (b); and (i) separately stated assets not included in paragraphs (f), (g) and (h). (2) For the purposes of paragraph (1) (b), non-distributable reserves arising on the acquisition of shares in a subsidiary may be set off against any excess of the cost of shares of other subsidiaries over the net value of such shares. - 57 Verify source ↗
Nature and transferability of shares ..................................................................................................................................... 24
A holding company must state its aggregate interest in certain subsidiary profits, losses, reserves, and dividends not dealt with in group accounts.
57. In regard to revenue profits or losses and distributable reserves not dealt with in group accounts, there shall be stated the aggregate interest of the holding company in— (a) the accumulated revenue profits or losses and accumulated distributable reserves of the subsidiaries for the period from the dates on which they respectively became subsidiaries to the end of the preceding financial year; (b) the revenue profits or losses and distributable reserves attributable to any shares of the subsidiaries disposed of during the financial year; (c) the revenue profits or losses of the subsidiaries for the financial year; (d) dividends paid or declared by the subsidiaries during the financial year; and (e) the revenue profits or losses and distributable reserves at the end of the financial year not dealt within the accounts of the holding company. Third Schedule (Section 185) Annual return In this Schedule, a reference to the date of a return is a reference to the date as at which the return states the position of the company in accordance with section one hundred and eighty-four of this Act. An annual return shall contain the information specified below. - 2 Verify source ↗
Interpretation ............................................................................................................................................................................................. 1
This provision states that a company’s business nature is identified by its business, or if it has no business, by the nature of its objects.
2. The nature of the business of the company or, if the company is not carrying on a business, the nature of its objects. - 3 Verify source ↗
Effect of declaration in certified copy .............................................................................................................................................. 6
The provision refers to the company’s registered office address and registered postal address.
3. The address of the registered office and the registered postal address of the company. - 4 Verify source ↗
Application of Act to existing companies ....................................................................................................................................... 7
This provision refers to the address of the company’s registered records office.
4. The address of the registered records office of the company. - 5 Verify source ↗
Prohibition of large partnerships ....................................................................................................................................................... 7
This provision refers to the company’s principal place of business address in Zambia.
5. The address of the company's principal place of business in Zambia. - 6 Verify source ↗
Application for incorporation ....................................................................................................................................................... 7
The required particulars about the company’s directors and secretary must be the ones section 224 says belong in the register.
6. All such particulars with respect of the persons who at the date of the return are the directors and secretary of the company as are required by section two hundred and twenty-four of this Act to be contained in the register of directors and secretary. - 7 Verify source ↗
The articles of a company ............................................................................................................................................................. 8
This section describes particulars of the company’s total indebtedness for charges covered by section 99.
7. Particulars of the total amount of the indebtedness of the company in respect of all charges to which section ninety-nine of this Act applies. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 203 Companies Act, 1994 (Chapter 388) Zambia Repealed - 8 Verify source ↗
Amendment of articles ................................................................................................................................................................... 8
The provision requires information about certain bodies corporate connected to the company, including names, countries of incorporation, and nature of business.
8. The names, countries of incorporation, and nature of the business of— (a) all bodies corporate related to the company; and (b) all bodies corporate in which the company is beneficially entitled to equity shares conferring the right to exercise more than 25 per cent of the votes exercisable at a general meeting of the body corporate. - 9 Verify source ↗
Statutory declaration as to compliance with the Act .......................................................................................................... 8
A company with share capital must include specified share-capital details in its return.
9. If the company has share capital— (a) the amount of the share capital of the share capital of the company and the number of shares into which it is divided; (b) the number of its authorised shares of each class; (c) the number of its issued shares of each class; (d) the total amount of any unpaid instalments or calls which are due and payable and the number and class of shares concerned; (e) the total amount of any unpaid liability, on shares of each class, which is not yet due for payment; (f) the total number of shares forfeited; and (g) the total amount of share capital for which share warrants are outstanding at the date of the return and of share warrants issued and surrendered respectively since the date of the last return, and the number of shares comprised in each warrant. - 10 Verify source ↗
Certificates of incorporation and of share capital .............................................................................................................. 8
A company’s list must include the names, addresses, share holdings, transfer details, and an index if names are not in alphabetical order.
10. A list— (a) (b) containing the names and addresses of all persons who are registered members of the company and of persons who have ceased to be members since the date of the last return or, in the case of the first return, since the incorporation of the company; stating the number of shares held by each registered member, at the date of the return, specifying shares transferred since the date of the last return (or, in the case of the first return, since the incorporation of the company) by persons who are still members and have ceased to be members respectively and the dates of registration of the transfers; and (c) having annexed thereto an index sufficient to enable the name of any person therein to be easily found, if the names are not arranged in alphabetical order. Fourth Schedule (Sections 124, 126, 127, 131 and 135) Contents of prospectus - 1 Verify source ↗
Short title .................................................................................................................................................................................................... 1
This provision defines “company” and “proposed subsidiary” for this Schedule.
1. In this Schedule, unless the context otherwise requires— "company" includes a company proposed to be formed; "proposed subsidiary", in relation to a company, means a body corporate in which the company proposes to acquire securities and which, by reason of the acquisition or anything to be done in consequence thereof or in connection therewith, will become a subsidiary of the company. - 2 Verify source ↗
Interpretation ............................................................................................................................................................................................. 1
A prospectus must state at its head that a copy has been delivered to the Registrar of Companies for registration, and that the Registrar has not checked the statements or accepted responsibility for them.
2. The prospectus shall state at its head: "A copy of this prospectus has been delivered to the Registrar of Companies for registration. The Registrar has not checked and will not check the accuracy of the statements made and accepts no responsibility therefor or for the financial soundness of the company or the value of the securities concerned." - 3 Verify source ↗
Effect of declaration in certified copy .............................................................................................................................................. 6
Reports in a prospectus for Part B must be made by qualified auditors.
3. The reports set out in a prospectus for purposes of Part B shall be made by a person or persons duly qualified under Part VIII of this Act to be appointed as auditors of the company. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 204 Companies Act, 1994 (Chapter 388) Zambia Repealed - 4 Verify source ↗
Application of Act to existing companies ....................................................................................................................................... 7
If reports for Part B would not otherwise give a true and fair view, the people preparing them must add information and explanations that make the reports true and fair.
4. Where reports prepared for the purposes of Part B would not otherwise give a true and fair view of the matters required to be covered by the reports, the persons charged with the preparation of the reports shall add such information and explanations as well give a true and fair view of those matters. - 5 Verify source ↗
Prohibition of large partnerships ....................................................................................................................................................... 7
If required Part B report information is unavailable for reasons beyond the company’s control, the company must state that fact and explain the reasons.
5. If any of the information required for the purposes of reports for the purposes of Part B is for reasons beyond the power of the company not available, that fact and the reasons therefor shall be stated. Part A – Matters to be specified in prospectus
Part
Part A – Matters to be specified in prospectus
- 7 Verify source ↗
The articles of a company ............................................................................................................................................................. 8
Offers to the public must include a full description of the securities and the terms of the offer; unsecured debentures must be described as “unsecured.”
7. (1) A full description of the securities which the public are being invited to acquire, and of the terms on which they are being invited to acquire them, including— (a) (b) the date prior to the expiration of which applications will not be accepted or treated as binding; the total amount payable for each share or debenture and the amount thereof payable on application and allotment, if securities are being offered for subscription or purchase; and (c) the policy which will be adopted if applications exceed the shares or debentures on offer. (2) Where the securities are unsecured debentures they shall be described as "unsecured". - 8 Verify source ↗
Amendment of articles ................................................................................................................................................................... 8
If an application for permission to deal in the securities has been or is being made, state the stock exchange name; otherwise state that there will be no market for the securities and disposal may be difficult.
8. Whether or not an application has been or is being made to a stock exchange for permission to deal in the securities concerned, and— (a) if so, the name of the stock exchange; or (b) if not, a statement that there will not be a market for the securities and that any holder wishing to dispose of his securities may be unable to do so. - 9 Verify source ↗
Statutory declaration as to compliance with the Act .......................................................................................................... 8
Each person making the invitation, except the company, must state their full name, any former or other names, residential and postal addresses, and business occupation.
9. The full name (including any former or other names), residential and postal addresses and business occupation of each person making the invitation, other than the company. - 10 Verify source ↗
Certificates of incorporation and of share capital .............................................................................................................. 8
This section concerns the company's registered office and postal address.
10. The situation of the company's registered office, and its postal address. - 11 Verify source ↗
Incorporation of the company ................................................................................................................................................... 9
This provision lists the information to be given for each director or proposed director and for the company secretary or proposed secretary.
11. The full name (including any former or other names), residential and postal addresses and business occupation of every director or proposed director and of the secretary or proposed secretary of the company, and particulars of all other directorships held by each director or proposed director. - 12 Verify source ↗
Register of companies .................................................................................................................................................................. 9
Except for a proposed company, the provision concerns the names, addresses, and professional qualifications of the company’s auditors.
12. Other than for a proposed company, the names, addresses and professional qualifications of the company's auditors. - 13 Verify source ↗
Types of company ........................................................................................................................................................................... 9
The provision requires the name and address of any underwriter of the invitation to be stated.
13. The name and address of any underwriter of the invitation. - 14 Verify source ↗
Public companies ............................................................................................................................................................................ 9
The provision refers to the names and addresses of the company's bankers, stockbrokers, and legal practitioners.
14. The names and addresses of the company's bankers, stockbrokers and legal practitioners. - 15 Verify source ↗
*** ....................................................................................................................................................................................................... 10
If an invitation relates to debentures, it must include the trustees’ names and addresses, the date of the resolutions creating the debentures, and brief details of the security, or a statement that the debentures are unsecured.
15. If the invitation relates to debentures, the names and addresses of any trustees for debentureholders, the date of the resolutions creating the debentures, and short particulars of the security therefor or, if the debentures are unsecured, a statement to that effect. - 16 Verify source ↗
Private companies ........................................................................................................................................................................ 10
This provision refers to the company’s business nature, or if it has no business, its principal objects.
16. The nature of the business or businesses of the company or, if the company has no business, its principal objects. - 17 Verify source ↗
Private companies limited by shares .................................................................................................................................... 11
This provision refers to any restrictions on the company’s business that are contained in its articles.
17. The restrictions, if any, upon the business of the company contained in the articles. - 18 Verify source ↗
*** ....................................................................................................................................................................................................... 11
This section is a brief summary of the company's history.
18. A brief summary of the history of the company. - 19 Verify source ↗
Companies limited by guarantee ........................................................................................................................................... 11
The provision requires disclosure of each subsidiary’s name, country of incorporation, and business nature, and also the same details for bodies corporate in which the company holds more than 25% voting rights through equity shares.
19. The names, countries of incorporation, and nature of the businesses of all subsidiaries of the company and of all bodies corporate in which the company is beneficially entitled to equity shares conferring the right to exercise more than 25 per cent of the votes exercisable at a general meeting of the body corporate. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 205 Companies Act, 1994 (Chapter 388) Zambia Repealed - 20 Verify source ↗
Unlimited companies .................................................................................................................................................................. 12
If a company is a subsidiary, it must disclose details about each holding company, and share numbers for any holding company that is also a member.
20. If the company is a subsidiary, the name, country of incorporation and nature of the business of each holding company and, in the case of a holding company that is a member of the company, the number of shares in each class of the company held by the holding company. - 21 Verify source ↗
Contractual effect of indorporation ....................................................................................................................................... 12
This provision lists the name, country of incorporation, and nature of the business of any proposed subsidiary of the company.
21. The name, country of incorporation, and nature of the business of any proposed subsidiary of the company. - 22 Verify source ↗
Capacity and powers of a company ...................................................................................................................................... 12
If a company is proposing to acquire a business, it must provide a full description of the nature of that business.
22. Where the company is proposing to acquire a business, a full description, of the nature of that business. - 23 Verify source ↗
Validity of acts .............................................................................................................................................................................. 12
This provision refers to the situation, area, and tenure of the company’s main business premises, including rent and unexpired lease or concession term where relevant.
23. The situation, area and tenure (including, where appropriate, the rent and unexpired term of any lease or concession) of the main places of business of the company and its subsidiaries and proposed subsidiaries. - 24 Verify source ↗
Notice not presumed .................................................................................................................................................................. 12
This provision refers to a statement about a company’s financial and trading prospects, any related material information, and any material changes since the end of the last completed financial year.
24. A statement as to— (a) the financial and trading prospects of the company together with any material information which may be relevant thereto; and (b) any material changes in the financial or trading position of the company which may have occurred since the end of the last completed financial year of the company. - 25 Verify source ↗
No disclaimer allowed ............................................................................................................................................................... 12
The directors must provide a statement saying whether the company’s working capital is sufficient, or explain how extra working capital will be provided if it is not.
25. A statement by the directors of the company that in their opinion the company's working capital is sufficient or, if not, how it is proposed to provide the additional working capital thought by the directors to be necessary. - 26 Verify source ↗
Companies ceasing to have at least two members ......................................................................................................... 13
This fragment refers to the amount or estimated amount of expenses incidental and preliminary to an invitation, including any stock exchange application expenses.
26. The amount or estimated amount of the expenses incidental and preliminary to the invitation (including the expenses of any application to a stock exchange for permission to deal in the securities Part B – Reports to be set out in prospectus
Part
Part B – Reports to be set out in prospectus
- 51 Verify source ↗
Company may keep branch register ............................................................................................................................................ 23
The provision requires a report on the company’s profits or losses for specified financial periods, and for subsidiaries if the company has any.
51. A report with respect to— (a) the profits or losses of the company in respect of— (i) each of the ten completed financial years immediately proceeding the publication of the prospectus, (or since the incorporation of the company if less than ten years); and (ii) the period from the end of the last financial year to the latest practicable date being a date less than three months before the date of the publication of the prospectus, if the last financial year of the company ended three months or more before the date of the publication of the prospectus; or (b) if the company has subsidiaries-a report as required by paragraph (a) with respect to the profits or losses of the company and of its subsidiaries, so far as such profits or losses can properly be regarded as attributable to the interests of the company. - 52 Verify source ↗
Duties in case of securities registered in branch register ................................................................................................... 24
The provision refers to a report about a company’s assets and liabilities, including a report based on the last financial year or the latest practicable date, and extends to subsidiaries where applicable.
52. A report with respect to— (a) (b) the assets and liabilities of the company as at the end of its last financial year or, if the financial year ended three months or more before the date of publication of the prospectus, as at the latest practicable date, being a date less than three months before the date of publication of the prospectus; or if the company has subsidiaries-a report of the kind required by paragraph (a) with respect to the assets and liabilities of the company, and of its subsidiaries so far as such assets can properly be regarded as attributable to the interests of the company. - 53 Verify source ↗
Branch registers of foreign companies kept in Zambia ........................................................................................................ 24
This provision refers to a report about directors’ aggregate emoluments and any difference from amounts payable under arrangements in force when the prospectus was published.
53. A report with respect to the aggregate emoluments paid by the company to the directors of the company or any related body corporate during the last period for which the accounts have been made up and the amount, if any, by which such emoluments would differ from the amounts payable under any arrangement in force at the date of publication of the prospectus. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 206 Companies Act, 1994 (Chapter 388) Zambia Repealed - 54 Verify source ↗
No notice of trust ............................................................................................................................................................................... 24
The report for a prospectus must cover profits or losses for specified subsidiaries and acquired businesses over stated periods, with a limited exception where clause 51 already covers the period.
54. (1) A report with respect to profits or losses of— (a) each proposed subsidiary of the company; (b) each business acquired by the company within ten years before the date of publication of the prospectus; and (c) each body corporate that became a subsidiary of the company within ten years before the date of publication of the prospectus; in respect of— (i) each of the ten financial years immediately preceding the publication of the prospectus, (or each financial year since the commencement of that business or the incorporation of that subsidiary or proposed subsidiary, if less than ten years); and (ii) if the last financial year of that business, subsidiary or proposed subsidiary ended three months or more before the date of the publication of the prospectus-the period from the end of the last financial year to the latest practicable date, being a date less than three months before the date of the publication of the prospectus. (2) The report shall deal with such of the profits or losses of a subsidiary or proposed subsidiary as can properly be regarded as attributable to the interests of the company. (3) Where the report relates to any financial year before the subsidiary became a subsidiary of the company or relates to a proposed subsidiary, only such of its profits or losses shall be regarded as attributable to the interests of the company as would have been properly so attributable if the company had held the securities in the subsidiary or proposed subsidiary which it holds at the date of publication of the prospectus or proposes to acquire. (4) Where any such subsidiary or proposed subsidiary itself has subsidiaries, the report shall extend to the profits or losses of its subsidiaries so far as the same can properly be regarded as attributable to the interests of the company. (5) The report need not extend to any period in respect of which the profits or losses of that business or the appropriate part of the profits or losses of that subsidiary are dealt with in the report required under clause 51. - 55 Verify source ↗
Register to be evidence .................................................................................................................................................................... 24
The provision requires a report on the assets and liabilities of each proposed subsidiary and each business or subsidiary acquired since the latest accounts date, measured at the relevant year-end or, if needed, at a latest practicable date within three months before the prospectus.
55. (1) A report with respect to the assets and liabilities of each proposed subsidiary of the company and each business or subsidiary acquired since the latest date up to which the accounts of the company have been made, as at the end of the last financial year of the business, subsidiary or proposed subsidiary, or, if the financial year ended three months or more before the date of publication of the prospectus, as at the latest practicable date not being more than three months before the date of publication of the prospectus. By Laws.Africa and contributors. Licensed under CC-BY. Share widely and freely. 207
Provision text is displayed from LexChat’s stored statute record. Use the official source links to verify amendments, commencement, and current legal force.
LexChat organizes source-backed legal information for research. Verify amendments, commencement, and current legal force with the official publisher before relying on it.