Companies Act, 2017

If a company’s share and beneficial ownership register has an error, the company should correct it within a reasonable time after being told. If it does not, or the error causes loss, an aggrieved person or shareholder may apply to the Court for rectification, compensation, or both.

A notice of a trust must be entered in the share and beneficial ownership register and lodged with the Registrar, subject to section 189.

A personal representative may be registered as the holder of a share in specified circumstances.

An assignee of a bankrupt’s property may be registered as the holder of the bankrupt’s share; for a beneficially entitled share in a company, this applies with the company’s and registered holder’s consent.

Companies must send share certificates within 21 days in the stated cases, and directors commit an offence if the company fails to comply.

A company’s debenture or deed securing it is not invalid just because it says the debenture is irredeemable or redeemable only on a contingency or after a period.

A company that has redeemed its debentures may re-issue them or issue replacement debentures, unless a contract, the articles, or a cancellation decision says otherwise.

The Court may order specific performance for a company debenture subscription contract, and it must not refuse just because the contract is treated as a loan to lend money.

The Registrar must change shareholding in a regulated company when notified by a regulator and after the company pays prescribed fees; the Registrar must not register a share transfer that would break any other written law.

If a company offers shares or debentures to the public by invitation, the invitation and the allotment can be treated as made by the company in law.

The first publication date of a prospectus is the date it is registered, unless subsection (2) applies and the prospectus must instead be advertised in a newspaper.

A person must not invite the public to buy shares, debentures, or equity shares in a company unless the stated company and share conditions are met; breaches can lead to compensation claims and criminal penalties.

A person may invite the public to buy shares or debentures of a public company only if a compliant prospectus is registered by the Registrar within six months before the invitation, copies are given to recipients, and the copies show registration details.

A prospectus lodged with the Registrar must not include false or misleading statements and must include the information readers would reasonably expect for a purchase decision.

A prospectus with an expert statement must be accompanied by the expert’s written consent; if consent is withdrawn, the expert must notify the Registrar and the issuer must stop issuing the prospectus.

The Registrar may register a prospectus only if the lodged copy complies with this section, and the prospectus must be properly signed and include required attachments and statements.

A company must not accept or keep debenture subscriptions above the amount stated in the prospectus unless the prospectus expressly allows over-subscriptions and sets a specific monetary limit.

If a prospectus refers to possible exchange listing, share or debenture allotment is restricted unless the listed-application conditions are met; otherwise the company must repay applicants and keep the money separate.

If a prospectus contains false, misleading, or incomplete information, specified people may have to compensate purchasers for resulting loss.

A person who authorises a misleading prospectus, advertisement, or circular for a public share or debenture invitation commits an offence and can be fined or imprisoned.

The Registrar may ask the Court for orders if a registered prospectus is false, misleading, materially non-compliant, or omits a material fact; the Court may then cancel registration and make related orders.

A company or its promoters cannot enforce certain share or debenture acquisition agreements made before the waiting period ends, unless it is a bona fide underwriting agreement.

An application for shares or debentures made after a public invitation cannot be withdrawn for seven days after the waiting period ends, unless a prospectus-responsible person gives a limiting notice to the public first.

Shares offered to the public cannot be allotted unless the minimum subscription is met and application money is received; later clauses set payment, repayment, director liability, notice, and timing rules.

A company that does not issue a prospectus when forming itself must not allot shares or debentures unless it lodges a statement in lieu of a prospectus with the Registrar at least three days before the first allotment.

A condition is void if it requires a person to waive compliance with this Part or treats them as having notice of a contract, document, or other matter not specifically mentioned in a prospectus, advertisement, or circular.

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

A company must deliver debentures or a debenture stock certificate to the registered holder within 60 days, endorse any transfer restriction on the instrument, and may be fined if it fails to comply.

A company cannot indemnify or compensate certain assignees for liability tied to breach of trust or lack of due care, and the court can remove an assignee or require security for costs in some cases.

Some people cannot be appointed or act as assignee for debenture holders, and violating this rule is an offence.

A debenture holder can request a copy of the trust deed, and the company must provide it within 7 days after payment of 100 fee units (or less if the company requires).

A company must not issue an unsecured debenture, debenture stock certificate, or related prospectus unless the document states “unsecured debenture” or another stated term.

A company that issues or has issued debentures must keep a register of debenture holders.

A registered debenture holder is entitled to votes in proportion to the value of the debentures held, unless the trust deed says otherwise.

The Court may order a meeting of debenture holders and give directions about how it is held, and registered debenture holders have votes in proportion to the value of debentures held unless the debenture says otherwise.

A company must not re-issue a redeemed debenture or issue a replacement debenture on the condition that it has the same priority as the redeemed debenture.

A charge securing an indeterminate or fluctuating amount is not treated as redeemed just because the current account is no longer in debit or no amount is currently due.

Companies with property subject to a charge must keep a register of charges and record specified details when a charge is created or charged property is acquired.

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

A company that creates or acquires property subject to a charge covered by this section must lodge specified particulars and supporting instrument documents with the Registrar within 21 days.

If the required charge documents are lodged on time, the Registrar must issue a certificate of registration within 14 days.

This section sets priority rules for registered charges and says an implied or express consent can affect priority as provided by the Movable Property (Security Interest) Act, 2016.

A creditor must lodge a discharge to release property once the debt has been satisfied in whole or in part.

If a registered charge is varied, the variation details must be lodged with the Registrar in the prescribed form within 21 days, unless it is a satisfaction or release under section 241.

A mortgagee who takes possession of company property must file a prescribed notice with the Registrar within 7 days; if the mortgagee later leaves possession, a similar notice must be filed within 14 days.

A company must endorse a debenture or debenture stock certificate with a registration statement and the registration date when the debt is secured by a registered charge; failure is an offence, and false endorsement or delivery of a knowingly false endorsed document is also an offence.

The Registrar must accept late documents for registration in some cases, may extend lodgement time, and may reduce or waive a prescribed fee if the failure was only due to administrative oversight and no one was likely prejudiced.

The board of directors must ensure accounting records are kept, including required transaction, asset, liability, and relevant goods/services records, and the records must be in writing and in English.

A company must keep its accounting records at its registered office.

A company must keep its accounting records available for inspection at its registered office, at all reasonable times, without charge.

A company’s annual financial statements must state amounts paid or receivable for directors’ emoluments and compensation for loss of office.

A company’s annual financial statements must disclose particulars of relevant loans and certain loan amounts; if the company does not comply, the auditors must include those particulars in their report as far as they reasonably can.

Current or recent company directors and officers must give the company information it requests for sections 249 and 250, or face an offence and a fine.

A company’s statement of financial position must be signed by at least two directors, or by the sole director if there is only one.

A company must appoint an auditor within 3 months of incorporation, usually by ordinary resolution. The company may remove the auditor by ordinary resolution, but the auditor must be paid for work done. If the company misses the auditor-appointment deadline after a financial year, each director commits an offence and may be fined up to 100,000 penalty units. Small private companies are excluded.

An auditing firm may be appointed as a company’s auditor if it meets the listed residency, qualification, debt, and relationship conditions.

An auditor’s report must be signed by a qualified partner of the appointed audit firm.

A person may not be appointed as a company auditor unless qualified and registered to practise as an auditor by the relevant body in Zambia.

A company may reappoint an auditor at its annual general meeting by ordinary resolution, but not if the auditor has said they do not want to be reappointed, and continuous reappointment is limited to six years.

An auditor of a company must not let any relationship or interest in the company or a related company impair the auditor’s judgement.

Auditors must prepare and present an audit report at the annual general meeting, include required auditing-standard information, report certain relationships or governance breaches, and issue a management letter within 90 days after signing the audit report.

The board of directors or an officer must make sure the company’s auditor can access the company’s information, explanations, accounting records, and other documents.

The board of directors must make sure the company auditor attends the annual general meeting, is heard on matters concerning the auditor, and receives AGM notices and communications that members are entitled to receive.

A company’s auditor must submit the audit report to the board and keep a copy for debenture holders or their assignees.

A small private company does not have to appoint an auditor.

A small private company must appoint an auditor if a qualifying notice is given to its board before the annual meeting deadline.

The board must arrange an audit within 3 months after the financial year ends, and a public company must file its audited financial statement with the Registrar within 30 days after shareholder adoption.

A company’s financial statements must comply with standards set by Zambia’s accountancy regulator.

A company with subsidiaries must prepare consolidated financial statements within six months after its financial year ends.

If a company becomes a subsidiary during the accounting period, the group’s consolidated statement must cover only the part of the period when it was a subsidiary.

If a subsidiary’s financial statement date is different from the holding company’s date, the group financial statements must include either the subsidiary’s statements for the matching accounting period or interim statements for the same period as the company.

Companies must file an annual return with the Registrar within 90 days after each financial year ends.

If a company is in receivership or being wound up, the receiver or liquidator must keep filing annual returns until that process is completed.

If a company’s status has not changed during the financial year, it must file a prescribed “no change” return. The Registrar may inspect company records even if such a return is filed.

A public company must lodge specified certified documents with the Registrar together with its annual return.

If a company chooses a date different from the one recognised for its financial year, it must notify the Registrar.

The board of directors must prepare an annual report on the company’s affairs for the accounting period, subject to section 277.

The board of directors must send every shareholder a copy of the annual report at least 21 days before the annual general meeting date.

A company’s annual report must be written, dated, signed, and must include the listed financial, ownership, governance, remuneration, donation, and fee information.

A company must let certain people inspect the records listed in section 279 if the Registrar or a member suspects non-compliance by directors or executive officers.

This section says which records must be available for inspection for the purposes of section 278.

Documents to be inspected must be available during business hours at the place where the company keeps its records.

This section defines an inspection period and allows a member, or someone the member authorizes in writing, to request a copy or extract of an inspectable document if they make a written request and pay a fee.

Two or more companies may amalgamate and continue as one company or as a new entity formed under the Act.

A person making an amalgamation proposal must set out the amalgamation terms.

The board of each company proposed for amalgamation must resolve that the amalgamation is in the company’s best interest and that the amalgamated company will satisfy the solvency test immediately after the amalgamation.

Before an amalgamation takes effect, the board of directors of each company being amalgamated must send each shareholder the listed amalgamation documents and information.

Before an amalgamation takes effect, each amalgamating company’s board must send the proposal to secured creditors and give public notice.

A proposal to amalgamate must be approved by special resolution of the shareholders of each amalgamating company.

The board of directors of each company being amalgamated must give written notice of the proposed amalgamation to every creditor at least 30 days before it is due to take effect.

To effect an amalgamation, specified documents must be lodged with the Registrar.

After receiving the documents in section 289, the Registrar must issue the relevant certificate and, for a new amalgamated company, enter its particulars on the Register and issue a certificate of incorporation.

The Registrar must, where appropriate, remove amalgamated companies’ names from the Register and keep only the amalgamated company’s name.

The amalgamated company gets the property, rights, powers, and privileges of each amalgamated company that has been removed from the Register.

An amalgamated company remains liable for the liabilities and obligations of the companies that merged, and pending proceedings continue against or by it.

A court decision for or against a company can be enforced by or against the amalgamated company.

A shareholder, debenture holder, creditor, or other interested person may object to an amalgamation before the Court.

A provision in an amalgamation proposal about converting shares and shareholders’ rights takes effect according to the terms of the amalgamation.

This Part applies to an existing foreign company as though it had been duly registered under this Act, and certain documents already lodged or registered under the repealed Act are treated as lodged or registered under this Act.

The Registrar must maintain a Register of Foreign Companies.

A foreign body corporate may register in Zambia by filing an application with the Registrar and the required supporting documents.

A foreign company is treated as having an established place of business in Zambia if it has certain listed places there, but some agent, broker, commission-agent, and subsidiary offices do not count for that purpose.

A foreign company may change its accounting date by filing a notice with the Registrar, but the change must not make the financial year longer than 15 months.

A foreign company must file notice of certain alterations with the Registrar within the stated time limits, and must include consent if the filing names a documentary agent, local director, or manager.

A company must notify the Registrar before reducing local directors in some cases, and it must not appoint an unqualified person as a local director.

Foreign companies must identify their local director in certain business documents, keep a register of local directors, and the Registrar may exempt a company from the document-identification rule in special circumstances.

A document may be served on a foreign company in several specified ways, and certain postal service is treated as valid service if delivery to the registered postal address is proved.

A foreign company must file annual accounts and an auditors’ report with the Registrar within nine months after each financial year end, and must appoint auditors.

Foreign companies must keep accounting records that are accurate, auditable, retained for 10 years, and made available for inspection; the Registrar may approve another language or grant exemptions.

This section sets how a foreign company’s name is used in Zambia and gives the Registrar power to require a name change.

A foreign company’s name is treated as including “incorporated in [country]” and, if members’ liability is limited, “with limited liability,” except for business correspondence sent outside Zambia.

Section 238 applies to a foreign company, with the listed references read as adapted for that company.

A foreign company must notify the Registrar within 28 days if it is wound up, voluntarily wound up, dissolved, or otherwise ceases to exist in its home country, and it must state on later invoices, orders, and business letters in Zambia that it is being wound up when the relevant winding-up events occur. A person who keeps doing business in Zambia for a dissolved foreign company commits an offence and may be fined per day.

A foreign company may be wound up under this section, and the Court may order the winding up and validate certain Zambia transactions.

If a foreign company stops having a place of business in Zambia, it must notify the Registrar within 28 days and keep a documentary agent for two years; the Registrar must register the notice.

Foreign companies are treated like public companies for Part X, and the Registrar may waive or modify Part X for them on request.

A non-Zambian company is defined, Part X applies to it with modifications, and its prospectus must include specified details. The Registrar may waive or modify Part X at the company’s request.

A foreign company that fails to comply with obligations under this Part, or a defaulting officer/documentary agent, commits an offence and may face the Act’s general penalty. If the company fails to lodge a required document, its contract rights in Zambia are unenforceable while the failure continues, unless the Court grants relief.

The Registrar may deregister a company in specified cases, but must give written notice, reasons, and 30 days to show cause first.

A company may ask the Registrar to deregister it, but the request must include the prescribed fee and specified documents. The Registrar must publish notice, then deregister the company after 90 days unless cause to the contrary is shown.

After deregistration, the Registrar may act for the company in limited situations and may sign relevant documents; the Registrar is not liable for acts done under this section.

The Agency administers this Act. In this Part, “officer” means an employee or agent of the Agency.

An office called the Companies Office must be established under the Agency.

The Registrar must exercise the powers and perform the functions assigned by this Act and the Patents and Companies Registration Agency Act, 2010.

The Agency may appoint officers it considers necessary, on terms and conditions it determines.

The Agency’s seal must be used for this Act, and impressions made for that purpose are to be judicially noticed.

The Registrar must keep the registers required by the Act and may keep other registers considered necessary or convenient. If a document is lodged under the Act, the Registrar must register it, or a copy, and keep it.

The public may inspect company registers and documents lodged at the Companies Office if the prescribed fees are paid and the inspection is during prescribed hours.

The Registrar may inspect company books after 14 days’ written notice, and the Court may order compliance and costs if a company or related officer fails to comply with required filings or notices.

The Registrar may waive all or part of a fee under this Act, if Board-issued rules allow it.

The Registrar may require a company or certain company officers/directors to provide specified information, records, or other information, and failure to comply can be an offence.

The Court may issue an injunction to restrain a company or director from conduct that breaches, or would breach, the articles or the Act, but not if the conduct has already been completed.

A director or entitled person generally may not start or join proceedings for a company or subsidiary unless the Court grants leave.

The Court may order a company to pay some or all costs of a derivative action on application by a director or entitled person.

The Court may make orders or give directions for proceedings brought with the Court’s leave under section 331.

Proceedings started with the court’s leave cannot be settled, compromised, or discontinued without the court’s leave.

A member or former member may sue a director for breach of duty owed to that member, but not to recover share-value loss caused only by company loss or forgone company gain.

A member may bring an action against the company if the company breaches a duty owed to that member.

A member may apply for a court order requiring the board of directors to do what the articles or the Act requires, and the court may also grant other appropriate relief.

The Court may appoint one member to represent other members in a proceeding against the company or a director when those members share the same or substantially the same interest.

Members or the relevant person may ratify or approve the board’s exercise of a power vested in them, and that ratification makes the exercise valid.

If the Registrar has discretionary or other power under the Act, the Registrar must not use it adversely or arbitrarily. A person challenging a Registrar decision has the right to apply to the Court.

A person aggrieved by a Registrar’s decision may appeal to the Court within 30 days after notice.

The Registrar may sit with assessors in proceedings, must appoint them when needed, and the Agency must pay them as prescribed.

If the Act requires the Registrar to do something but gives no time limit, the Registrar must do it as soon as practicable.

If an aggrieved person appeals, the Registrar must follow the Court’s decision, unless there is a further appeal. The Registrar may also send the Court a written, signed statement about the proceedings.

The Registrar may refer a complex or unusually important matter to the Attorney-General or the Court after notifying the parties, and must then follow the advice or decision given.

The Registrar may appear and be heard in cases about changing the register, and must appear if the Court directs it. The Registrar may also file a signed written statement instead of appearing, unless the Court directs otherwise.

The Registrar and Agency officers are not liable for acts or omissions connected to authorised investigations or related reports, and the Registrar is not liable for damage caused by good-faith publication of company-related matters in specified media.

The Registrar must provide a certificate or copies of a document on request, if the prescribed fee is paid and the document is open to public inspection and filed in the relevant register.

If this Act requires filing a document or particulars, the company must lodge a separate filing and the Registrar must register it in the prescribed form and manner.

The Registrar may extend a filing period on request, must accept late documents if the extra fee is paid, and may reduce or waive that fee in limited circumstances.

Documents or registers that the Act requires to be prepared, kept, maintained, or lodged must be in English; if the Registrar allows a non-English lodgement, a certified English translation may be required.

A person required by this Act to take an oath or swear an affidavit may instead make an affirmation or declaration under Zambian law.

Certified records from the Registrar can be used as evidence, and certified copies or extracts may be admitted without the original.

If the Registrar is satisfied a certificate of incorporation has been lost, destroyed, or cannot be produced, the Registrar may have a duplicate sealed on payment of prescribed fees.

This section allows certain documents, meetings, and resolutions to be handled electronically, and lets the Registrar correct or accept replacement documents subject to stated conditions.

A company must keep required records or books for at least 10 years.

A company that fails to keep required records or books commits an offence and may be fined up to one hundred thousand penalty units.

A company commits an offence if it fails or delays to provide required documents to the Registrar, or if it wilfully provides fraudulent documents.

A company director or employee must not knowingly make, submit, or authorize a false or misleading statement or report.

A company director, officer, employee, or shareholder must not fraudulently take, use, hide, or destroy company property.

Company directors, officers, employees, and shareholders must not fraudulently destroy, alter, falsify, or make false entries in company records.

A company director commits an offence if they use fraud to obtain credit for the company or fraudulently deal with company property to defraud a creditor.

A person convicted of certain company-related, fraud, or confidentiality offences must not manage a company for 3 years, unless the Court gives leave.

A person who fails to meet the Act’s registration requirement commits an offence and can be fined. A non-body corporate that trades in Zambia under certain company-style names like “Limited” or “PLC” also commits an offence and faces a daily fine.

If a court issues a warrant to imprison someone for not paying a fine under this Act, the imprisonment period in the warrant cannot exceed one day for every three unpaid penalty units.

A person is generally exempt from damages liability for acts or omissions done while exercising a power or function under this Act, unless there was bad faith or lack of reasonable care or diligence.

A person commits an offence if they knowingly make or submit a false statement, or if they fail to tell the Registrar within a reasonable time after discovering an innocent false statement was false.

A person commits an offence if they help, encourage, or knowingly join in an act done outside Zambia that would be an offence if done in Zambia, and they may be fined or imprisoned on conviction.

A person must not use business signs, documents, impersonation, or advertising that would make others think their office is the Companies Office or officially connected with it.

The Registrar may impose an administrative penalty for non-compliance with the Act, and unpaid penalties must be paid to the Agency within the period the Registrar sets.

If a body corporate or unincorporated body commits an offence under the Act, a director, manager, or shareholder who is suspected of and charged with the offence may be liable on conviction to the penalty for that offence, unless they can show lack of knowledge, consent, connivance, or that they took reasonable steps to prevent it.

Section 372 makes a wide range of company-related misconduct an offence and sets penalties on conviction.

If someone breaks a provision of the Act and no specific penalty applies, they may be fined, imprisoned, or both; foreigners may also have their immigration permit varied or revoked.

The Minister may prescribe a payable fee for acts done by the Registrar or for documents lodged with the Agency.

The Minister may make regulations, by statutory instrument, for matters this Act lets or requires to be prescribed, or that are needed to carry out the Act.

The Companies Act, 1994 is repealed, but the Fourth Schedule provisions still apply for this Act.

Certain companies and qualifying faith-based organisations continue operating as if incorporated under this Act; movable-asset charges under the repealed Act also continue in force, but must be registered within 12 months.

This section is titled “Share Capital and Variation of Rights.”

This provision is titled “Inspection of Records.”

This section starts the interpretation provision for the regulations, but the text provided cuts off before any definitions or rules are stated.

This provision defines several terms used in the regulations, including “Act,” “prescribed rate of interest,” “seal,” “resolution,” and “secretary.”

Directors may issue company shares and decide share rights or restrictions, subject to the Act and existing special rights.

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

Preference shares may be issued with a resolution sanction, and they can be set up so the company may redeem them.

Class rights may be changed if the required shareholder consent or a special resolution is obtained, and a class member present in person or by proxy may demand a poll.

A company may pay brokerage or commission on share issues, but the payment cannot exceed 10% of the issue price and may be made in cash or in shares.

A company must not recognise share interests held on trust or other non-absolute interests in a share, except where law or the regulations allow it.

A registered member is entitled to one share certificate without payment; joint holders need not receive more than one certificate, and a lost, defaced, or destroyed certificate may be renewed for a fee and on directors’ terms.

Directors may call on members to pay unpaid share money, subject to limits on amount and timing. Members must pay the called amount after at least 14 days’ notice. Directors may also revoke or postpone a call.

A call is treated as made when the directors’ resolution authorising it is passed, and it may be payable in instalments.

Joint holders of a share must pay all calls for that share, and each holder is jointly and severally liable.

If a share-related sum is not paid on time, the person owing it must pay interest until payment, unless the directors waive some or all of that interest.

A sum due on share allotment or at a fixed date is treated as if it were a duly made call, and if it is not paid, the regulations on interest, expenses, forfeiture, and related consequences apply.

Directors may treat shareholders differently when shares are issued, including in the amount of calls payable and the timing of those payments.

Directors may accept unpaid share amounts from a member and may authorise company interest on those amounts, subject to a capped interest rate.

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

If a member misses a share call payment, directors may serve a notice demanding the unpaid amount plus interest.

If a notice under regulation 17 is not complied with, the directors may forfeit the shares covered by that notice before the required payment is made.