Companies Act, 1994

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.

A person who knowingly takes part in carrying on a company’s business for a fraudulent purpose commits an offence.

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.

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.

People who are jointly liable can seek contribution from each other, and the court can set the terms, exempt someone, or order complete indemnity.

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.

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.

Certain certificates and documents from the former Act continue to count under this Act.

Existing companies get deemed articles, must update them by the deadline, and cannot amend them unless consistent with the Act.

Existing public companies get a temporary carve-out from section 15, and some existing companies are deemed to satisfy section 18.

Existing companies may treat certain records kept under the former Act as satisfying this Act’s matching requirements.

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.

Sections 177 to 181 do not apply to directors' reports for financial years of existing companies that began before the Act commenced.

Section 44 does not apply to an existing company until it must lodge its first annual return after the Act starts.

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.

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.

This section says the Act does not override or change special legislation for companies carrying on banking, insurance, or similar business.

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.

The Chief Justice may make court rules for company winding-up and related applications under the Act.

This section repeals the Companies Act.

This section defines key terms used in the regulations.

Section 2 is titled “Share capital and variation of rights.”

Directors may issue company shares, subject to the Act and a resolution, and may attach special rights or restrictions.

Directors must not issue rights or options to shares unless the issue has first been authorised at a general meeting by special resolution.

Preference shares may be issued only with a resolution, and they may be redeemable.

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.

The company may pay brokerage or commission when shares are issued, but the payments must not exceed 10% of the share issue price.

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.

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.

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.

A call is treated as made when the directors pass the resolution authorising it, and it may be payable by instalments.

Joint holders of a share must pay all calls on that share.

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.

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.

Directors may, when shares are issued, treat holders differently about how much is called up and when payment is due.

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.

The company has a lien over certain shares and related dividends, and directors may exempt a share from this rule.

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.

Directors may forfeit shares if a notice under regulation 17 is not complied with and the required payment has not been made.

Directors may sell or otherwise dispose of a forfeited share, and may cancel the forfeiture before any sale or disposition.

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.

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.

A company may accept consideration for a forfeited share, transfer it to the buyer, and must register the transferee once the transfer is executed.

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.

Forfeiture rules apply when a share-related sum payable at a fixed time is not paid.

A member may transfer shares in writing, subject to the regulations and any form approved by the directors.

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.

Directors may refuse to register certain share transfers.

Directors may refuse to register a share transfer if it is not accompanied by the appropriate share certificate.

Directors may suspend registration of transfers, but only for periods they determine and only up to 30 days in total in any year.

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.

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.

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.

A company may, by resolution, convert paid up shares into stock and convert stock back into paid up shares.

Directors may set the minimum amount of stock that can be transferred and may block or limit transfers of fractions of that minimum.

Holders of stock get the same rights and advantages, in proportion to the amount held, as if they held the underlying shares.

Rules that apply to paid up shares also apply to stock, and references to shares and shareholders are read to include stock and stockholders.

A company may, by resolution, change its authorised share capital and share structure in several ways.

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.

A company may reduce its share capital, capital redemption reserve fund, or share premium account by special resolution, subject to the Act.

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.

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.

Business at a general meeting may not proceed unless a quorum of members is present.

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.

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.

The chairman may adjourn a meeting with consent, and must do so if the meeting directs it.

At a general meeting, resolutions are decided by a show of hands unless a poll is properly demanded.

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.

If votes are equal, the chairman of the meeting has a casting vote.

This section is a proxy form for a registered member to appoint someone to vote on their behalf at a general meeting.

A proxy appointment is not valid unless it is deposited with any supporting authority within the required time limits.

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.

The company may set a share qualification for directors by ordinary resolution; otherwise, there is no share qualification.

A director’s office becomes vacant if the director makes any arrangement or composition with creditors generally.

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.

A company may, by resolution, suspend or relax the rules in subsection (7) of section 218, either generally or for a particular transaction.

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.

A directors’ meeting has a quorum of two, unless the company sets a larger number by resolution.

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.

Directors must choose one of their own as chairman of their meetings, and may set the chairman’s term of office.

Directors may delegate their powers to committees, and committees may manage meetings and voting as set out here.

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.

Directors may appoint or remove associate directors and set their powers, duties, and remuneration.

Directors must provide for the safe custody of the seal.

The seal may be used only with directors’ authority, and documents sealed must be signed by a director and countersigned by an authorised person.

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.

A company may declare a dividend only if the directors have recommended one, and the dividend must not exceed the recommended amount.

Directors may authorise the company to pay interim dividends to members if the dividends appear justified by the company’s profits.

The company must not pay interest in respect of any dividend.

A dividend may be paid only out of the company’s profits.

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.

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.

The directors may deduct sums owed to the company from a dividend payable to a member.

If the company declares a dividend, it may direct the directors to pay it partly or wholly with specific assets instead of cash.

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.

A company may capitalise distributable sums and apply them for members’ benefit, but only if the directors have recommended the resolution.

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.

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.

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.

The view must be given in figures and, where necessary, in a narrative report for financial statements.

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.

Items that are not material do not have to be disclosed under this Schedule.

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.

The balance sheet must state specified share capital and convertible share information.

The balance sheet must show the aggregate amounts of reserves and provisions, if material, in separate headings and subheadings.

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.

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.

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.

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.

A company must state when one of its liabilities is secured over its assets, except where the security arises by operation of law.

The section says certain indebtedness amounts must be shown under separate headings.

Assets must be summarised with enough detail to show their general nature and grouped under headings and subheadings that fit the company's business.

Fixed assets, current assets, and assets that are neither fixed nor current must be identified separately.

The method or methods used to arrive at the stated asset amounts must be stated under each heading.

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.

If a company has subsidiaries, it must show certain interests in those subsidiaries separately in its balance sheet.

The text says the amount owed to the company by related bodies corporate must be stated separately for debenture debt and other debt.

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.

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.

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.

A company must disclose certain shareholdings in its balance sheet or an annexure, unless the amount involved is not material.

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.

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.

Certain incorporation and securities-related expenses must be stated under separate subheadings, unless they have been written off.

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.

Matters stated in clause 29 to 35 may be presented in a note or in a statement or report attached to the balance sheet.

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.

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.

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.

The amount of arrears of fixed cumulative dividends on each class of the company's shares, and the period of arrears, must be stated.

The company must state details of encumbrances securing another person’s liabilities and disclose contingent liabilities, including amounts where practicable.

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.

If material assets or liabilities are affected, the basis for converting foreign currencies into Zambian currency must be stated.

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.

Directors’ emoluments must be shown separately in the accounts, using the amounts required by this section.

The provision requires turnover information and related calculation details to be shown.

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.

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.

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.

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.

A balance sheet must include a statement showing where funds came from and how they were used during the financial year.

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.

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.

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.

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.

The consolidated balance sheet and consolidated profit and loss account must combine the information from the holding company and relevant subsidiaries, with necessary adjustments.

The consolidated accounts must comply, as far as practicable, with the Act and Schedule when providing information, subject to clauses 51 and 52.

This section exempts consolidated accounts from having to disclose the remuneration of directors of subsidiary companies.

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.

If group accounts are not prepared as consolidated accounts, they must present equivalent group information as far as practicable.

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.

The reasons for not dealing with subsidiaries, or any of them, in the group accounts must be stated.

The section lists amounts that must be stated about subsidiaries in group accounts, including investments, reserves, outside shareholders’ interests, loans, assets, and goodwill.

A holding company must state its aggregate interest in certain subsidiary profits, losses, reserves, and dividends not dealt with in group accounts.

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.

The provision refers to the company’s registered office address and registered postal address.

This provision refers to the address of the company’s registered records office.

This provision refers to the company’s principal place of business address in Zambia.

The required particulars about the company’s directors and secretary must be the ones section 224 says belong in the register.

This section describes particulars of the company’s total indebtedness for charges covered by section 99.

The provision requires information about certain bodies corporate connected to the company, including names, countries of incorporation, and nature of business.

A company with share capital must include specified share-capital details in its return.

A company’s list must include the names, addresses, share holdings, transfer details, and an index if names are not in alphabetical order.

This provision defines “company” and “proposed subsidiary” for this Schedule.

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.

Reports in a prospectus for Part B must be made by qualified auditors.

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.

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.

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.”

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.

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.

This section concerns the company's registered office and postal address.

This provision lists the information to be given for each director or proposed director and for the company secretary or proposed secretary.

Except for a proposed company, the provision concerns the names, addresses, and professional qualifications of the company’s auditors.

The provision requires the name and address of any underwriter of the invitation to be stated.

The provision refers to the names and addresses of the company's bankers, stockbrokers, and legal practitioners.

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.

This provision refers to the company’s business nature, or if it has no business, its principal objects.

This provision refers to any restrictions on the company’s business that are contained in its articles.

This section is a brief summary of the company's history.

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.

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.

This provision lists the name, country of incorporation, and nature of the business of any proposed subsidiary of the company.

If a company is proposing to acquire a business, it must provide a full description of the nature of that business.

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.

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.

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.

This fragment refers to the amount or estimated amount of expenses incidental and preliminary to an invitation, including any stock exchange application expenses.

The provision requires a report on the company’s profits or losses for specified financial periods, and for subsidiaries if the company has any.

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.

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.

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.

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.