Companies Act, 2017

This section gives the Act its short title and says it starts on a date the Minister appoints by Statutory Instrument.

This section says the Act also applies to a body corporate and to an existing company incorporated under the repealed Act, treating that company as if it were incorporated under this Act.

This section defines many terms used in the Act, including Agency, accounts, accountant, beneficial owner, company, foreign company, local director, and shareholder.

Words and expressions used in this Act that are not defined here take the meaning given in certain other Acts, unless the context requires otherwise.

If this Act conflicts with another written law, this Act prevails to the extent of the conflict.

A company incorporated under this Act must be either a public company or a private company.

A public company must have share capital, its articles must state share-class terms and directors’ authority over series, and transfer restrictions on shares are tightly limited.

A private company’s articles must limit membership to 50 or fewer; an unlimited company’s articles may allow more than 50 members if specified conditions are met.

The articles of a private company limited by shares must set out share rights and related conditions, and may authorize directors to तय? determine series details. If the company is wound up, a member may have to contribute unpaid amounts on shares held.

Subscribers for a company limited by guarantee must sign a guarantee declaration, become members on incorporation, and the company must file membership changes with the Registrar within 7 days. The company must not carry on business for profit, and non-compliance can lead to an offence and daily fines.

A private unlimited company must have share capital, and its articles must set out share-class rights and director authority over share series. Members may be liable to contribute without limitation if the company is wound up.

This section says how people may apply to incorporate a company, what must go with the application, who must sign it, and who cannot subscribe or apply for certain purposes.

An incorporation application must be accompanied by a declaration of compliance, and the declaration must be made in the prescribed form and manner by an eligible legal practitioner or by the named first director or secretary.

If an applicant meets the Act’s requirements, the Registrar must register the company within five days and issue the required incorporation and share-capital certificates, then assign a registration number.

A certificate of incorporation issued under section 14 is conclusive evidence that the company has met the Act’s incorporation requirements and is incorporated from the date shown in the certificate.

A company registered under the Act gets separate legal status and continues as a corporation until it is removed from the Register of Companies.

Incorporation of a company has the same effect as a contract under seal between the company and its members, subject to the Act.

A registered company must display its certificate of incorporation in a prominent place at its business premises.

The Registrar must reject an incorporation application if the applicant does not meet the Act’s requirements or gives false information.

Rules on who is bound by pre-incorporation contracts, when a company may adopt them, and when a court may adjust liability.

The Registrar must keep company and beneficial ownership registers, and companies must report certain ownership/shareholding changes within 14 days.

A company has perpetual succession, a common seal, and the capacity and powers described in this section, including acting like an individual in law and operating outside Zambia where permitted.

In good faith, a person dealing with the company or acquiring rights from it must not be prejudiced for certain company-compliance or director-authority defects, and a company document signed by an authorised director, nominee, or chief executive officer is valid unless the other party knew or should have known the relevant facts.

A person must not be treated as having notice of a company document’s contents just because the document is registered, lodged with the Registrar, or available for inspection at the company’s office.

A company must have articles of association, and those articles must regulate the company’s conduct.

The articles of association operate as a contract between the company and each member, and among the members.

A company may amend its articles by special resolution, but must lodge the resolution and affected amended paragraphs with the Registrar within 21 days. The amended articles take effect when lodged, unless the resolution sets a later date. Failure to comply is an offence punishable by a fine.

A company must keep a registered office in Zambia and notify the Registrar within 14 days if it changes that office.

A company must display its name at specified office entrances and state its name on business documents and instruments in prescribed lettering.

Companies must keep specified records at their registered office.

A company must keep a register of its directors and secretaries, record specified details for each, and directors or secretaries must provide needed information when appointed or employed.

A company must have a common seal, and only specified persons may authenticate its use. A seal cannot be used except as allowed by the articles and the Act.

A company may keep a common seal for use outside Zambia and may authorise an agent or attorney to use it or execute deeds abroad, subject to the company’s articles and written authorisation.

A document may be served on a company by delivery to its registered office, personal service on a director or secretary, or—if that is not possible—by registered mail or email.

A company may serve documents on specified people by personal delivery, registered post, leaving them at the address with an adult, or in some cases by electronic means.

Public limited companies must end their names with “Public Limited Company” or “PLC”, and private limited companies must end their names with “Limited” or “Ltd” (subject to this Part).

The Registrar may approve omission of “limited” from the name of a company limited by guarantee, and must register the name without it and issue the appropriate certificate once approval is granted.

The Registrar may revoke an approval to omit or dispense with “Limited” from a company limited by guarantee’s name if the applicant’s reasons are no longer valid.

A person intending to incorporate a company may apply to the Registrar for clearance and approval of a proposed name. If the name does not contravene section 40, the Registrar may approve it and must notify the applicant in writing.

The Registrar may reject a proposed company name application on listed grounds, and must notify the applicant with reasons within seven days if it is refused.

People who plan to form a company may apply to reserve a proposed company name; if the Registrar approves it, the name is reserved for 90 days and the applicant may incorporate under that name.

A company changing its name must notify the Registrar within 21 days after the resolution, and if the new name is accepted it must file the incorporation certificate and resolution within 21 days after notice.

If a company name breaches section 40, the Registrar may order the company to change its name.

A company cannot have a contract or legal obligation treated as void just because its name is misspelled on the document.

If a company’s name is wrongly stated in a document showing a legal obligation, the person who issues or signs it can be liable like the company, unless an exception applies.

If a company changes its name, it must publish a Gazette notice with the new name, the change date, and the former name(s).

A company’s change of name does not affect its rights or obligations or invalidate legal proceedings, and it takes effect on the date stated in the replacement certificate of incorporation.

A private company limited by shares may convert into a company limited by guarantee if it meets the stated member-consent, share, resolution, and guarantee requirements.

A private company limited by shares may be converted into an unlimited company if all members agree in writing and other stated conditions are met.

A company limited by guarantee may convert into a company limited by shares or an unlimited company if the members give written consent, each member agrees in writing to take up shares, and the members pass a special resolution to amend the articles.

An unlimited company may convert to a limited company if the members agree in writing and pass the required special resolution; extra steps apply for conversion to a guarantee company or for changes to share capital.

A public company may convert into a private company limited by shares if the stated approval and amendment steps are completed.

A private company limited by shares may be converted into a public company if the stated steps are met.

A company converting under the relevant sections must file a notice and required documents with the Registrar within 21 days; the Registrar then issues a replacement certificate.

The Registrar must notify a private company of a proposed penalty, and the company must show cause within 30 days. If remedial measures are taken to the Registrar’s satisfaction, no penalty is imposed; otherwise, the Registrar may impose a penalty of up to 300 penalty units per day of continued non-compliance.

This section defines “meeting” for the Part and says certain meetings may be held by teleconferencing or other electronic means.

Companies must hold an annual general meeting within 90 days after each financial year ends.

An annual general meeting must include consideration of specified company matters, including financial statements, dividends, reports, director elections, director pay, and auditor appointment and pay.

An extraordinary general meeting may be convened under this Act, by the board of directors when it considers it necessary, or by another person if the articles allow.

A class meeting may be convened by the board of directors, or by two or more members of that class holding at least 5% of the voting rights, unless the articles say otherwise.

Members can requisition a general meeting, but only if the statutory conditions are met; the board must then convene the meeting, and the company must refund reasonable expenses.

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

This section sets the minimum notice periods for company meetings and allows full notice to be deemed given if the required members agree.

If it is impracticable to hold a company meeting under the Act and articles, the Court may order the meeting and give directions.

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

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

This section sets voting rights for members, bars non-members from voting, sets a quorum rule, and lets a meeting choose a chairperson and manage its business unless the articles or the Act say otherwise.

A statement by the chairperson and secretary that a motion or resolution passed by a specified majority is conclusive evidence that it passed, unless a poll was demanded or the articles say otherwise.

Members with voting rights may demand a poll at a company meeting, except for the election of the chairperson or an adjournment.

The company’s articles must not require a member with more than one vote on a poll to cast all votes the same way, if the member chooses to do so.

Rules on appointing proxies for company meetings, including writing requirements, notice wording, voting limits for director-proxies, and offences for non-compliance.

A corporate or association member may appoint a representative to act at a company meeting, and that representative may exercise the member’s powers.

A qualifying member may ask the company to circulate a resolution notice and statement at the company’s expense.

A company must circulate a member’s written statement, up to 1,000 words, if the member is entitled to attend and vote and the request meets the timing and payment conditions.

A company may refuse to circulate certain member resolutions or statements if it is satisfied they are being abused to publicize defamatory matter.

References to certain resolutions in articles, debentures, or debenture trust deeds mean the same thing as defined in the Act, with necessary modifications.

Members of a private company may pass written resolutions without holding a meeting, if they follow this section.

A company must lodge a certified copy of a special resolution with the Registrar within 21 days, and related articles must include the resolution copy.

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

A company must keep minutes of specified meetings in books kept for that purpose.

Company books covered by section 80(1) must be kept at the company’s registered records office and be open to inspection by listed persons and the Registrar (or a delegate).

A company must appoint a company secretary, and the board must fill any vacancy within 60 days. Certain eligibility rules apply, with an exception for small private companies.

A company secretary must guide directors, report relevant matters to the board, keep minutes and registers properly, maintain beneficial ownership information, ensure document-lodging compliance, and report failures to the board.

A body corporate may be appointed as company secretary.

Section 85 requires companies to appoint directors, sets minimum board sizes, and penalizes false claims that someone is a director.

The board of directors may manage the company’s business and exercise specified company powers, and two directors must sign certain negotiable instruments unless the board तयines otherwise.

The board of directors must not do certain major transactions without members’ approval by ordinary resolution.

The board of directors may delegate some of its powers to a director or committee of directors, subject to the articles.

The board of directors may form board committees and appoint directors to them, unless the articles say otherwise.

A company that operates for more than 90 days with fewer than the required number of directors commits an offence, and each officer is also liable.

Companies must keep at least half of their directors resident in Zambia, unless the Minister permits a lower 30% threshold for certain mining-related companies.

A company must appoint a natural person as director, and a person cannot be appointed if disqualified by the listed conditions.

The Court may stop a person from being appointed as a director for up to five years, and a disqualified person must not act as a director in another company during the disqualification period.

A person cannot be appointed as a director or secretary unless they first give consent in the prescribed form and declare they are not disqualified by the Act.

A person named as a director in an incorporation application or amalgamation proposal becomes a director on the incorporation or amalgamation date and stays in office until they stop holding office under the Act.

A shareholder or creditor may apply to the Court to appoint a director, and the Court may appoint one if there are no directors, the board is below the required minimum or quorum, and appointment under the articles is not possible or practicable.

Section 97 lets a director appoint an alternate director with board approval, but the appointment must be in writing and there are limits on the alternate director’s powers, shares, and remuneration.

A company may remove a director by ordinary resolution at a general meeting. A member must give the company secretary at least 28 days’ notice before moving the resolution, and the director has response rights.

A director’s office becomes vacant on resignation, removal, disqualification, or death. A director may resign by written notice to the company secretary, and the company may fill a casual vacancy before the term ends. The outgoing director remains liable for five years for acts done while in office.

A company must file a prescribed notice with the Registrar when there is a change in its directors or a director’s particulars.

A company must lodge the required notice with the Registrar within 21 days of certain director changes or when it first becomes aware of other changes.

A company may appoint an executive director, set the terms, and revoke the appointment subject to the articles and any agreement.

A requirement or authorisation to act by a director and company secretary is not satisfied if the same person does both roles.

This section limits loans, guarantees, and security given by certain companies to directors, related companies, and some companies linked to directors, subject to stated exceptions.

Directors must not act, or let the company act, in a way that contravenes the Act or the articles.

Directors must manage company risks, not cause serious-loss risks, and act in good faith with the care, diligence, and skill reasonably expected of a director.

A director must follow the Act and the articles, use powers for their proper purpose, promote the company’s success, exercise independent judgment, and disclose remuneration information in the company’s financial statements.

Directors must avoid situations where they have, or may have, interests that conflict with the company’s interests.

A director is treated as having an interest in a company transaction if specified personal, financial, or family connections exist, but not in the stated security/guarantee situations.

A director must not accept a third-party benefit given because of their role or actions as director, unless the situation does not create a conflict of interest.

A director with an interest in a company transaction must disclose it, enter it in the interests register, and not vote on that matter.

A company may avoid a transaction involving a director’s known interest within 6 months after disclosure to all shareholders, unless the company received fair value.

Avoiding a transaction does not affect a person’s title to or interest in property in the stated bona fide purchase situations.

Directors must not disclose or use certain company information unless subsection (2) or the articles allow it; they must also tell the company about any benefit they get from using that information.

Directors who have an interest in company shares must disclose it to the board and ensure the details are entered in the interests register.

A director may buy or sell company or subsidiary shares or debentures only if the consideration is at fair value and the director has material information that would not otherwise be available.

If a director deals in shares or debentures in breach of section 115, the director is liable for the amount paid above fair value.

A company dealing in shares on the capital market is not subject to the restrictions in sections 115 and 116 about directors disposing of shares.

The board of directors must propose directors’ remuneration, and the members must approve it by ordinary resolution.

Members may approve certain payments or other distributions to directors by special resolution, but only if there are reasonable grounds to believe the company will still satisfy the solvency test after the distribution.

If a director wilfully breaches a duty or responsibility under the Act, the director must compensate the company and account for any profit made; the company may also remove the director and rescind a related contract or transaction.

A company officer’s decision is treated as valid if disclosure requirements are met and the officer acts in good faith, for a proper purpose, without personal interest, with the company informed, and with a reasonable belief that the decision is in the company’s best interests.

If a company determines an officer’s decision was valid, the officer must be indemnified; if it was not valid, the officer is personally liable for resulting obligations or liabilities.

People listed as shareholders for someone else must disclose the beneficial owner to the company, and companies must record and file updated declarations. Certain failures are offences.

The Registrar must ensure beneficial ownership of shares is known, checked, and verified before shares are registered or traded.

A shareholder is generally not liable for company obligations just because they are a shareholder, but liability to the company remains for specified items.

A former shareholder can still be liable for unpaid share amounts or liabilities under the articles until they are fully paid or discharged.

If a person stops being a company shareholder before shareholder liability becomes unlimited, and does not later become a shareholder again, that person remains liable to the company as if the liability had stayed limited.

A shareholder is not bound by an amendment of the articles if it would require more shares or increase liability, unless the shareholder agrees in writing.

A personal representative registered as holder of a share in a deceased person's estate cannot be liable for more than the amount available from the estate after prior claims are paid.

An assignee’s liability for a bankrupt’s share is capped at the proportional amount available from the bankrupt estate after prior claims are satisfied.

Shareholders must exercise reserved shareholder powers at a shareholders’ meeting or, instead of a meeting, by a section 77 resolution, unless the articles or the Act say otherwise.

A transferee company may compel acquisition of minority shares if the section’s conditions are met and the required notices and time limits are followed.

A transferee company must notify remaining shareholders within 30 days after a qualifying takeover transfer, and shareholders may then require the company to buy their shares within 90 days of notice.

A member may apply to court for orders if company conduct, directors’ powers, acts/omissions, or member resolutions are oppressive or likely oppressive.

For this Act, one or more interest groups may exist for an action or proposal, and shareholders in the same class may be divided into multiple interest groups in some cases.

A company must not take action that affects rights attached to shares unless approved by a special resolution of each interest group.

A shareholder may require a company to buy the shares in the circumstances listed in this section.

A shareholder may sue the company or a director for breach of duty or an illegal act, but not to recover losses from a fall in share value based only on the company’s loss or forgone gain.

Most companies must have share capital as prescribed; companies limited by guarantee must have a guaranteed amount.

A company may alter its share capital by special resolution unless its articles say otherwise, and must file notice and the resolution with the Registrar within 30 days after the alteration.

A company share is personal property and gives the holder voting and dividend rights, subject to limits in subsection (3).

A company may issue different classes of shares, and those shares may be redeemable or carry special rights, including preferential distributions, limited or conditional voting rights, or no voting rights.

This section says when changes count as a variation of class rights, when class rights may be varied, and what notices, filings, and penalties apply.

A company must first offer certain new shares to existing shareholders on terms that preserve their voting or distribution rights.

A company that issues shares at a premium must transfer the premium amount to a share premium account, and the account may be used only for the listed purposes.

A company limited by shares must issue shares to eligible people after incorporation, and to entitled persons after an amalgamation takes effect.

The board of directors may issue shares to any person in any number it considers appropriate, subject to the Act and the company’s articles.

A shareholder may forfeit or surrender shares to the company under the articles, and a member who fails to pay a call on shares may forfeit the shares subject to the articles. The Registrar must register a forfeiture or surrender lodged in the prescribed form.

The board of directors may allot shares only if the shareholders pass a special resolution. The company must file a prescribed notice with the Registrar within 10 days after the allotment, together with the special resolution. If the company does not comply, each officer commits an offence.

A company may reduce its share capital only if authorised, approved by special resolution, and confirmed by the Court, with notices to the public, the Court, and the Registrar. Creditors may object, and solvency requirements apply.

The Court may confirm a reduction of share capital if every creditor who can object has consented, or their debt or claim has been discharged, determined, or secured.

A shareholder generally does not have to pay or provide consideration for shares unless the company’s articles specify it or the shareholder is bound by a relevant contract.

Before issuing shares, the board must set the consideration and terms, and sometimes determine and justify a fair cash value. Directors who approve the required resolutions must sign declarations, and the board must file copies with the Registrar within 10 days.

Section 152 does not apply to certain share issues, consolidations, divisions, and sub-divisions done proportionately.

Before issuing convertible securities or options, the board must तयermine consideration and issue terms, and certain directors must sign declarations and file them with the Registrar within 10 days.

The board of directors must not issue new shares that increase a shareholder’s liability without that shareholder’s consent.

A share is treated as issued when the holder’s name is entered in the company’s share register.

The board may authorise dividend distributions if the solvency test will be satisfied immediately after the distribution, and directors who vote for the distribution must sign a declaration.

A company must not pay dividends to shareholders unless they come from profits arising or accumulated from the company’s business.

The board of directors may issue shares to shareholders instead of a proposed dividend, if the listed conditions are met.

A company may recover unlawful dividend distributions, and directors may be personally liable to repay amounts the company cannot recover from shareholders.

This section says certain reductions of a shareholder’s liability must be treated as a dividend or distribution, including in share alterations, share acquisitions, redemptions, and amalgamations.

A qualifying company may buy its own fully paid-up shares by special resolution, but directors must file a notice and solvency declaration within 14 days, and breaches can lead to offences and penalties.

A company may buy or acquire its own shares if its articles expressly allow it and section 162 is satisfied.

The board may make an offer to acquire shares only if the required resolution conditions are met, and directors who vote for that resolution must sign a declaration.

The board may make a share-acquisition offer only if it resolves that the deal benefits remaining shareholders and is fair and reasonable, and it must send each shareholder a compliant disclosure document first.

A disclosure document must set out the offer terms, relevant shareholder names if applicable, any director interest in the share, the required resolution text, and enough explanation for shareholders to understand the proposed share acquisition.

The board may make a share purchase offer on a securities exchange only if it has passed the required resolution and the stated fairness and disclosure conditions are met.

A disclosure document for a proposed share acquisition must include specified details about the shares, the offer, directors’ interests, the section 168 resolution, and any extra information needed for shareholders to understand the proposal.

The board may buy shares on a securities exchange without prior notice to shareholders if specified approval and fairness conditions are met, the purchase stays within a five percent cap, and later notices are sent to exchanges and shareholders.

Shares acquired by a company otherwise than in accordance with the Act are treated as cancelled immediately.

A contract for a company to buy its own shares is specifically enforceable unless doing so would make the company fail the solvency test.

A company may hold its own shares if its articles allow it, the board resolves not to cancel the shares, and the total held stays within the five percent limit.

A company must hold certain acquired shares in itself, and the board of directors may cancel such a share by resolution.

A company that holds a share in itself cannot exercise the rights attached to that share while it holds it.

A company’s transfer of a share it holds in itself is treated as if it were an issue of the share, and section 189 applies.

A share is redeemable if the articles or issue terms allow redemption, including at the company’s or holder’s option or on a stated date.

A company may redeem shares only if the section’s shareholder, board, and solvency conditions are met.

A company may redeem shares only if the board approves the redemption, the grounds are fully stated, the required declaration is signed, the shareholder disclosure is sent, and the timing rule is met.

A disclosure document for section 177 must describe the redemption terms, list specified shareholders if the redemption option applies to them, and include the section 177 resolution text plus enough explanation for a reasonable shareholder to understand the proposed redemption.

Redeemed shares are treated as cancelled immediately, and the rights attached to a cancelled share expire; the share may then be reissued under this Part.

If a share is redeemable at the shareholder’s option and the holder gives proper prescribed notice, the company may redeem it.

If a share is redeemable on a specified date, the company must redeem it on that date, the share is treated as cancelled, and the former shareholder becomes an unsecured creditor for the redemption consideration.

Companies are generally forbidden to give financial assistance for buying their shares, and public companies have an added net-assets restriction when allowed assistance is given.

A private company may give financial assistance for share acquisition only if section 184’s approval and timing conditions are met.

This section defines when one company controls another company’s board and how to treat certain shares or powers when making that assessment.

A subsidiary generally must not hold shares in its holding company.

On a shareholder’s request, the board of directors must issue a statement about the shareholder’s shares and related rights, unless one of the listed exceptions applies.

This section sets the process for transferring fully paid-up shares and requires registration and notice steps.

Shares are generally transferable, but only if fully paid up and transferred according to section 187, and the board must refuse transfers to minors, persons of unsound mind, and undischarged bankrupts.

Shares can pass by operation of law, and the company must recognise the correct successor on a shareholder’s death.

A company must accept legally sufficient proof that a share has passed by operation of law, and the new owner must notify the Registrar within 14 days.

A company must not claim a lien on shares if there is no unpaid liability on those shares, and any lien cannot extend to other sums due from a shareholder except for the unpaid liability on the shares.

The board may create and issue share rights or options for directors, officers, employees, or subsidiary staff, and the holder can acquire shares under the terms set by the board.

A company may reduce paid-up capital by special resolution and must file a return with the Registrar within 21 days; the Registrar must not register the reduction unless tax laws have been complied with.

A company must keep a share and beneficial ownership register and record specified shareholding and transfer details; an agent may keep the register for the company.

A company may split its share and beneficial ownership register into multiple registers if its articles allow it, but the principal register must stay at the registered office and related notices and copies must be kept up to date.

A registered holder of a share in a company is entitled to vote, exercise other rights and powers attached to the share, and receive notices and distributions for the share.

The board of directors must take reasonable steps to keep the share and beneficial ownership register properly maintained and updated.