The Companies Actchapter 388 of The Laws of Zambia

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THE COMPANIES ACT CHAPTER 388 OF THE LAWS OF ZAMBIA

ARRANGEMENT OF SECTIONS
PART I PRELIMINARY
1. Short title
2. Interpretation
3. Effect of declaration in certified copy.
4. Application of Act to existing companies
5. Prohibition of large partnerships
PART II INCORPORATION AND MODIFICATION OF COMPANIES
Division 2.1-Incorporation
6. Application for incorporation
7. The articles of a company
8. Amendment of articles
9. Statutory declaration as to compliance with the Act
10. Certificates of incorporation and of share capital
11. Incorporation of the company
12. Register of companies
Division 2.2-Types of company
13. Types of company
14. Public companies
15. Public company may not operate until certificate issued that minimum capital
requirements are satisfied
16. Private companies
17. Private companies limited by shares
18. Minimum capital for private company limited by shares
19. Companies limited by guarantee
20. Unlimited companies
Division 2.3-General Provisions
21. Contractual effect of incorporation
22. Capacity and powers of a company
23. Validity of acts
24. Notice not presumed
25. No disclaimer allowed
26. Companies ceasing to have at least two members
27. No increase in a member's liability or contribution without consent
28. Pre-incorporation contracts
29. Copies of certificate of incorporation, certificate of share capital and articles to
be given to members
Division 2.4-Conversion of a company from one type to another
30. Conversion of a private company limited by shares to company limited by
guarantee
31. Conversion of private company limited by shares to unlimited company
32. Conversion of company limited by guarantee to company limited by shares or
unlimited company
33. Conversion of unlimited company to private limited company
34. Conversion of public company to private company limited by shares
35. Conversion of private company limited by shares to public company
36. Method of conversion

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Division 2.5-The name of a company
37. Name of company
38. Reservation of name
39. Registration may allow company to dispense with "Limited" in its name
40. Change of name
41. Registrar may require change of name
Division 2.6-Miscellaneous
42. Financial year of a company
43. Holding companies, subsidiaries and related companies
44. Registration of related bodies corporate
PART III MEMBERSHIP AND REGISTERS
45. Membership of company
46. Membership by company of itself or of holding company
47. Offence if membership of private company exceeds number specified in
articles
48. Register of members
49. Inspection of register
50. Power of court to rectify register
51. Company may keep branch register
52. Duties in case of securities registered in branch register
53. Branch registers of foreign companies kept in Zambia
54. No notice of trust
55. Register to be evidence
PART IV SHARES AND SHARE CAPITAL
Division 4.1-Interpretation
56. Interpretation
Division 4.2-Issue and transfer of shares
57. Nature and transferability of shares
58. Numbering of shares
59. Redeemable shares
60. Capital redemption reserve
61. Share premium account
62. Variation of class rights
63. Return as to allotment of shares
64. Transfer of shares
65. Restrictions on transferability
66. Issue of share certificates
67. Endorsement of transfers
68. Share certificates as evidence
69. Share warrants to bearer
70. Transmission of shares by operation of law
71. Evidence of transmission of shares by operation of law
72. Company's lien on shares
73. Rights and options to subscribe for share issue to directors, officers and
employees
Division 4.3-Alteration of share capital
74. Alteration of share capital
75. Power to return accumulated profits in reduction of paid up share capital

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76. Special resolution for reduction of share capital
77. Creditors may object to reduction in capital
78. Order confirming reduction and powers of court in making such order
79. Lodgement of order and issue of replacement certificate of share capital
80. Liability of members in respect of reduced shares
81. Offence of concealing name of creditor
Division 4.4-Restrictions on financial assistance
82. Restrictions on financial assistance in acquisition of shares
83. Relaxation of restrictions for private companies
Division 4.5-Miscellaneous
84. Dividends may be paid only out of profits
85. Exemption from property transfer tax
PART V DEBENTURES AND CHARGES
Division 5.1-Debentures
86. Issue of debentures
87. Documents of title to debentures
88. Trustees for debenture holders
89. Eligibility for appointment as trustee for debenture holders
90. Right to copies of trust deed
91. Unsecured debentures to be so described
92. Register of debenture holders
93. Meetings of holders of debentures secured by a trust deed
94. Meetings of other debenture holders
95. Re-issue of redeemed debentures
Division 5.2-Charges
96. Charge to secure fluctuating amount
97. Company's register of charges
98. Registrar's register of charges
99. Registration of charges by companies
100. Certificate to be issued by Registrar
101. Priorities
102. Entries of satisfaction and release of property from charge
103. Variation of registered charge
104. Registration of enforcement of security
105. Endorsement of registration on debentures of a series
106. Charges in favour of the State
Division 5.3-Receivers
107. Application of Division
108. Appointment of receiver by court
109. Notification of appointment of receiver
110. Payment of preferential creditors
111. Eligibility for appointment as receiver
112. Receivers appointed by the court.
113. Receivers appointed otherwise than by the court
114. Liabilities of receivers on contracts
115. Fact that receiver has been appointed to appear on correspondence
116. Statement of affairs and accounts where receiver of undertaking appointed
117. Accounts of receivers

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118. Reports by receivers
PART VI PUBLIC ISSUE OF SHARES, ETC.
Division 6.1-Interpretation
119. Meaning of "invitation to the public"
120. Offer of sale deemed to be made by the company
121. First publication of a prospectus
Division 6.2-Invitations to the public and prospectuses
122. Restrictions on invitations to the public to acquire shares and debentures
123. Prospectus required for invitations to the public to purchase share or
debentures
124. Contents of prospectus
125. Expert's consent
126. Registration of prospectuses
127. Over-subscription in debenture issue
128. Reference to stock exchange listing in prospectus-allotment of shares
129. Civil liability for misstatements or omissions in prospectus
130. Offence of misstatement or omission in prospectus
131. Stop trading order
132. Waiting period
133. Withdrawal of application after waiting period
134. Allotment and minimum subscription
135. Statement in lieu of prospectus
136. Prohibition of waiver and notice clauses
PART VII MEETINGS AND RESOLUTIONS
137. Interpretation
138. Annual general meeting
139. Extraordinary general meetings
140. Class meetings
141. Requisition of a general meeting
142. Entitlement to receive notice of meetings
143. Length of notice for convening a meeting
144. Power of court to order meeting
145. Place of meetings
146. Attendance at meetings
147. Conduct of meetings and voting
148. Chairman's declaration as to result of a vote
149. Right to demand a poll
150. Voting on a poll
151. Proxies
152. Representation of bodies corporate and unincorporated associations at
meetings
153. Circulation of members' resolutions and supporting circulars
154. Circulation of members' circulars
155. General provisions in regard to members' circulars
156. Ordinary extraordinary and special resolutions
157. Written resolutions for private companies
158. Registration of copies of certain resolutions
159. Date of certain resolutions

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160. Minutes of proceedings of meetings of company and of creditors
161. Inspection of minute books
PART VIII ACCOUNTS, AUDIT AND ANNUAL RETURNS
Division 8.1-Accounts
162. Accounting records to be kept
163. Financial year of holding company and subsidiary
164. Annual accounts to be prepared after each financial year
165. Group accounts
166. Delays in preparing group accounts
167. Annual accounts to include amounts paid to directors
168. Annual accounts to include particulars of loans to officers
169. Director to make disclosure of loans and receipts
170. Balance sheet to be signed by directors
Division 8.2-Auditors
171. Appointment of auditors
172. Qualifications of auditor
173. Auditors' rights and duties and auditors' report
174. Circumstances in which accounts may include the auditors' report or directors'
report
Division 8.3-The directors' report
175. Interpretation
176. Directors' report to be attached to balance sheet
177. General matters in directors' report
178. Where a company carries on more than one kind of business, attribution of
turnover and profitability
179. Average number by the month of a company's employees and amount, by the
year, of their wages
180. Particulars of gifts and donations
181. Particulars of exports
Division 8.4-Provision of accounts and reports to members
182. Circulation of annual accounts
183. Tabling of accounts
Division 8.5-Annual returns
184. Annual return to be made to the Registrar
185. Annual return to be made by a public company
186. Documents to be annexed to annual return of a public company
187. Annual return to be made by a private company
188. Additional certificates to be lodged by a private company
189. Offence relating to annual return
PART IX MANAGEMENT AND ADMINISTRATION
190. Registered office and postal address
191. Registered records office
192. Records and registers of a company
193. Inspection by members and others
194. Publication of name of company
195. Seal of company

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196. Official seal for use abroad
197. Form of contracts and instruments
198. Bills of exchange and promissory notes
199. Execution of deeds abroad
200. Service of documents on company
201. Service of documents by company
202. Liability of company not affected by officer's fraud or forgery
PART X DIRECTORS AND SECRETARY
Division 10.1-Appointment and powers
203. The directors of a company
204. Company to have at least two directors
205. The secretary
206. Appointment of directors
207. Eligibility of persons to be directors
208. Residential requirements of directors
209. Director's share qualification
210. Vacation of office of director
211. Removal of director
212. No directions or instructions to be given to directors by a person not eligible to
be a director
213. Alternate directors
214. Managing director
215. Powers and duties of directors
216. Limitations on powers of directors
217. Proceedings of directors
Division 10.2-Interests of directors
218. Contracts in which directors are interested
219. Prohibition of loans by companies to directors
220. Duties of directors in connection with sales or purchases of the company's
securities
Division 10.3-Payments to directors
221. Interpretation
222. Payments to directors for loss of office or on transfer of undertaking
223. Payments to directors in connection with takeover bids
Division 10.4-Registers
224. Register of directors and secretaries
225. Register of shares and debentures held by or in trust for directors and secretary
226. Registration of particulars of directors and secretaries
Division 10.5-Miscellaneous
227. Where one director is named in letters, etc. all are to be named
228. Limited company may have directors with unlimited liability
229. Avoidance of acts in dual capacity as director and secretary
230. Restraining fraudulent persons from managing companies
231. Prohibition of assignment of offices
232. Validity of acts of officers
233. Company may not indemnify officers

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PART XI SCHEMES OF ARRANGEMENT, TAKE-OVERS AND THE
PROTECTION OF MINORITIES
234. Power to compromise with creditors and members
235. Information as to compromises with creditors and members
236. Reconstruction and amalgamation of companies
237. Power to acquire shares of minority on take-over
238. Rights of minority on take-over
239. Remedy against oppression
PART XII FOREIGN COMPANIES
240. Interpretation
241. Established place of business
242. Financial year of a foreign company
243. Application of Part to existing foreign companies
244. Register of foreign companies
245. Registration of a foreign company
246. External company must register if it has an established place of business
247. Returns required on alteration of registered particulars
248. Foreign company must appoint local directors
249. Responsibilities of local directors
250. Service on foreign company
251. Annual accounts of foreign company
252. Keeping of accounting records by foreign company
253. Name of foreign company
254. Publication of name of foreign company
255. Registration of charges by foreign company
256. Notification of winding-up of foreign company
257. Winding-up of foreign company in Zambia
258. Cessation of business of foreign company
259. Penalties and disabilities
260. Invitations to the public relating to foreign companies
261. Invitations to the public relating to other external bodies corporate

PART XIII WINDING-UP


Division 13.1-General
262. Interpretation
263. Modes of winding-up
264. Application of repealed Act
265. Liability of members on winding-up
266. Limitation of liability
267. Nature of liability of a member
268. Liability in case of death or bankruptcy of a member
269. Jurisdiction to wind-up companies
Division 13.2-Winding-up by the court
270. Application of Division
271. Persons who may petition for a company to be wound-up by the court
272. Circumstances in which company may be wound-up by court
273. Commencement of winding-up by court
274. Payment of preliminary costs
275. Powers of court on hearing petition

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276. Power to stay or restrain proceedings against company
277. Avoidance of dispositions
278. Avoidance of attachments
279. Copy of order to be registered
280. Provisional liquidator
281. Stay of actions
282. Appointment and style of liquidators
283. Provisions where a person other than official receiver is appointed liquidator
284. Control of liquidators by official receiver
285. Remuneration of liquidators
286. Custody and vesting of company's property
287. Statement of company's affairs
288. Report by liquidator
289. Powers of liquidator
290. Exercise and control of liquidator's powers
291. Release of liquidator and dissolution of company
292. Orders for release or dissolution
293. Dissolution of the company
294. Meetings to determine whether committee of inspection to be appointed
295. Constitution and proceedings of committee of inspection
296. Power to stay winding-up
297. Appointment of special manager
298. Claims of creditors and distribution of assets
299. Inspection of books by creditors and members
300. Power to summon persons connected with company
301. Power to order public examination
302. Power to arrest absconding member or officer
303. Powers of court cumulative
Division 13.3-Voluntary Winding-up
304. Voluntary winding-up
305. Circumstances in which a company may be wound-up voluntarily
306. Commencement of voluntary winding-up
307. Effect of voluntary winding-up
308. Declaration of solvency
Division 13.4 Provisions applicable only to members' voluntary winding-up
309. Provisions applicable only to members' voluntary winding-up
310. Appointment of liquidator
311. Duty of liquidator to call creditors
312. Staying of members' voluntary winding-up
Division 13.5-Provisions applicable only to creditors' voluntary winding-up
313. Provisions applicable only to creditors' voluntary winding-up
314. Meetings of creditors
315. Appointment of committee of inspection
316. Fixing of liquidator's remuneration and vesting of directors powers in
liquidator
317. Stay of proceedings
Division 13.6-Provisions applicable to every voluntary winding-up
318. Provisions applicable to every voluntary winding-up
319. Distribution of property of company

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320. Review by court of liquidators appointment and remuneration
321. Powers and duties of liquidators
322. Power of liquidator to accept shares etc., as consideration for sale of property
of company
323. Annual meeting of members and creditors
324. Final meeting and dissolution of company
325. When an arrangement is binding on creditors
326. Application to court to have questions determined or powers exercised
327. Costs
328. Limitation on right to wind-up voluntarily
Division 13.7-Provisions applicable to every cycle of winding-up
329. Provisions applicable to every mode of winding-up
330. Meetings of creditors
331. Conduct of meetings of creditors
332. Eligibility for appointment as liquidator
333. Acts of liquidator valid
334. General provisions as to liquidators
335. Powers of official receiver where no committee of inspection
336. Appeal against decision of liquidator
337. Notice of appointment and address of liquidator
338. Liquidator's accounts
339. Notification that a company is in liquidation
340. Books of company
341. Investment of surplus funds
342. Unclaimed assets
343. Expenses of winding-up where assets insufficient
344. Meetings to ascertain wishes of members of creditors
345. Proof of debts
346. Preferential debts
347. Avoidance of preference
348. Avoidance of floating charge
349. Liquidator's rights to recover in respect of certain sales to or by company
350. Disclaimer of onerous property
351. Restriction of rights of creditor as to execution or attachment
352. Duties of sheriff as to goods taken in execution
353. Offences by officers of companies in liquidation
354. Inducement to be appointed liquidator
355. Penalty for falsification of books
356. Liability where proper accounts not kept
357. Liability for contracting debt
358. Power of court to assess damages against deliquent officers
359. Prosecution of delinquent officer and members
360. Frauds by officers of companies which have gone into liquidation
Division 13.8-Dissolution of defunct companies
361. Power of Registrar to strike defunct company off register
362. Power of court to declare dissolution of company void
363. Registrar to act as representative of defunct company in certain events
Division 13.9-Winding-up of other bodies corporate
364. Winding-up of other Zambian bodies corporate

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365. Winding-up of other foreign bodies corporate
PART XIV MISCELLANEOUS
Division 14.1-Administration of Act
366. The office of the Registrar of Companies
367. Appointment of Registrar and Deputies
368. Staff of the Office
369. Keeping of registers and lodged documents
370. Registration of documents
371. Extension of time for lodgement
372. Documents to be in approved language
373. Prescribed forms
374. Inspection, copies and evidence
375. Evidentiary provisions
376. Enforcement of duty to make returns
377. Fees
378. Fees to be paid into general revenues
379. Appeal against a decision of the Registrar
380. Collection of information and statistics from companies
Division 14.2-Penalties and liabilities
381. Penalty for false statements
382. Penalty for improper use of "Incorporated" or "Limited"
383. Civil liability for fraudulent trading
384. Offence of fraudulent trading
385. Imprisonment for failure to pay fine
386. Costs in actions by limited companies
387. Contribution between joint wrongdoers
388. Power to grant relief from civil liability
389. Exemption from liability for acts or omissions of public officers
Division 14.3-Transitional provisions
390. Certificates and documents made or lodged under former Act
391. Articles of existing companies
392. Minimum capital for existing companies
393. Registers, accounts, etc., of existing companies
394. Registration of charges
395. Directors' reports for existing companies
396. Related bodies corporate of existing companies
397. Directors of existing companies
398. Bodies corporate formed outside Zambia with existing business in Zambia
Division 14.4-General
399. Companies subject to other legislation
400. Regulations
401. Rules of Court
402. Repeal of former Act
SCHEDULE 1-Standard Articles
SCHEDULE 2-Annual Accounts
SCHEDULE 3-Annual Return
SCHEDULE 4-Contents of a Prospectus
CHAPTER 388

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COMPANIES ACT 26 of 1994, 6 of 1995
An Act to provide for the formation, management, administration and winding-up of
companies; to provide for the registration of charges over the undertakings or
properties of companies; to provide for the registration of foreign companies doing
business in Zambia; and to provide for matters connected with or incidental to the
foregoing. [12th July, 1994]
PART I PRELIMINARY
1. This Act may be cited as the Companies Act. Short title
2. In this Act, unless the context otherwise requires- Interpretation
"accounting records" includes-
(a) invoices, receipts, orders for the payment of money, bills of exchange, cheques,
promissory notes, vouchers and other documents of prime entry; and
(b) such working papers and other documents as are necessary to explain the methods
and calculations by which the accounts are made up;
"accounts" means profit and loss accounts and balance sheets together with any
statements, reports and notes attached to or intended to be read with any of those
profit and loss accounts or balance sheets, but, subject to section one hundred and
seventy-four, does not include the auditors' reports or directors' reports;
"alternate director" means an alternate director of a company referred to in section
two hundred and thirteen;
"annual accounts" means the annual accounts referred to in section one hundred and
sixty-four;

"annual general meeting" means an annual general meeting of a company referred to


in section one hundred and thirty-eight;

"annual return" means the return referred to in section one hundred and eighty-four,
together with any document required by this Act to accompany the return;

"articles" means the articles of a company described in section seven;

"auditors' report" means the report of the auditors of a company referred to in section
one hundred and seventy-three;

"body corporate" means a company or corporation incorporated under or by virtue of


the laws of Zambia or of any other country, other than a corporation sole;

"book" includes accounts, deed, writing, register, document, accounting record, and
any clear record of information, however compiled and whether recorded or stored in
written or printed form or by electronic or photographic process or otherwise;

"branch register" means a branch register of a company established under section


fifty-one;

"capital redemption reserve" means the reserve referred to in section sixty;

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"certificate of incorporation" means a certificate of incorporation of a company issued
by the Registrar under section ten, or a replacement of such a certificate issued under
this Act;
"certificate of share capital" means a certificate of share capital of a company issued
by the Registrar under section ten, or a replacement of such a certificate issued under
this Act;
"certified copy" means a copy of a document of a company which has endorsed
thereon or annexed thereto-
(a) a certificate by a notary public; or
(b) a declaration made and signed by an officer of the company or by some person
interested therein otherwise than on behalf of the company;
to the effect that it is a true and complete copy of the original, together with, in
the case of an original in a language other than English, an English translation
similarly certified to the effect that it is an accurate translation of the original;
"charge" means a charge created in any way and includes-
(a) mortgage;
(b) an agreement to give or execute a charge or mortgage whether on demand or
otherwise; and
(c) until such time as the whole of the purchase price is paid, an agreement for sale
and purchase of land under which the seller remains in occupation;
"class meeting" means a meeting of those members of a company who, under the
articles, belong to a particular class;
"committee of inspection" means a committee of inspection appointed in the course of
a winding-up under section two hundred and ninety-five or three hundred and fifteen;
"company" means-
(a) a company incorporated under this Act; or
(b) subject to section four and Division 14.3, an existing company;
"company limited by guarantee" means a company incorporated as such, being a
company satisfying section nineteen;
"company with share capital" means a public company, a private company limited by
shares or an unlimited company;
"court" means the High Court for Zambia;
"creditors' voluntary winding-up of" means a voluntary winding-up with respect to
which no declaration of solvency was made in accordance with section three hundred
and eight;
"current liability", means a liability that would in the ordinary course of events be
payable within twelve months after the end of the financial year to which the accounts
or group accounts concerned relate;
"debenture" means a document issued by a body corporate that evidences or
acknowledges a debt of the body corporate, whether or not it constitutes a charge on
property of the body corporate, in respect of money that is or may be deposited with
or lent to the body corporate, other than a document of the following kinds-

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(a) a document acknowledging a debt incurred by the body corporate in respect of
money that is or may be deposited with or lent to the body corporate by a person-
(i) in the ordinary course of a business carried on by the person; and
(ii) in the ordinary course of such business of the body corporate as is not part
of a business of borrowing money and providing finance;
(b) a document issued by a bank in the ordinary course of its banking business that
evidences or acknowledges indebtedness of the bank arising in the ordinary course of
that business;
(c) a cheque, order for the payment of money or bill of exchange;
(d) a document of a kind prescribed, and in the circumstances prescribed in the
regulations for the purposes of this paragraph; and includes-
(a) a unit of a debenture;
(b) debenture stock; and
(c) bonds and any other securities issued by a company, whether
constituting a charge on the assets of the company or not;
"debenture holder" includes a debenture stockholder;
"declaration of guarantee" means a declaration of guarantee made under section
nineteen;
"declaration of solvency" means a declaration made in accordance with section three
hundred and eight;
"default" means, in reference to a person who is "in default," that the person wilfully
authorised or permitted an act or omission that constitutes a contravention by a body
corporate of the provision of this Act in which the expression appears;
"designating number" means the number assigned to a company or foreign company
by the Registrar for the purposes of identification;
"director" means a person appointed as a director of a company under section two
hundred and six; and "the directors" means the directors acting collectively as
described in section two hundred and three;
"director- report" means the report by the directors of a company referred to in section
one hundred and seventy-six;
"document" includes-
(a) any paper or other material on which there is writing or printing or on which there
are marks, figures, symbols or perforations having a meaning for persons qualified to
interpret them;
(b) a disc or tape or other article, or any material, from which sounds, images,
writings or messages are capable of being reproduced with or without the aid of any
other article or device;
and without limiting the generality of the foregoing, includes any summons, order and
other legal process and any notice;
"equity share" means a share comprised in the equity share capital of a body
corporate;

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"equity share capital" means the issued share capital of a body corporate, excluding
any part thereof which neither as respects dividends nor as respects capital carries any
right to participate beyond a specified amount in a distribution;
"executive director" means a director to whom has been delegated any of the powers
of the directors to direct and administer the business and affairs of the company;
"executive officer" means a person, by whatever name called and whether or not a
director of a body corporate, who is concerned, or takes part, in the management of
the body corporate;
"existing company" means a body corporate which immediately prior to the
commencement of this Act was a company under the former Act;
"expert" includes an engineer, valuer, accountant, assayer, and any other person
whose profession or calling gives authority to a statement by the person on the subject
matter concerned;
"extraordinary general meeting" means a general meeting of a company that is not an
annual general meeting;
"extraordinary resolution" means an extraordinary resolution for the purposes of
section one hundred and fifty-six;
"financial year"
(a) in relation to a company, means the financial year of the company under section
forty-two;
(b) in relation to a foreign company, means the financial year of the foreign company
under section two hundred and forty-two; and
(c) in relation to any other body corporate, means a period in relation to which the
body corporate, in conformity with the law of the place of its incorporation, produces
accounts;
"former Act" means the Companies Act repealed by section four hundred and two;
Cap. 686 of the 1971 Edition
"former name" does not include-
(a) a name changed or disused before the person bearing the name attained the age of
eighteen years;
(b) a name changed or ceased to be used more than twenty years previously; or
(c) the name by which a married woman was known prior to her marriage;
"general meeting" means an annual general meeting or an extraordinary general
meeting;
"general accounts" means the accounts of a group of companies referred to in section
one hundred and sixty-five;
"group of companies" means a company that is a holding company together with all
its subsidiaries;
"holding company" means a body corporate that is a holding company under section
forty-three;

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"invitation to the public" means an invitation described in section one hundred and
nineteen;
"limited company" means a company limited by shares or a company limited by
guarantee;
"liquidator" includes a provisional liquidator;
"managing director" means the managing director of a company appointed under
section two hundred and fourteen;
"member" means a member of a company under section forty-five;
"members voluntary winding-up" means a voluntary winding-up with respect to
which a declaration of solvency was made in accordance with section three hundred
and eight;
"monetary unit" means an amount of one thousand kwacha;
"non-current liability" means a liability that is not a current liability;
"number", in relation to shares, includes an amount of stock;
"officer" includes-
(a) a director, secretary or executive officer of a body corporate;
(b) a local director of a foreign company;
(c) a receiver of any part of the undertaking of a body corporate appointed under a
power contained in any instrument; and
(d) a liquidator of a body corporate appointed by the members in a voluntary winding-
up; but does not include-
(i) a receiver of any part of the undertaking of a body corporate appointed by the
court;
(ii) a liquidator of a body corporate appointed by the court or by the creditors of the
body corporate; or
(iii) an auditor of a body corporate;
"official receiver" means-
(a) an official receiver appointed under the Bankruptcy Act; or Cap. 82
(b) an officer appointed for the purpose by the Minister, if no such official receiver is
appointed;
"ordinary resolution" means an ordinary resolution for the purposes of section one
hundred and fifty-six;
"prescribed" means prescribed in the regulations made under this Act;
"private company" means a private company limited by shares, a company limited by
guarantee or an unlimited company;
"private company limited by shares" means a company incorporated as such, being a
company satisfying section seventeen;
"profit and loss account" includes income and expenditure account, revenue account
or any other account showing the results of the business of a company for a period;

15
"public company" means a company incorporated as such, being a company satisfying
section fourteen;
"receiver" includes an official receiver and a receiver and manager; and any reference
to a receiver of the property of a company includes a reference to a receiver of part
only of that property and to a receiver only of the income arising from that property,
or from part thereof;
"register of foreign companies" means the register referred to in section two hundred
and forty-four;
"registered accountant" means a registered accountant for the purposes of the
Accountants Act; Cap. 390
"registered member" means a person registered as a member of a company under
section forty-eight;
"registered office" means-
(a) in relation to a company, the registered office of the company under section one
hundred and ninety; and
(b) in relation to a foreign company, the registered office of the company under
section two hundred and forty-five;
"registered records office" means the registered records office of a company referred
to in section one hundred and ninety-one;
"Registrar" means the Registrar of Companies established by section three hundred
and sixty-six;
"related" means related for the purposes of section forty-three;
"resolution for reducing share capital" means a resolution described in section
seventy-six;
"seal" means the common seal of a company or other body corporate;
"secretary"-
(a) in relation to a company, means a person appointed as the secretary pursuant to
section two hundred and five;
(b) in relation to a body corporate other than a company, means a person occupying
the position of secretary, by whatever name called;
"share" includes stock;
"shareholder" includes a stockholder;
"share premium account" means the share premium account referred to in section
sixty-one;
"share warrant" means a share warrant issued pursuant to section sixty-nine;
"special resolution" means a special resolution for the purposes of section one
hundred and fifty-six;
"Standard Articles" means the Standard Articles in the First Schedule;

16
"subsidiary" means a body corporate that is a subsidiary of another body corporate for
the purposes of section forty-three;
"unlimited company" means a company incorporated as such, being a company
satisfying section twenty;
"waiting period" means the period of seven days after the first publication of a
prospectus which has been registered, or such longer period after that date as may be
stated in the prospectus as the period before the expiration of which applications,
offers, or acceptances in response to the prospectus will not be accepted or treated as
binding;
"wholly owned subsidiary" means a body corporate that is the wholly owned
subsidiary of another body corporate for the purposes of section forty-three.
3. A declaration made for the purposes of paragraph (b) of the definition of certified
copy in section two shall be deemed to be a statutory declaration. Effect of
declaration in certified copy
4. Subject to this Act, this Act applies to an existing company as if it had been duly
incorporated under this Act as-
(a) a public company, if it was a public company under the former Act;
(b) a private company limited by shares, if it was a private company limited by
shares under the former Act; or
(c) a company limited by guarantee, if it was a private company limited by
guarantee under the former Act. Application of Act to existing companies
5. (1) Subject to this section, an association or partnership that- Prohibition of
large partnerships
(a) consists of more that twenty persons; and
(b) is not a body corporate;
shall not carry on any business for gain by the association or partnership or individual
members of the association or partnership.
(2) Subsection (1) shall not apply to a partnership-
(a) formed for the purpose of carrying on a prescribed profession or calling; and
(b) having not more than the number of partners prescribed for the purposes of that
profession.
(3) If an association or partnership contravenes this section, each member of the
association or partnership shall be guilty of an offence, and shall be liable on
conviction to a fine not exceeding five hundred monetary units.
PART II INCORPORATION AND MODIFICATION OF COMPANIES
Division 2.1-Incorporation
6. (1) Subject to this Act, any two or more persons associated for any purpose may
form an incorporated company by subscribing their names to an application for
incorporation that satisfies this section and lodging it with the Registrar, together
with- Application for incorporation
(a) any proposed articles of the company;
(b) a statutory declaration in accordance with section nine;

17
(c) a signed consent from each person named in the application as a director or
secretary of the company to act in the relevant capacity; and
(d) a declaration of guarantee by each subscriber, if the company is to be limited by
guarantee.
(2) An application for incorporation shall be in the prescribed form, shall be signed by
each subscriber and shall specify-
(a) the proposed name of the company;
(b) the physical address of the office to be the registered office of the company;
(c) a postal address to be the registered postal address of the company;
(d) the type of company to be formed;
(e) if the company is to have share capital-
(i) the amount of share capital of the company;
(ii) the division of the share capital into shares of fixed amount; and
(iii) the number of shares each subscriber agrees to take;
(f) the particulars referred to in subsection (2) of section two hundred and twenty-four
of at least two persons who are to be the first directors of the company;
(g) the particulars referred to in subsection (3) of section two hundred and twenty-four
of the person or persons who are to be the first secretary or joint secretaries of the
company;
(h) the name and address of the individual lodging the application; and
(i) such other information respecting the application, the company and the nature of
its proposed business as the prescribed form may require.
(3) The application for incorporation may also specify a date, being a date not more
than fifteen months after the date of lodgement of the application, on which the
second financial year of the company will begin.
(4) The application for incorporation and the documents lodged with it shall be
printed or typewritten.
(5) The application for incorporation shall be signed by each subscriber in the
presence of at least one witness who attests to the signature.
(6) An individual shall not subscribe to an application for incorporation if he-
(a) is under eighteen years of age;
(b) is an undischarged bankrupt under the laws of Zambia;
(c) subject to an order by the court, is an undischarged bankrupt under the laws of
another country; or
(d) is of unsound mind and has been declared to be so by the court or a court of
competent jurisdiction of another country.
(7) The incorporation of a company shall not be invalid by reason only that an
individual or individuals subscribed to the application for incorporation in
contravention of subsection (6).
7. (1) A company may have articles regulating the conduct of the company. The
articles of a company
(2) The articles may contain restrictions on business that the company may carry on.
(3) Where a provision in the articles is inconsistent with this Act or any other written
law, the provision is invalid to the extent of the inconsistency.

18
(4) The articles of a company may adopt the regulations of the Standard Articles, or
any specified regulations thereof.
(5) The articles of a public company or a private company limited by shares shall be
deemed to have adopted the regulations of the Standard Articles except insofar as the
articles exclude or modify those regulations.
(6) The articles of a company shall be divided into paragraphs numbered
consecutively.
8. (1) Subject to this Act, and to its articles, a company may amend its articles if it
passes a special resolution approving the amendment. Amendment of articles
(2) If a company passes a special resolution approving the amendment of its articles,
it shall within twenty-one days after the date of the resolution lodge a copy of the
resolution with the Registrar together with a copy of each paragraph of the articles
affected by the amendment, in its amended form.
(3) The articles have effect in their amended form on and from the day of their
lodgment with the Registrar or such later date as may be specified in the resolution.
(4) If a company fails to comply with subsection (2), the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding three monetary units for each day that the failure continues.

9. (1) An application for incorporation shall be accompanied by a statutory


declaration that the requirements of this Act in respect of registration and of matters
precedent and incidental thereto have been complied with, made by- Statutory
declaration as to compliance with the Act
(a) a legal practitioner having a practising certificate who was engaged in the
formation of the company; or
(b) a person named in the application as a first director or secretary of the
company.
(2) The Registrar may accept the declaration as prima facie evidence of compliance.
10. (1) Where an application for incorporation and the documents referred to in
section six have been duly lodged, the Registrar shall, subject to this Act, issue a
certificate in the prescribed form stating that the company is, on and from the date
specified in the certificate, incorporated and that the company is the type of company
specified in the application for incorporation. Certificates of incorporation and
of share capital
(2) If the company has share capital, the Registrar shall, at the same time, issue a
certificate stating-
(a) the amount of share capital of the company; and
(b) the division of the share capital into shares of a fixed amount.
(3) The Registrar shall keep a copy of each certificate issued under this section, and
this Act shall apply to the copies as if they were documents lodged with the Registrar.

19
11. On and from the date of incorporation specified in the certificate of
incorporation, but subject to this Act, there shall be constituted an incorporated
company by the name set out in the certificate. Incorporation of the company
12. (1) The Registrar shall maintain a register of companies in which is entered, in
respect of each company- Register of companies
(a) a chronological record of the prescribed particulars, and of any other
particulars which the Registrar thinks fit, in relation to the company; and
(b) a record of the documents lodged under this Act in respect of the company,
other than documents whose only effect is to change particulars recorded
under paragraph (a).
Division 2.2-Types of company
13. A company incorporated under this Act shall be-
(a) a public company; or
(b) a private company being-
(i) a private company limited by shares;
(ii) a company limited by guarantee; or
(iii) an unlimited company
14. (1) A public company shall have share capital. Public companies
(2) The articles of a public company shall state-
(a) the rights, privileges, restrictions and conditions attaching to each class of
shares, if there are two or more classes; and
(b) the authority given to the directors to determine the number of shares in,
the designation of, and the rights, privileges, restrictions and conditions
attaching to each series in a class of shares, if the class of shares may be
issued in series.
(3) All shares shall rank equally apart from differences due to their being in different
classes or series.
(4) Where a public company is wound-up, a member shall be liable to contribute, in
accordance with Part XIII, an amount not exceeding the amount, if any, unpaid on the
shares held by him.
(5) The articles of a public company shall not impose any restriction on the right to
transfer any shares of the company other than-
(a) a restriction on the right to transfer any shares on which there is unpaid
liability; or
(b) a restriction on the right to transfer shares issued to directors or other
officers or employees exercising any rights or options granted under
section seventy-three, or issued in pursuance of any scheme adopted under
that section; or
(c) a provision for the compulsory acquisition, or rights of first refusal, of
shares referred to in paragraph (b), in favour of other members of the
company or trustees appointed under any scheme adopted under section
seventy-three.
15. (1) A public company shall not transact any business, exercise any borrowing
powers or incur any indebtedness, except for a purpose incidental to its incorporation

20
or to the obtaining of subscription to, or payment for, its shares, unless the Registrar
has issued it with a certificate under this section. Public company may not operate
until certificate issued that minimum capital requirements are satisfied
(2) The Registrar shall issue a company with a certificate for the purposes of this
section if, on an application made to him in the prescribed form by the company and
accompanied by a statutory declaration complying with subsection (3), he is satisfied
that the nominal value of the company's allotted share capital is not less than the
authorised minimum.
(3) The statutory declaration shall be in the prescribed form and signed by a director
or secretary of the company and shall state-
(a) that the nominal value of the company's allotted share capital is not less
than the authorised minimum;
(b) the amount paid up at the time of the application on the allotted share
capital of the company; and
(c) the amount, or estimated amount of the preliminary expenses that have
been paid or are payable.
(4) For the purposes of this section, a share allotted in pursuance of an employee's
share scheme shall be disregarded in determining the nominal value of the company's
allotted share capital unless it is paid up at least as to one-quarter of the nominal value
of the share and the whole of any premium on the share.
(5) The Registrar may accept the statutory declaration as prima facie evidence of the
matters stated therein.
(6) A certificate under this section in respect of a company is conclusive evidence that
the company is entitled to do business and exercise any borrowing powers.
(7) If a company does business or exercises borrowing powers in contravention of this
section, the company, and each officer in default, shall be guilty of an offence, and
shall be liable on conviction to a fine not exceeding thirty monetary units for each day
that the company does business or remains indebted.
(8) If a company enters into a transaction in contravention of this section and fails to
comply with its obligations in connection therewith within thirty days after being
called upon to do so, the directors of the company shall be jointly and severally liable
to indemnify the other party to the transaction in respect of any loss or damage
suffered by him by reason of the failure of the company to comply with those
obligations.
(9) The liability imposed by subsection (8) shall be in addition to any liability of the
company.
(10) In this section "the authorised minimum" means one million kwacha or such
larger or smaller amount as may be prescribed instead.
(11) A regulation which increases the authorised minimum may specify a period
within which any public company having an allotted share capital of which the
nominal value is less than new authorised minimum shall be required to increase that
value to not less than the new authorised minimum or apply to be converted into a
private company.

21
(12) Where a regulation is made increasing the authorised minimum and specifying a
period under subsection (11), the authorised minimum that applied immediately
before the entry into effect of the regulation shall continue to apply in relation to a
company which, at that time, had an allotted share capital less than the new authorised
minimum until-
(a) the company increases its allotted share capital above the new authorised
minimum; or
(b) the end of the specified period;
whichever is earlier.
(13) Where a regulation is made increasing the authorised minimum and specifying a
period under subsection (11), the authorised minimum that applied immediately
before the entry into effect of the regulation shall continue to apply in relation to a
company which, at that time, had an allotted share capital less than the new authorised
minimum until the company increases its allotted share capital above the new
authorised minimum.
16. (1) Subject to this section, the articles of a private company shall limit the number
of its members to a specified number, being a number not more than fifty. Private
companies
(2) The regulations may provide that the articles of an unlimited company may,
subject to any specified conditions, limit the number of its members to a number
larger than fifty.
(3) The articles of a private company shall not impose any restriction on the
transferability of shares after they have been issued unless all the shareholders have
agreed in writing.
(4) For the purposes of subsection (1)-
(a) joint holders of shares are counted as one person; and
(b) a member is not counted if he is in the employment of the company or of a
related body corporate, or if he was a member while previously in the
employment of the company or a related body corporate and has been a
member continuously since that time.
(5) If a private company-
(a) has more members than permitted by its articles; or
(b) invites the public to acquire shares or debentures in the company in
contravention of section one hundred and twenty-two;
the Registrar may give notice to the company requiring the company to give reasons
why the company should not be converted into a public company.
(6) If, one month after the issue of the notice, the contravention concerned has not
been rectified, the court may, on the application of the Registrar, if not satisfied that
the contravention was inadvertent and not likely to be repeated, order-
(a) that the company shall be deemed to have made an application for conversion
to a public company, or conversion to a private company followed by
conversion to a public company, as appropriate, and to have passed any
resolutions necessary for such an application or applications in the form
specified in the order; and

22
(b) that the directors, or any of them, shall be liable for the costs of the application
of the Registrar and the conversion of the company.
17. (1) The articles of a private company limited by shares shall state- Private
companies limited by shares
(a) the rights, privileges, restrictions and conditions attaching to each class of
shares, if there are two of more classes; and
(b) the authority given to the directors to determine the number of shares in,
the designation of, and the rights, privileges, restrictions and conditions
attaching to each series, if a class of shares may be issued in series.
(2) All shares shall rank equally apart from differences due to their being in different
classes or series.
(3) Where a private company limited by shares is wound-up, a member shall be liable
to contribute, in accordance with Part XIII, an amount not exceeding the amount, if
any, unpaid on the shares held by him.
18. (1) A private company limited by shares shall not transact any business, exercise
any borrowing powers or incur any indebtedness, except for a purpose incidental to its
incorporation or to the obtaining of subscription to, or payment for, its shares, unless-
Minimum capital for private company limited by shares
(a) consideration (whether in cash or otherwise) to the value of not less than
fifty thousand kwacha, or such larger or smaller amount as may be
prescribed instead, has been paid to it for the issue of its shares; and
(b) it has furnished to the Registrar a declaration signed by one of the directors
or by the secretary, stating that the requirement of paragraph (a) has been
compiled with.
(2) For the purposes of subsection (1), the value of-
(a) the goodwill of a business; or
(b) services rendered or to be rendered to the company;
shall not be counted.
(3) Where a new amount is prescribed for the purposes of subsection (1), a private
company that satisfied this section immediately before the new amount was
prescribed shall be deemed to continue to satisfy it.
19. (1) Each subscriber to an application for incorporation as a company limited by
guarantee shall sign a declaration of guarantee specifying the amount that he
undertakes to contribute to the assets of the company in the event of its being wound-
up. Companies limited by guarantee
(2) Each subscriber to the application for incorporation shall, on the incorporation of
the company, be a member of the company.
(3) Subject to any additional requirements imposed by the articles of the company-
(a) a person shall become a member of the company, on approval by a
resolution of the company, by signing a declaration of guarantee and
delivering it to the company; and
(b) a person shall cease to be a member on delivering to the company a signed
notice in writing to that effect.

23
(4) Within seven days after a person becomes a member or ceases to be a member of
the company, the company shall lodge with the Registrar a notice in the prescribed
form, together with, in the case of a person's becoming a member, the declaration of
guarantee by the person.
(5) The company shall not carry on business for the purpose of making profits for its
members or for anyone concerned in its promotion or management.
(6) Where a company limited by guarantee is wound-up, a member shall be liable to
contribute, in accordance with Part XIII, an amount not exceeding the amount
specified in the declaration of guarantee made by him.
(7) If the company carries on business for the purpose of making profits for its
members or for anyone concerned in its promotion or management-
(a) those officers and members of the company who wilfully authorise or
permit the business to be carried on for that purpose shall be jointly and
severally liable for the payment and discharge of all debts and liabilities of
the company incurred in carrying on the business so authorised or
permitted; and
(b) each of the officers and members referred to in paragraph (a) shall be
guilty of an office, and shall be liable on conviction to a fine of not more
than thirty monetary units for each day on which that business is carried
on.
(8) If the company fails to comply with subsection (4), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding three monetary units for each day that the failure continues.
20. (1) An unlimited company shall have share capital and its articles shall state-
Unlimited companies
(a) the rights, privileges, restrictions and conditions attaching to each class of
shares, if there are two or more classes; and
(b) the authority given to the directors to determine the number of shares in,
the designation of, and the rights, privileges, restrictions and conditions
attaching to each series, if a class of shares may be issued in series.
(2) All shares shall rank equally apart from differences due to their being in different
classes or series.
(3) Where an unlimited company is wound-up, a member shall be liable to contribute,
in accordance with Part XIII, without limitation of liability.
Division 2.3-General provisions
21. Subject to this Act, the incorporation of a company shall have the same effect as
a contract under seal between the company and its members from time to time and
between those members themselves, in which they agree to form a company whose
business will be conducted in accordance with the application for incorporation, the
certificate of share capital from time to time, the articles of the company from time to
time, and this Act. Contractual effect of incorporation

24
22. (1) A company shall have, subject to this Act and to such limitations as are
inherent in its corporate nature, the capacity, rights, powers and privileges of an
individual. Capacity and powers of a company
(2) A company shall have the capacity to carry on its business and exercise its powers
in any jurisdiction outside Zambia to the extent that the laws of Zambia and of that
jurisdiction permit.
(3) A company shall not carry on any business or exercise any power that it is
restricted by its articles from carrying on or exercising, nor exercise any of its powers
in a manner contrary to its articles.
23. No act of a company, including any transfer of property to or by a company,
shall be invalid by reason only that the act or transfer is contrary to its articles or this
Act. Validity of acts
24. No person dealing with a company shall be affected by, or presumed to have
notice or knowledge of, the contents of a document concerning the company by
reason only that the document has been lodged with the Registrar or is held by the
company available for inspection. Notice not presumed
25. A company or a guarantor of an obligation of the company may not assert
against a person dealing with the company or with any person who has acquired rights
from the company that-
(a) any of the articles of the company has not been complied with;
(b) a shareholder agreement has not been complied with;
(c) the persons named in the most recent annual return or notice under section
two hundred and twenty-six are not the directors of the company;
(d) the registered office of the company is not an office of the company;
(e) a person held out by a company as a director, an officer or an agent of the
company has no authority to exercise the powers and perform the duties
that are customary in the business of the company or usual for such a
director, officer or agent; No disclaimer allowed
(f) a document issued by any director, officer or agent of the company with
actual or usual authority to issue the document is not valid or genuine; or
(g) the financial assistance referred to in section eighty-three or the sale or
(h) disposal of property referred to in section two hundred and sixteen was not
authorised; except where that person has, or ought to have had by virtue of
his position with or relationship to the company, knowledge of the fact
asserted.
26. (1) If at any time the number of members of a company is reduced below two and
it carries on business for more than six months without at least two members, a
member or director of the company who was aware that the business was being
carried on with fewer than two members shall be severally liable for the payment of
all the debts and liabilities of the company incurred after the end of that period of six
months. Companies ceasing to have at least two members
(2) The court, in any proceeding against the member or director or on application
being made to it by any person interested, may relieve the member or director either
wholly or partly from liability undersubsection(1) on such terms as it thinks fit, if it is
satisfied that the member or director had made reasonable efforts to prevent the
business from being continued, or that it is otherwise just and reasonable to do so.

25
(3) The liability imposed under subsection (1) shall be in addition to any liability of
the company.
27. A member of a company shall be bound by an alteration made in the articles on a
date (in this section called the "alteration date") after the date on which he became a
member only to the extent that the alteration does not require him-
(a) to take or subscribe for more shares than the number held by him on the
alteration date;
(b) in any way to increase his liability as at the alteration date; or
(c) to contribute to the share capital of the company or otherwise to pay
money to it;
unless he agrees in writing, either before or after the alteration date, to be bound
thereby. No increase in a member's liability or contribution without consent
28. (1) If a person purports to enter into a contract not evidenced in writing in the
name of or on behalf of a company before it comes into existence, the person shall be
bound by the contract and entitled to the benefits thereof. Pre-incorporation
contracts
(2) If a person purports to enter into a contract evidenced in writing in the name of or
on behalf of a company before it comes into existence, the person shall be bound by
the contract (in this section called "the relevant contract") and entitled to the benefits
thereof except as provided in this section.
(3) The company may, not later than fifteen months after its incorporation, adopt the
contract by an ordinary resolution, and upon the adoption, subject to subsection (4)-
(a) the company shall for all purposes be bound by the contract and entitled to
the benefits thereof as if the company had been in existence at the date of
the contract and had been a party thereto; and
(b) the person who purported to act in the name of or on behalf of the
company shall cease to be bound by or entitled to the benefits of the
contract.
(4) Subject to subsection (5), whether or not the relevant contract is adopted by the
company, the other party to the contract may apply to the court for an order fixing
obligations under the contract as joint or joint and several, or apportioning liability
between or among the company and the person who purported to act in the name of or
on behalf of the company, and upon such application the court may make any order it
thinks just and equitable.
(5) Subsection (4) does not apply if the relevant contract expressly provides that the
person who purported to act in the name of or on behalf of the company before it
came into existence shall not in any event be bound by the contract nor entitled to the
benefits thereof.
29. (1) A company shall supply to any member on request copies of- Copies of
certificate of incorporation, certificate of share capital and articles to be given to
members
(a) the certificate of incorporation;
(b) the certificate of share capital, in the case of a company with share capital;
and
(c) The articles of the company;

26
within seven days after receiving payment of the sum of one monetary unit, or such
lesser sum as may be prescribed by the company, for each set of copies.
(2) A company limited by guarantee shall supply to any member on request a list of
the members with the amounts guaranteed by each in the declaration of guarantee.
(3) A copy of the articles supplied under subsection (1) shall have endorsed on it the
registered address, the postal address and the address of the registered records office
of the company.
(4) If a company fails to comply with this section, the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding three monetary units for each day that the failure continues.
Division 2.4-Conversion of a company from one type to another
30. (1) A private company limited by shares may be converted into a company limited
by guarantee if- Conversion of a private company limited by shares to company
limited by guarantee
(a) there is no unpaid liability on any of its shares;
(b) all its members agree in writing to such a conversion;
(c) a special resolution amending the articles to satisfy section nineteen is
passed, if the articles do not satisfy that section; and
(d) each member makes a declaration of guarantee.
31. A private company limited by shares may be converted into an unlimited
company if all its members agree in writing to its conversion. Conversion of
private company limited by shares to unlimited company
32. A company limited by guarantee may be converted into a company limited by
shares or an unlimited company if-
(a) all the members agree in writing- Conversion of company limited by
guarantee to company limited by shares or unlimited company
(i) to convert the company into such a company; and
(ii) to a share capital for the company and the division thereof into shares
of fixed amounts; and
(b) each member agrees in writing to take up a specified number of shares.
33. (1) An unlimited company may be converted into a private company limited by
shares or a company limited by guarantee if- Conversion of unlimited company to
private limited company
(a) all its members agree in writing to its conversion;
(b) a special resolution amending the articles to satisfy section seventeen or
nineteen, as appropriate, is passed, if the articles do not satisfy section
seventeen and nineteen, as appropriate; and
(c) each member makes a declaration of guarantee, in the case of conversion
to a company limited by guarantee.
(2) In the case of a conversion to company limited by shares, the special resolution
may-
(a) increase the nominal amount of the company's share capital by increasing
the nominal amount of each of its shares, subject to the condition that no

27
part of the increased capital shall be capable of being called up except in
the event and for the purposes of the company's being wound-up; or
(b) provide that a specified portion of its uncalled share capital shall not be
capable of being called up except in the event and for the purpose of the
company's being wound-up.
34. A public company may be converted into a private company limited by shares if
a special resolution is passed that-
(a) approves the conversion; and
(b) amends the articles to satisfy sections sixteen and seventeen, if the
company's articles do not satisfy those sections. Conversion of public
company to private company limited by shares
35. (1) A private company limited by shares may be converted into a public company
if a special resolution is passed that- Conversion of private company limited by
shares to public company
(a) approves the conversion; and
(b) amends the articles to satisfy section fourteen, if the company's articles do
not satisfy that section.
36. (1) If the requirements of section thirty, thirty-one, thirty-two, thirty-three, thirty-
four or thirty-five (in this section called "the conversion section") are satisfied with
respect to a company, the company shall, within twenty-one days after the conversion
section's becoming satisfied, lodge with the Registrar an application in the prescribed
form for conversion of the company in accordance with the resolution or agreement,
together with the documents referred to in subsection (4). Method of conversion
(2) On receiving the application the Registrar shall-
(a) issue a replacement certificate of incorporation in the prescribed form
worded to meet the circumstances of the case and stating the date of
conversion of the company; and
(b) make such entries in such registers as he considers appropriate.

(3) On and from the date stated in the certificate as the date of conversion.
(a) the company shall be converted into a company of the status sought;
(b) if the company is being converted from a company with share capital to a
company limited by guarantee, the shares therein shall be validly
surrendered and cancelled notwithstanding section seventy-six;
(c) the articles of the company shall be amended in accordance with the
documents lodged with the application; and
(d) where this Act requires different words to be the last words of the name of
a company of the new status, the name of the company shall be changed
accordingly.
(4) The documents to be delivered to the Registrar are the following:
(a) the company's certificate of incorporation;
(b) a copy of each paragraph in the articles affected by any amendment, in its
amended form;
(c) a copy of the special resolution or written agreement by the members
referred to in the conversion section;
(d) the declarations of guarantee by each member, if the company is being
converted to a company limited by guarantee;

28
(e) a statutory declaration by a director and the secretary of the company
stating-
(i)that the conditions of the conversion section have been complied with &
(ii) that in their opinion the company is solvent;
(f) a certificate by the auditors of the company, made not more than three
months before the date of the application, that they have investigated the
affairs of the company and that the company is solvent at the date of the
certificate;
(g) certified copies, certified by a director and the secretary of the company, of
every balance sheet, profit and loss account, group accounts, directors'
report and auditors' report sent to the members of the company in the
preceding twelve months, if the company is being converted from a public
company to a private company and has been incorporated as a public
company for more than fifteen months.
(5) The conversion of the company under this section shall not alter the identity of the
company, nor affect any rights or obligations of the company except as mentioned in
this section, nor render defective any legal proceedings by or against the company.
(6) Where an unlimited company is converted to a limited company and is wound-up
within three years after the conversion, a member of the company who was a member
immediately before the conversion shall not be entitled to a limitation of liability
under section two hundred and sixty-six.
(7) If the company fails to comply with subsection (1), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding three monetary units for each day that the failure continues.
(8) If a director, secretary or auditor of a company makes a declaration or certificate
for the purposes of subsection (4) that in his opinion the company is solvent, without
having reasonable grounds for the opinion, he shall be guilty of an offence, and shall
be liable on conviction to a fine not exceeding five hundred monetary units.
Division 2.5-The name of a company
37. (1) A public company shall have a name the last word of which is "PLC".
Name of company
(2) Subject to this Division, a private company limited by shares or a company limited
by guarantee shall have a name the last word of which is "Limited".
(3) The Registrar shall not register as the name of a company a name which in his
opinion is likely to cause confusion with the name of another company or is otherwise
undesirable.
(4) The Registrar shall not, without the written consent of the Minister, register as the
name of a company a name which in the Registrar's opinion suggests that the
company enjoys the patronage of the President.
(5) The Registrar may, at the request of persons who intend to form an incorporated
company, give an opinion on the acceptability of a proposed name.
38. (1) A person or persons who propose to form a company may, subject to this
section, reserve a name for the company by lodging with the Registrar an application

29
in the prescribed form specifying the name proposed to be reserved (in this section
called "the reserved name"). Reservation of name
(2) If the reserved named is acceptable to the Registrar and the Registrar is satisfied
that-
(a) the reserved name is a registered business name of the person or persons;
(b) the reserved name is the name of an unincorporated association consisting
of or represented by the person or persons;
(c) the reserved name is a name under which the person or persons are trading
or conducting business, or is such a name with minor modifications or
additions; or
(d) the person is a body corporate other than a company and the reserved
name is the name of the body corporate or that name with minor
modifications or additions;
the Registrar shall register the name as reserved by the person or persons for a period
of three months.
(3) While the name is so registered-
(a) subject to this Act, the person or persons shall be entitled to incorporate a
company under the name; and
(b) the Registrar shall treat the proposed name as the name of a company
incorporated by the person or persons for the purposes of determining the
acceptability of any other name as the name of a company.
39. (1) The Registrar may, on the application of a company limited by guarantee,
grant the company written permission to omit the word "Limited" from its name for
the purposes of this Act apart from this Part. Registrar may allow company to
dispense with "Limited" in its name
(2) The Registrar may grant the permission on such conditions as he thinks fit, and
those conditions shall be binding on the company and shall, if the Registrar so directs,
be inserted in the articles of the company.
(3) The Registrar may revoke the permission at any time, after giving written notice to
the company of his intention to do so and considering any objections of the company.
40. (1) A company may pass a special resolution to change its name. Change of name
(2) Within twenty-one days after the date of the resolution, the company shall notify
the Registrar in the prescribed form that the company intends to change its name to
the name specified in the resolution (in this section called the "new name").
(3) The Registrar, after considering the new name, shall notify the company that-
(a) the new name is acceptable; or
(b) in the opinion of the Registrar, the new name of a company would be
likely to cause confusion with the name of another company or is
otherwise undesirable, & that the Registrar will not register the new name
(4) If the new name is acceptable, the company shall, within twenty-one days after
receiving the notice of the fact, lodge with the Registrar-
(a) the company's certificate of incorporation; and
(b) a copy of the resolution.

30
(5) On receiving the documents referred to in subsection (4), the Registrar shall enter
the new name on the Register in place of the former name, and shall issue a
replacement certificate of incorporation worded to meet the circumstances of the case.
(6) A certificate under this section shall be conclusive evidence of the alteration to
which it relates.
(7) A change of name by a company shall not affect any rights or obligations of the
company nor render defective any legal proceedings that could have been continued
or commenced against it by its former name, and any such legal proceedings may be
continued or commenced against it by its new name.
41. (1) If, in the opinion of the Registrar, the name of a company is likely to cause
confusion with the name of another company or is otherwise undesirable, the
Registrar may direct that the company shall change its name in accordance with this
Division. Registrar may require change of name
(2) If the company does not change its name within fifty days, or such longer period
as the Registrar may allow in writing, after receiving a direction under subsection (1),
the Registrar shall register the designating number of the company, together with the
word "Limited" or "PLC" if required by section thirty-seven, as the name of the
company, and shall issue a new certificate of incorporation for the company worded
to meet the circumstances of the case.
(3) A change of name under subsection (2) shall not affect any rights or obligations of
the company nor render defective any legal proceedings that could have been
continued or commenced against it by its former name, and any such legal
proceedings may be continued or commenced against it by its new name.
Division 2.6-Miscellaneous
42. (1) For the purposes of this Act, the "financial year" of a company is the period,
whether or not a period of twelve months, that begins on one accounting date of the
company and ends on the day before the next. Financial year of a company
(2) The first "accounting date" of a company is the date of its incorporation.
(3) Subject to this section, the subsequent accounting dates of a company are-
(a) the date specified in the application for its incorporation as the date on
which the second financial year of the company will begin, and
anniversaries of that date, if the application for incorporation specified
such a date; or
(b) the anniversaries of the date of its incorporation, if the application for
incorporation did not specify such a date.
(4) A company may change an accounting date by lodging a notice of the change in
the prescribed form with the Registrar, provided that-
(a) the notice is lodged with the Registrar and notice of the change is given to
each registered member and to the auditors (if any) of the company not
later than the accounting date previous to the one to be changed; and
(b) the change does not result in a financial year's being longer than fifteen
months.

31
(5) Where a company changes an accounting date under this section, the subsequent
accounting dates of the company are, unless changed under this section, the
anniversaries of that changed date.
43. (1) For the purposes of this section, "company" means a body corporate, whether
or not a company for other purposes of this Act and whether or not incorporated in
Zambia. Holding companies, subsidiaries and related companies
(2) For the purposes of this Act, a company is a "holding company" of another
company if the other company is a subsidiary of it under subsection (3).
(3) For the purposes of this Act, the "subsidiaries" of a company (in this subsection
called "the holding company") are the following companies:
(a) any company in which the holding company holds-
(i) more than half in nominal value of the equity share capital, if the company
is incorporated in a jurisdiction that has nominal value of share capital; or
(ii) more than half in value of the equity share capital, if the company is
incorporated in a jurisdiction that does not have nominal value of share
capital;
(c) any company of which the holding company is a member and the
composition of whose board of directors is controlled by the holding
company;
(d) any subsidiary under paragraph (a) or (b) of a company which is itself a
subsidiary of the holding company under paragraph (a) or (b) or by the
repeated application of this paragraph.
(4) For the purposes of this Act, the "wholly owned subsidiaries" of a holding
company are the following companies:
(a) any company with no members other than the holding company and its
nominees;
(b) any company with no members other than-
(i) the holding company;
(ii) nominees of the holding company;
(iii) companies which are themselves wholly owned subsidiaries of the
holding company under paragraph (a) or the repeated application of
this paragraph;
(iv) nominees of companies referred to in subparagraph (iii).
(5) For the purposes of this Act, a company is "related" to a second company if-
(i) the first company is a subsidiary of the second;
(ii) the first company is a holding company of the second; or
(iii) both companies are subsidiaries of a third company.
(6) For the purposes of this section, the composition of a company's board of directors
is controlled by another company if, and only if, in relation to each of more than half
of the directorships-
(a) the other company is able, without the consent or concurrence of any other
person, to appoint or remove the holder of the directorship; or
(b) a person's appointment to the directorship follows necessarily from his
appointment as director of the other company.

32
(7) In determining whether the composition of a company's board of directors is
controlled by another company-
(a) subject to this subsection, any shares held or power exercisable by a
person who is the effective nominee of the other company shall be deemed
to be held or exercisable by the other company;
(b) any shares held or power exercisable in a fiduciary capacity shall be
disregarded;
(c) any shares held or power exercisable by any persons by virtue of the
provisions of any debentures of the company or of a trust deed for securing
any issue of such debentures shall be disregarded; and
(d) any shares held or power exercisable by a person only by way of security
for the purposes of a transaction entered into in the ordinary course of
business shall be disregarded if the ordinary business of the person
includes the lending of money.
(8) For the purposes of this section, a member of a company is the effective nominee
of another company if he is-
(a) a nominee of the other company;
(b) a subsidiary of the other company;
(c) a person who is the effective nominee under paragraph (a) or (b) of a
person who is himself an effective nominee of the other company under
paragraph (a) or (b) or by the repeated application of this paragraph.
44. (1) A company shall, within one month after another body corporate has become
related to it, lodge with the Registrar a notice of that fact together with particulars
identifying the body corporate. Registration of related bodies corporate
(2) If a company fails to comply with this section, the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding three monetary units for each day that the failure continues.
PART III MEMBERSHIP AND REGISTERS
45. (1) The members of a company with a share capital shall be the shareholders and
stockholders of the company. Membership of company
(2) On the incorporation of a company with share capital and until the first allotment
of shares by the company, the members shall be those subscribers to the application
for incorporation who have not given the company written notice of their ceasing to
be members.
(3) The members of a company limited by guarantee shall be the persons who are
members in accordance with section nineteen.
46. (1) Except as provided in this section, a company shall not be a member of itself
or of a body corporate which is its holding company. Membership by company
of itself or of holding company
(2) A company may, in the capacity of personal representative or trustee, be a member
of itself or a body corporate which is its holding company unless it or the holding
company or a subsidiary of either of them has a beneficial interest in the membership.
(3) A company may be a member of itself or a body corporate which is its holding
company by way of security for the purposes of a transaction entered into in the

33
ordinary course of a business which includes the lending of money, but in that case
shall have no right to vote at meetings of the holding company or of any class of
members thereof.
(4) This section shall not prevent a subsidiary which was a member of a body
corporate before it became a subsidiary of the body corporate from continuing to be a
member.
(5) This section shall not prevent a subsidiary which was, immediately before the
commencement of this Act, a member of its holding company from continuing to be a
member.
(6) A subsidiary that continues to be a member of its holding company under
subsection (4) or (5)-
(a) shall have no right to vote at meetings of the holding company or any class
of members thereof;
(b) shall not acquire further shares in the holding company except upon a
general issue of fully-paid bonus shares, if the holding company is a
company with share capital; and
(c) shall not, as a member, increase any interest in, or liability in relation to,
the holding company, if the holding company is a company limited by
guarantee.
(7) For the purposes of this section, a company is deemed to be a member of a body
corporate if a nominee of the company is a member.
47. If a private company fails to comply with the provisions of its articles on the
number of its members, the company, and each officer and member in default, shall
be guilty of an offence, and shall be liable on conviction to a fine not exceeding five
hundred monetary units. Offence if membership of private company exceeds
number specified in articles
48. (1) A company shall maintain a register of its members and enter therein the
following particulars: Register of members
(a) the full name and address of each member of which it has received notice;
(b) the occupation of the member, if the member is an individual;
(c) the fact that the member is a body corporate or an unincorporated
association, as the case may be, if the member is not an individual;
(d) the date on which the company received the notice;
(e) if the company has share capital-
(i) the shares held by each member with the share numbers (if any); and
(ii) the amount paid or agreed to be considered as paid on the shares of
each member;
(f) the amount that each member has guaranteed in his declaration of
guarantee, if the company is limited by guarantee;
(g) the date on which the company received notice of any person's ceasing to
be a member.
(2) If the company has more than fifty members, the register shall contain an index of
the names of the members in a form that enables the account of each member to be
found readily.

34
(3) If the company fails to comply with this section, the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding ten monetary units for each day that the failure continues.
(4) If the company fails to comply with this section because of the default of an agent
charged with maintaining the register, the agent shall be guilty of an offence, and shall
be liable on conviction to a fine not exceeding ten monetary units for each day that the
failure continues.
49. (1) Subject to this Part, the register and index of the names of the members of the
company shall be available for inspection by any member of the company or other
person in accordance with section one hundred and ninety-three. Inspection of
register
(2) A company may, on giving notice by advertisement in a newspaper circulating
generally throughout Zambia, close for any time or times not exceeding in total thirty
days in each year the register of members of the company or the part thereof relating
to members holding shares of any class.
50.(1) If- Power of court to rectify register
(a) a company fails to correct an error in its register of members; or
(b) an error in the register causes a loss to a person;
the person aggrieved or any member of the company may apply to the court for an
order that the register be rectified and the person aggrieved may apply for an order
that the company pay compensation for the loss.
(2) If an application is made under this section, the court may make such orders as it
thinks fit.
(3) On an application under this section, the court may decide any question relating to
the title of any person who is a party to the application to have his name entered in or
removed from the register, whether the question arises between members or alleged
members, or between members or alleged members on the one hand and the company
on the other hand, and generally may decide any question necessary or convenient to
be decided for rectification of the register.
(4) If an order is made under this section, the company shall, within twenty-one days
after the making of the order, lodge a certified copy of the order with the Registrar.
(5) If the company fails to comply with subsection (4), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding three monetary units for each day that the failure continues.
51.(1) A company with share capital may, subject to its articles, keep a part of its
register of members (in this Act called a "branch register"), being the part relating to
members resident in a specified foreign country or countries, at a place in the foreign
country, or one of the foreign countries. Company may keep branch register
(2) The shares registered in a branch register shall be distinguished from the other
shares of the company while they are held by members resident in a country to which
the branch register applies.

35
(3) The company shall arrange for the information as to any entry in a branch register
to be transmitted to its registered records office as quickly as practicable, and shall
maintain there, as part of its register of members, a duplicate of the branch register.
(4) The company shall lodge with the Registrar notice of the physical address of the
office where any branch register is kept, and of any change in that address and, if it is
discontinued, of its discontinuance, and any such notice shall be given within twenty-
one days after the initial keeping of the register in that office or of the change or
discontinuance, as the case may be.
(5) A branch register shall be maintained and shall be open for inspection in the
manner required in sections forty-eight and forty-nine, or as nearly as is practicable,
except that the advertisement before closing the register shall be inserted in some
newspaper circulating generally in the country where the branch register is kept.
(6) If a company fails to comply with subsection (3), (4) or (5), the company, and
each officer in default, shall be guilty of an offence, and shall be liable on conviction
to a fine not exceeding ten monetary units for each day that the failure continues.
52. An instrument of transfer of any share registered in a branch register shall be
deemed to transfer property situated outside Zambia, and, unless executed in any part
of Zambia, shall be exempt from any duty chargeable in Zambia. Duties in case of
securities registered in branch register
53. The regulations may provide that sections forty-eight and forty-nine shall,
subject to any modifications and adaptations specified in the regulation, apply to a
register of members kept in Zambia by a specified body corporate, or class of bodies
corporate, incorporated under the law of a foreign country or countries. Branch
registers of foreign companies kept in Zambia
54.(1) Subject to section seventy, no notice of any trust, express, implied or
constructive, need be entered on the register of members of a company, or be received
by the company or the Registrar. No notice of trust
(2) A company shall not be bound to see to the execution of any trust, whether
express, implied or constructive in respect of any of its shares.
(3) A receipt given by a member in whose name a share stands in the register of
members shall be a valid and binding discharge of the company for any dividend or
other money payable in respect of such share, whether or not notice of any trust
relating to the share has been given to or received by the company.
55. The register of members shall be prima facie evidence of any matter by this Act
directed or authorised to be inserted therein. Register to be evidence
PART IV SHARES AND SHARE CAPITAL
Division 4.1-Interpretation
56. In this Part, unless the context otherwise requires, "company" means a company
with share capital.

Division 4.2-Issue and transfer of shares Interpretation

36
57.(1) The shares or other interest of a member in a company shall be personal estate
and movable property, transferable by a written transfer in a manner provided by the
articles of the company or by this Act. Nature and transferability of shares
(2) If an instrument of transfer of fully paid shares in a company is in the prescribed
form, executed by both the transferor and the transferee, or by persons duly authorised
on behalf of the transferor or the transferee, the company shall not refuse registration
of the transfer on the ground of form.
(3) Subsection (2) shall not affect-
(a) the validity of any instrument which would be effective to transfer shares
apart from that subsection;
(b) any powers of the directors to accept in their discretion an instrument in
any other form which may seem to them sufficient; or
(c) any right of the directors to refuse to register a person as the holder of
shares on any ground other than the form in which those shares purport to
be transferred to him.
58.(1) Subject to this section, each issued share in a company shall be assigned a
distinguished number. Numbering of shares
(2) If at any time all the issued shares in a company, or all the issued shares therein of
a particular class, are fully paid up, none of those shares need thereafter have a
distinguishing number so long as the shares, or the shares in that class, remain fully
paid up.
59.(1) The articles of a company may provide for the issue of shares which are to be
redeemed, or are liable to be redeemed at the option of- Redeemable shares
(a) the company;
(b) the share-holder, or
(c) either the company or the shareholder.
(2) No redeemable shares may be issued at a time when there are no issued shares of
the company which are not redeemable.
(3) Redeemable shares shall not be redeemed unless they are fully paid.
(4) The terms of redemption shall provide for payment on redemption.
(5) Redeemable shares may be redeemed only out of distributable profits of the
company or out of the proceeds of a fresh issue of shares made for the purposes of the
redemption.
(6) Any premium payable on redemption shall be paid either-
(a) out of distributable profits of the company; or
(b) out of the company's share premium account (including any sum
transferred to that account in respect of premiums on a fresh issue made
for the purposes of the redemption).
(7) The manner and terms of the redemption shall be as provided by the articles.
(8) Where shares are redeemed
(a) the shares shall be deemed to be cancelled on redemption;
(b) the amount of the company's issued share capital shall be diminished by
the nominal value of the shares redeemed; and

37
(c) the amount of the company's authorised share capital shall not be affected.
(9) Without prejudice to subsection (8), where a company is about to redeem any
shares under this section, it may issue shares up to the nominal amount of the shares
to be redeemed as if those shares had never been issued.
(10) Subject to subsection (11), for the purposes of this Act, shares issued by a
company-
(a) up to the nominal amount of any shares which the company has redeemed
under this section; or
(b) in pursuance of subsection (9), before the redemption of shares which the
company is about to redeem under this section;
shall be regarded as issued in place of the shares redeemed, or about to be redeemed,
under this section.
(11) Shares issued under subsection (9) shall not be regarded as issued in place of the
shares about to be redeemed unless those shares are redeemed within one month after
the issue of the new shares.
(12) If a company redeems any redeemable shares, it shall, within fourteen days after
doing so, lodge a notice of the redemption in the prescribed form with the Registrar.
(13) If a company fails to comply with subsection (12), the company, and each
officer in default, shall be guilty of an offence, and shall be liable on conviction to a
fine not exceeding three monetary units for each day that the failure continues.
60.(1) Where under section fifty-nine any shares of a company are redeemed wholly
out of the profits of the company, the amount by which the company's issued share
capital is diminished in accordance with subsection (8) of that section on cancellation
of the shares redeemed or purchased shall be transferred to a reserve, to be called "the
capital redemption reserve". Capital redemption reserve
(2) Where any shares of a company are redeemed wholly or partly out of the proceeds
of a fresh issue of shares and the aggregate nominal value of the shares redeemed or
purchased is greater than that of the shares issued, the amount of the difference shall
be transferred to the capital redemption reserve.
(3) The provisions of this Act relating to the reduction of the share capital of a
company shall apply to a reduction in the capital redemption reserve as if that reserve
were paid up share capital of the company, except that the reserve may be applied by
the company in paying up unissued shares of the company to be allotted to members
of the company as fully paid bonus shares.
61.(1) Where a company issues shares at a premium, whether for cash or otherwise, a
sum equal to the aggregate amount of value of the premiums on these shares shall be
transferred to an account, to be called "the share premium account", and the
provisions of this Act relating to the reduction of share capital of a company shall,
except as provided in this section, apply as if the share premium account were paid up
share capital of the company. Share premium account
(2) The share premium account may be applied by the company-
(a) in paying up unissued shares of the company to be issued to members of
the company as fully paid bonus shares;
(b) in writing off-

38
(i) the preliminary expenses of the company; or
(ii) the expenses of, the commission paid or the discount allowed on any
issue of shares or debentures of the company; or
(c) in providing for the premium payable on redemption of any redeemable
preference shares or of any debenture of the company.
62.(1) For the purposes of this section- Variation of class rights
(a) the abrogation of any rights attached to a class of shares; and
(b) any resolution of a company, other than a resolution for the creation or issue
of further shares, the implementation of which would have the effect of-
(j) diminishing the proportion of the total votes exercisable at a general
meeting of the company by the holders of the existing shares of a class; or
(ii) reducing the proportion of the dividends or other distributions payable at
any time to the holders of the existing shares of a class;
shall be deemed to be a variation of the rights of that class.
(2) If at any time the shares of a company are divided into different classes, the rights
attached to any class may not be varied except to the extent and in the manner
provided by the section.
(3) If the articles expressly forbid any variation of the rights of a class, or contain
provision for such a variation and expressly forbid any alteration of the provision, the
rights or the provision for variation may not be varied except in accordance with the
provision, or with the written consent of all the members of that class, or with the
sanction of the court under a scheme of arrangement in accordance with section two
hundred and thirty-four.
(4) If subsection (3) does not apply, the rights attached to any class of shares may be
varied with the written consent of the holders of three fourths of the issued shares of
that class, or with the sanction of a special resolution passed at a separate general
meeting of the holders of shares of that class.
(5) An application for the resolution to be cancelled may be made to the court within
twenty-one days after the date of the resolution by the holders of not less in the
aggregate than fifteen per centum of the issued shares of that class, and on such an
application the court may confirm or cancel the resolution.
(6) An application under subsection (5) may be made on behalf of the persons referred
to in that subsection or by such of their number as they may appoint in writing for the
purpose.
(7) If no application is made under subsection (5) the company shall, within fourteen
days after the end of the period for making such an application, lodge with the
Registrar a copy of each paragraph of the articles affected by the variation, in its
amended form.
(8) If an application is made under subsection (5) and the court makes an order, the
company shall, within fourteen days after the date of the order, lodge with the
Registrar-
(a) a copy of the order; and
(b) a copy of each paragraph of the articles affected by the variation, in its
amended form, if the order confirms the resolution.

39
(9) The articles shall have effect as amended on and from the date of their lodgement.
(10) If a company fails to comply with subsection (7) or (8), the company, and each
officer in default, shall be guilty of an offence, and shall be liable on conviction to a
fine not exceeding ten monetary units for each day that the failure continues.
(11) Nothing in this section shall affect or derogate from the powers of the court
under sections two hundred and thirty-four and two hundred and thirty-nine.
63.(1) Whenever a company makes an allotment of its shares, the company shall
within one month thereafter lodge with the Registrar- Return as to allotment of
shares
(a) a return of the allotments in the prescribed form, stating the number and
the nominal amount of the shares comprised in the allotment, the names
and addresses of each allottee, whether each allottee is an individual, a
body corporate or an unincorporated association, and the amount (if any)
paid or due and payable on each share; and
(b) subject to subsection (3), in the case of shares allotted as fully or partly
paid up otherwise than in cash-
(i) any contract constituting the tile of the allottee to the allotment;
(ii) any contract of sale, or for services or other consideration in
respect of which that allotment was made; and
(iii) a return stating the number and nominal amount of shares so allotted, the
extent to which they are to be treated as paid-up and the consideration for which they
have been allotted.
(2) Where a contract referred to in subsection (1) is not in writing, the company shall
lodge with the Registrar particulars of the contract.
(3) If a company fails to comply with subsection (1), the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding ten monetary units for each day that the failure continues.
64.(1) Subject to section sixty-nine, a company shall not register a transfer of shares
unless- Transfer of shares
(a) a proper instrument of transfer has been delivered to the company; or
(b) the right to the shares has been transmitted by operation of law.
(2) Transfers may be lodged with the company by either the transfer or transferee.
(3) If a company refuses to register a transfer, the company shall, within two months
after the date on which the transfer was lodged with the company, send to the
transferee and transferor notice in writing of the refusal, together with a statement of
the facts which are considered to justify refusal.
(4) If a company fails to comply with subsection (1), the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding two hundred and fifty monetary units.
(5) If a company fails to comply with subsection (3)-
(a) the company, and each officer in default, shall be guilty of an offence, and
shall be liable on conviction to a fine not exceeding three monetary units
for each day that the failure continues; and

40
(b) the transfer shall be deemed to have been registered on the day on which
the transfer was lodged with the company.
65.(1) Save as expressly provided in a company's articles and in this Act, shares shall
be transferable without restriction by a written transfer in accordance with section
fifty-seven. Restrictions on transferability
(2) The articles of a private company shall not impose any restriction on the
transferability of shares after they have been issued unless all the shareholders have
agreed in writing.
(3) A company may refuse to register a transfer of shares to any person who-
(a) is under eighteen years of age; or
(b) is of unsound mind and has been declared to be so by the court or a court
of competent jurisdiction of another country.
66.(1) A company shall, within two months after the allotment of any of its shares or
after the registration of the transfer of any shares, deliver to the registered holder
thereof a certificate under the common seal of the company stating- Issue of
share certificates
(a) the number and classes of shares held by him, and the distinguishing
numbers thereof (if any);
(b) the amount paid on such shares and the amount (if any) remaining unpaid;
and
(c) the full name and address of the registered holder and whether the holder
is an individual, a body corporate or an unincorporated association.
(2) If a share certificate is defaced, lost or destroyed, the company, at the request of
the registered holder of the shares, shall renew the same on payment of a fee not
exceeding one monetary unit and on such terms as to evidence and indemnity and the
payment of the company's expenses of investigation evidence as the company may
reasonably require.
(3) If a company fails to comply with this section, the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding three monetary units for each day that the failure continues.
67.(1) If the holder of any shares wishes to transfer to any person part only of the
shares represented by one or more certificates, the instrument of transfer together with
the relevant certificates may be delivered to the company with a request to endorse the
instrument of transfer.Endorsement of transfer
(2) If a company endorses on an instrument of transfer the words "certificate lodged",
or words to the like effect, this shall be a representation to anyone acting on the faith
of the endorsement that there has been produced to and retained by the company such
certificates as show a prima facie title to the shares in the transferor named in the
instrument of transfer, but not a representation that the certificates are genuine or that
the transferor has any title to the shares.
(3) If a person acts on the faith of a false representation made by the company under
subsection (2), the company shall be liable to compensate the person for any loss
suffered as a result of so acting.

41
(4) For the purposes of this section, an endorsement under this section shall be
deemed to be made by a company if it is made or signed by the secretary or any other
person apparently authorised to endorse instruments of transfer on the company's
behalf.
68. A share certificate shall be prima facie evidence of the title to the shares of the
person named therein as the registered holder and of the amounts paid and payable
thereon. Share certificates as evidence
69.(1) A company may, with respect to any fully paid-up shares (or stock) issue a
warrant (in this Act called a "share warrant") stating that the bearer of the warrant is
entitled to the shares therein specified, and may provide by coupons or otherwise for
the payment of the future dividends on the shares included in the warrant. Share
warrants to bearer
(2) A share warrant shall entitle the bearer to the shares therein specified, and the
shares may be transferred by the delivery of the share warrant.
(3) The bearer of a share warrant shall be entitled, on surrendering it for cancellation,
to have his name entered as a member in the register of members, and the company
shall be responsible for any loss incurred by any person by reason of the company
entering in its register the name of a bearer of a share warrant in respect of the shares
therein specified without the share warrant being surrendered and cancelled.
(4) The articles of the company may provide that the bearer of a share warrant shall
have any or all of the rights of a registered member of the company for the purposes
of this Act (other than the right to receive notices).
(5) The company shall record the issue of a share warrant in its register of members as
if the shareholder had ceased to hold those shares together with-
(a) the fact of the issue of the warrant;
(b) a statement of the shares included in the warrant, distinguishing the shares
by their share numbers (if any); and
(c) the date of the issue of the warrant.
(6) Until the warrant is surrendered, the particulars referred to in subsection (5) shall
be deemed to be the particulars required by this Act to be entered in the register of
members in relation to the shares.
(7) On the surrender of the share warrant, the date of the surrender shall be entered as
if it were the date on which the company received notice of the transfer of the shares
to the bearer.
70.(1) In the case of the death of a shareholder of a company, the survivor or
survivors where the deceased was a joint holder, and the legal personal or
representative of the deceased where he was a sole holder or last survivor of joint
holders, shall be the only persons recognised by the company as shareholders.
Transmission of shares by operation of law.
(2) A person (in this section called "the representative") upon whom the ownership of
a share devolves by reason of his being the legal personal representative, receiver, or
trustee in bankruptcy of the holder, or by operation of law may, upon such evidence
being produced as the company may reasonably require-
(a) be registered himself as the holder of the share; or

42
(b) transfer the share to some other person without first registering himself as
the holder of the share.
(3) A company shall have the same right, if any, to decline registration of a transfer by
the representative as it would have had in the case of a transfer by the registered
holder, but shall have no right to refuse registration of the representative himself.
(4) The representative shall, prior to registration of himself or a transferee, be entitled
to the same dividends and other advantages as if he were the registered holder and to
the same rights and remedies as if he were a member of the company, except that he
shall not, subject to any order by the court under section one hundred and forty-four,
before being registered as a member in respect of the share, be entitled to vote at any
meeting of the company.
(5) The company may at any time give notice requiring the representative to elect
either to be registered himself or to transfer the share, and, if the notice is not
complied with within three months, the company may thereafter suspend payment of
all dividends or other moneys payable in respect of the share until the notice has been
complied with.
71. The production to a company of any document which is by law sufficient
evidence that the ownership of a share has been transmitted by the operation of law
shall be accepted by the company as sufficient evidence of the transmission of
ownership. Evidence of transmission of shares by operation of law
72. A company shall not have or claim a lien on shares on which there is no unpaid
liability, nor shall any such lien extend to any sums due from the shareholder except
in respect of the unpaid liability on the shares. Company's lien on shares
73.(1) Subject to this section and to its articles, a company may create and issue,
whether in connection with the issue of any of its shares or otherwise, rights or
options in favour of any directors, officers or employees of the company or of any
subsidiary of the company, being rights or options that entitle the holders to acquire
from the company, upon such consideration, terms and conditions as may be fixed by
the board of directors, shares of any class. Rights and options to subscribe for share
issue to directors, officers and employees
(2) The terms and conditions of such rights or options, including the time or times at
or within which and the price or prices at which they may be exercised and any
limitations on transferability, shall be set forth or incorporated by reference in the
instrument or instruments evidencing the rights or options.
(3) Where a company proposes to issue such rights or options to one or more of the
persons referred to in subsection (1) as an incentive to service or continued service
with the company or any related company, or where it proposes to issue such rights or
options to a trustee on behalf of such persons, the issue shall be authorised at a
general meeting by special resolution, or shall be authorised by and be consistent with
a scheme adopted at a general meeting by special resolution.
(4) If there are any pre-emptive rights in any of the shares proposed under subsection
(3) to be subject to rights or options, the issue or scheme, as the case may be, shall
also be approved by the vote or written consent of the holders of a majority of the
shares entitled to exercise pre-emptive rights with respect to such shares, and the vote
or written consent shall release the pre-emptive rights.

43
(5) The special resolution authorising the issue such rights or options, or the scheme
adopted by special resolution, shall include-
(a) the material terms and conditions upon which the rights or options are to
be issued, including any restrictions on the number of shares that eligible
individuals may have the right or option to acquire;
(b) the method of administering the scheme, in the case of a scheme;
(c) the terms and conditions of payment for shares in full or by instalments
(d) any limitations on the transferability of the shares; and
(e) the voting and dividend rights to which the holders of the shares may be
entitled.
(6) The terms and conditions shall not provide for any share certificate to be delivered
to a shareholder, or confer any right to vote in respect of such shares, prior to full
payment therefor.
(7) In the absence of fraud in the transaction, the decision of the directors (or, where
the directors or a sufficient quorum thereof are not themselves disinterested in the
issue or scheme, the decision of the general meeting) shall be conclusive as to the
adequacy of the consideration, tangible or intangible, received or to be received by the
company for the issue of rights or options and for the acquisition pursuant thereto of
shares in the company.
(8) This section shall not apply to the right of holders of convertible debentures to
acquire shares upon the exercise of a conversion option.

Division 4.3-Alteration of share capital

74.(1) A company may, unless its articles provide otherwise, by special resolution
alter its share capital as stated in the certificate of share capital by doing any of the
following: Alteration of share capital
(a) increasing its share capital by new shares of such an amount as it thinks
expedient;
(b) consolidating and dividing all or any of its share capital into shares of a
larger amount than its existing shares;
(c) converting all or any of its paid up shares into stock, and re-converting that
stock into paid up shares of any denomination;
(d) subdividing its shares, or any of them, into shares of smaller amounts than
is stated in the certificate of share capital;
(e) cancelling shares which, at the date of the passing of the resolution, have
not been allotted to any person, and diminishing the amount of its share
capital by the amount of the shares so cancelled.
(2) Where shares are subdivided under this section, the proportion between the
amount paid and the amount, if any, unpaid on each reduced share shall be the same
as it was in the case of the share from which the reduced share is derived.

(3) A cancellation of un-allotted shares under this section shall be deemed not to be a
reduction of share capital for the purposes of this Act.
(4) Where a company has made any alteration referred to in subsection (1), it shall
within one month after so doing lodge with the Registrar-

44
(a) a notice in the prescribed form specifying, as the case may be, the shares
increased, consolidated, divided, subdivided, converted, redeemed or
cancelled or the stock reconverted; and
(b) a copy of the resolution authorising the alteration.
(5) Where an alteration under this section alters a particular stated in the company's
certificate of share capital, the Registrar shall issue a replacement certificate of share
capital worded to meet the circumstances of the case.
(6) If a company fails to comply with subsection (4), the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding ten monetary units for each day that the failure continues.
75.(1) If a company has accumulated a sum of undivided profits, which with the
approval of the shareholders may be distributed among the shareholders in the form of
a dividend or bonus, the company may, by special resolution, return the same, or any
part thereof, to the shareholders in reduction of the paid up capital of the company,
the unpaid capital being thereby increased by a similar amount. Power to return
accumulated profits in reduction of paid up share capital

(2) Within twenty-one days after making a special resolution under subsection (1), the
company shall lodge with the Registrar a return in the prescribed form giving the
details required in the case of a special resolution reducing share capital.
(3) The resolution shall take effect as from the date of lodgement.
(4) The provisions of this Act with respect to reduction of share capital shall not apply
to a reduction of paid up share capital under this section, except as provided in
subsection (2).
76.(1) Subject to confirmation by the court, a company may, if so authorised by its
articles, by special resolution reduce its share capital in any way, and in particular,
without prejudice to the generality of the foregoing power, may- Special resolution
for reduction of share capital
(a) extinguish or reduce the liability on any of its shares;
(b) either with or without extinguishing or reducing liability on any of its
shares, cancel any paid-up share capital which is in excess of the wants of
the company; or
(c) either with or without extinguishing or reducing liability on any of its
shares, pay off any paid-up share capital which is in excess of the wants of
the company;
and may, if and so far as is necessary, reduce the amount of its shares accordingly.
(2) A special resolution under this section is in this Act referred to as "a resolution for
reducing share capital".
77.(1) If a company has passed a resolution for reducing share capital, it shall, within
twenty-one days after the making of the resolution, apply to the court for an order
confirming the reduction. Creditors may object to reduction in capital
(2) If the proposed reduction of share capital involves either diminution of liability in
respect of unpaid share capital or the payment to any shareholder of any paid-up share

45
capital, subsections (5) and (6) shall apply to the reduction unless the court directs
otherwise.
(3) In giving a direction under subsection (2), the court may direct that subsections (5)
and (6) shall not apply to a specified class or classes of creditors.
(4) If subsection (2) does not apply, subsections (5) and (6) shall not apply unless the
court directs that they shall apply.
(5) Every creditor of the company who at the date fixed by the court is entitled to any
debt or claim which, if that date were the commencement of the winding-up of the
company, would entitle the creditor to benefit from the distribution under the
winding-up, shall be entitled to object to the reduction.
(6) The court shall settle a list of creditors so entitled to object, and for that purpose
shall ascertain, as far as possible without requiring an application from any creditor,
the names of those creditors and the nature and amount of their debts or claims, and
may publish notices fixing a day or days after which creditors not yet entered on the
list will lose their right to object if they have not presented a claim to be entered on
the list.
(7) If a creditor entered on the list whose debt or claim is not discharged or has not
been determined does not consent to the reduction, the court may, if it thinks fit,
dispense with the consent of that creditor, on the company's securing payment of his
debt or claim by appropriating-
(a) the full amount of the debt or claim, if the company admits the full amount
of the debt, or claim, or, though not admitting it, is willing to provide for
it; or
(b) an amount fixed by the court after the like inquiry and adjudication as if
the company were being wound-up by the court, if the company does not
admit and is not willing to provide for the full amount of the debt or claim,
or if the amount is contingent or not ascertained.
78.(1) The court, if satisfied with respect to every creditor of the company who is
entitled to object to the reduction, that- Order confirming reduction and powers
of court in making such order
(a) his consent to the reduction has been obtained;
(b) his debt or claim has been discharged or determined; or
(c) his debt or claim has been secured;
may make an order confirming the reduction on such terms and conditions as it thinks
fit.
(2) The order may require the publication of a notice of the reduction in capital on the
issue of the replacement certificate of share capital under section seventy-nine.
(3) Where the court makes any such order it may, if for any special reason it thinks it
proper so to do, make an order-
(a) directing that the company shall, during a period specified in the order, add
to its name as the last words thereof the words "and reduced"; or
(b) requiring the company to publish as the court directs the reasons for the
reduction or such other information in regard thereto as the court may
think expedient with a view to giving proper information to the public.

46
(4) Where a company is ordered to add to its name the words "and reduced", those
words shall, until the expiration of the period specified in the order, be deemed to be
part of the name of the company.
79.(1) The Registrar, on the lodgement of an order of the court confirming the
reduction of the share capital of a company and of a minute approved by the court
showing, with respect to the share capital of the company as altered by the order-
Lodgement of order and issue of replacement certificate of share capital
(a) the amount of the share capital;
(b) the number of shares into which it is to be divided;
(c) the amount of each share; and
(d) the amount, if any, at the date of lodgement deemed to be paid up on each
share;
shall issue a replacement certificate of share capital of the company, worded to meet
the circumstances of the case.
(2) On the issue of the certificate, the resolution for reducing share capital as
confirmed by the order shall take effect.
(3) The issue of the certificate of share reduction shall be conclusive evidence that all
the requirements of this Act with respect to reduction of share capital have been
complied with, and that the share capital of the company is as stated in the certificate.
80.(1) Subject to this section, where the share capital of a company is reduced, a
member of the company, past or present, shall not be liable in respect of any share to
any call or contribution exceeding in amount the difference, if any, between the
amount of the share fixed by the reduction and the amount paid, or the reduced
amount, if any, which is to be deemed to have been paid, on the share, as the case may
be. Liability of members in respect of reduced shares
(2) If any creditor, entitled in respect of any debt or claim to object to the reduction of
share capital, is, by reason of his ignorance of the proceedings for reduction, or of
their nature and effect with respect to his claim, not entered on the list of creditors,
and, after the reduction, the company is unable within the meaning of the provisions
of this Act with respect to the winding-up by the court to pay the amount of his debt
or claim, then-
(a) every person who was a member of the company at the date of issue of the
replacement certificate of share capital shall be liable to contribute as if the
company had commenced to be wound-up on that date; and
(b) if the company is wound-up, the court, on the application of any such
creditor and proof of his ignorance, may if it thinks fit settle accordingly a
list of persons so liable to contribute, and make and enforce calls and
orders on the persons on the list as if they were ordinary contributories in a
winding-up.
(3) Nothing in this section shall affect the rights of the members amongst themselves.
81. (1) Where a company has passed a resolution for reducing share capital, an
officer of a company who- Offence of concealing name of creditor
(a) wilfully conceals the name of any creditor entitled to object to the
reduction;

47
(b) wilfully misrepresents the nature or amount of the debt or claim of any
creditor; or
(c) aids, abets or is privy to any such concealment or misrepresentation;
shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding
five hundred monetary units.
(2) An officer referred to in subsection (1) shall be personally liable to pay to the
creditor the amount of his debt or claim to the extent that it is not paid by the
company, whether or not he has been convicted of an offence under subsection (1).
Division 4.4-Restrictions on financial assistance
82. (1) Subject to this Part, where a person is acquiring or is proposing to acquire any
shares in a company, the company or any of its subsidiaries shall not give financial
assistance directly for the purpose of that acquisition. Restrictions on financial
assistance in acquisition of shares
(2) Subject to this Part, where a person has acquired any shares in a company and any
liability has been incurred (by that or any other person) for the purpose of that
acquisition, the company and its subsidiaries shall not give any financial assistance
directly or indirectly for the purpose of reducing or discharging the liability so
incurred.
(3) This section shall not prohibit a company from giving any financial assistance for
the purpose of any acquisition of shares in the company or its holding company if-
(a) the giving of the assistance is an incidental part of some larger purpose of
the company, and the principal purpose of the company in giving that
assistance is not to reduce or discharge any liability incurred by a person
for the purpose of any such acquisition; and
(b) the assistance is given in good faith in the interest of the company.
(4) This section shall not prohibit-
(a) any distribution of a company's assets by way of dividend lawfully made
or any distribution made in the course of winding-up of the company;
(b) the allotment of any bonus shares;
(c) anything done in pursuance of an order of the court made under this Act
(d) anything done under an arrangement made in pursuance of section two
hundred and thirty-four;
(e) anything done under an arrangement made between a company and its
creditors which is binding on the creditors under section three hundred and
twenty-five;
(f) any reduction of capital confirmed by order of the court under this Part; or
(g) a redemption of any share in accordance with this Part.
(5) This section shall not prohibit-
(a) the lending of money by the company in the ordinary course of its business, if
the lending of money is part of the ordinary business of the company;
(b) the provision by a company, in accordance with an employee's share scheme,
of money for acquisition of fully paid shares in the company to be held by or
for the benefit of employees of the company (including any director holding a
salaried position in the company); or

48
(c) the making by a company of loans to persons, other than directors, employed
in good faith by the company, with a view to enabling those persons to acquire
fully paid shares otherwise than as nominees of the company.
(6) In giving financial assistance to any person under subsection (5), a public
company shall not reduce its net assets, other than distributable profits.
(7) A reference in this section to a person incurring any liability includes a reference
to his changing his financial position by making any agreement or arrangement
(whether enforceable or unenforceable and whether made on his own account or with
any other person) or by any other means.
(8) If a company fails to comply with subsection (1) or (2), the company, and each
officer in default, shall be guilty of an offence, and shall be liable on conviction to a
fine not exceeding two thousand monetary units or to imprisonment for a period not
exceeding two years, or to both.
(9) In this section-
"financial assistance" means:
(a) financial assistance given by way of gift;
(b) financial assistance given by way of guarantee, security or indemnity,
other than an indemnity in respect of the indemnifier's own neglect or
default, or by way of release or waiver;
(c) financial assistance given by way of-
(i) a loan;
(ii) any other agreement under which any of the obligations of any other
party to the agreement remains unfulfilled; or
(iii) inovation of, or the assignment of, any rights arising under any
such loan or agreement; or
(d) any other financial assistance given by a company which has no net assets, or
whereby the net assets of the company are reduced to a material extent;
"net assets", in relation to the giving of financial assistance by a company, means the
amount by which the aggregate amount of the company's assets exceeds the aggregate
amount of its liabilities taking the amount of both assets and liabilities to be stated in
the company's accounting records immediately before the financial assistance is
given;
"liabilities" includes any amount retained as reasonably necessary for the purpose of
providing for any liability or loss which is either likely to be incurred, or certain to be
incurred but uncertain as to amount or as to the date on which it will arise.
83.(1) A private company may give financial assistance for the acquisition of shares
in itself in accordance with this section. Relaxation of restrictions for private
companies
(2) A private company may give financial assistance for the acquisition of shares in a
private company that is its holding company in accordance with this section unless it
is the subsidiary of-
(a) a body corporate not incorporated in Zambia; or
(b) a public company;
that is also a subsidiary of the holding company concerned.

49
(3) Financial assistance shall not be given under this section unless-
(a) the company proposing to give the financial assistance is a wholly owned
subsidiary; or
(b) the giving of the assistance is approved by special resolution of the
company.
(4) Where the financial assistance to be given by a company is for the acquisition of
shares in its holding company, financial assistance shall not be given unless approved
by special resolutions of-
(a) that holding company; and
(b) any other company which is both the company's holding company and a
subsidiary of that holding company, other than a wholly owned subsidiary.
(5) The directors of the company proposing to give the financial assistance and, where
the shares to be acquired are shares in its holding company, the directors of the
companies referred to in paragraphs (a) and (b) of subsection (4), shall, not more than
seven days before the special resolution is put to a meeting, make a statutory
declaration in the prescribed form complying with subsection (6) and make it
available, together with the auditors' report annexed thereto, for inspection by
members of the company at the meeting at which the resolution is to be voted on.
(6) A statutory declaration for the purposes of subsection (5) shall-
(a) contain such particulars of the assistance to be given and of the business of
the company of which they are directors as may be prescribed;
(b) identify the person to whom the assistance is to be given;
(c) state that, to the best of the directors' knowledge and belief, the company
will be able to pay its debts-
(i) in full within twelve months of the commencement of the winding-up
of the company, if it is intended to commence the winding-up of the company
within twelve months of the date of the declaration; or
(ii) as they fall due during the year immediately following that date, in any
other case.
(7) In forming their views for the purposes of the statutory declaration, the directors
shall take into account any liabilities of the company which the court would be
required by section two hundred and seventy-two to take into account in determining
for the purposes of that section whether the company was unable to pay its debts.
(8) The statutory declaration shall have annexed to it a report by the auditors of the
company, addressed to the directors who made the declaration, stating that the
auditors have enquired into the state of affairs of that company and are not aware of
any thing to indicate that the opinion expressed by the directors in the declaration is
unreasonable in all the circumstances.
(9) Where a special resolution is required under this section to be passed approving
the giving of financial assistance, financial assistance shall not be given less than one
month after the date on which-
(a) the special resolution is passed; or
(b) the last of the resolutions is passed, where more than one such resolution is
passed;
unless each member of the company who was entitled to vote on the resolution, or any
of the resolutions, voted in favour of the resolution concerned.

50
(10) Where an application for the cancellation of any such resolution is made under
this section, financial assistance shall not be given before the final determination of
the application unless the court otherwise orders.
(11) Financial assistance shall not be given under this section more than two months
after-
(a) the date on which the directors of the company proposing to give the
financial assistance made the statutory declaration under subsection (5); or
(b) the date on which the earliest of the declarations under subsection (5) is
made, where the company is a subsidiary and both its directors and the
directors of any of its holding companies made such a declaration;
unless the court, on an application for the cancellation of any of the resolutions,
otherwise orders.
(12) Where a special resolution under this section is passed by a company, an
application may be made to the court for the cancellation of that resolution by not
fewer than one fifth of the members, being persons who did not consent to or vote in
favour of the resolution, within twenty-one days after the making of the resolution.

(13) Within twenty-one days after-

(a) the passing of a special resolution under this section, if there was no
application under subsection (12); or

(b) the decision by the court, if there was an application made under subsection
(12) but the court rejected the application;
the company shall lodge with the Registrar-
(i) the statutory declaration together with any auditors' report annexed thereto;
and
(ii) a copy of the special resolution.

(14) If a company fails to comply with subsection (13), the company, and each
officer in default, shall be guilty of an offence, and shall be liable on conviction to a
fine not exceeding ten monetary units for each day that the failure continues.

(15) A director of a company who makes a statutory declaration for the purposes of
this section without having reasonable grounds for the opinion expressed in that
declaration shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding five hundred monetary units or to imprisonment for a period not exceeding
six months, or to both.

(16) In this section, "financial assistance" and "net assets" have the same meaning as
in section eighty-two.

51
Division 4.5-Miscellaneous

84. No dividend shall be payable to the shareholders of a company except out of the
profits arising or accumulated from the business of the company. Dividends may be
paid only out of profits

85. Company shares that are listed on any stock exchange in Zambia shall be
exempt from the provisions of the Property Transfer Tax Act, 1984. Exemption
from Property Transfer Tax Act
Cap. 422

PART V
DEBENTURES AND CHARGES

Division 5.1-Debentures

86. (1) A company may raise loans by the issue of a debenture or of a series of
debentures. Issue of debentures

(2) Debentures may either be secured by a charge over property of the company or be
unsecured by any charge.

(3) All debentures which by their terms, or by the terms of any resolution authorising
their creation, or by the terms of any trust deed, are declared to be of the same series
shall rank equally in all respects notwithstanding that they may be issued on different
dates.

(4) Any debenture stock shall be created-

(a) by deed under the common seal of the company in favour of trustees for the
debenture stockholders; and

(b) as stock of a specified total amount, parts of which, represented by debenture


stock certificates, are issued to separate holders.

(5) A contract with a company to take up and pay for any debenture of the company
may be enforced by an order for specific performance.

52
(6) A condition contained in a debenture or in a trust deed for securing a debenture
shall not be invalid by reason only of the fact that the debenture is hereby made
irredeemable or redeemable only on the happening of a contingency, however remote,
or on the expiration of a period, however long.

87. (1) A company shall, within two months after the allotment of any of its
debentures or after the registration of the transfer of any debentures, deliver to the
registered holder thereof the debentures or a certificate of the debenture stock under
the common seal of the company. Documents of title to debentures

(2) Sections sixty-four and sixty-six to seventy-one shall apply, with the necessary
modifications, in relation to debentures and debenture holders.

(3) If any restriction is imposed on the right to transfer any debentures, notice of the
restriction shall be endorsed on the face of the debenture or debenture stock certificate
and, in the absence of such endorsement, the restriction shall be ineffective as regards
any transferee for value whether or not he has notice of the restriction.

(4) If a company fails to comply with subsection (1), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding three monetary units for each day that the failure continues.

88. (1) A company shall not- Trustees for debenture holders

(a) idemnify a person who is a trustee for debenture holders of the company or a
related company against any liability which under law would otherwise attach to him
in respect of any breach of trust or failure to show the degree of care and diligence
required of him as trustee having regard to the powers, authorities or discretion
conferred on him by the trust deed; or

(b) compensate such a person for the cost of meeting any such liability.

(2) A provision of a contract between the company and such a trustee shall be void if
it purports to indemnify or compensate him in contravention of subsection (1).

(3) A release in respect of anything done or omitted to be done by a trustee may be


made by a special resolution of the debenture holders.

(4) The court may remove a trustee for the holders of any debentures and appoint
another in his place if, on the application of any debenture holder, it is satisfied that

53
the trustee has interests which conflict or may conflict with those of the debenture
holders or that for any other reason it is undesirable that the trustee should continue to
act.

(5) Upon such an application the court may order the applicant to give security for
the payment of the costs of the trustee.

89. (1) The following persons shall not be eligible for appointment or competent to
act as trustee for the holders of debentures of a company: Eligibility for
appointment as trustee for debenture holders

(a) an individual under the age of eighteen years;

(b) a person under any legal disability;

(c) a person prohibited or disqualified from so acting by order of a court of


competent jurisdiction;

(d) an undischarged bankrupt;

(e) a person who is an officer or auditor of the company or a related company or


who has been such an officer or auditor within the preceding two years, save with the
leave of the court;

(f) a person who has been convicted within the preceding five years of an offence
involving fraud or dishonesty;

(g) a person who has been removed within the preceding five years from an
offence of trust by order of a court of competent jurisdiction.

(2) A person who, in contravention of this section, acts or continues to act as a trustee
for debenture holders shall be guilty of an offence, and shall be liable on conviction to
a fine not exceeding ten monetary units for each day that the contravention continues.

90. (1) A copy of any trust deed for securing an issue of debentures shall be provided
to a holder of those debentures at his request and on payment of the sum of one
monetary unit, or such lesser sum as may be required by the company, within seven
days after the receipt of the request. Right to copies of trust deed

54
(2) If the company fails to comply with this section, the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding three monetary units for each day that the failure continues.

91. (1) No unsecured debenture or debenture stock certificate, or prospectus relating


to unsecured debentures, shall be issued by a company unless the term "debenture", or
such other term as is used to denote the debenture, is qualified by the word "
unsecured". Unsecured debentures to be so described

(2) If the company fails to comply with this section, the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding five hundred monetary units.

92. (1) A company which issues or has issued debentures shall maintain a register of
debenture holders. Register of debenture holders

(2) Sections forty-eight to fifty-five shall apply, with the necessary modifications, in
relation to the register.

(3) A company shall, on the demand of any trustee for its debenture holders, within
seven days furnish to him the names, addresses and other registered particulars of the
debenture holders for which he is a trustee.

(4) If the company fails to comply with this section, the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding ten monetary units for each day for which the failure continues.

93. (1) Subject to this section, sections one hundred and thirty-nine to one hundred
and fifty-five shall apply, with the necessary modifications, in relation to the holders
of debentures of a company that are secured by a trust deed.Meetings of holders of
debentures secured by a trust deed

(2) Unless the trust deed provides otherwise, the registered debenture holders shall
have votes in proportion to the value of the debentures they hold.

94. (1) The terms of any debentures not secured by a trust deed may provide for the
convening of general meetings of the debenture holders or of classes of debenture
holders, and for the passing at such meetings of resolutions binding on all the

55
debenture holders or on all the debenture holders of those classes. Meetings of other
debenture holders

(2) Whether or not provision for meetings is made under the debentures, the court
may at any time direct a meeting of the debenture holders of any class to be held and
conducted in such manner as it thinks fit to consider such matters as it may direct, and
may give such ancillary or consequential directions as it thinks fit.

(3) Subject to subsection (4) and unless the debentures provide otherwise, sections
one hundred and forty-six to one hundred and fifty-two shall apply, with the necessary
modifications, to a meeting held in accordance with this section.

(4) Unless the terms of the debentures provide otherwise, the registered debenture
holders shall have votes in proportion to the value of the debentures they hold.

95. (1) A company shall not re-issue any debenture which has been redeemed. Re-
issue of redeemed debentures

(2) A company shall not issue a new debenture in place of a redeemed debenture on
terms that the new debenture shall have the same priorities as the redeemed debenture.

(3) The issue of a new debenture in place of a redeemed debenture shall not be
treated as the issue of a new debenture for the purposes of any provision limiting the
amount or number of debentures which may be issued.

(4) A purported issue or re-issue of debentures that contravenes this section shall be
void.
Division 5.2-Charges

96. Where a charge is expressed to be made to secure an indeterminate amount, or a


fluctuating amount advanced on current account by, or due and owing to, the person
entitled to the charge, the charge shall not be considered to be redeemed by reason
only that the current account ceases to be in debit or by reason only that no amount is
due or owing, as the case may be. Charge to secure fluctuating amount

97. (1) This section applies to any charge on property of the company, whether or
not it is required to be registered under section ninety-eight.Company's register of
charges

56
(2) A company which has any property subject to a charge shall open and maintain a
register of charges over its property in which it shall, on the creation of a charge over
property of the company, or on the acquisition of property subject to a charge, enter
the following particulars of each charge:

(a) the date of creation of the charge or the date of acquisition of the property, as
the case may be;

(b) a short description of the liability (whether present or prospective) secured by


the charge;

(c) a short description of the property charged;

(d) the name of the trustee, if the charge secures debentures under a trust deed;

(e) if the charge does not secure debentures under a trust deed-
(i) the name of the chargee; and
(ii) the name of the person whom the company believes to be the holder of the
charge.

(3) The register shall be open for inspection-

(a) by any member or creditor of the company or by the Registrar or his agent,
without charge; and

(b) by any other person on payment of an amount required by the company, not
exceeding ten monetary units or such higher amount as may be prescribed.

(4) If the company fails to comply with this section, the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding five hundred monetary units.

98. (1) The Registrar shall maintain a register containing, with respect to each
company, the particulars of the charges of the company that are lodged in accordance
with this Part. Registrar's register of charges

(2) The register shall include, with respect to each company, a chronological index of
the charges of the company.

57
99. (1) This section applies to the following charges over the property or undertaking
of a company: Registration of charges by companies

(a) a charge for the purpose of securing any issue of a series of debentures;

(b) a charge on uncalled share capital of the company;

(c) a charge to which the Trade Charges Act applies; Cap. 415

(d) a floating charge on the whole or part of the undertaking or property of the
company;

(e) a charge on land, wherever situated, or any interest therein;

(f) a charge on any present or future book debts of a company;

(g) a charge on calls made but not paid;

(h) a charge on a ship or aircraft or any share in a ship or aircraft;

(i) charge on goodwill, on a patent or a licence under a patent, on a trade mark, or


on a copyright or a licence under a copyright;

(j) a charge overshares in another body corporate, not being-


(i) a charge in favour of a broker who has paid for a share purchased or applied
for on behalf of the company; or
(ii) a charge created by or accompanied by delivery of the certificates for such
shares.

(2) Subject to this section, if a company-

(a) creates any charge to which this section applies; or

(b) acquires property that is subject to a charge to which this section applies;

58
the company shall, within twenty-one days after the date of the creation of the charge,
or after the acquisition of the property, as the case may be, lodge with the Registrar in
the prescribed form the particulars referred to in subsection (3) together with-
(i) particulars of the instrument by which the charge is created or evidenced
sufficient to identify the instrument, if the charge is created or evidenced by an
instrument by which it is already registered under this or any other Act; or
(ii) a certified copy of the instrument, if any, by which the charge is created or
evidenced, in any other case.

(3) The particulars required for the purposes of subsection (2) are-

(a) the date of creation of the charge;

(b) the date of acquisition of the property by the company, where the property was
subject to the charge when acquired by the company;

(c) the amount secured by the charge;

(d) short particulars of the property charged;

(e) the names of the charges; and

(f) any other prescribed particulars of the charge.

(4) Where the property subject to a charge includes property outside Zambia, this
section applies in relation to any instrument creating or evidencing or purporting to
create or evidence the charge, notwithstanding that further proceedings may be
necessary to make the charge valid or effectual according to the law of the country in
which the property is situated.

(5) Where a negotiable instrument has been given to a company to secure the
payment of any debts owed to the company, the deposit of the instrument for the
purposes of securing an advance to the company shall for the purposes of this section
be deemed not to be a charge on those debts owed to the company.

(6) Debentures entitling the holder to a charge on land shall for the purposes of this
section be deemed not to be an interest in land.

59
(7) Where a series of debentures is created by a company and contains, or gives by
reference to any other instrument, any charge to the benefit of which the debenture
holders of that series are entitled in all respects equally, subsection (3) shall be
satisfied by the lodgement of the following particulars:

(a) the total amount secured by the whole series;

(b) the date of the resolution authorising the issue of the series and the date of the
document, if any, by which the security is created or defined;

(c) a general description of the property charged; and

(d) the names of the trustees, if any, for the debenture holders, together with a
certified copy of the document containing the charge, or, if there is no such document,
a certified copy of one of the debentures of the series;

together with, where more than one issue is made of debentures in the series, the
lodgement, within twenty-one days after any issue, of particulars of the date and
amount of the issue.

(8) Where any commission, allowance, or discount has been paid or made either
directly or indirectly by a company to any person in consideration of his subscribing
or agreeing to subscribe, whether absolutely or conditionally, for any debentures of
the company, or procuring or agreeing to procure subscriptions, whether absolute or
conditional, for any such debentures, the particulars required to be lodged under this
section shall include particulars as to the amount or rate per centum of the
commission, discount, or allowance to be paid or made.

(9) The deposit of any debentures as security for any debt of the company shall not
for the purposes of this section be regarded as the issue of such debentures at a
discount.

(10) Lodgement of documents for the purposes of this section may be effected on the
application of any person interested in the charge concerned, and if lodgement is
effected by a person other than the company, that person shall be entitled to recover
from the company the amount of any fees properly paid by him to the Registrar on the
lodgement.

(11) If the particulars and documents relating to a charge that are required by this
section to be lodged with the Registrar are not lodged within the time required-

60
(a) the charge shall be void against the liquidator and any creditor of the
company; and

(b) the full debt secured by the charge shall become payable immediately by the
company.

(12) Nothing in this section shall affect the provisions of any other written law
relating to the registration of charges.

100. If the particulars and documents relating to a charge that are required by this
Part to be lodged with the Registrar are lodged within the time required, the Registrar
shall issue a certificate of the registration of the charge stating the date of lodgement
and, if applicable, the amount thereby secured, and the certificate shall be conclusive
evidence that the requirements of this Part as to registration have been complied with.
Certificate to be issued by Registrar

101. (1) Subject to any consent (express or implied) given by the person who would
otherwise be entitled to priority, charges required by this Part to be registered shall
have priority in relation to one another in accordance with the times at which they
were lodged. Priorities

(2) Where another written law by its terms accords priority as between successive
charges affecting the same property, subsection (1) shall not affect the priorities
between those charges set by that written law.

(3) Subject to subsection (2), where a charge (other than a floating charge) gives
security over property of such a kind that this Part would require its registration, and
also over other property, subsection (1) shall apply in respect of the first-mentioned
property, but not in respect of the other property.

102. (1) If there is lodged with the Registrar a statement in the prescribed form,
signed on behalf of a company and by the person entitled to charge, to the effect that-
Entries of satisfaction and release of property from charge

(a) the debt for which the charge was given has been paid or satisfied in whole or
in part; or

(b) part of the property or undertaking charged has been released from the charge
or has ceased to form part of the company's property or undertaking;
then-

61
(i) the Registrar shall enter the fact in the register of charges;

(ii) the statement shall, in favour of the liquidator and any creditor of the
company, be binding on the person entitled to the charge who signed the statement
and on any other person claiming through him.

103. (1) If a variation is made in the terms of a charge registered under this Part,
other than a satisfaction or release to which section one hundred and two applies,
particulars after the variation in the prescribed form shall be lodged with the Registrar
within twenty-one days of the making of the variation. Variation of registered
charge

(2) The particulars shall identify the terms of the original charge that have been
varied and shall indicate the nature of the variation made in each such term.

(3) Where the effect of the variation is to increase the extent of the security or the
amount for which security is available, the increase shall, for the purposes of
priorities, be treated as if it were a charge, being a charge for an amount which is the
amount of the increase and whose particulars were lodged at the time that the
particulars of the variation were lodged.

(4) Where by its terms a registered charge secures a fluctuating amount, or an initial
sum together with the words "further advances", the making of a further advance to
the company shall not, for the purposes of this section, constitute a variation in the
terms of the charge.

(5) Lodgement of documents for the purposes of this section may be effected on the
application of any person interested in the charge concerned, and if lodgement is
effected by a person other than the company, that person shall be entitled to recover
from the company the amount of any fees properly paid by him to the Registrar on the
lodgement.

(6) If the particulars and documents relating to a charge that are required by this
section to be lodged with the Registrar are not lodged within the time required-

(a) the charge shall be void against the liquidator and any creditor of the
company; and

62
(b) the full debt secured by the charge shall become payable immediately by the
company.

104. (1) If a person enters into possession of any of the property of a company as
mortgagee under any powers contained in a charge, he shall, within seven days after
so doing, lodge a notice to that effect in the prescribed form with the Registrar.
Registration of enforcement of security by mortgagee

(2) Where a person who is in possession as mortgagee of property of a company goes


out of possession, he shall, within fourteen days thereafter, lodge a notice to that
effect in the prescribed form with the Registrar.

(3) A person who fails to comply with this section shall be guilty of an offence, and
shall be liable on conviction to a fine not exceeding ten monetary units for each day
that the failure continues.

105. (1) Where a company issues a debentures forming one of a series of debentures,
or a certificate of debenture stock, and the payment of the debenture is secured by a
charge registered under this Part, the company shall endorse on the debenture or
certificate of debenture stock a statement that registration has been effected and the
date of registration. Endorsement of registration on debentures of a series

(2) If the company fails to comply with subsection (1), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding two hundred and fifty monetary units.

(3) A person who-

(a) causes to be endorsed on any debenture or certificate of debenture stock a


statement that registration has been effected, which he knows to be false in any
particular, or

(b) authorises or permits the delivery of any debenture or certificate of debenture


stock bearing an endorsed statement that registration has been effected, which he
knows to be false in any particular;
shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding
two hundred and fifty monetary units or to imprisonment for a period not exceeding
three months, or to both.

106. This Division shall bind the State in respect of all charges to which the State is
entitled.

63
Division 5.3-Receivers Charges in favour of the State

107. This Division shall apply in relation to a receiver of property of a company


who is appointed after the commencement of this Act, even if the appointment arose
out of a transaction entered into before that commencement. Application of
Division

108. (1) When a charge over property of a company has become enforceable, the
court may, on the application of the chargee, appoint- Appointment of receiver
by court

(a) a receiver who is not also a manager; or

(b) a receiver and manager;


of the property.

(2) In the case of floating charge, the court may, whether or not the charge has
become enforceable, on the application of the chargee, appoint-

(a) a receiver who is not also a manager; or

(b) a receiver and manager;


of the property and undertaking of the company if it is satisfied that events have
occurred or are about to occur which render it unjust to the chargee that the company
should retain power to dispose of its assets.

(3) A receiver shall not be appointed as a means of enforcing debentures not secured
by any charge.

109. (1) A person who obtains an order for the appointment of a receiver of property
of a company, or who appoints such a receiver under a power contained in an
instrument, shall, within seven days after obtaining the order or making the
appointment, lodge a notice with the Registrar of the order or appointment.
Notification of appointment of receiver

(2) A person who is appointed as a receiver of property of a company shall, within


fourteen days after the appointment, lodge with the Registrar a notice in the
prescribed form of the physical address of the person's office, and a postal address.

64
(3) Where a person who has been appointed receiver of property of a company ceases
to act as receiver, he shall, within seven days after so ceasing to act as receiver, lodge
with the Registrar a notice that he has ceased to act as receiver.

(4) On lodgement of a notice under subsection (1) or (3), the Registrar shall cause a
notice of the appointment of the person as receiver, or that the person has ceased to
act as receiver, as the case may be, to be published in the Gazette.

110. (1) Where- Payment of preferential creditors

(a) a receiver is appointed, on behalf of the holder or trustee of any debenture of a


company that is secured by a floating charge; or

(b) possession is taken by or on behalf of such a person;


of property comprised in or subject to the charge, then, if the company is not at the
time in the course of being wound-up, the debts which in every winding-up are, under
section three hundred and forty-six (relating to preferential payments), to be paid in
priority to all other debts shall be paid out of any assets coming to the hands of the
receiver or the person taking possession in priority to any claim for principal or
interest in respect of the debentures.

(2) For the purpose of applying section three hundred and forty-six, the date of the
appointment of the receiver or of possession being taken, as the case may be, shall be
deemed to be the date of commencement of the winding-up.

111. (1) A body corporate shall not be appointed as a receiver of the property or
undertaking of a company. Eligibility for appointment as receiver

(2) An individual shall not be appointed, act or continue to act as a receiver of the
property or undertaking of a company if he is-

(a) under the age of eighteen years;

(b) under any legal disability;

(c) prohibited or disqualified from so acting by any order of a court of competent


jurisdiction;

65
(d) a mortgagee or chargee of the company;

(e) an undischarged bankrupt;

(f) a person who is, or has been within the previous two years, a director or
officer of the company or any related body corporate, save with the leave of the court;

(g) a trustee under any trust deed for the benefit of debenture holders of the
company, save with the leave of the court;

(h) a person who has been convicted, within the previous five years, of an offence
involving fraud or dishonesty; or

(i) a person who has been removed, within the previous five years, from an office
of trust by order of a court of competent jurisdiction.

(3) Where a company is being wound-up, the liquidator may not be appointed
receiver.

(4) Any person who in contravention of this section acts or continues to act as a
receiver shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding five hundred monetary units or to imprisonment for a period not exceeding
six months, or to both.

112. A receiver of any property or undertaking of a company appointed by the court


shall be an officer of the court and shall be deemed, in relation to the property or
undertaking, not to be an officer of the company, and shall act in accordance with the
directions and instructions of the court. Receivers appointed by the court

113. (1) A receiver of any property or undertaking of a company appointed,


otherwise than by a court, under a power contained in any instrument shall, subject to
section one hundred and fourteen, be deemed in relation to the property or
undertaking to be an agent and officer of the company and not an agent of the persons
by or on behalf of whom he is appointed, and he shall act in accordance with the
instrument under which he is appointed and with any directions of the court made
under this section. Receivers appointed otherwise than by the court

(2) The court may, on the application of such a receiver, make any order it thinks fit
giving directions in relation to any matter arising in connection with the performance

66
of the receiver's functions or declaring the rights of persons before the court or
otherwise.

(3) The court may, on the application of the company or any liquidator of the
company, by order fix the amount to be paid by way of remuneration to any such
receiver and may from time to time, on application made by the company or
liquidator or by the receiver, vary or amend the order.

(4) The power of the court under subsection (3) shall-

(a) extend to fixing the remuneration for any period before the making of the
order or the application therefor, if the court is satisfied that there are special
circumstances making it proper to do so;

(b) be exercisable notwithstanding that the receiver had died or ceased to act
before the making of the order or the application therefor; and

(c) extend to requiring the receiver or his personal representatives to account for
any amount that the receiver may have been paid or retained for his remuneration,
before the making of the order, that is in excess of the remuneration so fixed for that
period.

114. (1) A receiver of any property or undertaking of a company shall be personally


liable on any contract entered into by him as receiver except insofar as the contract
expressly provides otherwise. Liabilities of receivers on contracts

(2) Where the contract was entered into by the receiver in the proper performance of
his functions, he shall have, subject to the rights of any prior encumbrances, an
indemnity in respect of liability thereon out of the property in respect of which he has
been appointed to act as receiver.

(3) Where the receiver was appointed, otherwise than by a court, under a power
contained in any instrument, and the contract was entered into by him with the
express or implied authority of those appointing him, he shall also have an indemnity
in respect of liability thereon from those appointing him to the extent to which he is
unable to recover in accordance with subsection (2).

115. (1) Where a receiver of any property or undertaking of a company has been
appointed, every invoice, order or business letter issued by or on behalf of the
company, the receiver or the liquidator, being a document on or in which the name of

67
the company appears, shall contain a statement that a receiver has been appointed.
Fact that receiver has been appointed to appear on correspondence

(2) If the company fails to comply with this section, the company, and each officer,
liquidator and receiver in default, shall be guilty of an offence, and shall be liable on
conviction to a fine not exceeding three monetary units in respect of each document
not containing the statement.

116. Where a receiver is appointed of the whole or substantially the whole of the
undertaking of any company on behalf of the holders of any debentures secured by a
floating charge, section two hundred and eighty-eight and three hundred and thirty-
eight shall apply as regards the submission of a statement of affairs and of periodical
accounts by the receiver as if the company had been ordered to be wound-up under
this Act and as if the receiver had been appointed liquidator. Statement of
affairs and accounts where receiver of undertaking appointed

117. (1) Except where section one hundred and sixteen applies, a receiver of any
property of a company shall- Accounts of receivers

(a) within one month, or such longer period as the Registrar may allow, after the
end of the period of twelve months from the date of his appointment and of every
subsequent period of twelve months until he ceases to act, lodge with the Registrar an
abstract showing the receiver's receipts and payments during that period of twelve
months; and

(b) within one month, or such longer period as the Registrar may allow, after he
ceases to act as receiver, lodge with the Registrar an abstract showing the receiver's
receipts and payments during the period from the end of the twelve months to which
the last abstract (if any) related, and the total of those receipts and payments during
the whole period of his appointment.

(2) A receiver who fails to comply with this section shall be guilty of an offence, and
shall be liable on conviction to a fine not exceeding ten monetary units for each day
that the failure continues.

118. (1) If a receiver, in the course of the performance of his duties as receiver of
property or undertaking of a company, is satisfied that- Reports by receivers

(a) there has been a contravention of, or failure to comply with, any of the
provisions of this Act; and

68
(b) the circumstances are such that in his opinion the matter has not been or will
not be adequately dealt with by bringing the matter to the notice of the directors of the
company or, if the company is a subsidiary, of the directors of any holding company
of the company;
he shall as soon as is practicable report the matter to the Registrar in writing.

(2) The court may, on its own motion or on the application of the Registrar or of any
person interested in the appointment of a receiver of the property of a company,
require the receiver to submit a report to the Registrar on any matter relating to the
company on which the receiver may have information.

PART VI
PUBLIC ISSUE OF SHARES, ETC.

Division 6.1-Interpretation

119. (1) In this Part, an "invitation to the public" to acquire shares or debentures of a
company means an offer of, or invitation to make an offer for, shares or debentures of
a company other than one- Meaning of "invitation to the public"

(a) made to fifteen or fewer persons; or

(b) made-
(i) to fifty or fewer persons; or
(ii) of the company exclusively to its existing shareholders, debenture holders or
employees;
on the basis that a person who accepts the invitation may not renounce or assign the
benefit of any shares or debentures to be obtained thereunder in favour of any other
person.

(2) For the purpose of this Part, the issue of any kind of application form for shares or
debentures of a company shall be deemed to be an invitation to acquire those shares
or debentures.

120. (1) Where a company allots or agrees to allot any of its shares or debentures to
a person with a view to the public's being invited to acquire any of those shares or
debentures, then, for the purposes of this Act- Offer of sale deemed to be made
by the company

(a) an invitation to the public so made shall be deemed to be made by the


company as well as by the person who in fact made it; and

69
(b) a person who acquires any of the shares or debentures in response to the
invitation shall be deemed to be an allottee from the company of those shares or
debentures.

(2) Where a company allots or agrees to allot any of its shares or debentures to a
person and an invitation to the public is made in respect of any of the shares or
debentures-

(a) within six months after the allotment or agreement to allot; or

(b) before the company has received the whole of the consideration in respect of
the shares or debentures;
it shall be presumed that the allotment or agreement to allot was made by the
company with a view to an invitation to the public being made in respect of those
shares or debentures.

121. (1) The first publication of the prospectus shall be presumed to be on the date of
registration thereof. First publication of a prospectus

(2) Where the shares or debentures to which the invitation relates are dealt in on a
stock exchange or where the prospectus states that application has been or will be
made for permission to deal therein on any stock exchange, and it is necessary to
advertise the prospectus in one or more newspapers to comply with the requirements
of that stock exchange, the first publication of the prospectus shall be deemed to occur
when the prospectus is first so advertised.
Division 6.2-Invitations to the public and prospectuses

122. (1) In this section, "company" includes a company proposed to be formed.


Restrictions on invitations to the public to acquire shares and debentures

(2) A person shall not make an invitation to the public to acquire shares in a company
unless-

(a) the company is a public company and the invitation complies with this
Division; or

(b) the invitation is supervised by the court.

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(3) A person shall not make an invitation to the public to acquire debentures in a
company unless-

(a) all of the following conditions are satisfied:


(i) the company is a public company;
(ii) the debentures are created by deed under the common seal of the company in
favour of trustees for the debenture holders; and
(iii) the invitation complies with this Division; or

(b) the invitation is supervised by the court.

(4) A person shall not make an invitation to the public to acquire equity shares in a
company unless all the equity shares in the company already issued and all those to
which the invitation relates carry an unrestricted right to vote at general meetings of
the company and, on a poll, a constant number of votes which, in proportion to
nominal value, is the same in the case of every share.

(5) Subsection (4) shall not prohibit an invitation to acquire equity shares that do not
comply with that subsection if-

(a) the rights making them equity shares are expressed by the terms of issue to be
conditional upon the exercise by the holder of an option; and

(b) the shares will comply with that subsection if the option is exercised.

(6) Subsection (4) shall not prohibit an invitation to acquire equity shares that do not
comply with that subsection if the shares are issued, and the invitation made, in
fulfilment of an obligation entered into by the company before the commencement of
this Act.

(7) If a person acquires shares or debentures in a company as a result of any


invitation to the public in contravention of this section, he shall be entitled to recover
compensation for any loss sustained by him from any person making the invitation,
and where a person making the invitation was a body corporate, from any officer in
default.

(8) If an invitation to the public is made in contravention of this section, each person
making the invitation and, where such a person is a body corporate, each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding two thousand monetary units or to imprisonment for a period not exceeding
two years, or to both.

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123. (1) Subject to this section, a person may invite the public to acquire shares or
debentures of a public company or of a public company proposed to be formed only
if- Prospectus required for invitations to the public to purchase share or
debentures

(a) within six months prior to the making of the invitation there was registered by
the Registrar a prospectus relating to the shares or debentures that complies with this
Division;

(b) every person to whom the invitation is made is supplied with a true copy of
the prospectus at the time when the invitation is first made to him; and

(c) every copy of the prospectus states on its face that it has been registered by the
Registrar and the date of registration.

(2) An invitation published in a newspaper or magazine advertisement that


summarises the contents of a prospectus shall be deemed to satisfy paragraph (b) of
subsection (1) if the advertisement-

(a) does not contain or accompany any kind of application form for shares or
debentures;

(b) states with reasonable prominence where copies of the full prospectus may be
obtained, the fact that it has been registered and the date of registration; and

(c) is in terms previously approved in writing by the Registrar.

124. (1) A prospectus shall not be lodged with the Registrar unless- Contents
of prospectus

(a) it does not contain any untrue or misleading statement;

(b) it contains all information that prospective purchasers of the shares or


debentures and their advisors would reasonably expect to be provided in order to
make a decision on purchase; and

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(c) either-
(i) it deals with the matters and provides the reports specified in the Fourth
Schedule; or
(ii) the invitation concerned is an invitation made only to existing members or
debenture holders of the company (whether or not an applicant for shares or
debentures will have the right to renounce in favour of other persons).

125. (1) This section applies to a prospectus that includes a statement purporting to
be made by an expert. Expert's consent

(2) The prospectus shall not be lodged with the Registrar unless it is accompanied by
the written consent of the expert to the publication of the prospectus with the
inclusion of the statement in the form and context in which it is included.

(3) The prospectus shall include a statement that the expert has given his consent to
the inclusion of the statement and has not withdrawn his consent.

(4) If the expert withdraws his consent to the inclusion of the statement, he shall
immediately notify the Registrar and the persons responsible for issuing the
prospectus.

(5) A person responsible for issuing a prospectus shall cease to issue the prospectus
after receiving a notice from an expert under subsection (4).

(6) A person who contravenes subsection (5), and, if that person is a body corporate,
each officer in default, shall be guilty of an offence, and shall be liable on conviction
to a fine not exceeding five hundred monetary units.

126. (1) The Registrar shall not register a prospectus for shares or debentures in a
company or in a company proposed to be formed unless the copy lodged conforms
with this section. Registration of prospectuses

(2) The copy shall be signed by-

(a) each individual named therein as a director or proposed director of the


company or by his agent authorised in writing; and

(b) each other person making the invitation, or his agent authorised in writing.

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(3) For the purpose of paragraph (b) of subsection (2), where the invitation is made
by a body corporate or members of a firm, it shall be sufficient if the copy is signed
on behalf of the body corporate by not fewer than two directors or on behalf of the
firm by not fewer than half the partners, and any such director or partners may sign by
his agent authorised in writing.

(4) The copy shall have endorsed thereon or attached thereto-

(a) the consent of any expert required by section one hundred and twenty-five;
and

(b) a certified copy or translation of each of the documents required to be


available for inspection in accordance with paragraph 49 of the Fourth Schedule.

(5) If a copy or translation referred to in paragraph (b) of subsection (4) has already
been lodged with the Registrar by the company, the Registrar may waive the
requirement that it be attached or endorsed if he is satisfied that the copy originally
delivered is readily identifiable and accessible.

(6) The prospectus shall state at its head that a copy has been registered by the
Registrar and also state immediately after that statement that the Registrar assumes no
responsibility as to its contents.

(7) The copy shall be accompanied by a statutory declaration by a director and the
secretary of the company stating that the prospectus conforms to the requirements of
this Division.

(8) On registering the prospectus, the Registrar shall issue a certificate stating that the
prospectus has been registered.

127. (1) A company shall not accept or retain subscriptions to a debentures issue in
excess of the amount of the issue disclosed in the prospectus unless the prospectus
specifies- Over-subscription in debenture issue

(a) that the company expressly reserves the right to accept or retain over-
subscriptions; and

(b) a limit, expressed as a specific sum or money, on the amount of over-


subscriptions that may be accepted or retained, being an amount not exceeding

74
twenty-five per centum above the amount of the issue as disclosed in the prospectus.

(2) Subject to the Fourth Schedule, where a company specifies in a prospectus


relating to a debenture issue that it reserves the right to accept or retain over-
subscriptions-

(a) the prospectus shall not contain any statement of, or reference to, the asset
backing for the issue, other than a statement or reference to the total tangible assets
and the total liabilities of the company and of its guarantor companies; and

(b) the prospectus shall contain a statement or reference as to what the total assets
and total liabilities of the company would be if over-subscriptions to the limit
specified in the prospectus were accepted or retained.

128. (1) Where a prospectus states or implies that application has been or will be
made for permission for the shares or debentures offered in the prospectus to be listed
for quotation on the official list of a stock exchange, then, subject to subsection (8),
no allotment of shares or debentures shall be made on an application made pursuant to
the prospectus except in accordance with this section. Reference to stock
exchange listing in prospectus-allotment of shares

(2) An allotment may be made-

(a) if the permission has been applied for in the form required by the stock
exchange before the third day on which the stock exchange is open after the date of
issue of the prospectus; or

(b) if the permission has been granted before the determination day.

(3) If, on the determination day, the conditions of subsection (2) are not satisfied, the
company shall, within fourteen days after the determination day, repay without
interest any money received from any applicant in pursuance of the prospectus.

(4) If the company fails to repay money in accordance with subsection (3), the
directors shall, in addition to the liability of the company but subject to subsection (5),
be jointly and severally liable to repay that money with interest at the ruling bank rate
from the end of that period of fourteen days.

75
(5) A director shall not be liable under subsection (4) if he proves that the default in
the repayment of the money was not due to any misconduct or negligence on his part.

(6) The company shall, for so long as the conditions of subsection (2) are not
satisfied, keep in a separate bank account all money received in pursuance of a
prospectus.

(7) A condition purporting to require or bind an applicant for shares or debentures to


waive compliance with any requirement of this section shall be void.

(8) The Registrar may, on the application of the company made before the
determination day, by notice in the Gazette provide that this section shall not apply to
the allotment of the shares or debentures.

(9) For the purposes of this section, a statement in a prospectus to the effect that the
articles comply with, or have been drawn up so as to comply with, a condition
imposed by a stock exchange shall, unless the contrary intention appears, be deemed
to imply that application has been, or will be, made for permission for the shares or
debentures offered by the prospectus to be listed for quotation on the official list of
the stock exchange.

(10) For the purposes of this section, where a stock exchange grants the permission
subject to a condition, the permission shall be deemed to be granted if and when the
directors of the company give to the stock exchange a written undertaking to comply
with the condition.

(11) For the purposes of this section, the determination day is, subject to subsection
(12), the day forty-two days after the day of issue of the prospectus.

(12) If, before the day referred to in subsection (11), the stock exchange notifies the
applicant for the permission that a later day, being a day not more than three months
after the day of issue of the prospectus, will be the determination day, the
determination day is that later day.

129. (1) Where a prospectus- Civil liability for misstatements or omissions in


prospectus

(a) contains a statement which is untrue or, in the context, misleading;

76
(b) omits any matter which is material; or

(c) omits to state any of the particulars or to set out any of the reports which,
under this Act, it is required to state or set out;
then, subject to this section, the persons specified in subsection (2) shall be liable to
pay compensation to any persons who acquire any shares or debentures on the faith of
the prospectus for any loss they may have sustained by reason of the untrue statement
or omission.

(2) The persons liable to pay compensation under subsection (1) are the following:

(a) every person making the invitation to which the prospectus relates;

(b) every person who was a director of a body corporate making the invitation at
the time when the prospectus was published;

(c) where the invitation was made by the company to whose shares or debentures
the invitation relates-
(i) every person who has authorised himself to be named in the prospectus as a
director or as having agreed to become a director, either immediately or after an
interval of time; and
(ii) every promoter of the company who was a party to the preparation of the
prospectus;

(d) the expert, if the untrue statement or omission occurs in a statement by an


expert who has consented to the publication of the prospectus in accordance with
section one hundred and twenty-five.

(3) A person shall not be liable under this section if he proves-

(a) that as regards any untrue statement, not purporting to be-


(i) a statement or report made by an expert (other than himself);
(ii) a public official document or statement; or
(iii) an extract from a document referred to in paragraph (i) or (ii);
he had reasonable ground to believe and did believe up to the time of the publication
of the prospectus or, where the waiting period applies, up to the expiration of the
waiting period, that the statement was true;

(b) that as regards any untrue statement purporting to be a statement or report by


an expert (other than himself) or an extract therefrom-

77
(i) it was a correct and fair copy of the statement, report or extract; and
(ii) he had reasonable ground to believe and did believe up to the time of the
publication of the prospectus that the person making the statement was competent to
make it and had given the consent required by section one hundred and twenty-five
and had not withdrawn that consent before the date of registration of the prospectus;

(c) that as regards any untrue statement purporting to be a copy of or extract from
a public official document or a statement made by an official person, it was a correct
and fair copy of or extract from the document or statement;

(d) that as regards any omission, he was not aware of the matter omitted, or that
the matter omitted was material, up to the time of the publication of the prospectus or,
where the waiting period applies, up to the expiration of the waiting period;

(e) that after the publication of the prospectus but before the expiration of the
waiting period he, on becoming aware of any untrue statement therein or omission
therefrom, withdrew his consent thereto and gave reasonable public notice of the
withdrawal and of the reason therefor; or

(f) that the prospectus was published without his knowledge and that, on
becoming aware of its publication, he forthwith gave reasonable public notice that it
was published without his knowledge.

(4) A person shall not be liable under this section by reason that subparagraph (c) (i)
of subsection (2) applies to him if he proves that, having consented to being named as
a director or as having agreed to become a director, he withdrew his consent before
the registration of the prospectus and that it was published without his authority or
consent.

(5) A person shall not be liable under this section by reason that paragraph (d) of
subsection (2) applies to him if he proves-

(a) that as regards any untrue statement made by him, he was competent to make
the statement and that he had reasonable ground to believe and did believe, up to the
date of publication of the prospectus or, where the waiting period applies, up to the
expiration of the waiting period, that the statement was true; or

(b) that, after the lodgement of the prospectus with the Registrar but before
publication thereof, or, where the waiting period applies, before the expiration of the
waiting period, on his becoming aware of the untrue statement or omission, he

78
withdrew his consent in writing and gave reasonable public notice of the withdrawal
and of the reason therefor.

(6) Where-

(a) a person is named in a prospectus as a director of a company or as having


agreed to become a director of a company and he has not consented to become a
director or has withdrawn his consent before the publication of the prospectus and has
not authorised or consented to the publication thereof; or

(b) the consent of a person is required under section one hundred and twenty-five
to the publication of the prospectus and he either has not given that consent or has
withdrawn it before the publication of the prospectus;
every person making the invitation to which the prospectus relates and every person
who was a director of any body corporate making the invitation at the time when the
prospectus was published (except any person without whose knowledge or consent
the prospectus was published) shall be liable to indemnify the person referred to in
paragraph (a) or (b) against all damages, costs, and expenses to which he may be
made liable by reason of his name having been inserted in the prospectus or of the
inclusion therein of a statement purporting to be made by him as an expert, or in
defending himself against any legal proceeding brought against him in respect thereof.

130. (1) Where any prospectus, advertisement or circular published in relation to any
invitation to the public to acquire shares or debentures of a company contains any
untrue statement or omits truthfully to state any of the matters which, under this Act,
it is required to state, any person who authorised the publication of the prospectus,
advertisement or circular shall be guilty of an offence, and shall be liable on
conviction to a fine not exceeding seven thousand monetary units or to imprisonment
for a period not exceeding seven years, or to both. Offence of misstatement or
omission in prospectus

(2) It is a defence to a charge under subsection (1) that-

(a) the untrue or omitted statement was immaterial; or

(b) the person had reasonable ground to believe and did believe, up to the time of
publication of the prospectus, that the statement was true.

(3) For the purposes of this section, a person shall not be regarded as having
authorised the publication of a prospectus by reason only of his having given the
consent required by section one hundred and twenty-five, and the Registrar shall not

79
be regarded as having authorised the publication of an advertisement or circular by
reason of his having given the certificate referred to in section one hundred and
twenty-six.

131. (1) Where a prospectus has been registered and it appears to the Registrar that
it- Stop trading order

(a) contains a statement, promise, estimate or forecast that is false or misleading,


whether or not the statement or other particular was false or misleading at the time the
prospectus was lodged;

(b) fails to comply in any material respect with this Division or with the Fourth
Schedule; or

(c) conceals or omits to state a material fact so that a statement in the prospectus
is rendered misleading in the context in which it appears;
the Registrar may apply to the court for an order under subsection (2).

(2) If the court is satisfied that the ground for the application is established, it may
make an order-

(a) cancelling the registration of the prospectus and directing the persons making
the invitation to the public to which the prospectus relates-
(i) to withdraw the prospectus;
(ii) to cease to accept further subscriptions or purchases of shares or debentures
offered in the prospectus; and
(iii) to repay with interest any money received from applicants in pursuance of the
prospectus;

(b) declaring any contract for the subscription or purchase of shares or debentures
offered in the prospectus to be voidable;

(c) directing the persons making the invitation to the public to which the
prospectus relates to reissue forthwith the prospectus amended in such terms as the
court directs; or

(d) protecting the rights of persons injuriously affected by the issue of the
prospectus, in such terms as it thinks fit.

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(3) In exercising its powers under this section, the court may, on the application of
the Registrar and on being satisfied of the existence of a prima facie case, make such
interim orders as it considers necessary to apply for a period of not more than fourteen
days after the date of the order.

132. Where an invitation is made to the public to acquire shares or debentures of a


public company or of a public company proposed to be formed, an agreement for the
acquisition of the shares or debentures made before the end of the waiting period,
other than a bona fide underwriting agreement, shall not be enforceable by the
company or the promoters. Waiting period

133. Where an invitation is made to the public in respect of any shares or debentures
of a public company, an application for such shares or debentures shall not be
revocable during a period of seven days commencing on the expiry of the waiting
period unless, before the expiry of that period of seven days, some person responsible
for the prospectus has given a notice to the public which has the effect under section
one hundred and twenty-nine of excluding or limiting the responsibility of the person
giving it for any misstatement or omission in the prospectus. Withdrawal of
application after waiting period

134. (1) No allotment of shares offered to the public shall be made unless-
Allotment and minimum subscription

(a) the minimum subscription has been subscribed as required by section fifteen;
and

(b) the sum payable on application for the shares so subscribed has been received
by the company.

(2) Where a cheque is given in payment of a sum under subsection (1), the sum shall
not be regarded as having been received by the company until the cheque is paid by
the bank on which it is drawn.

(3) The minimum subscription shall be calculated-

(a) on the nominal value of each share, if the shares are not issued at a premium;
or

(b) on the nominal value of each share plus the premium payable, if the shares are
issued at a premium.

81
(4) The amount payable on application on each share offered to the public shall not
be less than five per centum of the nominal amount of the share.

(5) If the conditions of subsection (1) have not been satisfied after the expiry of four
months from the first issue of the prospectus, any money received from applicants for
shares shall forthwith be repaid to them without interest.

(6) Subject to subsection (7), if any money received under subsection (5) is not repaid
within five months after the issue of the prospectus, the directors of the company shall
be jointly and severally liable to repay that money with interest at the ruling bank rate
from the expiry of the period of five months.

(7) A director shall not be liable under subsection (6) if he proves that the default in
the repayment of the money was not due to any misconduct or negligence on his part.

(8) An allotment made by a company to an applicant in contravention of this section


shall, notwithstanding that the company is in the course of being wound-up, be
voidable at the option of the applicant by written notice given to the company within
one month after the date of the allotment.

(9) A director who wilfully contravenes, or wilfully authorises or permits the


contravention of, this section shall be liable to compensate the company and the
allottee for any loss, damages or costs which the company or the allottee has sustained
or incurred thereby.

(10) Proceedings for the recovery of any compensation under subsection (9) shall not
be commenced more than two years after the date of the allotment.

(11) A condition purporting to require or bind an applicant for shares to waive


compliance with any requirement of this section shall be void.

(12) A company shall not allot, and an officer or promoter of a company or a


proposed company shall not authorise or permit the allotment of, shares or debentures
to the public on the basis of a prospectus more than six months after the publication of
the prospectus.

(13) An allotment of shares or debentures shall not be voidable or void by reason


only that it was made in contravention of subsection (12).

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135. (1) A public company that does not issue a prospectus on, or with reference to,
its formation shall not allot any of its shares or debentures unless it has, not later than
three days before the first allotment of the shares or debentures, lodged with the
Registrar a statement in lieu of a prospectus. Statement in lieu of prospectus

(2) The statement in lieu of a prospectus shall-

(a) be signed by every person who is named therein as a director or a proposed


director of the company or by his agent authorised in writing; and

(b) be in the form of a prospectus and deal with such matters specified in Part A
of the Fourth Schedule as apply to the formation of a company.

136. A condition purporting to require or bind any person to waive compliance with
this Part or purporting to attribute to him notice of any contract document or other
matter not specifically referred to in any prospectus advertisement or circular, shall be
void. Prohibition of waiver and notice clauses

PART VII
MEETINGS AND RESOLUTIONS

137. (1) In this Part, unless the context otherwise requires, "meeting" means any of
the following meetings of a company: Interpretation

(a) an annual general meeting;

(b) an extraordinary general meeting; and

(c) a class meeting.

138. (1) Subject to this section, a company shall hold, within three months after the
end of each financial year of the company, a meeting to be called the annual general
meeting of the company. Annual general meeting

(2) If, after any financial year, no annual general meeting is held in accordance with
subsection (1), the Registrar may, on the application of any member of the company,
convene, or direct the convening of, an annual general meeting of the company and
give such ancillary or consequential directions as the Registrar thinks expedient,

83
including directions modifying or supplementing, in relation to the convening,
holding and conducting of the meeting, the operation of the company's articles, or a
direction that one member of the company present in person or by proxy shall be
deemed to constitute a meeting.

(3) If the company fails to comply with subsection (1), or with any direction of the
Registrar under subsection (2), the company, and each officer in default, shall be
guilty of an offence, and shall be liable on conviction to a fine not exceeding one
thousand monetary units.

(4) If the company is a private company, the annual general meeting in relation to a
financial year, other than the first financial year, may be dispensed with if all the
members of the company entitled to attend and vote at any annual general meeting so
agree in writing before the end of the financial year.

139. (1) An extraordinary general meeting of a company may be convened in


accordance with other provisions of this Act, or- Extraordinary general meetings

(a) by the directors whenever they think fit; or

(b) if the articles so provide, by any other person in accordance with those
provisions.

140. (1) Unless the articles provide otherwise, a meeting of members of a particular
class may be convened- Class meetings

(a) by the directors whenever they think fit; or

(b) by two or more members of that class, holding, at the time that notice of the
meeting is sent out, not less than one-twentieth of the total voting rights of all the
members having a right to vote at meetings of that class.

141. (1) A member or members of the company may make a requisition for a general
meeting to be held under this section if they hold, at the time when the requisition is
made, not less than one-twentieth of the total voting rights of all the members having
a right to vote at general meetings of the company. Requisition of a general meeting

(2) The requisition shall state the nature of the business to be transacted at the
meeting, and shall be signed by the requisitionists and deposited at the registered

84
office of the company or posted to its registered postal address, and may consist of
several documents in like form each signed by one or more requisitionists.

(3) Where a requisition is made in accordance with this section, the directors shall
proceed duly to convene a general meeting of the company.

(4) If the directors do not proceed duly to convene a meeting to be held within the
requisition period, the requisitionists or any of them may themselves convene a
meeting, but any meeting so convened shall not be held more than three months after
the receipt of the requisition by the company.

(5) A meeting convened under this section by the requisitionists shall be convened in
the same manner, as nearly as possible, as that in which meetings are to be convened
by directors.

(6) Notwithstanding anything in the articles, the notice period for a meeting convened
under this section shall be the period set out in section one hundred and forty-three for
the type of meeting concerned.

(7) Any reasonable expenses incurred by the requisitionists by reason of the failure of
the directors duly to convene a meeting shall be repaid to the requisitionists by the
company, and the sum so repaid shall be retained by the company out of any sums
due or to become due from the company by way of fees or other remuneration in
respect of their services to such of the directors as wilfully authorised or permitted the
failure.

(8) For the purposes of this section, the requisition period is the period of-

(a) twenty-eight days, if the meeting is to be an annual general meeting or a


meeting for the passing of a special resolution; or

(b) twenty-one days, in any other case;


beginning on the date of receipt by the company of the requisition.

(9) For the purposes of this section, the directors fail duly to convene a meeting if-

(a) they do not convene it within the requisition period; or

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(b) they do not give such notice thereof as is required by section one hundred and
forty-three for a meeting at which a special resolution is to be proposed, if the
requisition states that a resolution is to be proposed as a special resolution at the
meeting.

142. (1) Where a meeting of a company is to be convened, any person who is, on the
day before the latest day on which notice of the meeting may be given under this Act-
Entitlement to receive notice of meetings

(a) a registered member having the right to vote at a meeting of that kind;

(b) a person upon whom the ownership of a share devolves by reason of his being
a legal personal representative, receiver or trustee in bankruptcy of such a member
and of whom the company has received notice;

(c) a director of the company;

(d) an auditor of the company; or

(e) a person entitled under the articles to receive such notice;


shall be entitled to receive notice of the meeting.

(2) The proceedings of a meeting shall not be invalid by reason only of-

(a) the accidental omission to give notice of a meeting to a person entitled to


receive notice; or

(b) the non-receipt of notice of a meeting duly sent to such a person.

143. (1) Subject to this section, notice of a meeting of a company shall be given in
writing served in accordance with this Act on each person entitled to receive such
notice and shall be given not less than- Length of notice for convening a meeting

(a) twenty-one days, in the case of an annual general meeting;

(b) twenty-one days, in the case of a meeting at which a special resolution will be
proposed; or

86
(c) fourteen days, in any other case;
and not more than fifty days before the meeting is to be held.

(2) The articles may substitute for the minimum periods of notice provided in
subsection (1) longer periods, being periods of not more than thirty days.

(3) Where a meeting of the company is convened with a shorter period of notice than
that required under this section, full notice shall be deemed to have been given if it is
so agreed-

(a) by all the members entitled to attend and vote at the meeting, in the case of a
meeting convened as the annual general meeting;

(b) by a majority in number of the members having a right to attend the meeting
and vote on the resolution concerned, being a majority holding not less than ninety-
five per centum of the total of such voting rights, in the case of a meeting convened as
a meeting at which a special resolution will be moved, and in relation to that
resolution; and

(c) by a majority in number of the members having a right to attend and vote at
the meeting, being a majority holding not less than ninety-five per centum of the total
of such voting rights, in the case of any other meeting.

144. (1) If for any reason it is impracticable to convene or to conduct a meeting of a


company in compliance with this Act and the articles, the court may, either of its own
motion or on the application of any director of the company or of any member of the
company who would be entitled to vote at the meeting, order a meeting of the
company to be convened, held and conducted in such a manner as the court thinks fit,
and, where any such order is made, may give such ancillary or consequential
directions as it thinks expedient, including a direction that one member of the
company present in person or by proxy shall be deemed to constitute a meeting.
Power of court to order meeting

(2) A meeting convened, held and conducted in accordance with an order under this
section shall for all purposes be deemed to be a meeting of the company duly
convened, held and conducted.

145. Unless the articles provide otherwise, or all the members entitled to vote at that
meeting agree in writing to a meeting at a place outside Zambia, a meeting of a
company shall be held in Zambia. Place of meetings

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146. The following persons shall be entitled to attend and to speak at a meeting of a
company:
(a) each member of the company having the right to vote at the meeting;
(b) each person upon whom the ownership of a share devolves by reason of his
being a legal personal representative, receiver or trustee in bankruptcy of such a
member;
(c) each director of the company;
(d) the secretary of the company;
(e) each auditor of the company;
(f) each person entitled under the articles to do so;
(g) any other person permitted to do so by the chairman. Attendance at
meetings

147. (1) Unless the articles of a company provide otherwise, members shall have
votes at any meeting of the company as follows: Conduct of meetings and voting

(a) a member of a company with share capital shall have one vote for-
(i) each share; and
(ii) each whole unit of stock;
that he is registered as holding;

(b) each member of a company limited by guarantee shall have one vote.

(2) The articles may provide that a member shall have rights in respect of shares not
registered in respect of the person, but a person who is not a member of the company
shall not be entitled to vote at a meeting of the company.

(3) Unless the articles provide otherwise, the quorum for a meeting of the company
shall be two members of the company holding not less than one-third of the total
voting rights in relation to the meeting.

(4) Unless the articles provide otherwise-

(a) a meeting of the company may elect a chairman; and

(b) on matters not provided for in this Act or in the articles, the meeting may
provide for the conduct of its business.

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(5) The articles may provide that a member shall not be entitled to attend a meeting
of the company unless all sums presently payable by him in respect of shares in the
company have been paid.

(6) For the purposes of this section, a "unit of stock" of a company is the amount of
stock having the nominal value arrived at by adding together the nominal values of all
the shares of the company other than stock, and dividing the sum by the number of
those shares.

148. Unless the articles of a company provide otherwise, a statement by the


chairman of a meeting of the company that a motion or resolution at a meeting was
passed by a specified majority shall be conclusive evidence that it was so passed
unless a poll was demanded on the motion or resolution. Chairman's declaration as
to result of a vote

149. A poll may be demanded at a meeting of a company on any question other than
the election of the chairman of the meeting or the adjournment of the meeting by-
(a) not fewer than three members having the right to vote on the question,
representing not less than one-twentieth of the total voting rights of all members
having the right to vote on the question, where there are more than eight such
members present; or
(b) not fewer than one third of the members present having the right to vote on the
question, where there are eight or fewer such members present. Right to demand a
poll

150. On a poll taken at a meeting of company or a meeting of any class of members


of a company, a member entitled to more than one vote need not, if he votes, use all
his votes or cast all the votes he uses in the same way. Voting on a poll

151. (1) A member of a company entitled to attend and vote at a meeting of the
company shall be entitled to appoint another person as his proxy to attend and vote
instead of him.Proxies

(2) An appointment as proxy shall be in writing under the hand of the appointer or his
agent duly authorised in writing or, if the appointer is a body corporate, either under
seal or under the hand of an officer or agent duly authorised.

(3) A proxy appointed under this section shall have, subject to any instructions from
the member in the instrument of appointment, all the rights and powers of the member
in relation to the meeting.

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(4) If voting rights attach to shares in a company having share capital, a shareholder
may appoint separate proxies to represent respectively such of the shares held by him
as may be specified in their instruments of appointment.

(5) An appointment of a director as a proxy shall not authorise the director to vote as
proxy on the following business transacted at an annual general meeting:

(a) the declaration of a dividend;

(b) the consideration of the accounts and the directors' and auditors' reports;

(c) the election of directors in place of those retiring;

(d) the fixing of the remuneration of the directors; and

(e) the appointment of the auditors and the fixing of their remuneration.

(6) In every notice convening a meeting of a company there shall appear with
reasonable prominence a statement that a member entitled to attend and vote is
entitled to appoint one or more proxies to attend and vote instead of him, and, unless
the articles provide otherwise, that a proxy need not also be a member.

(7) A company shall not provide a member with a form for the appointment of a
proxy unless the form permits the member to direct the proxy as to how to use his
vote on different matters.

(8) A company's articles shall not have the effect of requiring the instrument
appointing a proxy, or any other document necessary to show the validity of
appointment of a proxy, to be received by the company or any other person more than
forty-eight hours before a meeting or adjourned meeting in order that the appointment
may be effective thereat.

(9) If a company fails to comply with subsection (6) or (7), the company, and each
officer in default, shall be guilty of an offence, and shall be liable on conviction to a
fine not exceeding two hundred and fifty monetary units.

(10) If a company, for the purpose of any meeting of the company, issues invitations
to appoint as proxy a person specified or listed in the invitation, and issues the
invitations to some only of the members entitled to be sent a notice of the meeting and

90
to vote thereat, the company, and every officer in default, shall be guilty of an
offence, and shall be liable on conviction to a fine not exceeding two hundred and
fifty monetary units.

(11) A company shall not be regarded as issuing an invitation for the purposes of
subsection (10) if the name or list is available on request to every member entitled to
vote at the meeting, and is not sent to any such member except on request.

152. (1) A body corporate or an unincorporated association may, if it is a member of


a company, by resolution of its directors or other governing body, authorise any
person as it thinks fit to act as its representative at any meeting of the company.
Representation of bodies corporate and unincorporated associations at
meetings

(2) A person so authorised may exercise the same powers on behalf of the body
corporate or unincorporated association which he represents as it could exercise if it
were an individual member of the company.

153. (1) A member of a company entitled to attend and vote at a meeting may, in
accordance with this section, require the company to circulate , at the company's
expense- Circulation of members' resolutions and supporting circulars

(a) notice of any resolution which may properly be moved and is intend to be
moved at the meeting; and

(b) a statement of not more than five hundred words with respect to the matter
referred to in the proposed resolution or any other business to be dealt with at the
meeting.

(2) A requisition for the purposes of this section shall be in writing and posted to the
company's registered postal address or deposited at the company's registered office.

(3) If a meeting of the company is proposed and the company receives a requisition-

(a) not less than seven days before the end of the period during which notice of
the meeting is required to be given; or

91
(b) at a time when it is practicable to include the notice and statement required
with the notice of the meeting;
the company shall send the notice and statement to each person entitled to receive
notice of the meeting before the end of period during which notice of the meeting is
required to be given.

(4) If the company receives a requisition and subsection (3) does not apply, the
company shall include the notice and statement required with the notice of the next
meeting of the company for which it is practicable to do so.

(5) If a requisition is made under this section and the resolution is not passed, a
requisition shall not be made in relation to the same resolution, or one substantially to
the same effect, to be moved at a meeting within three months after the meeting at
which the resolution was moved unless-

(a) the directors otherwise agree; or

(b) the requisition is supported in writing by members of the company


representing between them not less than one-twentieth of the total voting rights of all
the members having at the date of the request a right to vote on the resolution to
which the request relates.

154. (1) A company shall, at the written request of any member entitled to attend and
vote at a meeting, circulate to members of the company a statement of not more than
one thousand words with respect to any business to be dealt with at that meeting.
Circulation of members' circulars

(2) Unless the company otherwise resolves, the circulation of the statement shall be
at the expense of that member.

(3) The statement shall be circulated to members of the company in any manner
permitted for service of notice of the meeting and at the same time as notice of the
meeting or as soon as practicable thereafter.

(4) A company shall not be bound to circulate the statement unless-

(a) the request, signed by the member concerned, together with the statement, is
received at the registered postal address of the company or deposited at the registered
office of the company not less than ten days before the meeting; and

92
(b) there is also deposited with the request a sum reasonably sufficient to meet the
company's expenses in giving effect thereto.

155. (1) A company shall not be bound under section one hundred and fifty-three or
one hundred and fifty-four to circulate any resolution or statement if, on the
application either of the company or of any other person who claims to be aggrieved,
the court is satisfied that the rights conferred by those sections are being abused to
secure publicity for defamatory matter. General provisions in regard to members'
circulars

(2) On hearing an application under subsection (1), the court may order the
company's costs to be paid in whole or in part by the member making the request,
notwithstanding that he is not a party to the application.

(3) A company shall not incur liability to any person by reason only that it has
circulated a resolution or statement in compliance with section one hundred and fifty-
three or one hundred and fifty-four.

(4) If a company fails to comply with section one hundred and fifty-three or one
hundred and fifty-four, the company, and each officer in default, shall be guilty of an
offence, and shall be liable on conviction to a fine not exceeding five hundred
monetary units.

156. (1) A resolution shall be an ordinary resolution if it is passed by a simple


majority of votes cast by such members of the company as, being entitled so to do,
vote in person or by proxy at a meeting duly convened and held. Ordinary
extraordinary and special resolutions

(2) A resolution shall be an extraordinary resolution if it is passed by a majority of


not less than three-fourths of the votes cast by such members of the company as,
being entitled so to do, vote in person or by proxy at a meeting duly convened and
held.

(3) A resolution shall be a special resolution if it is passed by a majority of not less


than three-fourths of the votes cast by such members of the company as, being
entitled so to do, vote in person or by proxy at a meeting duly convened as a meeting
at which the resolution will be moved as a special resolution, and duly held.

(4) Any reference in-

(a) this Act;

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(b) the articles of a company;

(c) any debentures or debenture trust deed;


to an ordinary, extraordinary or special resolution of a meeting of creditors or
debenture holders or of any class of creditors or debenture holders shall, unless the
context otherwise requires, bear a like meaning to that specified in this section, with
the necessary modifications.

157. (1) The members of a private company may, in accordance with this section,
pass a resolution in writing without holding a meeting, and such a resolution shall be
as valid and effective for all purposes as if it had been passed at a meeting of the
appropriate kind duly convened, held and conducted. Written resolutions for
private companies

(2) The resolution shall be signed by each member who would be entitled to vote on
the resolution if it were moved at a meeting of the company, or by his duly authorised
representative.

(3) The resolution shall be passed when signed by the last member referred to in
subsection (2), whether or not he was a member when other members signed.

(4) If the resolution is described in the writing as a special resolution, it shall be


deemed to be a special resolution for the purposes of this Act.

(5) If the resolution states a date as being the date of the signature thereof by any
member, the statement shall be prima facie evidence that it was signed by the member
on that date.

(6) This section shall not apply to a resolution to remove an auditor or to remove a
director.

158. (1) A certified copy of every special resolution made by a company, or by a


class of members of a company, shall, within fifteen days after the making thereof, be
lodged with the Registrar. Registration of copies of certain resolutions

(2) Subject to this section, every copy of the articles of a company issued by it shall
have embodied in it or attached to it a copy of every special resolution of the company
in force at the time of issue.

94
(3) For the purposes of subsection (2), where the sole effect of a special resolution is
to amend the articles, a copy of the articles that embodies the effect of the passing of
the special resolution embodies the resolution.

(4) If a company fails to comply with subsection (1), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding ten monetary units for each day that the failure continues.

(5) If a copy of the articles is issued that fails to comply with subsection (2), the
company, and each officer in default, shall be guilty of an offence, and shall be liable
on conviction to a fine not exceeding three monetary units in respect of each copy.

159. (1) Where a resolution is passed on a poll, it shall for all purposes be deemed to
have been passed on the day on which the result of the poll is declared. Date of
certain resolutions

(2) Subject to subsection (1), where a resolution is passed at an adjourned meeting of


a company or of the directors be deemed to have been passed on the date of the
adjourned meeting.

160. (1) A company shall cause minutes of all proceedings of- Minutes of
proceedings of meetings of company and of creditors

(a) meetings of the company;

(b) meetings of its directors and of any committee of directors;

(c) meetings of its debenture holders or other creditors;


to be entered in books kept for that purpose.

(2) Any such minute, if purporting to be signed by the Chairman of the meeting at
which the proceedings took place or of the subsequent meeting, shall be prima facie
evidence of the facts stated in the minute in relation to the proceedings.

(3) Where minutes have been made in accordance with this section, the meeting shall
be presumed to have been duly convened, held and conducted and all appointments of
directors, officers, auditors and liquidators shall be presumed to be valid.

95
(4) If the company fails to comply with subsection (1), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding five hundred monetary units.

161. The books containing the minutes of proceedings of any meeting referred to in
section one hundred and sixty shall be kept at the registered records office of the
company and shall be open to inspection by any member, officer, auditor, receiver or
liquidator of the company, and by the Registrar or his delegate. Inspection of
minute books

PART VIII
ACCOUNTS, AUDIT AND ANNUAL, RETURNS

Division 8.1-Accounts

162. (1) A company shall- Accounting records to be kept

(a) keep such accounting records as correctly record and explain the transactions
of the company (including any transactions as trustee) and the financial position of the
company; and

(b) keep its accounting records in such a manner as will enable-


(i) the preparation from time to time of true and fair accounts of the company;
and
(ii) the accounts of the company to be conveniently and properly audited in
accordance with this Act.

(2) The company shall retain the accounting records for a period of ten years after the
completion of the transactions to which they relate.

(3) If any accounting records of the company are kept at a place other than its
registered records office, the company-

(a) shall keep at the registered records office such statements and records with
respect to the matters dealt with in those accounting records as would enable the
company to prepare true and fair accounts together with any documents required by
this Act to be attached to the accounts; and

96
(b) for that purpose, shall, within fourteen days after the creation of any
accounting record, transmit the appropriate statement or record to the registered
records office.

(4) The accounting records of the company shall be kept in writing in English, or in
any form that enables the accounting records to be readily accessible and readily
convertible into such writing.

(5) The company shall make its accounting records kept at its registered records
office available, at all reasonable times, for inspection without charge by the directors,
secretary and auditors of the company.

(6) The company shall, on being given fourteen days' notice in writing by any
director, secretary or auditor of the company that he wishes to inspect specified
accounting records, make the accounting records, wherever kept, available for
inspection without charge at the registered records office or such other place as may
be agreed with the person giving the notice.

(7) If a company fails to comply with this section, the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding one thousand monetary units.

163. (1) Subject to this section, the directors of a company which is a holding
company shall take such action (if any) as is necessary to ensure that the financial
year of each subsidiary of the holding company coincides with the financial year of
the holding company. Financial year of holding and subsidiary

(2) The action referred to in subsection (1) need not be taken if the directors of the
holding company lodge with the Registrar a statutory declaration that-

(a) the action would cause unreasonable expense or difficulty; and

(b) the members of the holding company will not be disadvantaged if the action is
not taken.

164. (1) Subject to this Division, the directors of a company shall, after the end of
each financial year of the company but not later than twenty-one days before the
annual general meeting of the company for that financial year, or, if no annual general
meeting of the company is held within three months after the end of the financial year
of the company, not later than twenty-one days before the end of that period of three

97
months, caused to be made out- Annual accounts to be prepared after each
financial year

(a) a profit and loss account for the financial year just ended, being a profit and
loss account that gives a true and fair view of the profit or loss of the company for that
financial year;

(b) a balance sheet as at the end of the financial year just ended, being a balance
sheet that gives a true and fair view of the state of affairs of the company as at the end
of that financial year;

(c) group accounts, if the company is a company required to provide group


accounts, dealing with-
(i) the profit or loss of the company and its subsidiaries for their respective
financial years most recently ended, giving a true and fair view of the profit or loss;
and
(ii) the state of affairs of the company and its subsidiaries as at the end of their
respective financial years most recently ended, giving a true and fair view of the state
of affairs so far as it concerns members of the holding company.

(2) The accounts referred to in subsection (1) (in this Act called the "annual
accounts") shall comply with such of the requirements of the Second Schedule as are
relevant to those accounts, but where accounts prepared in accordance with those
requirements would not otherwise give a true and fair view of the matters required by
this section to be dealt with in the accounts, the directors of the company shall add
such information and explanations as will give a true and fair view of those matters.

(3) The directors shall take reasonable steps to ensure that the annual accounts of the
company and, if it is a holding company for which group accounts are required, the
group accounts, are audited as required by this Part within the time allowed by
subsection (1).

(4) The directors shall cause the auditors' report relating to the annual accounts that is
furnished to the directors in accordance with this Part to be attached to, or endorsed
upon, the annual accounts.

(5) The directors shall, before the profit and loss account and balance sheet referred
to in subsection (1) are made out, take reasonable steps-

(a) to ascertain what action has been taken in relation to the writing off of bad
debts and the making of provisions for doubtful debts;

98
(b) to cause all known bad debts to be written off and adequate provision to be
made for doubtful debts;

(c) to ascertain whether any current assets, other than current assets to which
paragraph (a) or (b) applies, are unlikely to realise in the ordinary course of business
their value as shown in the accounting records of the company and, if so, to cause-
(i) those assets to be written down to an amount that they might be expected so to
realise; or
(ii) adequate provision to be made for the difference between the amount of the
value as so shown and the amount that they might be expected so to realise; and

(d) to ascertain whether any non-current asset is shown in the books of the
company at an amount that, having regard to its value to the company as a going
concern, exceeds the amount that it would have been reasonable for the company to
expend to acquire that asset as at the end of the financial year and, unless adequate
provision for writing down that asset is made, to cause to be included in the accounts
such information and explanations as will prevent the accounts from being misleading
by reason of the overstatement of the amount of that asset.

(6) The directors shall cause to be attached to the annual accounts, before the auditor
reports on the accounts under this Part, a statement made in accordance with a
resolution of the directors and signed by at least two directors stating whether, in the
opinion of the directors-

(a) the profit and loss account is drawn up so as to give a true and fair view of the
profit or loss of the company for the financial year;

(b) the balance sheet is drawn up so as to give a true and fair view of the state of
affairs of the company as at the end of the financial year;

(c) there are reasonable grounds to believe that the company will be able to pay its
debts as and when they fall due; and

(d) the group accounts are drawn up so as to give a true and fair view of-
(i) the profit or loss of the company and its subsidiaries for their respective last
financial years; and
(ii) the state of affairs of the company and its subsidiaries as at the end of their
respective last financial years, so far as they concern members of the company;
if the company has group accounts.

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165. (1) Where at the end of its financial year a company was a holding company,
the company shall, subject to this section, prepare- Group accounts

(a) a set of consolidated accounts for the group of companies;

(b) separate accounts for each body corporate in the group; or

(c) a combination of sets of consolidated accounts and separate accounts together


covering the group;
(in this Act called the "group accounts") for inclusion in its annual accounts for that
financial year.

(2) This section shall not oblige a company to make out group accounts if it is, at the
end of its financial year, a wholly-owned subsidiary of another body corporate
incorporated in Zambia.

(3) Group accounts need not deal with a subsidiary of the company if a statutory
declaration made by each director has been lodged with the Registrar to the effect
that-

(a) it is impracticable, or would be of no real value to members of the company,


in view of the insignificant amounts involved, or would involve expenses or delay out
of proportion to the value to members of the company; or

(b) the result would be misleading or harmful to the business of the company or
any of its subsidiaries;
and the omission of the subsidiary from the group accounts has been approved in
writing by the Registrar.

166. (1) The directors of a subsidiary shall, at the request of the directors of the
holding company, supply all such information as is required for the preparation of
group accounts of the holding company and its subsidiaries, and of the report of the
directors of the holding company. Delays in preparing group accounts

(2) The directors of a holding company shall take all reasonable steps to ensure that,
when they prepare the group accounts and the directors' report, they have available to
them all the information from each subsidiary that is to be included in the group
necessary for the completion of the group accounts and directors' report of the group.

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(3) The directors of a holding company are, unless they know or have reason to
suspect that any matter in any accounts, report or information furnished by the
directors of a subsidiary is false or misleading, entitled to rely on the accounts, report
or information for the purpose of the preparation of the group accounts and their
report, so far as they relate to the affairs of the subsidiary.

(4) Where the directors of a holding company, having taken all such steps as are
reasonably available to them, are unable to obtain from the directors of a subsidiary
any accounts, report or other information required for the preparation of the group
accounts and the directors' report of the group, they may cause the group accounts to
be made out and make the directors' report without those accounts, report or other
information relating to the subsidiary, but with such qualifications and explanations as
are necessary to prevent the group accounts and directors' report from being
misleading.

(5) Where the directors of a holding company have caused the group accounts to be
made out and have made the directors' report in accordance with subsection (4), they
shall send to the members of the holding company, within one month after receiving
the accounts, report or other information from the directors of the subsidiary, a copy
of the accounts and report or a statement embodying the other information, as the case
may be, together with a statement by the directors of the holding company containing
such qualifications and explanations of the group accounts and of their report as are
necessary having regard to the accounts, report or information received from the
subsidiary.

167. (1) The annual accounts of a company shall, subject to this section, show-
Annual accounts to include amounts paid to directors

(a) the total amount of the emoluments paid to or receivable by the directors for
their services;

(b) the total amount of pensions paid to or receivable by the directors or past
directors for their services;

(c) the total amount of any compensation paid to or receivable by the directors or
past directors in respect of loss of office;
in the financial year concerned.

(2) The amount to be shown under paragraph (a) of subsection (1) shall include any
emoluments paid to or receivable by any person in respect of his services, while a
director of the company-

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(a) as director of the company;

(b) as director of any subsidiary; or

(c) otherwise in connection with the management of the affairs of the company or
any subsidiary.

(3) The amount to be shown under paragraph (b) of subsection (1)-

(a) shall not include any pension paid or receivable under a pension scheme if the
scheme is such that the contributions to the scheme paid in respect of the directors are
adequate for the maintenance of the scheme; and

(b) shall include any other pension paid or receivable in respect of any of the
services of a person, while a director of the company-
(i) as director of the company;
(ii) as director of any subsidiary; or
(iii) otherwise in connection with the management of the affairs of the company or
any subsidiary;
whether the pension is paid to or receivable by the person himself or, on his
nomination or by virtue of any connection with him, to or by any other person.

(4) The amount to be shown under paragraph (c) of the subsection (1) shall include
any sums paid to or receivable by a director or past director by way of compensation
for-

(a) loss of office as director of the company; or

(b) loss of any other office in connection with the management of the affairs of
the company or of a subsidiary, where the loss arose from or in connection with the
loss of office as director of the company.

(5) The accounts shall also show, with the total amounts to be shown under
subsection (1), the subtotals of the amounts that are receivable or to be paid-

(a) in relation to emoluments and pensions, in respect of-


(i) services as director of the company or a subsidiary; and
(ii) other services; and

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(b) in relation to compensation for loss of office, in respect of-
(i) loss of office as director of the company or a subsidiary; and
(ii) loss of any other office.

(6) Where an amount to be shown under subsection (1) or (5) includes an amount to
be paid by or receivable from a person other than the company, the accounts shall also
show the subtotals of the amounts receivable from or paid by-

(a) the company;

(b) the company's subsidiaries; and

(c) any other person.

(7) For the purposes of this section-


"compensation for loss of office" includes sums paid as consideration for or in
connection with a person's retirement from office;
"contributions" means any payment into a pension scheme (including an insurance
premium paid for the purposes of the scheme) by or in respect of which pensions will
or may become payable under the scheme, other than a payment in respect of two or
more persons where the amount paid in respect of each of them is not ascertainable;
"emoluments" includes fees and percentages paid to a director, any sums paid by way
of expenses and allowances, any contributions paid in respect of him under any
pension scheme and the estimated money value of any other benefits received by him
otherwise than in cash;
"pension" includes any superannuation allowance, superannuation gratuity or similar
payment;
"pension scheme" means a scheme for the provision of pensions which is maintained
in whole or in part by means of contributions.

168. (1) The annual accounts of a company shall show the particulars of any relevant
loan made during the financial year to which the accounts apply, including any such
loan which was repaid during that year. Annual accounts to include particulars of
loans to officers

(2) The accounts shall also show the amount of any relevant loan, whenever made,
that remained outstanding at the end of the financial year.

(3) If this section is not complied with, the auditors shall include in the auditors'
report on the balance sheet of the company, so far as they are reasonably able to do
so, a statement giving the required particulars.

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(4) For the purposes of this section, a relevant loan is a loan, other than a loan
referred to in subsection (5), made to-

(a) an officer of the company; or

(b) any person who, after the making of the loan, became during that financial
year an officer of the company;
that was made by-
(i) the company or a subsidiary of the company; or
(ii) any other person under a guarantee from or on a security provided by the
company or a subsidiary of the company.

(5) This section does not apply to a loan that was-

(a) made in the ordinary course of its business by the company or a subsidiary of
the company, where the ordinary business of the company or, as the case may be, the
subsidiary, includes the lending of money; or

(b) made by the company to an employee of the company, or by a subsidiary to an


employee of the subsidiary, if the loan does not exceed fifty monetary units and is
certified by the directors of the company or subsidiary, as the case may be, to have
been made in accordance with any practice adopted or about to be adopted by the
company or subsidiary with respect to loans to its employees;
and was not made under a guarantee from or on a security provided by the company
or any subsidiary.

(6) For the purposes of this section, a subsidiary of the company is a body corporate
that was a subsidiary of the company at the end of the financial year of the company
during which the loan concerned was made, whether or not it was a subsidiary at the
date of the loan.

169. (1) A person who is, or has at any time within the previous five years been, a
director or officer of a company shall, on the request of the company, provide the
company with such information relating to himself as may be necessary for the
purposes of sections one hundred and sixty-seven and one hundred and sixty-eight.
Director to make disclosure of loans and receipts

(2) A person who fails to comply with this section shall be guilty of an offence, and
shall be liable on conviction to a fine not exceeding five hundred monetary units.

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170. (1) The balance sheet of a company's annual accounts, and every copy of the
balance sheet which is laid before the company in general meeting or delivered to the
Registrar, shall be signed on behalf of the company by two directors. Balance
sheet to be signed by directors

(2) In the case of a company authorised by law to conduct banking business, the
balance sheet shall be signed by the secretary and-

(a) by both the directors, where there are two only; or

(b) by at least three directors, where there are three or more.

(3) If a copy of the balance sheet-

(a) is laid before the company in general meeting or delivered to the Registrar and
is not signed as required by this section; or

(b) not being a copy so laid or delivered, is issued, circulated or published-


(i) when the balance sheet has not been signed as required by this section; or
(ii) without a copy of the signatures;
the company, and each officer in default, shall be guilty of an offence, and shall be
liable on conviction to a fine not exceeding five hundred monetary units.

(4) If a copy of the balance sheet is issued, circulated or published without having
annexed thereto copies of-

(a) the profit and loss account;

(b) any group accounts required under section one hundred and sixty-four to be
annexed; and

(c) the auditors' report;


the company, and each officer in default, shall be guilty of an offence, and shall be
liable on conviction to a fine not exceeding five hundred monetary units.
Division 8.2-Auditors

171. (1) A company shall, within three months after its incorporation, appoint an
auditor or auditors of the company, who shall hold office until the close of its first
annual general meeting. Appointment of auditors

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(2) An appointment under subsection (1) may be made by the directors or by an
ordinary resolution of the company.

(3) A company shall at each annual general meeting appoint an auditor or auditors of
the company, who shall hold office until the close of the next annual general meeting
held by the company.

(4) A company shall not appoint a person as auditor unless he has previously
consented in writing to the appointment and has not withdrawn the consent.

(5) Notwithstanding any agreement between a company and an auditor, the company
may, by ordinary resolution, remove the auditor before the expiration of his term of
office.

(6) If a company-

(a) appoints an auditor;

(b) removes an auditor from office;

(c) fails to appoint an auditor under subsection (1) or at an annual general


meeting; or

(d) for any reason ceases to have an auditor;


the company shall within fourteen days after the event lodge a notice of that fact in
the prescribed form with the Registrar.

(7) If a company fails to comply with subsection (6), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding ten monetary units for each day that the failure continues.

(8) The directors of a company, or the company by ordinary resolution, may fill any
casual vacancy in the office of auditor, and an auditor so appointed shall hold office
until the close of the next annual general meeting held by the company.

(9) If a company does not have an auditor for a period of three months, the Registrar
may appoint an auditor of the company.

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(10) The remuneration of an auditor of the company, including any sums to be paid
by the company in respect of the auditors' expenses-

(a) may be fixed by the directors, where the appointment is made by the directors;

(b) may be fixed by the Registrar, where the appointment is made by the
Registrar; and

(c) shall be fixed by ordinary resolution of the company, or in such manner as the
company may determine by ordinary resolution, in any other case.

(11) Where an individual or firm holds office as auditor of a company on the


commencement of this Act-

(a) he or it shall be deemed to have been appointed under this Act; and

(b) he or it shall hold office until the close of the next annual general meeting held
by the company.

(12) Where a company has no auditor on the commencement of this Act, this section
shall apply as if the company had been incorporated on that commencement.

(13) Nothing in subsection (5) shall deprive a person removed thereunder of


compensation or damages payable to him in respect of the termination of his
appointment as auditor or of any appointment terminating with that as auditor.

172. (1) A private company may appoint an individual or a firm as auditor of the
company. Qualifications of auditor

(2) A public company may appoint-

(a) a registered accountant having a practice certificate issued by the Zambia


Institute of Certified Accountants under the Accountants Act, or Cap. 390

(b) a firm of such registered accountants;

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as auditor of the company.

(3) Where a firm is appointed as auditor of a company, each partner of the firm shall
be deemed to be an auditor of the company.

(4) An individual or firm shall not-

(a) consent to be appointed as auditor of a company; or

(b) act as auditor of a company;


if the individual or firm is disqualified under this section.

(5) For the purposes of this section, an individual is disqualified in relation to a


company if-

(a) he is-
(i) an officer of the company;
(ii) a partner, employer or employee of an officer of the company; or
(iii) a partner or employee of an employee of an officer of the company; or

(b) he, or a company in which more than half the shares are beneficially owned by
him, owes a debt of more than five hundred monetary units to the company concerned
or to a related body corporate, not being a debt entered into by the company or related
body corporate in the ordinary course of its business where the ordinary business of
the company or related body corporate, as the case may be, includes the lending of
money.

(6) For the purposes of this section, a firm is disqualified in relation to a company if
any member of the firm is disqualified under subsection (5).

(7) An auditor of a company shall not take any action that would result in his being
disqualified under this section.

(8) A person who contravenes subsection (4) or (7) shall be guilty of an offence, and
shall be liable on conviction to a fine of five hundred monetary units.

(9) For the purposes of this section, a reference to an officer of a company includes a
reference to-

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(a) an officer of a related body corporate; and

(b) a person who has, at any time within the immediately preceding period of
twelve months, been an officer or promoter of the company or of a related company,
unless the Registrar, if he thinks fit in the circumstances of the case, directs in writing
that this paragraph shall not apply to the person.

(10) For the purposes of this section, a person shall not be regarded as an officer of a
company by reason only of his being or having been the liquidator of that company.

(11) A report, notice or consent that purports to be made or given by a firm appointed
as auditor of a company shall not be duly made or given unless it is signed in the firm
name and in his own name by a partner of the firm.

173. (1) The auditors of a company shall make a report (in this Act called the
"auditors' report") to the members of the company on the annual accounts and on the
company's accounting records and other records relating to those accounts.Auditors'
rights and duties and auditors' report

(2) The auditors' report shall be furnished by the auditors to the directors of the
company in sufficient time to enable the company to circulate the report in
accordance with section one hundred and eighty-two.

(3) The auditors' report shall state whether in the auditors' opinion-

(a) the annual accounts have been properly prepared in accordance with this Act;
and

(b) the accounting records, other records and registers required by this Act to be
kept by-
(i) the company; and
(ii) by any subsidiaries for which the auditors, or any of them, have acted as
auditor;
have been properly kept in accordance with this Act; and

(c) a true and fair view is given-


(i) of the state of the company's affairs as at the end of its financial year, in the
case of the balance sheet;

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(ii) of the company's profit or loss for its financial year, in the case of the profit
and loss account; and
(iii) of the state of affairs and profit or loss of the company and its subsidiaries so
far as concerns members of the company, in the case of group accounts;
and set out any defect or irregularity in the annual accounts, and any matter not set out
therein without regard to which a true and fair view of the matters dealt with by the
annual accounts would not be obtained.

(4) Where the annual accounts include group accounts, the auditors' report shall also
state-

(a) the names of the subsidiaries (if any) for which none of the auditors has acted
as auditor;

(b) whether the auditors have examined the accounts and auditors' reports of all
such subsidiaries that are covered by the group accounts;

(c) whether they are satisfied that the accounts of subsidiaries that are to be
consolidated with other accounts are in form and content appropriate and proper for
the purposes of the preparation of the consolidated accounts, and whether they have
received satisfactory information and explanations as required by them for that
purpose;

(d) whether the auditors' report on the accounts of any subsidiary was made
subject to any qualification, or included any comment made under subsection (3), and,
if so, particulars of the qualification or comment; and

(e) the auditors' reason for not being satisfied as to any matter referred to in
paragraph (a), (b) or (c), if he is not so satisfied.

(5) The auditors of a company, in preparing their report under this section, shall make
such investigations as will enable them to form an opinion, and shall form an opinion,
as to-

(a) whether proper accounting records have been kept by the company and proper
returns adequate for their audit have been received from branches not visited by them;
and

(b) whether the company's balance sheet and profit and loss account are in
agreement with the accounting records and returns;

110
(c) whether the procedures and methods used by the company and by each of its
subsidiaries in arriving at the amounts taken into any consolidated accounts were
appropriate to the circumstances of the consolidation, where any group accounts
include consolidated accounts; and

(d) whether they agree with the reasons given by the directors for preparing any
group accounts in the form in which they are prepared, where group accounts are
prepared otherwise than as one set of consolidated accounts for the group;
and if the auditors are of the opinion that there is any deficiency in a matter referred to
in this subsection, they shall state that opinion in the report.

(6) Every auditor of a company shall have a right of access at all reasonable times to
the accounting records and other records, including registers, of the company and to
require from any officer such information and explanations as he thinks necessary for
him to perform his duties as auditor.

(7) Every auditor of a holding company for which group accounts are required shall
have a right of access at all reasonable times to the accounting records and other
records, including registers, of any subsidiary, and shall be entitled to require from
any officer or auditor of any subsidiary, at the expense of the holding company, such
information and explanations in relations to the affairs of the subsidiary as he requires
for the purpose of reporting on the group accounts.

(8) If the auditors fail to obtain all the information and explanations which, to the
best of their knowledge and belief, are necessary for the purposes of their audit, they
shall state that fact in their report.

(9) If the auditors are unable to agree on the contents of an auditors' report, they shall
provide a single report on the matters on which they agree, together with separate
comments or reports on the matters on which they disagree.

(10) An auditor of a company shall be entitled to attend any general meeting of the
company and to receive all notices of and other communications relating to any
general meeting which any member of the company is entitled to receive, and to be
heard at any general meeting on any part of the business of the meeting which
concerns him as auditor, notwithstanding that he retires at that meeting or a resolution
to remove him from office is passed at that meeting.

(11) If an auditor, in the course of the performance of his duties as auditor of a


company, is satisfied that-

111
(a) there has been a contravention of, or failure to comply with, any of the
provisions of this Act; and

(b) the circumstances are such that in his opinion the matter has not been or will
not be adequately dealt with by-
(i) comment in the auditors' report on the annual accounts; or
(ii) bringing the matter to the notice of the directors of the company or, if the
company is a subsidiary, of the directors of any holding company of the company;
he shall forthwith report the matter to the Registrar in writing.

174. (1) A reference in this Act to a document annexed or required to be annexed to


a company's annual accounts shall not include the directors' report or the auditors'
report except as provided in this section. Circumstances in which accounts may
include the auditors' report or directors' report

(2) Any information which is required by this Act to be given in the annual accounts,
and is thereby allowed to be given in a statement annexed, may be given in the
directors' report instead of in the accounts, and if any such information is so given the
report shall be annexed to the accounts and this Act shall apply in relation thereto
accordingly, except that the auditors' report shall report thereon only so far as it gives
the said information.

(3) Where an item is shown in the directors' report instead of in the accounts, the
report shall also show the corresponding amount of that item for (or, as the case may
be as at the end of) the immediately preceding financial year, except where that
amount would not have had to be shown had the item been shown in the accounts.
Division 8.3-The Directors' report

175. In this Division, a reference to a subsidiary of a company that is a holding


company includes only those subsidiaries which the holding company is required to
cover in its group accounts. Interpretation

176. (1) The directors shall prepare, in conjunction with the annual accounts, a report
(in this Act called "the directors' report") with respect to the state of the company's
affairs, the amount, if any, which they recommend should be paid by way of dividend
and the amount, if any, which they propose to carry to reserves. Directors' report to
be attached to balance sheet

(2) The report shall deal with any change during the financial year in-

(a) the nature of the business of the company or its subsidiaries; or

112
(b) the classes of business in which the company or any subsidiary has an interest,
whether as member of another company or otherwise;
so far as is material for the appreciation of the state of the company's affairs by its
members and will not in the directors' opinion be harmful to the business of the
company or of any of its subsidiaries.

(3) A director of a company who wilfully fails to take all reasonable steps to comply
with subsection (1) shall be guilty of an offence, and shall be liable on conviction to a
fine not exceeding five hundred monetary units or to imprisonment for a period not
exceeding six months, or to both.

(4) In any proceedings against a person for an offence under this section, it shall be a
defence to prove that he reasonably believed that a competent and reliable person was
charged with the duty of seeing that the provisions of that section were complied with
and was in a position to discharge that duty.

177. (1) The directors' report shall state- General matters in directors' report

(a) the names of the persons who at any time during the financial year were
directors of the company;

(b) the principal activities of the company and of its subsidiaries in the course of
that year; and

(c) any significant change in those activities in that year.

(2) The directors' report shall contain particulars of-

(a) any significant changes in the fixed assets of the company or of any of its
subsidiaries in the financial year that occurred; and

(b) any significant differences between the values, as included in the balance
sheet, of such assets as consist of interests in land and the market values thereof.

(3) If the company has issued any shares or debentures in that year, the directors'
report shall state-

(a) the reasons for making the issue;

113
(b) the classes of shares issued;

(c) as respects each class of shares-


(i) the number issued; and
(ii) the consideration received by the company for the issue; and

(d) as respects each class of debentures-


(i) the amount issued; and
(ii) the consideration received by the company for the issue.

(4) If, at any time in that year, arrangements subsisted to which the company was a
party, being arrangements at least one of whose objects was to enable directors of the
company to acquire benefits by means of the acquisition of shares in or debentures of
the company or of any other body corporate, the directors' report shall contain a
statement explaining the effect of the arrangements and giving the names of the
persons who at any time in that year were directors of the company and held, or
whose nominees held, shares or debentures acquired under the arrangements.

(5) The directors' report shall contain-

(a) particulars of any important events affecting the company or any of its
subsidiaries which have occurred during the year;

(b) an indication of likely future developments in the business of the company and
of its subsidiaries; and

(c) an indication of the activities (if any) of the company or its subsidiaries in the
field of research and development.

(6) A directors' report for a company of a class prescribed for the purposes of this
paragraph shall contain prescribed information about the arrangements in force during
that year for securing the health, safety and welfare at work of employees of the
company and its subsidiaries, and for protecting other persons against risks to health
or safety arising out of or in connection with the activities at work of those
employees.

(7) The particulars required by subsection (6) may be given by way of notes to the
company's accounts in respect of the financial year in question, instead of being stated
in the directors' report.

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(8) Regulations made for the purposes of subsection (6) may-

(a) make different provision in relation to companies of different classes;

(b) enable any requirements of the regulations to be dispensed with or modified in


particular cases by any specified person or by any person authorised to do so by a
specified authority; and

(c) contain such transitional provisions as the Minister thinks necessary or


expedient in connection with any provision made by the regulations.

(9) Any expression used in subsection (6) that is also used in-

(a) Part I of the Factories Act; or Cap. 441

(b) Part I of the Public Health Act;


shall have the same meaning as in that Part. Cap. 295

178. (1) If in the course of a financial year, a company has carried out business of
two or more classes that in the opinion of the directors differ substantially from each
other, the directors' report relating to that year shall state- Where a company carries
on more than one kind of business, attribution of turnover and profitability

(a) the proportions in which the turnover for that year (so far as stated in the
annual accounts for that year) is divided amongst those classes (describing them); and

(b) as regards business of each class, the extent or approximate extent (expressed,
in either case, in monetary terms) to which, in the opinion of the directors, the
carrying on of business of that class contributed to or restricted, the profit of or loss,
before taxation of the company for that year.

(2) If-

(a) a company has subsidiaries at the end of its financial year and submits in
respect of that year group accounts prepared as consolidated accounts; and

115
(b) the company and the subsidiaries dealt with by the consolidated accounts
carried on between them in the course of the year business of two or more classes
that, in the opinion of the directors, differ substantially from each other;
the directors' report relating to that year shall also state the matters referred to in
subsection (1) in relation to the company and its subsidiaries.

179. (1) The directors' report of a company relating to a financial year shall state-
Average number by the month of a company's employees and amount, by the
year, of their wages

(a) the average number of persons employeed by it in each month in that year; and

(b) the total remuneration paid or payable in respect of that year to the persons
employed by it.

(2) If, at the end of a financial year, a company has subsidiaries, the directors' report
relating to the year shall also state the matters referred to in subsection (1) in relation
to the company and the subsidiaries.

(3) If the average number of employees for the purposes of subsection (1) or (2) is
less than one hundred, the directors' report may state only that the average number of
employees for that financial year was less than one hundred.

(4) This section shall not apply to a company that is a wholly owned subsidiary of a
company incorporated in Zambia.

(5) For the purposes of this section, the average number of persons employed in a
month shall be calculated as follows:

(a) for each whole calendar month during the financial year, the number of
persons who, under contracts of service, were employed during the month (whether
throughout it or not) by the employer or employers concerned is ascertained;

(b) the numbers so ascertained are added together;

(c) the sum is divided by the number of whole calendar months in the financial
year;

116
(d) the quotient is the average number of persons employed in a month.

(6) For the purposes of this section, no regard shall be had to a person who worked
wholly or mainly outside Zambia.

(7) In this section, "remuneration" means gross remuneration including bonuses


(whether payable under contract or not).

180. (1) If a company, during a financial year, makes gifts or donations for any
purpose with a total value of more than fifty monetary units, the directors' report
relating to the year shall state the total value. Particulars of gifts and donations

(2) If, at the end of a financial year, a company has subsidiaries, subsection (1) shall
apply to the company as if any gift or donation made by a subsidiary during the
financial year had been made by the company, whether or not the subsidiary was a
subsidiary at the time when the gift or donation was made.

181. (1) Where the business of a company consists of or includes the supplying of
goods, the directors' report in relation to a financial year shall, unless the turnover for
that year did not exceed five hundred monetary units- Particulars of exports

(a) state the value of any goods exported by the company from Zambia; or

(b) state that no goods were exported by the company from Zambia during that
year, if no goods were exported.

(2) If, at the end of a financial year, a company whose business consists of or
includes the supplying of goods, has subsidiaries, the directors' report relating to that
year shall, unless the turnover of the company and its subsidiaries for that year did not
exceed five hundred monetary units, state the matters referred to in subsection (1) in
relation to the company and its subsidiaries.

(3) For the purposes of this section, goods exported by a company or subsidiary as
the agent of another person shall be disregarded.

(4) This section shall not require the disclosure of information if-

117
(a) it is in the national interest that the information should not be disclosed; and

(b) the Minister issues a certificate to that effect.


Division 8.4-Provision of accounts and reports to members

182. (1) Not later than twenty-one days before an annual general meeting of a
company, or, if no annual general meeting is to be held within three months after the
end of a financial year, twenty-one days before the end of that three months, a copy
of- Circulation of annual accounts

(a) the annual accounts (including any group accounts);

(b) the auditors' report or reports on the accounts; and

(c) the directors' report;


relating to the previous financial year shall be sent to-
(i) each person entitled to receive notice of the annual general meeting; and
(ii) each registered debenture holder of the company.

(2) If the copies of the documents are not sent within the period allowed by
subsection (1), they shall, notwithstanding that fact, be deemed to have been duly sent
if it is so agreed in writing by all the members entitled to attend and vote at the
meeting.

(3) Where a firm has been appointed as auditor to the company, this section shall not
require copies to be sent to each member of the firm who is an auditor of the company
if a copy of each document is sent to the firm.

(4) Any member or debenture holder of a company, whether or not he is entitled to


receive notice of the company's annual general meeting, may require the company to
send him, without charge and within seven days after the requisition is made, a copy
of the most recent annual accounts of the company, together with a copy of the
relevant auditors' report and directors' report.

(5) If the company fails to comply with subsection (1), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding five hundred monetary units.

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(6) If the company fails to comply with subsection (4), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding one hundred monetary units unless it is proved that the person making the
demand has already been furnished with a copy of the document.

(7) This section shall not apply in relation to the annual accounts, auditors' report and
directors' report of a company for a financial year that began before the
commencement of this Act, and the right of any person to be furnished with a copy of
any of those documents, and the liability of the company in respect of a failure to
satisfy that right, shall be same as they would have been if this Act had not been
passed.

183. At an annual general meeting of a company-


(a) the annual accounts (including any group accounts);
(b) the auditors' report; and
(c) the directors' report; relating to the previous financial year shall be laid before
the company and shall-
(i) remain open and accessible throughout the meeting to any person attending
the meeting; and Tabling of accounts

(ii) be read at that meeting, if any member requests it.


Division 8.5-Annual returns

184. (1) A company shall, after the end of each financial year of the company, lodge
with the Registrar a return (in this Act called the "annual return") in accordance with
this Division- Annual return to be made to the Registrar

(a) within one month after the annual general meeting, if an annual general
meeting is held within three months after the end of the financial year; or

(b) within three months after the end of the financial year, in any other case.

(2) The annual return shall be signed by a director and by the secretary of the
company.

(3) The annual return shall state the position as at the date of the annual general
meeting of the company, or if there was no annual general meeting, as at the date on
which the annual return was made.

(4) The Registrar may cause to be published from time to time, in the Gazette or in
any newspaper, a list of companies whose annual returns are overdue.

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(5) No liability shall attach to the Registrar for any publication made in good faith
under subsection (4).

185. (1) The annual return of a public company shall- Annual return to be made
by a public company

(a) deal with the matters specified in the Third Schedule; and

(b) be in the prescribed form or as near thereto as circumstances admit.

(2) The annual return may, if the return for either of the two immediately preceding
years has given as at the date of that return the full particulars required by the Third
Schedule, give only such of the particulars required by that Schedule as related to
persons ceasing to be or becoming members since the date of the last return and to
shares transferred since that date or to changes as compared with that date in the
amount of stock held by a member.

186. A public company shall lodge with its annual return a certified copy, certified
by both a director and the secretary of the company, of every balance sheet, profit and
loss account, group accounts, directors' report and auditors' report sent to members
and debenture holders of the company in accordance with section one hundred and
eighty-two since the last annual return was made. Documents to be annexed to
annual return of a public company

187. (1) The annual return of a private company shall state- Annual return to
be made by a private company

(a) the registered office of the company;

(b) the registered postal address of the company;

(c) the registered records office of the company;

(d) all the particulars with respect to any person who at the date of the return is a
director or secretary of the company that this Act requires to be contained in the
register of the directors and secretary of a company; and

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(e) particulars identifying the bodies corporate related to the company at the date
of the return.

(2) There shall be annexed to the annual return a statement containing particulars of
the total amount of the indebtedness of the company in respect of all mortgages and
charges which are required to be registered with the Registrar under this Act.

188. (1) A private company shall lodge with its annual return a certificate that the
company has not since the date of the last return or, where there has been no return
since the company was incorporated as or converted to a private company, since the
date of the incorporation or conversion, issued any invitation to the public to
subscribe for any shares or debentures of the company. Additional certificates to
be lodged by a private company

(2) If the company has more than fifty members, the company shall lodge with its
annual return a certificate that the excess consists wholly of persons who under
section sixteen are to be excluded in reckoning the number of members.

(3) The certificates required by this section shall be signed by a director and by the
secretary of the company.

189. If a company fails to lodge an annual return and the other documents in
accordance with this Division, or lodges documents which do not comply with this
Division, the company, and each officer in default, shall be guilty of an offence, and
shall be liable on conviction to a fine not exceeding one thousand monetary units.
Offence relating to annual return

PART IX
MANAGEMENT AND ADMINISTRATION

190. (1) For the purposes of this Act, on the incorporation of a company- Registered
office and postal address

(a) the registered office of the company is the place the physical address of which
was notified in the application for incorporation; and

(b) the registered postal address is the postal address notified in the application.

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(2) A company may change its registered office or registered postal address by
lodging a notice in the prescribed form with the Registrar, specifying the date from
which the change will take effect.

191. For the purposes of this Act, a company's registered records office is-
(a) the place specified as the company's registered records office in a notice in the
prescribed form lodged with the Registrar, if such a notice has been lodged and not
revoked by the company; or
(b) company's registered office, if no such notice is current. Registered records
office

192. (1) Any record, register or book required by this Act to be kept by a company
may be kept either in a bound or loose leaf form, or by a system of mechanical or
electronic recording or otherwise. Records and registers of a company

(2) A company and its officers shall take adequate precautions to prevent loss or
destruction of the records, registers and books, to prevent the falsification of entries
and to facilitate the detection and correction of inaccuracies therein.

(3) Where any system of mechanical or electronic recording is adopted, adequate


arrangements shall be made for making the information therein available in written
form in English to anyone lawfully inspecting the record, register or book.

(4) Where a record, register or book is kept by means of a system of electronic


recording, a company shall for the purposes of this Act be deemed to keep the record,
register, or book at any place where the information therein is made available for
inspection.

(5) If a company fails to comply with this section, the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding five hundred monetary units.

193. (1) Subject to this Act, where this Act requires any record, register or book kept
by a company to be made available for inspection by a person, the record, register or
book shall, during business hours, be open to inspection by the person at the
company's registered records office. Inspection by members and others

(2) Where an inspection is made under subsection (1)-

(a) by a member, director, or auditor of the company, or by the Registrar or his


delegate, no charge may be made by the company; and

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(b) by any other person, the company may make a charge not exceeding one
monetary units, or such larger amount as may be prescribed, for each inspection.

(3) The company may by ordinary resolution restrict the hours during which a record,
book or register shall be available for inspection provided that it is available for
inspection during not less than two hours in any working day.

(4) Any person who is entitled to inspect any such record, register or book may
require a copy of the whole or any part thereof on payment of a charge not exceeding
one monetary unit, or such larger amount as may be prescribed, for every hundred
words or part thereof required to be copied.

(5) The company shall cause any copy so required by any person to be sent to that
person not more than ten days after the day on which the requirement is received by
the company.

(6) If the company fails to comply with this section-

(a) the court, on the application of a person aggrieved, may order-


(i) that the company comply immediately; and
(ii) that the company, and any officer in default, shall be liable to pay all costs of
and incidental to the application for the order;
whether or not any person has been convicted under paragraph (b); and

(b) the company, and each officer in default, shall be guilty of an offence, and
shall be liable on conviction to a fine not exceeding five hundred monetary units.

194. (1) A company shall- Publication of name of company

(a) paint or affix, and keep painted or affixed, its name, in easily legible Roman
letters above or adjacent to the principal entrance to its registered office, its registered
records office and to every other office or place in which its business is carried on;
and

(b) have its-


(i) name in Roman letters; and
(ii) designating number in Arabic numerals;
accurately stated in all business letters, invoices, receipts, notices and other
publications of the company, and in all negotiable instruments or orders for money,

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goods or services purporting to be signed or endorsed by or on behalf of the company.

(2) If a company fails to comply with subsection (1), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding five hundred monetary units.

(3) If any officer of the company or other person signs, endorses or authorises the
signing or endorsement on behalf of the company of any negotiable instrument or
order for money, goods or services that does not comply with paragraph (b) of
subsection (1), the person shall be personally liable to discharge the obligation
thereby incurred unless it is duly discharged by the company or otherwise, but without
prejudice to any right of indemnity which the person may have against the company
or any other person.

195. (1) A company shall have a common seal bearing its name and the words
"common seal" thereon in legible Roman letters. Seal of company

(2) The common seal shall not be used except with the authority of a resolution of the
directors of a committee of the directors specifically empowered to authorise the
affixing of the seal.

196. (1) A company may, subject to its articles, have for use in any place outside
Zambia an official seal, which shall be a facsimile of the common seal of the
company with the addition on its face of the name of the places where it is to be used.
Official seal for use abroad

(2) Every document to which an official seal is duly affixed shall bind the company
as if it had been sealed with the common seal of the company.

(3) The company may, by writing under its common seal, authorise any agent
appointed for that purpose to affix the official seal to any document to which the
company is a party in that place.

(4) Any person dealing with such an agent in reliance on the writing conferring the
authority shall be entitled to assume that the authority of the agent continues during
the period, if any, specified in the writing or, if no period is therein specified, until
that person has actual notice of the revocation or determination of the authority.

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(5) The person affixing any such official seal shall, by writing under his hand, certify
on the document to which the seal is affixed the date on which and the place at which
it is affixed.

197. (1) Any contract or instrument which, if entered into by a person other than a
body corporate, would not be required to be under seal may be entered into or
executed without seal on behalf of a company by the secretary, a director, or any
person generally or specifically authorised by the directors to do so. Form of
contracts and instruments

(2) Any document purporting to be a document under the seal of a company, or


issued on behalf of the company, shall be received in evidence and shall be presumed
to be duly executed or issued.

198. A bill of exchange or promissory note shall be deemed to have been made,
accepted or endorsed on behalf of a company if made, accepted or endorsed in the
name of, or by or on behalf or on account of, the company by any person acting under
its authority, express or implied. Bills of exchange and promissory notes

199. (1) A company may, by writing under its common seal, empower any person,
either generally or in respect of any specified matters, as its attorney, to execute deeds
on its behalf in any place outside Zambia. Execution of deeds abroad

(2) A deed signed by such an attorney on behalf of the company and under his seal
shall bind the company and have the same effect as if is were under its common seal
of the company.

200. (1) A document may be served on a company by- Service of documents on


company

(a) leaving it at the registered office of the company; or

(b) personal service on a director or secretary.

(2) A document sent by post to the registered postal address of the company shall be
deemed to have been served on the company if it is proved, by a receipt issued or
otherwise, that the document, or a post office notification of the document, was
delivered to the registered postal address.

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(3) Nothing in the section shall affect any provision in this Act relating to the service
of any document, or detract from the power of any court to direct how service shall be
effected of any document relating to legal proceedings before the court.

201. (1) For the purposes of this Act, a document may be served by a company on
any member, debenture holder, director or secretary of the company- Service of
documents by company

(a) personally;

(b) by sending it by registered post in a prepaid letter addressed to him at his


registered postal address or at any other address supplied by him to the company for
the giving of notices to him; or

(c) by leaving it for him at his registered address with some person apparently
over the age of eighteen years.

(2) A document may be served by a company on the joint holders of any share of
debenture of the company by serving it on the joint holder named first in the register
of members of debenture holders in respect of the share of debenture.

(3) A document may be served by a company on the person upon whom the
ownership of any share or debenture has devolved by reason of his being a legal
personal representative, receiver, or trustee in bankruptcy of a member of debenture
holder-

(a) personally;

(b) by sending it by registered post in a prepaid letter addressed to him at a postal


address notified by him to the company;

(c) by serving it in any manner in which it might have been served if the death,
receivership or bankruptcy had not occurred, if the company has not received notice
of a postal address for the person; or

(d) by leaving it for him at a place the address of which has been notified by him
to the company, with some person apparently over the age of eighteen years.

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(4) Where a document is sent by registered post, service shall be deemed to be
effected by properly addressing, prepaying and posting a letter containing the
document and to have been effected at the expiration of seven days or, if it is sent to
an address outside Zambia, twenty-one days, after the letter containing the same is
posted.

(5) For the purposes of subsection (4), where a letter is sent to an address outside
Zambia, it shall be despatched by airmail.

202. Where a company would be liable for the acts of any officer or agent, the
company shall be liable notwithstanding that the officer or agent has acted
fraudulently or forged a document purporting to be sealed by or signed on behalf of
the company. Liability of company not affected by officer's fraud or forgery

PART X
DIRECTORS AND SECRETARY

Division 10.1-Appointment and powers

203. (1) For the purposes of this Act, any person who is appointed by the members
of a company to direct and administer the business of the company shall be deemed to
be a director of the company, whether or not he is called a director. The directors of a
company

(2) In this Act, unless the context otherwise requires-

(a) a reference to "the directors" is a reference to the directors acting collectively;

(b) where a decision of the directors is required for them so to act, the decision
shall be made by resolution of the directors;

(c) a requirement that a document be signed by the directors shall be read as a


requirement that a majority of the directors sign the document.

(3) A person, not being a duly appointed director of the company, who holds himself
out, or knowingly allows himself to be held out, as a director of the company-

127
(a) shall be deemed to be a director for the purposes of all duties and liabilities
(including liabilities for criminal penalties) imposed on directors by this Act; and

(b) shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding five hundred monetary units.

(4) A person, not being a duly appointed director of a company, on whose directions
or instructions the duly appointed directors are accustomed to act shall be deemed to
be a director for the purposes of all duties and liabilities (including liabilities for
criminal penalties) imposed on directors by this Act.

(5) If a company-

(a) holds out a person; or

(b) allows a person to hold himself out;


as a director of the company, knowing that the person is not a duly appointed director,
the company shall be guilty of an offence, and shall be liable on conviction to a fine
not exceeding five hundred monetary units.

(6) No limitation upon the authority of a director of a company, whether imposed by


the articles or otherwise, shall be effective against a person who does not have
knowledge of the limitation unless, taking into account his relationship with the
company, he ought to have had such knowledge.

(7) For the purposes of this section, a person shall not be considered to be a person in
accordance with whose directions or instructions the directors of a company are
accustomed to act, by reason only that the directors of the company act on advice
given by him in a professional capacity.

204. (1) A company shall have at least two directors. Company to have at least
two directors

(2) If a company carries on business for a period of more than two months with fewer
than two directors, the company, and each officer in default, shall be guilty of an
offence, and shall be liable on conviction to a fine not exceeding ten monetary units
for each day after that period of two months that the company carries on business.

205. (1) A company shall have a secretary. The secretary

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(2) The persons named in the application for incorporation as the first secretary or
joint secretaries of a company shall, on the incorporation of the company, be deemed
to have been appointed as such for a term of one year.

(3) Unless the articles provide otherwise, the secretary, other than the first secretary,
shall be appointed by the directors for such a term as they think fit.

(4) A secretary shall be appointed on such remuneration and other conditions as the
directors think fit, and may be removed by them, subject to his right to claim damages
from the company if removed in breach of contract.

(5) The secretary may be a body corporate.

(6) Two or more persons may act jointly as the secretary of a company.

(7) The secretary of a company shall be-

(a) resident in Zambia, if an individual;

(b) incorporated in Zambia, if a body corporate.

(8) Anything required or authorised to be done by or to the secretary may, if the


office is vacant or there is for any other reason no secretary capable of acting, be done
by or to any assistant or deputy secretary or, if there is no assistant or deputy secretary
capable of acting, by or to any officer of the company authorised generally or
specially for that purpose by the directors.

(9) If a company carries on business for more than two months without a secretary or
in contravention of subsection (7), the company, and each officer in default, shall be
guilty of an offence, and shall be liable on conviction to a fine not exceeding ten
monetary units for each day after that period of two months that the business is
carried on.

206. (1) The number of directors of a company shall be the number of first directors
named in the application for incorporation, or such other number as the company may
decide by ordinary resolution.Appointment of directors

129
(2) The persons named in the application for incorporation as the first directors of a
company shall, on the incorporation of the company, be deemed to have been
appointed as such with a term of office that expires at the end of the first annual
general meeting.

(3) Subsections (4) to (16) apply to a company unless the articles provide otherwise.

(4) Where the company changes the number of directors it may, by ordinary
resolution, determine in what rotation the increased or decreased number is to retire
from office.

(5) At all annual general meetings held by the company, other than the first annual
general meeting, one third of the directors, or, if one third is not a whole number, the
whole number next largest than one third, shall retire from office.

(6) The directors to retire under subsection (5) shall be those who have been longest
in office, but, as between those who were appointed on the same day, those to retire
shall (unless they agree otherwise among themselves) be determined by lot.

(7) The company may, at the meeting at which a director retires under subsection (2)
or (5), appoint a person to fill the office by ordinary resolution.

(8) A retiring director is eligible for re-appointment.

(9) If an office is not filled under subsection (7), and the retiring director offers
himself for re-appointment and is not disqualified under this Act from holding office
as a director, the retiring director shall be deemed to have been re-appointment unless
at the meeting-

(a) it is expressly resolved not to fill the vacated office; or

(b) a resolution for the re-appointment of the director is put and lost.

(10) If there are fewer directors than the number set in accordance with this section,
the directors may appoint a person to be a director.

130
(11) A director appointed under subsection (10) holds office only until the next
annual general meeting held by the company, and at that meeting shall not be taken
into account in determining the number of directors to retire.

(12) A director appointed under subsection (10) shall be eligible for re-appointment
as a director at the next annual general meeting.

(13) Where a director's office becomes vacant otherwise than under subsection (5),
the company may, by ordinary resolution, appoint a replacement, who shall be subject
to retirement as if he had become a director on the day on which the person he
replaced as director had last been appointed or re-appointed.

(14) The directors shall be paid such remuneration as is from time to time determined
by the company by ordinary resolution.

(15) The remuneration shall accrue from day to day.

(16) If the company by ordinary resolution so decides, the directors shall be paid,
subject to the resolution, all travelling and other expenses properly incurred by them
in attending and returning from meetings of the directors, or any committee of the
directors or general meetings of the company, or otherwise in connection with the
business of the company.

207. (1) A person shall not be appointed as or continue to hold office as a director of
a company if the person is- Eligibility of persons to be directors

(a) a body corporate;

(b) an infant or any other person under legal disability;

(c) any person prohibited or disqualified from so acting by any order of a court; or

(d) an undischarged bankrupt.

(2) A director of a company shall cease to hold office as such if-

(a) he is adjudged bankrupt; or

131
(b) he is removed by order of a court from an office of trust on account of
misconduct.

(3) A person who, in contravention of subsection (1) or (2), takes office, or continues
to hold office, as a director of a company shall be guilty of an offence, and shall be
liable on conviction to a fine not exceeding five hundred monetary units or to
imprisonment for a period not exceeding six months, or to both.

(4) The articles of a company may provide further restrictions or qualifications on the
appointment or continuation in office of its directors.

(5) A person shall not be appointed as a director of a company unless he has


consented in writing to be so appointed.

(6) A contravention of this section shall not invalidate any transaction entered into by
a company.

208. (1) More than half of the directors of a company, including- Residential
requirements of directors

(a) the managing director, if the company has a managing director; and

(b) at least one executive director, if the company has executive directors;
shall be resident in Zambia.

(2) Any contravention of subsection (1) which continues for more than two months
shall constitute grounds for winding-up of the company by the court on the
application of the Registrar.

209. (1) Unless the company's articles otherwise provide, a director need not be a
member of the company or hold any shares therein. Directors' share qualification

(2) Where the articles require a director to hold a specified share qualification, a
person appointed as a director shall obtain his qualification within two months after
his appointment or such shorter period as may be fixed by the articles.

132
(3) If a company amends its articles so as to introduce or increase the requirement of
a share qualification, every director holding office at the date of the amendment shall
obtain his qualification within two months after the amendment or such shorter period
as may be fixed by the articles.

(4) A director who-

(a) fails to comply with subsection (2) or (3); or

(b) ceases to hold the specified share qualification, at any time after so complying;
shall cease to hold office.

(5) A person who ceases to hold office under subsection (4) shall not be re-appointed
as a director of the company until he has obtained his qualification.

210. (1) A director may resign his office by notice in writing to the company.
Vacation office of director

(2) In addition to the other circumstances specified in this Act, an office of director
shall become vacant if the director-

(a) is absent from meetings of the directors held during a period of six months,
without the consent of the directors;

(b) holds any office of profit under the company, except that of managing director
or principal executive officer, without the consent of the company by ordinary
resolution; or

(c) is directly or indirectly interested in any contract or proposed contract with the
company and fails to declare his interest as required by this Act.

(3) The articles of a company may provide for the termination or vacation of office in
circumstances additional to those specified in this Act.

211. (1) A company may, by ordinary resolution at a general meeting of the


company remove from office all or any of the directors, subject to their rights to claim
damages from the company if removed in breach of contract. Removal of
director

133
(2) A resolution to remove a director shall not be moved at any general meeting
unless notice of the intention to move it has been given to the company not less than
twenty-eight days before the meeting.

(3) On receipt of notice of an intended resolution to remove a director under this


section, the company shall forthwith send a copy thereof to the director concerned and
the director (whether or not he is a member of the company) shall be entitled-

(a) to be heard on the resolution at the meeting;

(b) to send to the company a written statement (in this section called "the
director's statement"), copies of which the company shall, subject to this section, send
with every notice of the general meeting or, if the statement is received too late, shall
forthwith circulate to every person entitled to notice of the meeting in the same
manner as notices of meetings are required to be given; and

(c) to require that the director's statement be read to the meeting.

(4) The company shall not be obliged to send or circulate the director's statement if it
is received by the company less than seven days before the meeting.

(5) The court, on application by the company or any other person who claims to be
aggrieved and on being satisfied that the director's statement is unreasonably long or
that the rights conferred by this section are being abused to secure publicity for
defamatory matter, may order-

(a) that the company shall not send or circulate the director's statement and that
the statement not be read at the meeting; and

(b) that the costs of the applicant are to be paid in whole or in part by the director,
notwithstanding that he is not a party to the application.

(6) On a resolution to remove a director no share shall, on a poll, carry a greater


number of votes than it would carry in relation to the generality of matters to be voted
on at a general meeting of the company.

(7) A vacancy created by the removal of any director under this section, if not filled
at the meeting at which he is removed, may be filled as a casual vacancy.

134
212. (1) A person shall not give directions or instructions to the duly appointed
directors of a company if the person is not eligible to be a director of the company.
No directions or instructions to be given to directors by a person not eligible to
be a director

(2) A person who contravenes this section shall be guilty of an offence, and shall be
liable on conviction to a fine not exceeding five hundred monetary units or
imprisonment for a period not exceeding six months, or to both.

213. (1) Subject to any restriction in the articles of a company, a director may-
Alternate directors

(a) either generally, or in respect of a specified period or specified circumstances;


and

(b) with the approval of the directors;


appoint a person who is not a director as his alternate director.

(2) An appointment as alternate director shall be in writing signed by the director


making the appointment and the person appointed and lodged with the company.

(3) A person shall not be appointed as an alternate director by more than one director.

(4) Subject to this section, this Act, including the provisions on registration of
directors' particulars and interests, shall apply to an alternate director as if he were a
director and not the agent of the director who appointed him.

(5) An appointment of a person as an alternate director shall confer on him-

(a) the right to attend any meeting of the directors or any committee of directors at
which the director who appointed him is not present; and

(b) one vote at such a meeting or committee.

(6) Except in relation to meetings, both the director who appointed an alternate
director and the alternate director may act as director of the company.

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(7) An alternate director shall not be required to hold any shares.

(8) An alternate director shall not himself appoint an alternate director.

(9) The company shall not be liable to pay additional remuneration by reason of the
appointment of an alternate director.

(10) The articles may provide that an alternate director shall be entitled to receive
from the company during the currency of his appointment the remuneration to which
the director who appointed him would, but for the appointment, have been entitled,
and that the director who appointed him shall not be entitled to that remuneration, but,
in the absence of such a provision, the alternate shall not be entitled to be remunerated
otherwise than by the director who appointed him.

(11) The appointment of an alternate director shall cease-

(a) at the expiration of the period, if any, for which he was appointed;

(b) if the director who appointed him gives written notice to that effect to the
company;

(c) if the director who appointed him ceases for any reason to be a director; or

(d) if the alternate resigns by notice in writing to the company.

214. (1) This section applies to a company unless the articles provide otherwise.
Managing director

(2) The directors may from time to time appoint one or more of their number to the
office of managing director for such period and on such terms as they think fit, and
subject to the terms of any agreement entered into in a particular case, may revoke
any such appointment.

(3) The managing director shall not, while holding that office, be subject to
retirement by rotation or be taken into account in determining the rotation of
retirement of directors, but his appointment shall terminate automatically if he ceases
for any reason to be a director.

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(4) The managing director shall receive remuneration, subject to the terms of any
agreement entered into in a particular case, as determined by the directors.

215. (1) Subject to this Act, the business of a company shall be managed by the
directors, who may pay all expenses incurred in promoting and forming the company,
and may exercise all such powers of the company as are not, by this Act or the
articles, required to be exercised by the company by resolution. Powers and duties
of directors

(2) Subsections (2) to (6) shall apply to a company unless the articles provide
otherwise.

(3) Without limiting the generality of subsection (1), the directors may exercise the
powers of the company to borrow money, to charge any property or business of the
company or all or any of its uncalled capital and to issue debentures or give any other
security for a debt, liability or obligation of the company or of any other person.

(4) The directors may, by power of attorney, appoint any person or persons to be the
attorney or attorneys of the company for such purposes, with such powers, authorities
and discretions (being powers, authorities and discretions vested in or exercisable by
the directors), for such periods and subject to such conditions as they think fit.

(5) A power of attorney under subsection (5) may contain such provisions for the
protection and convenience of persons dealing with the attorney as the directors think
fit and may also authorise the attorney to delegate all or any of the powers, authorities
and discretions vested in him.

(6) All cheques, promissory notes, bankers drafts, bills of exchange and other
negotiable instruments, and all receipts for money paid to the company, shall be
signed, drawn, accepted, endorsed or otherwise executed, by any two directors or in
such other manner as the directors determine.

216. (1) The directors of a company shall not, without the approval in accordance
with this section of an ordinary resolution of the company- Limitations on powers of
directors

(a) sell, lease or otherwise dispose of the whole, or substantially the whole, of the
undertaking or of the assets of the company;

(b) issue any new or unissued shares in the company; or

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(c) create or grant any rights or options entitling the holders thereof to acquire
shares of any class in the company.

(2) The approval for a transaction referred to in paragraph (a) of subsection (1) shall
be an approval of the specific transaction proposed by the directors.

(3) The approval for a transaction referred to in paragraph (b) of subsection (1) shall
be given not less than one year before the issue of the shares, unless the issue is in
accordance with a scheme relating to the issue of shares to or for the benefit of
persons bona fide in the employment of the company or of any related companies.

(4) This section shall not prohibit-

(a) the issue of any shares under a bona fide underwriting agreement; or

(b) the issue to a director of such shares, if any, as, under the articles of the
company, he is required to hold by way of share qualification.

(5) The validity of any transfer or disposition of property to a person dealing with the
company in good faith shall not be affected by a failure to comply with this section.

(6) This section shall not limit the powers of any liquidator or receiver of the property
of a company.

217. (1) This section shall apply to a company unless the articles provide otherwise.
Proceedings of directors

(2) The directors may meet together for the despatch of business and adjourn and
otherwise regulate their meetings as they think fit.

(3) A director may at any time, and a secretary shall on the requisition of a director,
convene a meeting of the directors.

(4) A question arising at a meeting of directors shall be decided by a majority of


votes of directors present and voting, and any such decision shall for all purposes be
deemed a decision of the directors.

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(5) In case of an equality of votes, the chairman of the meeting, in addition to his
deliberative vote (if any), has a casting vote.

(6) The directors may delegate any of their powers to a committee or committees of
directors, and such a power duly exercised by the committee shall be deemed to have
been exercised by the directors.

(7) If all the directors eligible to vote on a resolution sign a document or documents
containing the terms of the resolution and a statement that they are in favour of the
resolution, the resolution shall be deemed to have been passed at the time at which the
document is signed by the last director to sign.
Division 10.2-Interests of directors

218. (1) For the purposes of this section, a director has an interest in a contract of the
company if- Contracts in which directors are interested

(a) he will derive any material benefit, whether direct or indirect, from the
contract; or

(b) another party to the contract is a firm or body corporate and he has a material
interest, whether direct or indirect, in the firm or body corporate;
but he shall not be considered to have a material interest in a body corporate by reason
only that-

(i) he holds debentures of the body corporate; or

(ii) he holds shares in the body corporate comprising less than five per centum of
the shares, or, where the company has classes of shares, less than five per centum of
the shares in each class.

(2) For the purposes of paragraph (a) of subsection (1), a benefit accruing to a spouse
of the director or to a child under the age of twenty-one shall be deemed to be a
benefit accruing to the director.

(3) Unless the articles of a company provide otherwise, a director shall be entitled,
subject to this Act, to enter into a contract with the company, and such a contract shall
not be voidable, nor shall the director be liable to account for any profit made thereby,
by reason only of his being a director or of the fiduciary relationship thereby
established.

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(4) A director who is interested in any contract or proposed contract of the company
shall declare the nature and extent of his interest at a meeting of the directors or
shareholders of the company.

(5) If the director is interested in a proposed contract at the time that it is first
considered at a meeting of the directors or shareholders, the declaration shall be made
at that meeting or an earlier one.

(6) If the director becomes interested in a contract or proposed contract at some later
time, the declaration shall be made at the next meeting after he becomes so interested.

(7) For the purposes of this section, a general declaration in writing by a director that-

(a) states that he has an interest in a specified body corporate or firm;

(b) specifies the nature and extent of the interest; and

(c) states that he is to be regarded as interested in any contract which may, after
the date of the notice, be made with that body corporate or firm;
shall be a sufficient declaration of interest in relation to any contract so made unless,
at the time the question of confirming or entering into any contract is first taken into
consideration by the company, the extent of his interest in the body corporate or firm
is greater than is stated in the declaration.

(8) Subject to this section and the articles, where a contract or arrangement in which
a director is interested is considered at a meeting-

(a) the director shall not be counted in the quorum required for that business; and

(b) the director shall not vote in respect of that business.

(9) Subsection (8) shall not apply in respect of-

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(a) an arrangement for giving the director any security or indemnity in respect of
money lent by him to, or obligation undertaken by him for the benefit of, the
company;

(b) an arrangement for the giving by the company of any security to a third party
in respect of a debt or obligation of the company for which the director has assumed
responsibility in whole or in part under a guarantee or indemnity, or by the deposit of
a security; or

(c) a contract by the director to subscribe for or underwrite shares or debentures


of the company.

(10) A director who fails to comply with this section shall be guilty of an offence,
and shall be liable on conviction to a fine not exceeding five hundred monetary units.

219. (1) This section shall apply to the following companies: Prohibition of
loans by companies to directors

(a) a public company;

(b) a company related to a public company;

(c) a company in a prescribed class of company.

(2) A company to which this section applies shall not-

(a) make a loan to a director of the company or of a related body corporate;

(b) enter into any guarantee or provide any security in connection with a loan
made by any other person to a director of the company or of a related body corporate;
or

(c) subject to this section-


(i) make a loan to; or
(ii) enter into any guarantee or provide any security in connection with a loan
made by any other person to;

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a body corporate in which a director or directors of the company, or their nominees,
hold shares having in total one-fifth or more of the value of its issued share capital.

(3) This section shall not prohibit a company from making a loan to a related body
corporate, or entering into a guarantee or providing security in connection with a loan
made by any other person to a related body corporate.

(4) This section shall not prohibit a company whose ordinary business includes the
lending of money, or the giving of guarantees in connection with loans made by other
persons, from making a loan to, or entering into a guarantee or providing security in
connection with, a director or a body corporate referred to in paragraph (c) of
subsection (2)-

(a) if the prior approval of the company has been given at a general meeting at
which the purposes of the expenditure and the amount of the loan, or the extent of the
guarantee or security, were disclosed; or

(b) on condition that the loan shall be repaid, or the liability under the guarantee
or security shall be discharged, within eighteen months, if approval is not given by the
company within twelve months at a general meeting at which the purposes of the
expenditure and the amount of the loan, or the extent of the guarantee or security, are
disclosed.

(5) A company may advance to director of the company or of a related body


corporate funds to meet expenditure incurred or to be incurred by him for the
purposes of the company or for the purposes of enabling him properly to perform his
duties as an officer or employee of the company, provided that the total amount
advanced to such persons does not exceed one per centum of the assets of the
company less the liabilities of the company as shown in the last audited balance sheet
of the company.

(6) If a company fails to comply with this section-

(a) the company, and each officer in default, shall be guilty of an offence, and
shall be liable on conviction to a fine not exceeding five hundred monetary units; and

(b) the directors who authorised the making of the loan or the entering into the
guarantee or the providing of the security shall be jointly and severally liable to
indemnify the company against any loss arising therefrom.

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(7) This section shall not apply in relation to a loan, guarantee or security made or
provided before the commencement of this Act.

220. (1) If a director of a company, having acquired in that capacity any special
information which may substantially affect the value of the share or debentures of the
company or any related body corporate, buys or sells any such shares or debentures
without disclosing such information to the seller or purchaser thereof, the purchase or
sale shall be voidable at the option of the seller or purchaser within twelve months
after the date of the agreement to sell or buy.Duties of directors in connection with
sales or purchases of the company's securities

(2) For the purposes of this section, any shares or debentures bought or sold shall be
deemed to have been bought or sold by a director if he held before or after the
transaction, directly or indirectly, any beneficial interest therein, unless it is proved
that the sale or purchase was not made by him or on his instructions or advice or on
the instructions or advice of any other person to whom he had imparted any special
information affecting the value of the shares or debentures obtained by him in the
capacity of director.

(3) Nothing in this section shall derogate from any right or remedy which may be
available under any other law.
Division 10.3-Payments to directors

221. (1) For the purposes of this Division "payment"- Interpretation

(a) does not include the payment of damages awarded or approved by any court
for breach of an independent service agreement or the bona fide payment of any
pension or superannuation benefit in respect of past services in accordance with a
service agreement; and

(b) includes any other benefit or advantage whether in cash or in kind.

(2) For the purposes of this Division-

(a) a service agreement shall be considered independent only if it was not entered
into in contemplation of such a transfer as is referred to in subsection (1) of section
two hundred and twenty-two or such an offer as is referred to in section two hundred
and twenty-three;

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(b) a service agreement shall be presumed to have been entered into in
contemplation of such a transfer or offer unless it was made more than one year
before the date of the agreement to transfer or the making of the offer, and

(c) if-
(i) any payment (not being remuneration properly payable) is received by a
director or former director within a period of one year before or two years after the
date of the agreement to make such a transfer or offer; and
(ii) the company or the person to whom the transfer or by whom the offer was
made was privy to the making of the payment; the payment shall be presumed to have
been received by him in connection with the transfer or offer.

222. (1) A company shall not make to any director or former director of the company
or of a related body corporate any payment by way of compensation for loss of any
office in the company or in a related body corporate, or as consideration for or in
connection with his retirement from office, unless the particulars relating to the
proposed payment (including the amount thereof) have been disclosed to the members
of the company and the proposal has been approved by an ordinary resolution of the
company. Payments to directors for loss of office or on transfer of undertaking

(2) A person shall not make a payment to a director or former director of a company
in connection with the transfer of the whole or any part of the undertaking or property
of the company or of a related body corporate, whether the payment is expressed to be
by way of compensation for loss of office or otherwise, unless the particulars relating
to the proposed payment, including the amount thereof, have been disclosed to the
members of the company and the proposal has been approved by an ordinary
resolution of the company.

(3) If a payment is made in contravention of this section, the amount of the payment
shall be deemed to have been received in trust for the company.

223. (1) Where- Payments to directors in connection with takeover bids

(a) an offer is made for the acquisition of any shares of a company on the terms
that the offer is available for acceptance-
(i) by all the shareholders of the company or by all the holders of shares of the
class to which the offer related; or
(ii) by the holders of shares which, together with any shares already beneficially
owned by the person making the offer or any body corporate in which that person is a
controlling shareholder, confer the right to exercise or control the exercise of not less
than one-third of the votes at any general meeting of the company; and

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(b) in connection with the offer a payment (in this section called "the relevant
payment") is made, or has been made or is proposed to be made to a person (in this
section called the "payee director") who is a director or former director of the
company or of a related body corporate, being a payment other than payment to
purchase shares held by the payee director at the same price receivable under the offer
by other holders of shares in that class;
the director or former director shall take all reasonable steps to ensure that particulars
of the relevant payment are included in or sent with any notice of the offer made for
their shares which is given to any shareholders.

(2) If the payee director fails to comply with subsection (1), he shall be guilty of an
offence, and shall be liable on conviction to a fine not exceeding five hundred
monetary units.

(3) If a person who has been properly directed by the payee director to include in, or
send with, a notice of offer referred to in subsection (1) the particulars referred to in
that subsection fails to do so, he shall be guilty of an offence, and shall be liable on
conviction to a fine not exceeding two hundred and fifty monetary units.

(4) If the relevant payment, or a part thereof, is made to the payee director, then
subsection (5) shall apply unless-

(a) the payee director has complied with subsection (1); and

(b) the making of the relevant payment has been-


(i) agreed to by all the holders of the shares to which the offer relates; or
(ii) approved by an ordinary resolution passed at a meeting of such holders,
summoned for the purpose.

(5) If this subsection applies, then, subject to this section-

(a) the person making the payment and the payee director shall be jointly and
severally liable to distribute the amount of the relevant payment among any persons
who have sold their shares as a result of the offer in proportion to the number of
shares sold by them;

(b) the payee director shall hold any amounts received by him in connection with
the relevant payment on trust for such persons; and

(c) the expenses incurred in distributing the payment shall be borne by the persons
liable to make the distribution and not retained out of the payment.

145
(6) If, in proceedings instituted less than three months after the first transfer of any
shares in pursuance of the offer, the court awards or approves the payment of
damages to the payee director for breach of an independent service agreement, the
amount of the damages, and of any costs awarded to the payee director in the
proceedings, shall be paid to or retained by the payee director out of the amount of the
relevant payment and subsection (5) shall apply only to the balance thereof, if any.

(7) If the offer does not apply to all the shareholders or to all shareholders of a class,
a meeting called for the purposes of subparagraph (b) (ii) of subsection (4) shall be
convened, held and conducted as nearly as may be as if it were a meeting of the
shareholders or of a class of shareholders.

(8) The notices convening a meeting called for the purposes of subparagraph (b) (ii)
of subsection (4) shall include a statement to the effect that, if the resolution
approving the payment is not passed, the payment will be distributable among the
persons who have sold their shares in pursuance of the offer, except to the extent that
the court may award or approve the payment to the payee director of damages for
breach of an independent service agreement.

(9) The offer shall not include any provision that the offer is conditional upon
approval of the relevant payment, and any provision purporting to have that effect
shall be void.

(10) For the purposes of this section-

(a) shares shall be deemed to be beneficially owned by a body corporate if they


are owned beneficially by-
(i) the body corporate;
(ii) another body corporate related to the body corporate;
(iii) a controlling shareholder of a body corporate referred to in paragraph (i) or
(ii);

(b) a person shall be deemed to be a controlling shareholder of a body corporate


if-
(i) the body corporate or its directors are accustomed to act in accordance with
the directions or instructions of the person or his nominee; or
(ii) at a general meeting of the body corporate, the person is entitled to exercise or
control the exercise of one-third or more of the votes.
Division 10.4-Registers

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224. (1) A company shall keep a register of its directors and secretary or secretaries.
Register of directors and secretaries

(2) The register shall contain the following particulars of each director:

(a) his present forenames and surname;

(b) any former forename and surname;

(c) his residential and his postal address;

(d) his business or occupation, if any;

(e) his present nationality and National Registration Card Number or foreign
passport number;

(f) any directorship held by him in another body corporate, whether or not formed
in Zambia, at any time during the previous five years;

(g) any local directorship held by him in a foreign company at any time during the
previous five years;

(h) any secretaryship held by him in another body corporate, whether or not
formed in Zambia, at any time during the previous five years.

(3) The register shall contain, in the case of each secretary who is an individual, the
particulars referred to in subsection (2) and, in the case of a secretary that is a body
corporate, the following particulars:

(a) its name;

(b) its registered office and registered postal address and, if different, the address
of its principal office;

(c) any secretaryship held by it in another body corporate.

147
(4) If all the partners in a firm are joint secretaries of the company, the register may
contain, instead of the name and address of each partner, the name and the address of
the principal office of the firm and, if the principal office of the firm is outside
Zambia, the address of the principal office of the firm in Zambia.

(5) The register shall be available for inspection by any person.

(6) If a company fails to comply with this section, the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding five hundred monetary units.

(7) A director or secretary of a company shall give notice in writing to the company
of such matters relating to himself as may be necessary for the purposes of this
section, and a person who fails to do so shall be guilty of an offence, and shall be
liable on conviction to a fine not exceeding five hundred monetary units.

225. (1) A company shall keep a register showing in respect of each director and of
the secretary the number, description and amount of any shares in or debentures of the
company or any related body corporate which are held by or in trust for him or of
which he has any right to become the holder (whether on payment or not). Register of
shares and debentures held by or in trust for directors and secretary

(2) The register need not include shares in a body corporate which is the wholly-
owned subsidiary of another body corporate.

(3) Where a transaction involving any shares results in change in the register, the
register shall also show the date of, and price or other consideration for, the agreement
for the transaction.

(4) The nature and extent of a director's interest or right in or over any shares or
debentures recorded in relation to him in the register shall, if he so requires, be
indicated in the register.

(5) For the purposes of this section-

(a) a director shall supply the company with the information relating to himself
required to be registered; and

(b) the company shall be entitled to rely on the information provided by the
director.

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(6) This section shall not require the company to make any inquiry into the rights of
any person in relation to any shares, nor shall the company be taken to have, as a
result of anything done under this section, any notice of a matter relating to the rights
of any person in relation to the shares other than actual notice.

(7) The register shall be open to inspection-

(a) by any member or holder of debentures of the company during the period
beginning fourteen days before the date of the company's annual general meeting and
ending three days after the date of its conclusion; and

(b) by any person acting on behalf of the Registrar, at that or any other time.

(8) The register shall be produced at the commencement of the company's annual
general meeting and remain open and accessible throughout the meeting to any person
attending the meeting.

(9) If the company fails to comply with a provision of this section, the company, and
each officer in default, shall be guilty of an offence, and shall be liable on conviction
to a fine not exceeding five hundred monetary units.

(10) A director who fails to comply with subsection (5) shall be guilty of an offence,
and shall be liable on conviction to a fine not exceeding five hundred monetary units.

(11) If the company fails to allow inspection of the register in accordance with this
section, the court may order an immediate inspection of the register.

(12) For the purposes of this section-

(a) any person in accordance with whose directions or instructions the directors of
a company are accustomed to act shall be deemed to be a director of the company;
and

(b) a director of a company shall be deemed to hold or have an interest or right in


or over, any shares or debentures if a body corporate other than the company holds
them or has that interest or right in or over them, and either-

149
(i) that body corporate or its directors are accustomed to act in accordance with
his directions or instructions; or
(ii) he is entitled to exercise or control the exercise of one third or more of the
voting power at any general meeting of that body corporate.

226. (1) A company shall, within twenty-one days after any change occurs among its
directors or in its secretary or in any of the particulars contained in the register of
directors and secretaries, lodge with the Registrar notice of the change in the
prescribed form, specifying the date of the change. Registration of particulars of
directors and secretaries

(2) Any notification of a person's having become a director or secretary of the


company shall state that the person has consented in writing to act in the relevant
capacity.

(3) If the company fails to comply with this section, the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding three monetary units for each day that the failure continues.
Division 10.5-Miscellaneous

227. (1) A company to which this section applies shall not state, in any form, the
name of any of its directors (otherwise than in the text or as a signatory) on any
business letter, trade catalogue, circular or showcard on which the company's name
appears unless it also states in legible characters the Christian name, or the initial
thereof, and surname of every director (other than an alternate director) of the
company. Where one director is named in letters, etc, all are to be named

(2) For the purposes of this section-


"Christian name" includes a recognised abbreviation of a Christian name;
"director" includes any person in accordance with whose directions or instructions the
directors of the company are accustomed to act;
"showcard" means a card or pamphlet containing or exhibiting articles dealt with or
samples of representations thereof.

228. (1) In a limited company, the liability of the directors and managers may, if the
articles so provide, be unlimited. Limited company may have directors with
unlimited liability

(2) In a limited company in which the liability of directors or managers is unlimited,


a person shall not be elected or appointed to the office of director or manager unless
he has signed a statement that he understands and accepts that the liability of the
person holding that office will be unlimited.

150
(3) If a person is elected or appointed to the office of director or manager in
contravention of this section-

(a) the person will have unlimited liability;

(b) the member who proposed the person for election or appointment to the office
or director or manager, the promoters of the company, the directors of the company,
any managers of the company and the secretary of the company shall indemnify the
person against his liability under paragraph (a); and

(c) the persons referred to in paragraph (b) shall each be guilty of an offence, and
shall be liable on conviction to a fine not exceeding five hundred monetary units.

229. A provision requiring or authorising a thing to be done by or to a director and


the secretary shall not be satisfied by its being done by or to the same person acting
both as director and as, or in place of, the secretary. Avoidance of acts in dual
capacity as director and secretary

230. (1) Where- Restraining fraudulent persons from managing companies

(a) a person is convicted, whether in Zambia or elsewhere, on an indictment, or on


any other process analogous to or in substitution of indictment-
(i) of any offence involving fraud or dishonesty; or
(ii) of any offence in connection with the promotion, formation or management of
a body corporate; or

(b) in the course of winding-up a body corporate, whether in Zambia or


elsewhere, a person has been found guilty of-
(i) any fraud in relation to the body corporate; or
(ii) any breach of duty in relation to the body corporate;
the court, on its own motion or on the application of any of the persons referred to in
subsection (3), may order that the person shall not, without leave of the court, be a
director of or in any way, whether directly or indirectly, be concerned or take part in
the management of any company, or act as secretary, auditor or liquidator of any
company, or as receiver of the property or as trustee for the debenture holders of any
company, for such period not exceeding five years as may be specified in the order.

(2) In subsection (1), "the court" means the High Court for Zambia or-

151
(a) in relation to the making of an order against a person under paragraph (a)
thereof, the court before which he

(b) in relation to the making of an order against a person under paragraph (b)
thereof, the court having jurisdiction to wind-up the body corporate, if that court is in
Zambia; or

(c) in relation to the granting of leave, the court which made the order from which
leave is sought.

(3) An application for an order under this section may be made by-

(a) the Registrar;

(b) the trustee in bankruptcy of the person concerned; or

(c) the liquidator of any body corporate.

(4) A person intending to apply for the making of an order under this section shall
give not less than twenty-eight days' written notice of his intention to the person
against whom the order is sought.

(5) A person against whom an order has been made under this section who intends to
apply for leave to act as a director or in any other capacity in relation to the property
or affairs of a company shall, unless the court otherwise orders, give at least twenty-
eight days' written notice of his intention to any person on whose application the order
was made, and that person may be a party to the proceedings.

(6) Where any order is made or leave is granted under this section-

(a) the person who sought the order or leave shall lodge a copy thereof with the
Registrar; and

(b) the Registrar shall cause a summary thereof to be published in the Gazette.

(7) A person who contravenes an order made under this section shall be guilty of an
offence, and shall be liable on conviction to a fine not exceeding two thousand
monetary units or imprisonment for a term not exceeding two years, or to both.

152
231. A director or other officer of a company shall not assign his office to another
person, and any purported assignment of the office shall be void. Prohibition of
assignment of offices

232. An act done by a director, the directors or the secretary shall not be invalid
only because it is afterwards discovered that there was some defect in the appointment
or qualification of a person to be a director or secretary or a member of a committee
of directors, or to act as a director or secretary. Validity of acts of officers

233. (1) Subject to this Act, a company shall not indemnify a director or other officer
of the company or a related body corporate against, or compensate him for, any
liability which under law would otherwise attach to him in respect of any civil or
criminal liability for any negligence, default, breach of duty or breach of trust which
he may commit in relation to the company or a related body corporate after the
commencement of this Act. Company may not indemnify officers

(2) Any provision in a contract between the company and such a director or officer
purporting to indemnify or compensate him in contravention of subsection (1) shall be
void.

(3) This section shall not prevent a company from indemnifying or compensating
such a director or officer from any costs or liability incurred by him in defending any
proceedings, whether civil or criminal, in which-

(a) judgement is given in his favour;

(b) he is acquitted; or

(c) relief is granted to him by the court.

PART XI
SCHEMES OF ARRANGEMENT, TAKE-OVERS AND THE PROTECTION OF
MINORITIES

234. (1) In this section, "arrangement" includes a reorganisation of the share capital
of the company by the consolidation of shares of different classes or by the division of
shares in shares of different classes or by both methods. Power to compromise
with creditors and members

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(2) Where a compromise or arrangement is proposed between-

(a) a company and its creditors or any class of its creditors; or

(b) a company and its members or any class of its members;


the court may, on the application of the company or of any creditor or member of the
company, or, in the case of a company being wound-up, of the liquidator, order a
meeting of the creditors, the class of creditors, the members or the class of members,
as the case may be, to be convened, held and conducted in such manner as it thinks fit
to consider the compromise or arrangement.

(3) Subject to the order of the court, Part VII shall apply to a meeting of members or
a class of members ordered to be convened pursuant to this section.

(4) Subject to the order of the court, sections one hundred and forty-six to one
hundred and fifty-two shall apply, with the necessary modifications, to a meeting of
creditors or a class of creditors ordered to be convened pursuant to this section.

(5) Unless the court orders otherwise, the voting power at the meeting of creditors
ordered to be convened pursuant to this section shall be assigned to the creditors in
proportion to the amount of the debt outstanding from the company to each creditor.

(6) If a meeting, by extraordinary resolution, agrees to any compromise or


arrangement, the compromise or arrangement-

(a) shall be binding on all the creditors or the class of creditors, or on the
members or class of members, as the case may be; and

(b) shall be binding on the company if and when-


(i) it has been approved by order of the court; and
(ii) a copy of the order has been lodged with the Registrar.

(7) Where an extraordinary resolution agreeing to a compromise or arrangement has


been passed at a meeting convened pursuant to this section, the company or any
person who was entitled to vote at the meeting may apply to the court for approval of
the compromise or arrangement.

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(8) At the hearing by the court of the application for approval of the compromise or
arrangement, any member or creditor of the company claiming to be affected thereby
shall be entitled to be represented and to object.

(9) The court may prescribe such terms as it thinks fit as a condition of its approval,
including a condition that any member shall have the right to require the company to
purchase his shares at a price fixed by the court or to be determined in a manner
provided in the order, and, in that case, for the reduction of the company's capital
accordingly.

(10) Where an order is made approving the compromise or arrangement-

(a) the company shall lodge a copy with the Registrar within twenty-one days
after the making of the order; and

(b) a copy of the order shall be annexed to or incorporated in every copy of the
articles issued after the order has been made.

(11) Where an order under this section has the effect of altering the share capital of
the company, the Registrar, on lodgement of the copy of the order, shall issue a
replacement certificate of share capital for the company, worded to meet the
circumstances of the case.

(12) If the company fails to comply with paragraph (a) of subsection (10), the
company, and each officer in default, shall be guilty of an offence, and shall be liable
on conviction to a fine not exceeding ten monetary units for each day that the failure
continues.

(13) If the company issues a copy of the articles that fails to comply with paragraph
(b) of subsection (10), the company, and each officer in default, shall be guilty of an
offence, and shall be liable on conviction to a fine not exceeding three monetary units
in respect of each copy issued.

235. (1) In this section, "arrangement" has the same meaning as in section two
hundred and thirty-four. Information as to compromises with creditors and
members

(2) Where a meeting of creditors or any class of creditors or of members or any class
of members is convened under section two hundred and thirty-four the company shall
prepare a statement explaining the effect of the compromise or arrangement and in
particular stating any material interests of the directors in the company or a related

155
body corporate, whether as directors or as members or as creditors of the company or
otherwise, and the effect thereon of the compromise or arrangement, in so far as it is
different from the effect on the like interests of other persons.

(3) Where the compromise or arrangement affects the rights of debenture holders of
the company, the statement shall give the same explanation as respects the debenture
holders of the company or any trustees of any instrument for securing the issue of the
debentures as it is required to give as respects the company's directors.

(4) A copy of the statement shall be sent to every creditor or member with the notice
of the meeting.

(5) Every notice of the meeting given by advertisement shall include either a copy of
the statement or notice of the way in which the members or creditors entitled to attend
the meeting may obtain copies of the statement.

(6) Where notice of the meeting is given by advertisement, the company shall supply
a copy of the statement, free of charge, to any creditor or member who applies in the
way indicated in the advertisement.

(7) If the company fails to comply with this section, the company, and each officer in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding five hundred monetary units.

(8) It shall be a defence to a prosecution under subsection (7) to show that failure was
due to the refusal of any other person to supply the necessary particulars as to his
interests in the company or a related body corporate.

(9) A person who is director of the company or a trustee for debenture holders of the
company shall give notice to the company of such matters relating to himself as may
be necessary for the purposes of this section, and a person who fails to do so shall be
guilty of an offence, and shall be liable on conviction to a fine of five hundred
monetary units.

236. (1) Where an application is made to the court under section two hundred and
thirty-four to approve a compromise or arrangement referred to in that section, and it
is shown to the court that- Reconstruction and amalgamation of companies

(a) the compromise or arrangement has been proposed for the purposes of or in
connection with a scheme for-
(i) the reconstruction of any company or companies; or

156
(ii) the amalgamation of any two or more companies; and

(b) under the scheme the whole or any part of the undertaking or the property of
any company concerned in the scheme (in this section referred to as "the transferor
company") is to be transferred to another company (in this section referred to as "the
transferee company");
the court may, either by the order approving the compromise or arrangement or by a
subsequent order, provide for all or any of the following:
(i) the transfer to the transferee company of the whole or any part of the
undertaking and of the property or liabilities of the transferor company;
(ii) the allotment or appropriation by the transferee company of any shares,
debentures, policies or other like interests in the transferor company which under the
compromise or arrangement are to be allotted or appropriated by the transferor
company to or for any person;
(iii) the continuation by or against the transferee company of any legal proceedings
pending by or against the transferor company;
(iv) the dissolution, without winding-up, of the transferor company;
(v) the provision to be made for any persons who, within such time and in such
manner as the court directs, dissent from the compromise or arrangement;
(vi) such incidental, consequential and supplementary matters as are necessary to
secure that the reconstruction or amalgamation is fully and effectively carried out.

(2) Where an order under this section provides for the transfer of property or
liabilities-

(a) the property shall, by virtue of the order, be transferred to and vest in the
transferee company and shall, if the order so directs, be freed from any charge which
is under the compromise or arrangement to cease to have effect; and

(b) the liabilities shall, by virtue of the order, be transferred to and become the
liabilities of, the transferee company.

(3) Where an order is made under this section, every company in relation to which
the order is made shall cause a copy thereof to be lodged with the Registrar within
fifteen days after the making of the order.

(4) If a company fails to comply with subsection (3), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding ten monetary units for each day that the failure continues.

(5) In this section-

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(a) "property" includes property rights and powers of every description; and

(b) "liabilities" includes duties of every description;


notwithstanding that such rights, powers or duties are of such a character that under
the common law they could not be assigned or performed vicariously.

237. (1) This section shall apply where body corporate, whether a company within
the meaning of this Act or not, (in this section referred to as "the transferee
company"), has made an offer to the holders of shares in a company (in this section
referred to as "the transferor company") and each of the following conditions is
satisfied: Power to acquire shares of minority on take-over

(a) the offer by the transferee company is made to the holders of the whole of the
shares in the transferor company, other than those already held by the transferee
company or any of its related companies or by nominees for the transferee company
or any of its related companies;

(b) the consideration for the acquisition or a substantial part thereof is either-
(i) the allotment of shares in the transferee company; or
(ii) the allotment of shares in the transferee company or, at the option of the
holders, a payment of cash;

(c) the same terms are offered to all the holders of the shares to whom the offer is
made or, where there are different classes of shares, to all the holders of shares of the
same class;

(d) the notice of the offer sent to the shareholders included-


(i) a description of the effect of this section;
(ii) a statement that, if paragraph (e) is satisfied, the transferee company intends to
take advantage of this section; and
(iii) a statement that the shareholder may apply to the court under subsection (3);

(e) within four months after the making of the offer it has been accepted in respect
of sufficient shares in each class to make up, together with any shares held by the
transferee company, nine-tenths of the shares of that class.

(2) If this section applies, the transferee company may, within the period of two
months beginning when subsection (1) is satisfied, give to each shareholder who has
not accepted the offer in respect of all his shares a notice stating-

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(a) that it desires to acquire his shares;

(b) that if no action is taken by the shareholder, the shares will be compulsorily
acquired under this section;

(c) the alternative that will apply unless the shareholder directs otherwise, if the
offer consists of alternatives.

(3) A copy of the notice referred to in subsection (2) shall be sent to the transferor
company.

(4) At any time within the period beginning when the offer is made and ending three
months after subsection (1) is satisfied, the shareholder may apply to the court for an
order that-

(a) the shares may not be compulsorily acquired under this section; or

(b) the terms of the offer applying to the shareholder in respect of the shares, or of
the shares of a particular class, shall be varied as specified by the court;
and the court may make such an order.

(5) Where the court makes an order that the terms of the offer shall be varied, then,
unless the court orders otherwise, the transferee company shall give notice of the
varied terms to all other holders of shares of the same class and to all former holders
of shares of the same class who accepted the original offer, and at any time within two
months after receiving the notice-

(a) a holder of shares of that class shall be entitled to accept either the original
offer or the offer as varied by the court; and

(b) a former holder of shares of that class who accepted the original offer shall be
entitled to require the transferee company to pay or transfer to him any additional
consideration to which he would have been entitled, had his shares been acquired
under the offer as varied by the court.

(6) If a shareholder has not accepted the offer by the end of the acquisition day, the
transferee company shall, unless the court has directed otherwise, within seven days
after that day send to the transferor company an instrument of transfer of the shares of
that shareholder executed-

159
(a) on behalf of the shareholder by a person appointed by the transferee company;
and

(b) on its own behalf by the transferee company;


and transfer to the transferor company the consideration (whether shares, cash or any
other consideration) payable by the transferee company for the shares, and the
transferor company shall thereupon register the transferee company as the holder of
those shares.

(7) For the purposes of this section, the acquisition day is the day-

(a) three months after the day on which subsection (1) is satisfied: or

(b) on which the last of any applications under subsection (4) is disposed of;
whichever is the later.

(8) Any sums received by the transferor company under subsection (6) shall be paid
into a separate bank account and any such sums and all shares or other consideration
so received shall be held by the transferor company in trust for the several persons
entitled to them.

238. (I) Where- Rights of minority on take-over

(a) an offer is made to the shareholders of a company (in this section called "the
transferor company") or any of them for the purchase of their shares;

(b) in pursuance of the offer, shares in the transferor company are transferred to
another body corporate (referred to in this section as "the transferee company"),
whether the body corporate is a company within the meaning of this Act or not; and

(c) after the transfer of shares, the transferee company holds more than three-
fourths of the shares in the transferor company or in a class of those shares;
then-
(i) the transferee company shall within one month after the date of the transfer,
unless after a previous transfer it has already complied with this requirement, give
notice of that fact to the holders of the remaining shares or of the remaining shares of
that class, as the case may be; and
(ii) any such holder may, within three months after the giving to him of the notice
require the transferee company to acquire all or any of his shares.

160
(2) For the purposes of subsection (1), where a share is transferred to or held by-

(a) a body corporate related to the transferee company; or

(b) a nomince of the transferee company or of a body corporate related to the


transferee company; the share shall be deemed to be transferred to or held by the
transferee company.

(3) Where a shareholder under subsection (1) requires the transferee company to
acquire any shares, the transferee company shall be entitled and bound to acquire
those shares on the terms of the offer or on such other terms as may be agreed or as
the court, on the application of either the transferee company or the shareholder,
thinks fit to order.

239. (1) In this section, "oppressive" means-


(i) oppressive or unfairly prejudicial to, or unfairly discriminatory against, a
member or members of a company; or
(ii) contrary to the interests of the members as a whole;
whether in the capacity of the member or members concerned as a member or
members of the company, or otherwise. Remedy against oppression

(2) The court may, on the application of a member of a company, make an order or
orders under this section if it is of the opinion-

(a) that the affairs of the company are being conducted, or the powers of the
directors are being exercised, in a manner that is oppressive; or

(b) that-
(i) some act or omission, or proposed act or omission, by or on behalf of the
company has been done or is threatened; or
(ii) some resolution of the members, or any class of them, has been passed or is
proposed;

which was or would be oppressive;


for the purpose of remedying the situation of the member or members concerned.

(3) Subject to this section, an order or orders under this section may include, but is
not limited to, one or more of the following;

161
(a) an order directing or prohibiting any act or cancelling or varying any
transaction or resolution;

(b) an order regulating the conduct of the company's affairs in the future;

(c) an order for the purchase of the shares of any members of the company by
other members or by the company itself and, in the case of a purchase by the company
itself, for the reduction of the company's capital accordingly;

(d) an order that the company be wound-up;

(e) an order appointing a receiver of property of the company.

(4) Where an order under this section makes any alteration to the company's share
capital or articles then, notwithstanding anything in any other provision of this Act but
subject to any provisions of the order, the company shall not without the leave of the
court make any further alteration to the share capital or articles inconsistent with the
order.

(5) Where an order is made under this section that a company be wound-up, Part XIII
shall apply to the winding-up, with any necessary modifications, as if the order had
been made upon an application duly filed by the company for a winding-up by the
court.

(6) A copy of any order under this section altering the company's share capital or
articles shall be lodged by the company with the Registrar within fifteen days after the
making of the order.

(7) Where the order alters the company's share capital, the Registrar, on the
lodgement of the order, shall issue a replacement certificate of share capital for the
company, worded to meet the circumstances of the case.

(8) A person who contravenes an order under this section that is applicable to the
person shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding one thousand monetary units or to imprisonment for a period not exceeding
twelve months, or to both.

162
(9) If the company fails to comply with subsection (6), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding ten monetary units for each day that the failure continues.

PART XII
FOREIGN COMPANIES

240. (1) In this Part, unless the context otherwise requires-


"documentary agent" means a person appointed as a documentary agent of a foreign
company for the purposes of section two hundred and forty-five;
"established place of business" means a place of business of a foreign company that is
an established place of business under section two hundred and forty-one;
"existing foreign company" means a body corporate incorporated outside Zambia
which immediately before the commencement of this Act was registered as a foreign
company under the former Act;
"foreign company" means- Interpretation

(a) a body corporate formed outside Zambia that has registered under this Part; or

(b) an existing foreign company, subject to section two hundred and forty-three;
"local director" means a local director of a foreign company appointed under section
two hundred and forty-eight;
"registered principal office" means the office of a foreign company registered under
section two hundred and forty-five as its principal place of business.

241. (1) For the purposes of this Part, and subject to this section, a body corporate
formed outside Zambia has an "established place of business" if it has any of the
following in Zambia; Established place of business

(a) a branch or management office;

(b) an office for the registration of transfer of shares;

(c) a factory or mine; or

(d) any other fixed place of business.

(2) An agency in Zambia of a body corporate formed outside Zambia in which the
agent-

163
(a) does not have, or does not habitually exercise, a general authority to negotiate
and conclude contracts on behalf of the body corporate; and

(b) does not maintain a stock of merchandise belonging to that body corporate
from which he regularly fills orders on its behalf;
is not an established place of business of the body corporate for the purpose of this
Part.
(3) If a body corporate formed outside Zambia carries on business dealings in Zambia
through a broker or general commission agent acting in the ordinary course of his
business as such, the office of the broker or agent is not an established place of
business of the body corporate for the purposes of this Part.

(4) If a body corporate formed outside Zambia has a subsidiary which is incorporated
in Zambia or has an established place of business in Zambia, then-

(a) an office of the subsidiary; or

(b) an established place of business of the subsidiary;


shall not be regarded for that reason only as an established place of business of the
body corporate.

242. (1) For the purposes of this Act, the "financial year" of a foreign company is the
period, whether or not a period of one year, that begins on one accounting date of the
company and ends on the day before the next. Financial year of a foreign
company

(2) The first "accounting date" of a foreign company is

(a) the date of its registration as a foreign company; or

(b) the date on which it first had an established place of business;


whichever is earlier.

(3) Subject to this section, the subsequent accounting dates of a foreign company are-

164
(a) the date specified in the application for its registration as the date on which the
second financial year of the company will begin, and anniversaries of that date, if the
application for registration specified such a date; or

(b) the anniversaries of the date of its incorporation, if the application for
registration did not specify such a date.

(4) A foreign company may change an accounting date by lodging a notice of the
change in the prescribed form with the Registrar, provided that the change does not
result in a financial year's being longer than fifteen months.

(5) Where a foreign company changes an accounting date under this section, the
subsequent accounting dates of the company are unless changed under this section,
the anniversaries of that date.

243. (1) Subject to this Act, this Act applies to an existing foreign company as if
Application Part to listing foreign companies

(a) it had been duly registered under this Act as a foreign company; and

(b) any document that, in accordance with the former Act, was duly lodged by it
with the Registrar, or duly registered by the Registrar, had been duly lodged or
registered under this Act.

244. The Registrar shall maintain a register of foreign companies for the purposes of
this Part. Register of foreign companies

245. (1) A body corporate formed outside Zambia (in this section called an "external
company") may register under this section as a foreign company by lodging with the
Registrar the application for registration and the other documents required to
accompany it under this section. Registration of a foreign company

(2) The application shall be in the prescribed form and contain the following
particulars relating to the company:

(a) its name;

(b) the nature of its business or businesses or other main objects;

165
(c) the relevant particulars of each of one or more individuals resident in Zambia,
or bodies corporate incorporated in Zambia, authorised to accept on behalf of the
company service of process or any notice required to be served on the company (in
this Part called "documentary agents");

(d) the relevant particulars of the persons who are to be local directors of the
company, specifying which is to be the local chairman;

(e) if the company has shares, the number and nominal value, if any, of its
authorised and issued shares, and the amount paid thereon, distinguishing between the
amounts paid and payable in cash and the amounts paid and payable otherwise than in
cash;

(f) the address of the company's registered or principal office in the country of its
incorporation;

(g) subject to subsection (5), the physical address of an office in Zambia to be its
registered office;

(h) a postal address in Zambia.

(3) The application may also specify a date, being a date, not more than fifteen
months after the date of lodgement of the application, on which the second financial
year of the company will begin.

(4) The application shall be accompanied by-

(a) a certified copy of the charter, statutes, regulations, memorandum and articles,
or other instrument constituting, or defining the constitution of, the company;

(b) in relation to each documentary agent and local director, a statement signed by
him accepting appointment as such; and

(c) the particulars and documents referred to in subsection (2) of section ninety-
nine relating to any charge on any property in Zambia acquired by the company more
than fourteen days before the lodgement of the application, of, if there are no such
charges, a statement in the prescribed form to that effect.

166
(5) If an external company has not set up or acquired an established place of business
when it lodges an application for registration as a foreign company, it shall do so
within twenty-eight days after the lodgement.

(6) For the purposes of this section, the relevant particulars of a person are the
following:

(a) in the case of an individual-


(i) his present forenames or surname;
(ii) any former forename or surname;
(iii) his residential and postal address;
(iv) his business occupation (if any);

(b) in the case of a body corporate-


(i) its name and, if a company, its designating number;
(ii) its registered office; and
(iii) its registered postal address.

246. (1) If a body corporate formed outside Zambia sets up or acquires an


established place of business in Zambia, it shall, within twenty-eight days after so
doing, apply for registration as a foreign company under section two hundred and
forty-five. External company must register if it has an established place of
business

(2) If a body corporate fails to comply with subsection (1), the body corporate, and
any officer in default, shall be guilty of an offence, and shall be liable on conviction to
a fine not exceeding ten monetary units for each day that the failure continues.

247. (1) If any alteration is made in the charter, statutes, regulations, memorandum
and articles, or other instrument relating to a foreign company referred to in paragraph
(4) (a) of section two hundred and forty-five the company shall, within two months
after the date on which that alteration takes effect, lodge with the Registrar a notice in
the prescribed form giving details of the alteration. Returns required on alteration of
registered particulars

(2) If any alteration is made in any of the particulars contained in the application
referred to in subsection (2) of section two hundred and forty-five the company shall,
in accordance with this section, lodge with the Registrar a notice in the prescribed
form giving details of the alteration.

(3) In the case of any alteration in any of the particulars referred to in paragraphs (a),
(b), (e) or (f) of subsection (2) of section two hundred and forty-five the notice

167
required by subsection (2) shall be lodged within two months after the date of effect
of the alteration.

(4) In the case of any alteration in any of the particulars referred to in subparagraphs
(c), (d), (g) or (h) of subsection (2) of section two hundred and forty-five the notice
required by subsection (2) shall be lodged within twenty-eight days after the date of
the alteration.

(5) Where the particulars lodged pursuant to this section include the name of a person
appointed as a documentary agent or as a local director or manager, the notice shall be
accompanied by a consent signed by the person to act in that capacity.

248. (1) A foreign company shall have at all times at least one and no more than nine
individuals (in this Act called "local directors") empowered and authorised to conduct
and manage all the affairs, properties, business and other operations of the company
in Zambia. Foreign company must appoint local directors

(2) At least one local director of the company shall be resident in Zambia, and if the
company has more than two local directors, more than half of them shall be residents
of Zambia.

(3) A contravention of subsection (2) which continues for more than two months
shall constitute grounds for winding-up of the company by the court on the applicant
of the Registrar.

(4) The company shall not decrease the number of its local directors if the Registrar
directs it in writing not to do so.

(5) The company shall designate one of the local directors, being a local director who
is a resident of Zambia, as the local chairman.

(6) The company shall not appoint as a local director a person who, under Part X, is
not qualified to be a director of a company incorporated under this Act.

249. (1) If a person registered as a local director of a foreign company does an act
ostensibly on behalf of the company in the course of carrying on the business of the
company in Zambia, the act shall bind the company unless- Responsibilities of local
directors

(a) the local director has no authority so to act; and

168
(b) the person with whom he is dealing has actual knowledge of the absence of
authority, or, having regard to his position with, or relationship to, the company,
ought to know of the absence of authority.

(2) The company shall, in all trade circulars and business correspondence on or in
which the company's name appears, and which are despatched by or on behalf of the
company-

(a) in Zambia, whether to persons in Zambia or not;

(b) outside Zambia exclusively to persons in Zambia; or

(c) exclusively for the purposes of the company's operations in Zambia;


state in legible Roman characters in respect of each local director-
(i) his forenames or the initials thereof and his surname; and
(ii) any former forename or surname.

(3) The Registrar may, if in his opinion special circumstances exist which justify it,
by notice published in the Gazette, and subject to any conditions specified in the
notice, exempt the company from the requirements of subsection (2).

(4) The company shall maintain a register of its local directors, to be kept at its
registered office or the office notified to the Registrar for the purposes of section two
hundred and fifty-two, and section two hundred and twenty-four shall apply to the
register with the necessary modifications.

250. (1) A document may be served on a foreign company by- Service on foreign
company

(a) leaving it at an address registered as the address of a documentary agent of the


company;

(b) personal service on a documentary agent of a company, if the agent is an


individual;

(c) service in accordance with this Act on the documentary agent, if the
documentary agent is a company;

169
(d) leaving it at the registered office of the company, if the company has no
registered documentary agent, or no registered address for such an agent;

(e) personal service on a local director;

(f) leaving it at the registered office or principal place of business of the company
in the country of its incorporation; or

(g) personal service on a director or secretary of a company in the country of its


incorporation.

(2) A document sent by registered or other receipted post to the address registered as
the postal address of a documentary agent of the company shall be deemed to have
been served on the company if it is proved, by a receipt issued or otherwise, that the
document, or a post office notification of the document, was delivered to the
registered postal address.

(3) Service in accordance with subsection (1), other than paragraph (d), shall
continue to be effective in relation to the company for a period of two years after the
company ceases to be registered as a foreign company.

(4) Nothing in this section shall derogate from the power of any court to direct how
service shall be affected of any document relating to legal proceedings before the
court.

251. (1) A foreign company shall, within three months after the end of each financial
year of the company, lodge with the Registrar annual accounts and an auditors' report
corresponding as nearly as practicable with the annual accounts and auditors' report in
relation to the operations and assets in Zambia of the company that would be required
under Part VIII if those operations and assets were the whole operations and assets of
a public company incorporated under this Act. Annual accounts of foreign
company

(2) For the purposes of subsection (1), the foreign company shall appoint an auditor
or auditors.

(3) An auditor of a foreign company shall be-

170
(a) a registered accountant having a practice certificate issued by the Zambia
Institute of Certified Accountants under the Accountants Act, 1982; or Cap. 391

(b) a firm of such registered accountants.

(4) If the foreign company is required under its articles or other provisions of the
constitution regulating its conduct, or under the laws of the country in which it is
incorporated, to circulate annual accounts to its members or lay them before its
members in general meeting, the company shall, within twenty-eight days after
complying with those requirements, lodge with the Registrar a certified copy of the
accounts together with, if the accounts are in a language other than English, a certified
translation of them into English.

(5) In the profit and loss account in the accounts referred to in subsection (1), the
company may make such apportionments and add such notes and explanations as are,
in its opinion, necessary or desirable in order to give a true and fair view of the profit
or loss on its operations in Zambia, and for this purpose may debit a reasonable rate of
interest on capital employed in Zambia.

(6) In relation to the accounts and reports referred to in subsection (1), the Registrar
may, on the application or with the consent of the local directors of the company,
modify, in relation to the company, any of the requirements of this section or Part
VIII to suit the circumstances of the company, provided that the accounts and reports
give a true and fairview of the profit or loss on the operations of the company, and of
the state of affairs of the company, in Zambia.

252. (1) A foreign company shall- Keeping of accounting records by foreign


company

(a) keep such accounting records as correctly record and explain the transactions
of the company relating to its operations and assets in Zambia (including any
transactions as trustee) and the financial position of the company in relation to those
operations and assets; and

(b) keep its accounting records in such a manner as will enable-


(i) the preparation from time to time of true and fair accounts of those operations
and assets of the company; and
(ii) those accounts of the company to be conveniently and properly audited in
accordance with this Part.

(2) The company shall retain the accounting records for a period of ten years after the
completion of the transactions to which they relate.

171
(3) The company shall keep at its registered office, or at another office notified to the
Register in writing, such statements and records with respect to the matters dealt with
in its accounting records as would enable the company to prepare true and fair
accounts together with any documents required by this Part to be attached to the
accounts.

(4) The accounting records of the company shall be kept in writing or in any form
that enables the accounting records to be readily accessible and readily convertible
into writing.

(5) The accounting records of the company shall be kept in English, unless the use of
another language is approved in writing by the Registrar.

(6) The company shall make its accounting records available in writing at all
reasonable times for inspection without charge by the local directors and auditors of
the company and by the Registrar or his delegate.

(7) If the company fails to comply with this section-

(a) the Registrar may apply for an order that the company be wound-up in
accordance with section two hundred and fifty-seven; and

(b) the company, and each officer in default, shall be guilty of an offence, and
shall be liable on conviction to a fine not exceeding two thousand monetary units or to
a term of imprisonment not exceeding two years, or to both.

(8) The Registrar may, if he considers that the special circumstances of the company
justify it, exempt the company, generally or in respect of any particular financial year,
from any of the provisions of this section.

253. (1) Subject to this section, the name of a foreign company in Zambia shall be-
Name of foreign company

(a) the name of the company in the country of its incorporation, if that name is in
English; or

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(b) the name of the company in the country of its incorporation or a translation
thereof, as the company chooses, if that name is in Roman characters in a language
other than English;

(c) a translation or transliteration of the name of the company in the country of its
incorporation, as the company chooses, if that name is not in Roman characters.

(2) The Registrar may, on the application of the foreign company, whether before or
after registration of the company, permit the company to have a different name in
Zambia.

(3) If, in the opinion of the Registrar, whether formed before or after the registration
of a foreign company, the name of the foreign company is likely to cause confusion
with the name of another body corporate or is otherwise undesirable, the Registrar
may direct that the foreign company shall adopt another name for use in Zambia,
being a name approved by the Registrar.

(4) If the Registrar makes a direction under subsection (3) in the case of a body
corporate applying for registration as a foreign company, he shall not register the
body corporate until it adopts such a new name.

(5) If the Registrar makes a direction under subsection (3) in the case of a foreign
company already registered, and it does not adopt such a name within forty-two days
after the issue of the direction, he shall register the designating number of the
company, together with the words "Foreign Company", as the name of the company.

(6) A change of name under this section, or the use of a name different from the
name used by the foreign company in the country of its incorporation shall not affect
any rights or obligations of the company, or render defective any legal proceedings
instituted or to be instituted by or against the company, and any legal proceedings
may be continued or commenced by or against the company by its new name that
might have been continued or commenced by or against the company by its former
name.

254. (1) Section one hundred and ninety-four shall apply to a foreign company as if
its name included at the end- Publication of name of foreign company

(a) the words "incorporated in "followed by the country of its incorporation; and

173
(b) the words "with limited liability", if the liability of the members is limited;
but shall not apply in relation to business correspondence of the company despatched
outside Zambia.

255. Section ninety-nine shall apply in relation to a foreign company as if-


(a) a reference to a company were a reference to the foreign company;
Registration of charges by foreign company

(b) a reference to a charge were a reference to a charge over property of the


company situated in Zambia; and

(c) a reference to the acquisition of property by the company included a reference


to the acquisition of property before it registration as a foreign company.

256. (1) Where, in the case of a foreign company- Notification of winding-up of


foreign company

(a) a winding-up order is made by a court of the country of its incorporation;

(b) a resolution is passed or other appropriate proceedings are taken in that


country to lead to the voluntary winding-up of the company; or

(c) the company is dissolved or otherwise has ceased to exist according to the law
of the country of its incorporation.
the company, or, if the company is dissolved, the documentary agents and local
directors of the company, shall lodge a notice thereof with the Registrar within
twenty-eight days after the event.

(2) Where an event referred to in paragraph (a) or (b) of subsection (1) has occurred,
the company shall cause a statement to appear in legible Roman characters on every
invoice, order or business letter thereafter issued in Zambia by or on behalf of the
company, being a document on or in which the company's name appears, to the effect
that the company is being wound-up in the country of its incorporation.

(3) A person who carries on, or purports to carry on, in Zambia business on behalf of
a foreign company after the date on which it was dissolved or otherwise ceased to
exist in the country of its incorporation shall be guilty of an offence, and shall be
liable on conviction to a fine not exceeding thirty monetary units for each day that he
carries on or purports to carry on the business.

174
(4) Nothing in this action shall derogate from the provisions of section two hundred
and fifty-seven.

257. (1) The undertaking in Zambia of a foreign company may be wound-up in


accordance with this section whether or not the company has been dissolved or has
otherwise ceased to exist according to the law of the country of its incorporation.
Winding-up of foreign company in Zambia

(2) For the purposes of a winding-up under this section, the foreign company shall be
treated as if it were a company incorporated in Zambia whose whole operations and
assets were the operations and assets in Zambia of the foreign company.

(3) Subject to this section, Part XIII shall apply, with any necessary modifications, to
the winding-up of a foreign company.

(4) A foreign company may be wound-up by the court on the following grounds in
addition to those referred to in section two hundred and seventy-two;

(a) if it is in the course of being wound-up, voluntarily or otherwise, in the


country of its incorporation;

(b) if it is dissolved in the country of its incorporation or has ceased to carry on


business in Zambia, or is carrying on business for the purposes only of winding-up its
affairs;

(c) if the court is of the opinion that the company is being operated in Zambia for
any unlawful purpose.

(5) The court may, in the winding-up order or on subsequent application by the
liquidator, direct that all transactions in Zambia by or with the foreign company shall
be deemed to be or have been validly done notwithstanding that they occurred after
the date when the company was dissolved or otherwise ceased to exist according to
the law of the country of its incorporation, and may make the order on such terms and
conditions as it deems fit.

258. (1) If a foreign company ceases to have an established place of business in


Zambia, it shall, within twenty-eight days after so ceasing, lodge a notice of that fact
in the prescribed form with the Registrar. Cessation of business of foreign
company

175
(2) The Registrar shall register the notice and the company shall, subject to this
section, thereupon cease to be registered as a foreign company.

(3) The company shall maintain a documentary agent, and continue to notify the
Registrar of the particulars of its documentary agents, for a period of two years after
lodging the notice of its ceasing to have an established place of business.

(4) Where the Registrar has reason to believe that a foreign company has ceased to
have an established place of business in Zambia, he shall serve a notice on the
company of that fact and stating the effect of subsection (5).

(5) If, at the end of three months after the giving of a notice under subsection (4), the
Registrar is not satisfied that the foreign company is maintaining an established place
of business in Zambia, the company shall be deemed to have lodged a notice under
subsection (1) on that day.

(6) Any person who, while a body corporate was registered as foreign company,
would have had the right to inspect a document or register held by the Registrar in
relation to the company, shall have the right to do so during the period of two years
following the lodging of a notice by the company under subsection (1).

259. (1) If a foreign company fails to comply with any of the obligations imposed
upon it by this Part, the foreign company and any officer or documentary agent in
default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding five hundred monetary units. Penalties and disabilities

(2) If a local director or a documentary agent of a foreign company wilfully fails to


comply with any of the obligations imposed upon him by this Part, the local director
or documentary agent shall be guilty of an offence, and shall be liable on conviction
to a fine not exceeding five hundred monetary units.

(3) Subsections (1) and (2) shall not apply in respect of any act or omission which
constitutes an offence under another provision of this Part, or of this Act as applied by
this Part.

(4) Subject to this section, if a foreign company fails to lodge with the Registrar any
document required by this Part to be so lodged, the rights of the foreign company
under or arising out of or incidental to any contract made in Zambia while the failure
continues shall not be enforceable by action or other legal proceedings.

176
(5) A court may, on the application of a foreign company to which subsection (4)
applies and if it is satisfied that it is just and equitable to do so, grant relief, either
generally or on conditions, from any disability imposed by subsection (4).

(6) Nothing in this section shall prejudice the rights of any other parties against the
foreign company in respect of a contract referred to in subsection (4).

(7) If another party commences an action or proceedings against a foreign company


to which subsection (4) applies, this section shall not preclude the foreign company
from enforcing in the action or proceedings by way of counter-claim, set-off or
otherwise, such rights as it may have against the party in respect of that contract.

260. (1) Part VI shall apply in relation to foreign companies, with the necessary
modifications, as if a foreign company were a public company. Invitations to the
public relating to foreign companies

(2) At the request of a foreign company, the Registrar may, if he thinks fit, waive or
modify the provisions of Part VI in relation to the company.

(3) Any prospectus registered by a foreign company for the purposes of an invitation
to the public to acquire shares or debentures shall, in addition to complying with Part
VI and subject to any modifications made under subsection (2), also contain
particulars of-

(a) the instrument constituting or defining the constitution of the company;

(b) the law, or provisions having the the force of law, by or under which the
incorporation of the company was effected;

(c) an address in Zambia where copies of the foregoing, or, if the same are in a
language other than English, certified translations thereof, can be inspected;

(d) the date on which and the country in which the company was incorporated;
and

(e) whether the liability of the members is limited.

(4) A breach of subsection (3) shall be deemed to be a breach of section one hundred
and thirty.

177
261. (1) In this section, "non-Zambian company" means any body corporate formed
or proposed to be formed outside Zambia, other than a foreign company. Invitations
to the public relating to other external bodies corporate

(2) Part VI shall apply, with the necessary modifications, in relation a non-Zambian
company as if it were a public company.

(3) At the request of a non-Zambian company, the Registrar may, if he thinks fit,
waive or modify the provisions of Part VI in relation to the company.

(4) Any prospectus registered by a non-Zambian company for the purposes of an


invitation to the public to acquire shares or debentures shall, in addition to complying
with Part VI and subject to any modifications made under subsection (2), also contain
particulars of-

(a) the instrument constituting or defining the constitution of the company;

(b) the law, or provisions having the force of law, by or under which the
incorporation of the company was effected;

(c) an address in Zambia where copies of the foregoing, or, if the same are in a
language other than English, certified translations thereof, can be inspected;

(d) the date on which and the country in which the company was incorporated;
and

(e) whether the liability of the members is limited.

(5) A breach of subsection (4) shall be deemed to be a breach of section one hundred
and thirty.

PART XIII
WINDING-UP

Division 13.1-General

178
262. For the purposes of this Part, a reference to a member of a company includes,
unless the context otherwise requires, a reference to a person claiming or alleged to be
liable to contribute to the assets of the company in a winding up, for the purpose of
any proceedings for determining, and of all proceedings prior to the final
determination of, the persons who are so liable (including the presentation of a
winding-up petition). Interpretation

263. (1) The winding-up of a company under this Part shall be- Modes of
winding-up

(a) a winding-up by the court; or

(b) a voluntary winding-up, being-


(i) a members' voluntary winding-up; or
(ii) a creditors' voluntary winding-up.

264. The provisions of this Act relating to the winding-up of a company shall not
apply in relation to a winding-up that was commenced before the commencement of
this Act, and such a winding-up shall be continued as if this Act had not been passed.
Application of repealed Act

265. (1) This section shall apply only in the case of a company limited by guarantee,
an unlimited company and a company having shares which are not fully paid up.
Liability of members on winding-up

(2) When a company is wound-up, every member at the time of the commencement
of the winding-up shall, subject to section two hundred and sixty-six, be liable to
contribute to the assets of the company an amount sufficient for payment of its debts
and liabilities and the costs, charges and expenses of the winding-up and for the
adjustment of the rights of the members among themselves.

(3) A sum due to any member in his capacity as a member by way of dividends or
otherwise-

(a) shall not be regarded as a debt of the company payable to that member in a
case of competition between himself and any other creditor not a member; and

(b) may be taken into account for the purpose of the final adjustment of the rights
of the members among themselves.

179
266. (1) In the case of a public company or a private company limited by shares,
section two hundred and sixty-five shall not require from any member a contribution
exceeding the amount, if any, unpaid on the shares in respect of which he is liable as a
member. Limitation of liability

(2) In the case of a company limited by guarantee, section two hundred and sixty-five
shall not require from any member a contribution exceeding the amount that he
undertook, in the declaration of guarantee, to contribute to the assets of the company
in the event of its being wound-up.

267. The liability of a member shall create a debt in the nature of a specially
accruing debt due from him at the time when his liability commenced, but payable at
the times when calls are made for enforcing the liability. Nature of liability of a
member

268. (1) If a member dies, whether before or after he has been placed on the list of
those liable to contribute to the assets of the company, his personal representatives
shall be so liable in due course of administration and, if they fail to pay any money
ordered to be paid by them, proceedings may be taken for administering the estate of
the deceased member and for compelling payment therefrom of the money due.
Liability in case of death of bankruptcy of a member

(2) If a member becomes bankrupt, either before or after he has been placed on the
list of those liable to contribute to the assets of the company-

(a) his trustee in bankruptcy shall represent him for all the purposes of the
winding-up, and shall be liable to contribute accordingly; and

(b) there may be proved against the estate of the bankrupt the estimated value of
his liability to future calls as well as to calls already made.

269. (1) The court shall have jurisdiction to wind-up, in accordance with this Act-
Jurisdiction to wind-up companies

(a) a body corporate incorporated in Zambia;

(b) a body corporate incorporated in a foreign country and-


(i) registered as a foreign company; or
(ii) having any business or undertaking or assets in Zambia.
Division 13.2-Winding-up by the court

180
270. This Division shall apply in the case of the winding-up of a company by the
court. Application of Division

271. (1) Subject to this section, a company may be wound-up by the court on the
petition of- Persons who may petition for a company to be wound-up by the court

(a) the company;

(b) any creditor, including a contingent or prospective creditor, of the company;

(c) a member;

(d) any person who is the personal representative of a deceased member;

(e) the trustee in bankruptcy of a bankrupt member;

(f) any liquidator of the company appointed in a voluntary liquidation; or

(g) the Registrar.

(2) In the case of a public company or a private company limited by shares, a


member shall not be entitled to present a winding-up petition unless his shares, or
some of them-

(a) were originally allotted to him;

(b) have been held by him, and registered in his name for at least six months; or

(c) have devolved on him by operation of law.

(3) The court shall not hear a winding-up petition presented by a contingent or
prospective creditor until-

181
(a) such security for costs has been given as the court thinks reasonable; and

(b) A prima facie case for winding-up has been established to the satisfaction of
the court.

(4) Where a company is being wound-up voluntarily, the court shall not make a
winding-up order unless it is satisfied that the voluntary winding-up cannot be
continued with due respect to the interests of the creditors or members.

272. (1) The court may order the winding-up of a company on the petition of a
person other than the Registrar if- Circumstances in which company may be
wound up by court

(a) the company has by special resolution resolved that it be wound-up by the
court;

(b) the company does not commence its business within twelve months after its
incorporation or suspends its business for twelve months;

(c) the company is unable to pay its debts;

(d) the period, if any, fixed for the duration of the company by the articles expires
of the event, if any, occurs on the occurrence of which the articles provide that the
company is to be dissolved;

(e) the number of members is reduced below two; or

(f) in the opinion of the court, it is just and equitable that the company should be
wound-up.

(2) The court may order the winding-up of a company on the petition of the Registrar
on the grounds specified in paragraph (b), (d), (e or f) of subsection (1) or on the
ground that the company has persistently failed to comply with any of the provisions
of this Act.

(3) For the purposes of this section, a company is unable to pay its debts if-

182
(a) there is due from the company to any creditor (including a creditor by
assignment) an amount exceeding fifty monetary units, and-
(i) the creditor has, more than twenty-one days previously, served on the
company a written demand under his hand requiring the company to pay the amount
so due; and
(ii) the company has failed to pay the sum or to secure or compound it to the
reasonable satisfaction of the creditor;

(b) execution or other process issued on a judgment, decree or order of any court
in favour of a creditor of the company is returned unsatisfied in whole or in part; or

(c) the company is unable to pay its debts as they fall due.

(4) In determining whether a company is unable to pay its debts, the court shall take
into account the contingent and prospective liabilities of the company.

273. (1) Where, before the presentation of the petition for the winding-up of a
company by the court, a resolution has been passed by the company for voluntary
winding-up, the winding-up of the company shall be deemed to have commenced at
the time of the passing of the resolution, and, unless the court otherwise directs, all
proceedings taken in the voluntary winding-up shall be deemed to have been validly
taken. Commencement of winding-up by court

(2) In any other case the winding-up shall be deemed to have commenced at the time
of the presentation of the petition for the winding-up of the company by the court.

274. (1) The person, other than the company itself or the liquidator thereof, on
whose petition a winding-up order is made shall at his own cost prosecute all
proceedings in the winding-up until a liquidator has been appointed. Payment of
preliminary costs

(2) The liquidator shall, unless the court orders otherwise, reimburse to the petitioner,
out of the assets of the company, the taxed costs incurred by the petitioner in any such
proceedings.

(3) Where any winding-up order is made upon the petition of the company or the
liquidator thereof, the costs incurred shall, subject to any order of the court, be paid
out of the assets of the company in like manner as if they were the costs of any other
petitioner.

183
275. (1) On hearing a winding-up petition, the court may- Powers of court on
hearing petition

(a) dismiss it with or without costs;

(b) adjourn the hearing conditionally or unconditionally; or

(c) make any interim order or other order that it thinks fit;
but the court shall not refuse to make a winding-up order on the ground only that the
assets of the company have been mortgaged to an amount equal to or in excess of
those assets or that the company has no assets or, in the case of a petition by a
member, that there will be no assets available for distribution amongst the members.

(2) The court may, on the petition's coming on for hearing or at any time on the
application of the petitioner, the company, or any person who has given notice that he
intends to appear on the hearing of the petition-

(a) direct that any notices be given or any steps taken before or after the hearing
of the petition;

(b) dispense with any notices being given or steps being taken which are required
by or under this Act, or by any prior order of the court;

(c) direct that oral evidence be taken on the petition or any matter relating thereto;

(d) direct a speedy hearing or trial of the petition or any issue or matter;

(e) allow the petition to be amended or withdrawn; and

(f) give such directions as to the proceedings as the court thinks fit.

(3) Where the petition is presented by members on the ground that it is just and
equitable that the company should be wound-up, and the court is of opinion that-

(a) the petitioners are entitled to relief either by winding-up the company or by
some other means; and

184
(b) in the absence of any other remedy, it would be just and equitable that the
company should be wound-up; the court shall make a winding-up order unless it is
also of the opinion both that some other remedy is available to the petitioners and that
they are acting unreasonably in seeking to have the company wound-up instead of
pursuing that other remedy.

276. At any time after the presentation of a winding-up petition and before a
winding-up order has been made, the company or the creditor or member may, where
any action or proceeding against the company is pending, apply to the court to stay or
restrain further proceedings in the action or proceeding, and the court may stay or
restrain the proceedings accordingly on such terms as it thinks fit. Power to stay or
restrain proceedings against company

277. Any disposition of the property of the company including things in action, and
any transfer of shares or alteration in the status of the members of the company made
after the commencement of winding-up by the court shall be void unless the court
otherwise orders. Avoidance of dispositions

278. Any attachment, sequestration, distress or execution put in force against the
estate or effects of the company after the commencement of a winding-up by the court
shall be void. Avoidance of attachments

279. (1) Within fifteen days after the making of a winding-up order the petitioner
shall- Copy of order to be registered

(a) lodge a copy of the order with the Registrar;

(b) cause a copy to be served upon the secretary of the company or upon such
other person or in such manner as the court directs;

(c) deliver a copy to the official receiver, if the official receiver has not been
appointed as liquidator or if no liquidator has been appointed; and

(d) deliver a copy to the liquidator (if any) with a statement that the requirements
of this subsection have been complied with.

(2) Within fifteen days after receiving a copy of a winding-up order under subsection
(1), the Registrar shall cause a notice of the making of the order to be published in the
Gazette.

185
(3) If the petitioner fails to comply with subsection (1), he shall be guilty of an
offence, and shall be liable on conviction to a fine not exceeding three monetary units
for each day that the failure continues.

280. (1) The court may appoint the official receiver or any other person to be
liquidator provisionally at any time after the presentation of a winding-up petition and
before the making of a winding-up order. Provisional liquidator

(2) The provisional liquidator shall have and may exercise all the functions and
powers of a liquidator subject to such limitations and restrictions as may be
prescribed, or as the court specifies in the order appointing him.

281. When a winding-up order has been made or a provisional liquidator has been
appointed, no action or proceeding shall be proceeded with or commenced against the
company except by leave of the court and subject to such terms as the court may
impose. Stay of actions

282. (1) The court may in the winding-up order appoint a liquidator, or may give
directions as to the appointment of a liquidator, by the members or creditors of a
company or otherwise as it thinks fit. Appointment and style of liquidator

(2) If the order makes no direction as to the liquidator, the official receiver shall be
the liquidator of the company.

(3) Where a provisional liquidator has been appointed before the making of the
winding-up order, he shall continue to act as such until he or another person becomes
liquidator and is capable of acting as such.

(4) Where no provisional liquidator has been appointed before the making of the
winding-up order, the official receiver shall become the provisional liquidator and
shall continue to act as such until he or another person becomes liquidator and is
capable of acting as such.

(5) The official receiver shall be the liquidator during any vacancy or at any time
when there is no liquidator capable of acting.

(6) Any vacancy in the office of the liquidator appointed by the court may be filled
by the court.

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(7) A liquidator appointed by the court may resign or on cause shown be removed by
the court.

(8) A liquidator shall be described, where a person other than the official receiver is
liquidator, by the style of "the liquidator" or where the official receiver is liquidator,
by the style of "the official receiver and liquidator", of the particular company in
respect of which he is appointed, and not by his individual name.

(9) If more than one liquidator is appointed by the court, the court shall declare
whether anything by this Act required or authorised to be done by the liquidator is to
be done by all or any one or more of the persons appointed.

283. (1) If a person other than the official receiver is appointed liquidator in the
winding-up of a company by the court, that person- Provisions where a person other
than official receiver is appointed liquidator

(a) shall not be capable of acting as liquidator until he has lodged a notice of his
appointment with the Registrar and given such security as may be directed by the
court, or by the offical receiver, to the satisfaction of the official receiver; and

(b) shall give the official receiver such information and such access to and
facilities for inspecting the books and documents of the company, and generally such
aid as may be requisite for enabling the official receiver to perform his duties under
this Act.

(2) Paragraph (a) of subsection (1) shall not apply in the case of a provisional
liquidator unless the court so orders.

284. (1) Where, in the winding-up of a company by the court, a person other than the
official receiver is the liquidator, the official receiver shall take cognizance of his
conduct and if the liquidator does not faithfully perform his duties and duly observe
all the respect to the performance of his duties, or if any complaint is made to the
official receiver by any creditor or member in regard thereto, the official receiver shall
inquire into the matter, and take such action as he thinks fit.Control of liquidators by
official receiver

(2) The official receiver may at any time require any liquidator of a company which
is being wound-up by the court to answer any inquiry in relation to any winding-up in
which he is engaged, and may apply to the court to examine him or any other person
on oath concerning the winding-up.

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(3) The official receiver may direct an investigation to be made of the books and
vouchers of a liquidator.

285. (1) A liquidator other than the official receiver shall be entitled to receive such
salary or remuneration by way of commission otherwise as is determined-
Remuneration of liquidators

(a) by agreement between the liquidator and the committee of inspection (if any);

(b) by an extraordinary resolution passed at a meeting of creditors convened by


the liquidator by a notice to each creditor to which was attached a statement of all
receipts and expenditure by the liquidator and the amount of remuneration sought by
him, failing such an agreement or where there is no committee of inspection; or

(c) by the court, failing a determination under paragraph (a) or (b).

(2) Where the salary or remuneration of a liquidator is determined under paragraph


(a) of subsection (1), the court may, on the application of one or more members
whose shareholdings represent in total not less than five per centum of the issued
capital of the company (or who, in the case of a company having no share capital,
constitute not less than five per centum of the members), confirm or vary the
determination.

(3) Where the salary or remuneration of a liquidator is determined under paragraph


(b) of subsection (1), the court may, on the application of the liquidator or one or
more members as described in subsection (2), confirm or vary the determination.

(4) Subject to any order of the court, the official receiver when acting as a liquidator
or provisional liquidator of a company shall be entitled to receive such remuneration
by way of commission or otherwise as may be prescribed.

286. (1) Where a winding-up order has been made or a provisional liquidator has
been appointed, the liquidator or provisional liquidator shall take into his custody or
under his control all the property and things in action to which the company is or
appears to be entitled. Custody and vesting of company's property

(2) The court may, on the application of the liquidator, by order direct that all or any
part of the property of whatsoever description belonging to the company or held by
trustees on its behalf shall vest in the liquidator, and thereupon the property to which

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the order relates shall vest accordingly and the liquidator may, after giving such
indemnity, if any, as the court directs, bring or defend any action or other legal
proceedings which relates to that property or which it is necessary to bring or defend
for the purpose of effectually winding-up the company and recovering its property.

(3) Where an order is made under this section, the liquidator of a company in relation
to which the order is made shall within fifteen days after the making of the order-

(a) lodge a copy of the order with the Registrar; and

(b) in the case of property vested in the liquidator in respect of the transfer of
which any written law provides for registration, deliver a copy of the order to the
proper officer of the appropriate authority for the registration of the transfer, together
with a written application to the officer for the registration of the order.

(4) A liquidator who fails to comply with subsection (3) shall be guilty of an offence,
and shall be liable on conviction to a fine not exceeding three monetary units for each
day that the failure continues.

(5) No vesting order referred to in this section shall have any effect or operation in
transferring or otherwise vesting any such property as is referred to in paragraph (b)
of subsection (3) until delivered to the appropriate authority as required by the written
law.

287. (1) Unless the court directs otherwise, the company shall prepare and submit to
the liquidator a statement as to the affairs of the company as at the date of the
winding-up order showing- Statement of company's affairs

(a) the particulars of its assets, debts and liabilities;

(b) the names and addresses of its creditors;

(c) the securities held by each of the creditors;

(d) the dates when the securities were respectively given; and

(e) such further information as may be prescribed or as the liquidator requires.

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(2) The statement shall be verified by the statutory declaration of-

(a) at least one director as at the date of the winding-up order or;

(b) the secretary of the company at that date.

(3) The liquidator, subject to the direction of the court, may by notice in writing,
require a person-

(a) who is, or was within two years before the date of the winding-up order, an
officer of the company; or

(b) who took part in the formation of the company, if the company was formed
less than two years before the date of the winding-up order;
to verify, by statutory declaration, such parts of the statement as he is in a position to
verify.

(4) The liquidator may serve a notice on a person under subsection (3) either
personally or by sending it by post to the address of that person last known to the
liquidator.

(5) A person required to verify the statement shall, within fourteen days after
receiving the notice or within such extended time as the liquidator or the court for
special reasons specifies, submit a statutory declaration verifying those matters in the
statement which he is in a position to verify and specifying any matters in the
statement which in his opinion are incorrect.

(6) Within seven days after receiving the statement or any statutory declaration under
subsection (3), the liquidator shall cause copies to be-

(a) filed with the court;

(b) lodged with the Registrar; and

(c) delivered to the official receiver, if the official receiver is not the liquidator.

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(7) Any person required under this section to verify the statement may be allowed,
and be paid out of the assets of the company, such costs and expenses incurred in and
relating to doing so as the liquidator considers reasonable, subject to an appeal to the
court.

(8) If a company fails to comply with subsection (1), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding five hundred monetary units.

(9) A person who fails to comply with subsection (5) shall be guilty of an offence,
and shall be liable on conviction to a fine not exceeding two hundred and fifty
monetary units or to imprisonment for a period not exceeding three months, or to
both.

(10) A statement made under this section may be used as evidence in any
proceedings against any person making it.

(11) A liquidator who fails to comply with subsection (6) shall be guilty of an
offence, and shall be liable to a fine of three monetary units for each day that the
failure continues.

288. (1) The liquidator shall, as soon as practicable after receipt of the statement of
affairs, submit a preliminary report to the court as to- Report by liquidator

(a) the amount of capital issued, subscribed and paid up and the estimated amount
of assets and liabilities;

(b) the cause of the failure of the company, if it has failed; and

(c) whether in his opinion further inquiry is desirable as to any matter relating to
the promotion, formation or failure of the company or the conduct of its business.

(2) The liquidator may also make further reports stating-

(a) the manner in which the company was formed;

(b) whether in his opinion any fraud has been committed or any material fact has
been concealed-
(i) by any person in its promotion or formation; or

191
(ii) by any officer in relation to the company since its formation;

(c) whether any officer of the company has contravened or failed to comply with
any of the provisions of this Act; and

(d) any other matter which in his opinion it is desirable to bring to the notice of
the court.

289. (1) The liquidator may, during the four weeks following the date of the
winding-up order, carry on the business of the company so far as is necessary for the
satisfactory winding-up thereof. Powers of liquidator

(2) The liquidator may, with the authority either of the court or of the committee of
inspection-

(a) carry on the business of the company, so far as is necessary for the beneficial
winding-up thereof, after the four weeks following the date of the winding-up order;

(b) pay any class of creditors in full, subject to section three hundred and forty-
six;

(c) make any compromise or arrangement with creditors, persons claiming to be


creditors, or persons having or alleging themselves to have any claim against the
company, whether present or future, certain or contingent, ascertained or sounding
only in damages or whereby the company may be rendered liable;

(d) compromise any debts and liabilities capable of resulting in debts and any
claims of any kind, whether present or future, certain or contingent, ascertained or
sounding only in damages, that subsist or are supposed to subsist between the
company on the one hand and a member, a debtor or person apprehending liability on
the other;

(e) make agreements on all questions in any way relating to or affecting the assets
or the winding-up of the company; and

(f) take any security for the discharge of any such debt, liability or claim, and
give a complete discharge in respect thereof.

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(3) For the purpose of winding-up the affairs of the company and distributing its
assets the liquidator may-

(a) bring or defend any action or other legal proceeding in the name and on behalf
of the company;

(b) compromise any debt due to the company, other than a debt due from a
member, where the amount claimed by the company to be due to it does not exceed
fifty monetary units;

(c) sell the real and personal property and things in action of the company by
public auction, public tender or private contract either by transferring the whole
thereof to any person or company or selling the same in parcels;

(d) execute, in the name and on behalf of the company, all deeds, receipts and
other documents, and for that purpose use when necessary the company's seal;

(e) prove, rank and claim in the bankruptcy of any member or debtor for any
balance against his estate, and receive dividends in the bankruptcy in respect of that
balance as a separate debt due from the bankrupt and rateably with the other separate
creditors;

(f) draw, accept, make and endorse any bill of exchange or promissory note in the
name and on behalf of the company with the same effect with respect to the liability
of the company as if the bill or note had been drawn, accepted, made or endorsed by
or on behalf of the company in the course of its business;

(g) raise on the security of the assets of the company any money necessary;

(h) take out letters of administration of the estate of any deceased member or
debtor, and do any act necessary for obtaining payment of any money due from a
member or debtor or his estate which cannot be conveniently done in the name of the
company, in which case, for the purposes of enabling the liquidator to take out the
letters of administration or recover the money, the money due shall be deemed due to
the liquidator himself;

(i) appoint a legal practitioner to assist him in his duties;

(j) appoint an agent to do any business which the liquidator is unable to do


himself;

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(k) give notice of the winding-up in any jurisdiction where the company does
business; and

(l) do all such other things as are necessary for winding-up the affairs of the
company and distributing its assets.

(4) The exercise by the liquidator of the powers conferred by this section shall be
subject to the control of the court, and any creditor or member may apply to the court
with respect to any excercise or proposed exercise of any of these powers.

290. (1) Subject to this Act, the liquidator shall, in the administration of the assets of
the company and in the distribution thereof among its creditors, have regard to any
directions given by resolution of the creditors or members at any general meeting or
by the committee of inspection, and any directions so given by the creditors or
members shall in case of conflict override any directions given by the committee of
inspection. Exercise and control of liquidator's powers

(2) The liquidator may summon general meetings of the creditors or members for the
purpose of ascertaining their wishes, and he shall summon meetings at such times as
the creditors or members by resolution direct or whenever requested in writing to do
so by-

(a) members whose shareholdings represent in total not less than one twentieth of
the issued capital of the company, in the case of a company with share capital;

(b) not fewer than one tenth of the members, in the case of a company limited by
guarantees; or

(c) creditors representing in the aggregate not less than one twentieth of the value
of the creditors of the company.

(3) The liquidator may apply to the court for directions in relation to any particular
matter arising under the winding-up.

(4) Subject to this Act, the liquidator shall use his own discretion in the management
of the affairs and property of the company and the distribution of its assets.

291. When the liquidator-

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(a) has realised all the property of the company or so much thereof as can in his
opinion be realised without needlessly protracting the liquidation, and has distributed
a final dividend, if any, to the creditors and adjusted the rights of the members among
themselves and made a final return, if any, to the members; or
(b) has resigned or has been removed from his office;
he may apply to the court for an order-
(i) that he be released; or
(ii) that he be released and that the company be dissolved. Release of
liquidator and dissolution of company

292. (1) In deciding whether to grant an application under section two hundred and
ninety-one, the court- Orders for release or dissolution

(a) may cause a report on the accounts of a liquidator (not being the official
receiver) to be prepared by the official receiver or by an auditor appointed by the
court; and

(b) shall take into consideration-


(i) the report;
(ii) any objection which is made against the release of the liquidator by the official
receiver, auditor or any creditor or member or other person interested; and
(iii) whether the liquidator has complied with all the requirements of the court.

(2) If the court does not grant the release of a liquidator, the court may, on the
application of any creditor or member or person interested, if it thinks it just and
equitable, make an order that the liquidator shall be liable to the person or persons
concerned for any damages caused to them by any act or omission, or specified acts or
omissions, the liquidator may have done or made contrary to his duty.

(3) An order of the court releasing the liquidator shall discharge him from all liability
in respect of any act done or default made by him in the administration of the affairs
of the company or otherwise in relation to his conduct as liquidator, but any such
order may be revoked on proof that it was obtained by fraud or by suppression or
concealment of any material fact.

(4) Where the liquidator has not previously resigned or been removed, his release
shall operate as a removal from office.

(5) Where the court has made-

(a) an order that the liquidator be released; or

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(b) an order that the liquidator be released and that the company be dissolved;
a copy of the order shall within twenty-one days after the making thereof be lodged
by the liquidator-
(i) with the Registrar; and
(ii) with the official receiver, of the liquidator.

(6) A liquidator who fails to comply with subsection (5) shall be guilty of an offence,
and shall be liable on conviction to a fine not exceeding three monetary units for each
day that the failure continues.

293. Where the court has made an order that the company be dissolved, the
Registrar shall, upon lodgement with him of a copy of the order, strike the name of
the company off the register and notify the same in the Gazette, and the company
shall thereupon be dissolved as at the date of the publication of the notice in the
Gazette. Dissolution of the company

294. (1) The liquidator may, and if requested by any creditor or member shall,
summon separate meetings of the creditors and members for the purpose of-
Meetings to determine whether committee of inspection to be appointed

(a) determining whether or not the creditors or members require a committee of


inspection to act with the liquidator;

(b) appointed members of the committee, if a committee is required.

(2) If there is a difference between the determinations of the meetings of the creditors
and members, the court shall decide the matter and make such order as it thinks fit.

295. (1) The committee of inspection shall consist of creditors and members of the
company or persons holding- Constitution and proceedings of committee of
inspection

(a) general powers of attorney from creditors or members; or

(b) special authorities from creditors or members authorising the persons named
therein to act on such a committee;
and shall be appointed by the meetings of creditors and members in such proportions
as are agreed or, if there is no agreement, as are determined by the court.

196
(2) The committee shall meet at such times and places as they from time to time
decide, and the liquidator or any member of the committee may also call a meeting of
the committee as he thinks necessary.

(3) The committee may act by a majority of members present at a meeting, but shall
not act unless a majority of the committee is present.

(4) A member of the committee may resign by notice in writing signed by him and
delivered to the liquidator.

(5) If a member of the committee-

(a) becomes bankrupt;

(b) assigns his estate for the benefit of his creditors or makes an arrangement with
his creditors pursuant to any written law relating to bankruptcy; or

(c) is absent from five consecutive meetings of the committee without the prior
leave or subsequent consent of a majority of those members who together with
himself represent the creditors or members, as the case may be;
his office shall thereupon become vacant.

(6) A member of the committee may be removed by an ordinary resolution at a


meeting of creditors, if he represents creditors, or of members, if he represents
members, of which meeting seven days' notice in writing has been given stating the
object of the meeting.

(7) A vacancy in the committee may be filled by the appoinment by the committee of
the same or another creditor or member or person holding a general power or special
authority as referred to in subsection (1).

(8) The liquidator may at any time of his own motion, and shall within seven days
after the request in writing of a creditor or member, summon a meeting of creditors or
of members, as the case requires, to consider any appointment made under subsection
(7), and the meeting may-

(a) confirm the appointment; or

197
(b) revoke the appointment and make another appointment.

(9) The continuing members of the committee, if not fewer than two, may act
notwithstanding any vacancy in the committee.

296. (1) At any time after an order for winding-up has been made, the court may, on
the application of the liquidator or of any creditor or member and if it is satisfied that
all proceedings in relation to the winding-up ought to be stayed, make an order
staying the proceedings either altogether or for a specified time on such terms and
conditions as the court thinks fit. Power to stay winding-up

(2) On any such application the court may, before making an order, require the
liquidator to furnish a report with respect to any facts or matters which are in his
opinion relevant.

(3) A copy of an order made under this section shall be lodged by the company with-

(a) the Registrar, and

(b) the official receiver;


within twenty-one days after the making of the order.

(4) If the company fails to comply with subsection (3), the company, and each officer
in default, shall be guilty of an offence and shall be liable on conviction to a fine not
exceeding ten monetary units for each day that the failure continues.

297. (1) The liquidator may, if satisfied that the nature of the estate or business of the
company, or the interests of the creditors or members generally, require the
appointment of a special manager of the estate or business of the company other than
himself, request the court to appoint a special manager of the estate or business to act
during such time as the court directs with such powers, including any of the powers of
a receiver or receiver and manager, as are entrusted to him by the court.
Appointment of special manager

(2) The special manager-

(a) shall give such security and account in such a manner as the court directs;

198
(b) shall receive such remuneration as is fixed by the court;

(c) may at any time resign after giving not less than one month's notice in writing
to the liquidator of his intention to resign; and

(d) may, on cause shown, be removed by the court.

298. (1) The court may fix a date on or before which creditors are to prove their
debts or claims and after which they will be excluded from the benefit of any
distribution made. Claims of creditors and distribution of assets

(2) The court shall adjust the rights of the members among themselves and distribute
any surplus among the persons entitled thereto.

(3) The court may, in the event of the assets being insufficient to satisfy the
liabilities, make an order as to the payment out of the assets of the costs, charges and
expenses incurred in the winding-up in such order of priority as the court thinks fit.

299. The court may, at any time after making a winding-up order, make any order
for inspection of the books and papers of the company by creditors and members that
the court thinks fit, and any books and papers in the possession of the company may
be inspected by creditors or members in accordance with the order. Inspection of
books by creditors and members

300. (1) The court may summon before it any officer of the company or person
known or suspected to have in his possession any property of the company or
supposed to be indebted to the company, or any person whom the court thinks capable
of giving information concerning the promotion, formation, trade, dealings, affairs or
property of the company. Power to summon persons connected with company

(2) The court may examine the officer or person on oath concerning the matters
referred to in subsection (1) either orally or on written interrogatories and may reduce
his answers to writing and require him to sign them.

(3) Any writing so signed may be used in evidence in any legal proceedings against
the officer or person.

(4) The court may require him to produce any books and papers in his custody or
power relating to the company, but, if he claims any lien on books or papers, the

199
production shall be without prejudice to that lien, and the court shall have jurisdiction
to determine all questions relating to that lien.

(5) An examination under this section may, if the court so directs, be held before the
Registrar of the High Court.

(6) Any person summoned for examination under this section may at his own cost
employ a legal practitioner who shall be at liberty to put to him such questions as the
court thinks just for the purpose of enabling him to explain or qualify any answers
given by him.

(7) If any person so summoned, after being tendered a reasonable sum for his
expenses, refuses to come before the court at the time appointed, not having a lawful
excuse made known to the court at the time of its sitting and allowed by it, the court
may cause him to be apprehended and brought before the court for examination.

301. (1) Where the liquidator has made a report stating that, in his opinion-
Power to order public examination

(a) a fraud has been committed;

(b) any material fact has been suppressed or concealed by any person in the
promotion or formation of the company or by any officer in relation to the company
since its formation; or

(c) any officer of the company has failed to act honestly or diligently or has been
guilty of any impropriety or recklessness in relation to the affairs of the company;
the court may, after consideration of the report, direct that-
(i) the person or officer;
(ii) any other person who was previously an officer of the company, or who is
known or suspected to have in his possession any property of the company or is
supposed to be indebted to the company; or
(iii) any person whom the court thinks capable of giving information concerning
the promotion, formation, trade, dealings, affairs or property of the company;
shall attend before the court on a day appointed and be publicly examined as to the
promotion or formation or the conduct of the business of the company, and, in the
case of an officer or former officer, as to his conduct and dealings as an officer
thereof.

(2) The liquidator and any creditor or member may take part in the examination
either personally or by a legal practitioner.

200
(3) The court may put or allow to be put such questions to the person examined as the
court thinks fit.

(4) The person examined shall be examined on oath and shall answer all such
questions as the court puts or allows to be put to him.

(5) If a person directed to attend before the court under this section applies to the
court to be exculpated from any charges made or suggested against him, the liquidator
shall appear on the hearing of the application and call the attention of the court to any
matters which appear to him to be relevant, and if the court, after hearing any
evidence given or witnesses called by the liquidator, grants the application, the court
may allow the applicant such costs as it thinks just.

(6) A person ordered to be examined under this section-

(a) shall before his examination be furnished with a copy of the liquidator's
report; and

(b) may at his own cost engage a legal practitioner, who shall be at liberty to put
to him or any other person giving evidence such questions as the court thinks just.

(7) Notes of the examination-

(a) shall be reduced to writing;

(b) shall be read over to or by and signed by the person examined;

(c) may thereafter be used in evidence in any legal proceedings against him; and

(d) shall at all reasonable times, be open to the inspection of any creditor or
member.

(8) The court may, if it thinks fit, adjourn the examination from time to time.

(9) An examination under this section may, if the court so directs, be held before the
Registrar of the High Court.

201
(10) For the purposes of this section, "officer" includes a banker, legal practitioner or
auditor of the company.

302. (1) The court, at any time before or after the making of a winding-up order, on
proof of probable cause for believing that a member or officer or former member or
officer of the company is about to- Power to arrest absconding member or officer

(a) quit Zambia;

(b) otherwise to abscond; or

(c) remove or conceal any of his property for the purpose of evading payment of
any money due to the company or of avoiding examination respecting the affairs of
the company;
may cause the member, officer or former member or officer to be arrested and his
books and papers and movable personal property to be seized and him and them to be
kept safely until such time as the court orders.

(2) For the purposes of this section, "officer" includes a banker, legal practitioner or
auditor of the company.

303. Any powers by this Act conferred on the court shall be in addition to and not in
derogation of any power of instituting proceedings against any member or debtor of a
company or the estate of any member or debtor for the recovery of any debt or other
sum.
Division 13.3-Voluntary Winding-upPowers of court cumulative

304. This Division shall apply to every voluntary winding-up of a company.


Voluntary winding-up

305. (1) A company may be wound-up voluntarily if the company so resolves.


Circumstances in which a company may be wound-up voluntarily

(2) The resolution shall be a special resolution unless the period, if any, fixed by the
articles for the duration of the company has expired or the event, if any, has occurred,
on the occurrence of which the articles provide that the company is to be dissolved.

202
(3) Upon the passing of a resolution for voluntary winding-up, the company shall
within seven days thereafter lodge a copy of the resolution with the Registrar, and the
Registrar shall within seven days after the lodgement cause notice thereof to be
published in the Gazette.

(4) If the company fails to comply with subsection (3), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding three monetary units for each day that the failure continues.

306. For the purposes of this Act, a voluntary winding-up commences at the time of
the passing of the resolution for voluntary winding-up. Commencement of
voluntary winding-up

307. (1) The company shall from the commencement of the winding-up cease to
carry on its business, except so far as in the opinion of the liquidator is required for
the beneficial winding-up thereof, but the corporate state and corporate powers of the
company shall continue until it is dissolved. Effect of voluntary winding-up

(2) Any transfer of shares, not being a transfer made to or with the sanction of the
liquidator, and any alteration in the status of the members after the commencement of
the winding-up, shall be void.

308. (1) Where it is proposed to wind-up a company voluntarily, the directors of the
company may, before the date on which notices of the meeting at which the resolution
for the winding-up of the company is to be proposed are sent out, at a meeting of
directors make a written declaration to the effect that they have made a full inquiry
into the affairs of the company, and have formed the opinion that the company will be
able to pay its debts and liabilities in full within a period specified in the declaration,
being a period of not more than twelve months after the commencement of the
winding-up. Declaration of solvency

(2) There shall be attached to the declaration a statement of affairs of the company
showing-

(a) the assets of the company, and the total amount expected to be realised
therefrom;

(b) the liabilities of the company; and

(c) the estimated expenses of winding-up, made up to the latest practicable date
before the making of the declaration.

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(3) The declaration shall have no effect for the purposes of this Act unless-

(a) it is made at the meeting of directors referred to in subsection (1);

(b) it is made less than five weeks before the passing of the resolution for
voluntary winding-up; and

(c) it is lodged with the Registrar on or before the date on which the notices of the
meeting at which the resolution for the winding-up of the company is to be proposed
are sent out.

(4) A director who makes a declaration under this section without having reasonable
grounds for the opinion that the company will be able to pay its debts in full within
the period stated in the declaration shall be guilty of an offence, and shall be liable on
conviction to a fine not exceeding five hundred monetary units or to imprisonment for
a period not exceeding six months, or to both.

(5) If the company is wound-up in pursuance of a resolution for voluntary winding-


up passed within a period of five weeks after the making of the declaration, but its
debts are not paid or provided for in full within the period stated in the declaration, it
shall be presumed that the director did not have reasonable grounds for his opinion.
Division 13.4-Provisions applicable only to members' voluntary winding-up

309. This Division shall apply to a members' voluntary winding-up of a company.


Provisions applicable only to members' voluntary winding-up

310. (1) After the commencement of the winding-up of the company, the company
shall by ordinary resolution appoint one or more liquidators for the purposes of
winding-up the affairs and distributing the assets of the company, and may fix the
remuneration to be paid to him or them. Appointment of liquidator

(2) On the appointment of the liquidator, all the powers of the directors shall cease
except so far as the liquidator, or the company by ordinary resolution with the consent
of the liquidator, approves the continuance thereof.

(3) Subject to any direction of the court on the application of any member, creditor or
liquidator, the company may, by special resolution, of which the requisite notice has
been given not only to the members but also to the creditors and the liquidator,
remove any liquidator.

204
(4) If a vacancy occurs by resignation, removal or otherwise in the office of a
liquidator, the company by ordinary resolution may fill the vacancy and for that
purpose a general meeting may be convened by any member, or, if there were more
liquidators than one, by the continuing liquidators.

311. (1) If the liquidator is at any time of the opinion that the company will not be
able to pay or provide for the payment of its debts in full within the period stated in
the solvency declaration, he shall forthwith convene a meeting of the creditors and lay
before the meeting a statement of the assets and liabilities of the company. Duty of
liquidator to call creditors

(2) The notice of the meeting shall draw the attention of the creditors to the right
conferred upon them by subsection (3).

(3) The creditors may, at the meeting convened under subsection (1), appoint some
other person to be liquidator of the company instead of the liquidator appointed by the
company.

(4) Within seven days after a meeting has been held pursuant to subsection (1), the
liquidator shall lodge with-

(a) the Registrar; and

(b) the official receiver;


a notice that the meeting has been held, stating the decisions, if any, taken at the
meeting.

(5) Where the liquidator has convened a meeting under subsection (1), the winding-
up shall thereafter proceed as if the winding-up were a creditors' voluntary winding-
up, but the liquidator shall not be required to summon an annual meeting of creditors
at the end of the first year from the commencement of the winding-up if the meeting
held under subsection (1) was held less than three months before the end of that year.

(6) A liquidator who fails to comply with subsection (1) or (4) shall be guilty of an
offence, and shall be liable on conviction to a fine not exceeding three monetary units
for each day that the failure continues.

205
312. (1) At any time during the course of a voluntary winding-up prior to the
dissolution of the company, the company may, by special resolution, resolve that the
winding-up proceedings be stayed. Staying of members' voluntary winding-up

(2) After the passing of the special resolution, application may be made to the court
by the liquidator or any member of the company and the court may, in its discretion
and subject to such terms and conditions as it thinks fit, order that the winding-up be
stayed, that the liquidator be discharged, and that the directors resume the
management of the company.

(3) Not less than twenty-eight days' written notice of the hearing of any application to
the court under subsection (2) shall be given by the applicant to the official receiver,
to every director of the company, and to any liquidator of the company, and the
official receiver shall cause a copy of the notice to be published in the Gazette not
later than seven days before the hearing.

(4) The official receiver and any director, liquidator, member or creditor of the
company shall be entitled to appear on the hearing of the application and to call
witnesses and give evidence.

(5) If the court makes an order confirming the resolution, the company shall within
twenty-one days thereafter lodge a copy of the order and resolution with the Registrar,
who shall cause a notice thereof to be published in the Gazette.

(6) On the publication of the notice, the winding-up shall cease and the company
shall continue as a going concern subject to any terms or conditions in the order.

(7) If the company fails to comply with subsection (5), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding ten monetary units for each day that the failure continues.
Division 13.5-Provisions applicable only to creditors' voluntary winding-up

313. This Division shall apply to a creditors' voluntary winding-up of a company.


Provisions applicable only to creditors' voluntary winding-up

314. (1) Where a resolution for the voluntary winding-up of a company has been
proposed, and no declaration of solvency made, the company shall cause a meeting of
the creditors of the company (in this section called "the meeting") to be convened for
the day, or the day after the day, on which the meeting is to be held at which the
resolution for voluntary winding-up is to put, or on which the resolution is expected to
be passed under section one hundred and fifty-seven. Meetings of creditors

206
(2) The company shall cause notice of the meeting of creditors to be sent to each
creditor, being notice-

(a) not less than the notice to members of any meeting for the purposes of the
resolution for voluntary winding-up; and

(b) in any case, of not less than seven days.

(3) The notice to the creditors shall be accompanied by a statement showing the
names of all creditors and the amounts of their claims.

(4) The company shall cause notice of the meeting of the creditors to be published at
least seven days before the date of the meeting in the Gazette and in any newspaper
circulating generally in Zambia.

(5) The company shall-

(a) cause a full statement of the company's affairs to be laid before the meeting of
creditors, showing in respect of assets the method and manner in which the valuation
of the assets was arrived at, together with a list of the creditors and the estimated
amount of their claims; and

(b) appoint a director to attend the meeting.

(6) The director so appointed and the secretary shall attend the meeting and disclose
to the meeting the company's affairs and the circumstances leading up to the proposed
winding-up.

(7) The creditors at the meeting may appoint one of their number, or the director
appointed under subsection (5), to preside at the meeting.

(8) If the meeting of the company is adjourned and the resolution for winding-up is
passed at an adjourned meeting, any resolution passed at the meeting of the creditors
shall have effect as if it had been passed immediately after the passing of the
resolution for winding-up.

(9) The company shall nominate a liquidator for the company.

207
(10) The creditors may, by ordinary resolution, nominate at the meeting a liquidator
for the company.

(11) If the creditors and the company nominate different persons, the person
nominated by the creditors shall be liquidator.

(12) If no person is nominated by the creditors, the person nominated by the company
shall be liquidator.

(13) Where different persons are nominated as liquidator, any director, member or
creditor may, within seven days after the date on which the nomination was made by
the creditors, apply to the court for an order directing that the person nominated as
liquidator by the company shall be liquidator instead of or jointly with the person
nominated by the creditors.

(14) If a liquidator, other than a liquidator appointed by or by the direction of the


court, resigns or otherwise vacates that office, the creditors may fill the vacancy and,
for that purpose, a meeting of the creditors may be summoned by any two of their
number.

(15) If the company fails to comply with subsection (1), (2), (3), (4) or (5), the
company, and each officer in default, shall be guilty of an offence, and shall be liable
on conviction to a fine not exceeding five hundred monetary units.

(16) If the nominated director or the secretary of the company fails to comply with
subsection (6), he shall be guilty of an offence, and shall be liable on conviction to a
fine not exceeding two hundred and fifty monetary units.

315. (1) There shall be a committee of inspection for the winding-up of a company if
the creditors, at the meeting convened under section three hundred and eleven or three
hundred and fourteen or at any subsequent meeting, so decide by ordinary resolution
and appoint not more than five persons, whether creditors or not, to be members of
the committee.Appointment of committee of inspection

(2) The company may, at the time of the passing of the resolution for voluntary
winding-up is passed or at any time subsequently, by ordinary resolution, appoint not
more than five persons to be, subject to this section, members of any committee of
inspection.

208
(3) The creditors may resolve that all or any of the persons so appointed by the
company ought not to be members of the committee of inspection and, if the creditors
so resolve, the persons mentioned in the resolution shall not, unless the court
otherwise directs, be qualified to act as members of the committee, and on any
application to the court under this subsection the court may, if it thinks fit, appoint
other persons to act as such members in place of the persons mentioned in the
resolution.

(4) Subject to this section, section two hundred and ninety-five shall apply with
respect to a committee of inspection appointed under this section.

316. (1) The committee of inspection, or, if there is no such committee, the creditors,
may fix the remuneration to be paid to the liquidator. Fixing of liquidator's
remuneration and vesting of directors' powers in liquidator

(2) On the appointment of a liquidator, all the powers of the directors shall vest in the
liquidator, and the powers and authority of every director shall cease, except so far as
the committee of inspection, or, if there is no such committee, the creditors, sanction
the continuance thereof.

317. (1) Any attachment, sequestration, distress or execution put in force against the
estate or effects of the company after the commencement of a creditors' voluntary
winding-up shall be void. Stay of proceedings

(2) After the commencement of the winding-up, no action or proceeding shall be


proceeded with or commenced against the company except by leave of the court and
subject to such terms as the court directs.
Division 13.6-Provisions applicable to every voluntary
winding-up

318. This Division shall apply to every voluntary winding-up of a company.


Provisions applicable to every voluntary winding-up

319. Subject to the provisions of this Act as to preferential payments, the property
of a company shall, on its winding-up, be applied pari passu in satisfaction of its
liabilities, and subject to that application shall, unless the articles otherwise provide,
be distributed among the members according to their rights and interests in the
company. Distribution of property of company

320. (1) If for any reason there is no liquidator acting, the court may appoint a
liquidator. Review by court of liquidators appointment and remuneration

209
(2) The court may on cause shown remove a liquidator and appoint another
liquidator.

(3) Any member or creditor or the liquidator may at any time before the dissolution
of the company apply to the court to review the remuneration of the liquidator, and
the decision of the court shall be conclusive.

321. (1) The liquidator may-Powers and duties of liquidators

(a) with the approval of-


(i) a resolution of the company, in the case of a members' voluntary winding-up;
or
(ii) the court or the committee of inspection, in the case of a creditors' voluntary
winding-up;
exercise any of the powers given by section two hundred and eighty-nine to a
liquidator in a winding-up by the court;

(b) exercise any of the other powers by this Act given to the liquidator in a
winding-up by the court; and

(c) convene meetings of the company for the purpose of obtaining the sanction of
the company in respect of any matter or for any other purpose he thinks fit.

(2) When several liquidators are appointed, any power given by this Act may be
exercised by such one or more of them as is determined at the time of their
appointment, or in default of such a determination, by any number not less than two.

322. (1) Where it is proposed that the whole or part of the business or property of a
company (in this section called "the company") be transferred or sold to another body
corporate (in this section called "the corporation"), the liquidator may, with the
approval of- Power of liquidator to accept shares, etc., as consideration for sale of
property of company

(a) a special resolution of the company, in the case of a members' voluntary


winding-up; or

(b) the court or the committee of inspection, in the case of a creditors' voluntary
winding-up;

210
receive, in compensation or part compensation for the transfer or sale, fully paid
shares, debentures or other like interests in the corporation for distribution among the
members of the company or may enter into any other arrangement whereby the
members of the company may, in lieu of receiving cash, shares, debentures or other
like interests or in addition thereto, participate in the profits of or receive any other
benefit from the corporation.

(2) If, within one year after the date of the passing of such a special resolution, the
winding-up becomes a winding-up by the court because of an order made under
section two hundred and seventy-two, the transfer or sale and distribution or
arrangement shall not be valid unless approved by the court.

(3) Subject to this section, any transfer or sale and distribution of arrangement under
this section shall be binding on the company and all the members thereof and each
member shall be deemed to have agreed with the corporation to accept the fully-paid
shares, debentures, or other like interests to which he is entitled under the distribution
or arrangement.

(4) If any member of the company, in respect of any shares held by him, expresses
his dissent in writing addressed to the liquidator and served upon the liquidator within
twenty-eight days after the passing of the special resolution, he may require the
liquidator either to abstain from carrying the resolution into effect or to purchase the
shares that he holds at a price to be determined by agreement or by arbitration in the
manner provided by subsection (7).

(5) If the liquidator elects to purchase the member's shares, the purchase money shall
be paid before the company is dissolved and be raised by the liquidator in such
manner as is determined by special resolution.

(6) A special resolution shall not be valid for the purposes of this section unless it is
passed before or concurrently with the resolution for voluntary winding-up.

(7) For the purposes of an arbitration under this section-

(a) the Arbitration Act shall apply as if there were a submission for reference to
two arbitrators, one to be appointed by each party. Cap. 41

(b) the appointment of an arbitrator may be made under the hand of the liquidator,
or if there is more than one liquidator then under the hands of any two or more of the
liquidators; and

211
(c) the court may give any directions necessary for the initiation and conduct of
the arbitration and the directions shall be binding on the parties.

(8) Nothing in this section shall authorise any variation or abrogation of the rights of
any creditors of the company.

323. (1) If a winding-up continues for more than one year, the liquidator shall
convene- Annual meetings of members and creditors

(a) a general meeting of the company, in the case of a members' voluntary


winding-up; and

(b) separate meetings of the creditors and of the company, in the case of a
creditors' voluntary winding-up;
within three months after the end of the first year after the commencement of the
winding-up and of each succeeding year, and shall lay before every such meeting an
account of his acts and dealings and of the conduct of the winding-up during the
preceding year.

(2) In the case of a creditors' voluntary winding-up, the meeting of the company shall
be held after, but not more than one month after, the meeting of the creditors.

(3) A liquidator who fails to comply with this section shall be guilty of an offence,
and shall be liable on conviction to a fine not exceeding three monetary units for each
day that the failure continues.

324. (1) As soon as the affairs of the company are fully wound-up, the liquidator
shall make up a report showing how the winding-up has been conducted and the
property of the company has been disposed of, and thereupon shall convene-
Final meeting and dissolution of company

(a) a general meeting of the company, in the case of a members' voluntary


winding-up; and

(b) separate meetings of the creditors and of the company, in the case of a
creditors' voluntary winding-up;
for the purpose of laying before the meetings the report and giving any explanation
thereof.

212
(2) In the case of a creditors' voluntary winding-up, the meeting of the company shall
be held after, but not more than one month after, the meeting of the creditors.

(3) A notice of the meetings shall be published in one issue of the Gazette and in one
issue of a newspaper in general circulation throughout Zambia, which notice shall
specify the time, place and object of each meeting and shall be published one month
at least before each such meeting.

(4) The liquidator shall, within seven days after the meeting or the later of the
meetings, lodge with the Registrar and with the official receiver a return in the
prescribed form of the holding of the meetings or meeting and of the date or dates
thereof, with a copy of the report attached to the return.

(5) The quorum at a meeting of the company shall be two members and at a meeting
of the creditors shall be two creditors.

(6) If a quorum is not present at a meeting, the liquidator shall, in lieu of the return
referred to in subsection (4), lodge with the Registrar and the official receiver a return
(with account attached) that the meeting or meetings were duly summoned and that no
quorum was present thereat.

(7) Upon the lodgement of the return, the Registrar shall strike the name of the
company off the register and cause notice thereof to be published in the Gazette, and
the company shall thereupon be dissolved as at the date of the publication of the
notification in the Gazette.

(8) A liquidator who fails to comply with this section shall be guilty of an offence,
and shall be liable on conviction to a fine not exceeding three monetary units for each
day that the failure continues.

325. (1) Any arrangement entered into between a company about to be or in the
course of being wound-up and its creditors shall, subject to the right of appeal under
this section, be binding on the company if approved by a special resolution, and on
the creditors if approved by a special resolution of the creditors. When an
arrangement is binding on creditors

(2) Any dispute with regard to the value of any security or lien or the amount of a
debt or set-off the subject of the arrangement may be settled by the court on the
application of the company, the liquidator, or the creditor.

213
(3) Any creditor or member may, within twenty-one days after the completion of the
arrangement, appeal to the court against it, and the court may thereupon amend, vary
or confirm the arrangement, as it thinks just.

326. (1) The liquidator or any member or creditor may apply to the court-
Application to court to have questions determined or powers exercised

(a) to determine any question arising in the winding-up of a company; or

(b) to exercise all or any of the powers which the court might exercise if the
company were being wound-up by the court.

(2) The court, if satisfied that the determination of the question or the exercise of
power will be just or beneficial, may accede wholly or partially to any such
application on such terms and conditions as it thinks fit, or may make such other order
on the application as it thinks just.

327. All proper costs, charges and expenses of and incidental to the winding-up,
including the remuneration of the liquidator, shall be payable out of the assets of the
company in priority to all other claims. Costs

328. Where a petition has been presented to the court to wind-up a company on the
ground that it is unable to pay its debts, the company shall not resolve that it be
wound-up voluntarily, except with the leave of the court.
Division 13.7-Provisions applicable to every mode of winding-up Limitation on
right to wind-up voluntarily

329. This Division shall apply to every winding-up of a company. Provisions


applicable to every mode of winding-up

330. The court may at any time during the course of a winding-up direct a meeting
of the creditors of any class to be held and conducted in such manner as it thinks fit to
consider such matters as it shall direct, and may give such ancillary or consequential
directions as it thinks fit. Meetings of creditors

331. (1) A person shall be accounted a creditor of a company for the purposes of a
meeting of creditors under this Part if, upon an account fairly stated, after allowing the
value of security or liens held by him and the amount of any debt or set-off owing by
him to the company, there appears to be a balance due to him. Conduct of
meetings of creditors

214
(2) At a meeting of creditors, unless the court directs otherwise-

(a) each creditor shall have votes in proportion to amount of the balance
apparently due to him by the company upon an account fairly stated, after allowing
the value of security or liens held by him and the amount of any debt or set-off owing
by him to the company; and

(b) sections one hundred and forty-six to one hundred and fifty-two shall apply
with the necessary modifications.

(3) Subject to this Part and to any direction by the court, fourteen days' notice of a
meeting of creditors shall be given either personally or in a newspaper circulating
generally in Zambia.

332. (1) A person shall not be eligible for appointment or competent to act or to
continue to act as liquidator of a company if he is- Eligibility for appointment as
liquidator

(a) a body corporate;

(b) an infant or any other person under legal disability;

(c) a person prohibited or disqualified from so acting by any order of a court;

(d) an undischarged bankrupt;

(e) a director or secretary of the company or any related company, or any person
who has been such a director or secretary within the two years before the
commencement of the winding-up, save with the leave of the court;

(f) a person who has at any time been convicted of an offence involving fraud or
dishonesty; or

(g) a person who has at any time been removed from an office of trust by order of
a court.

(2) An auditor of a company may be appointed as liquidator of that company.

215
(3) Any appointment made in contravention of this section shall be void.

(4) A person who acts or continues to act as liquidator of a company in contravention


of this section shall be guilty of an offence, and shall be liable on conviction to a fine
not exceeding five hundred monetary units or to a term of imprisonment not
exceeding six months, or to both.

333. (1) Subject to this Act, the acts of a liquidator shall be valid notwithstanding
any defect that may afterwards be discovered in his appointment or qualification.
Acts of liquidator valid

(2) Any conveyance, assignment, transfer, mortgage, charge or other disposition of a


company's property made by a liquidator shall, notwithstanding any defect or
irregularity affecting the validity of the winding-up or the appointment of the
liquidator, be valid in favour of any person taking such property bona fide and for
value and without notice of the defect or irregularity.

(3) Every person making or permitting any disposition of property to any liquidator
shall be protected and indemnified in so doing notwithstanding any defect or
irregularity affecting the validity of the winding-up or the appointment of the
liquidator not then known to the person.

(4) For the purposes of this section a disposition of property includes a payment of
money.

334. (1) A liquidator shall keep proper books at his office in which he shall cause to
be made entries or minutes of proceedings at meetings and of such other matters, if
any, as may be prescribed. General provisions as to liquidators

(2) Any creditor or member may, subject to the control of the court, personally or by
his agent inspect the liquidator's books at his office in accordance with section one
hundred and ninety-three.

(3) The court shall take cognizance of the conduct of liquidators, and if a liquidator
does not faithfully perform his duties and observe the prescribed requirements or the
requirements of the court, or if any complaint is made to the court by any creditor or
member or by the official receiver in regard thereto, the court shall inquire into the
matter and take such action as it thinks fit.

216
(4) The Registrar or the official receiver may report to the court any matter which in
his opinion is misfeasance, neglect or omission on the part of the liquidator, and the
court may order the liquidator to make good any loss which the estate of the company
has sustained thereby and make such other order as it thinks fit.

(5) The court may at any time require a liquidator to answer any inquiry in relation to
the winding-up and may examine him or any other person on oath concerning the
winding-up, and may direct an investigation to be made of the books and vouchers of
the liquidator.

(6) The court may require any member, trustee, receiver, banker, agent or officer of
the company to pay, deliver, convey, surrender or transfer to the liquidator or
provisional liquidator forthwith, or within such time as the court directs, any money,
property, books and papers in his hands to which the company is prima facie entitled.

335. (1) Where a person other than the official receiver is the liquidator and there is
no committee of inspection, the official receiver may, on the application of the
liquidator, do any act or thing or give any direction or permission which is by this Act
authorised or required to be done or given by the committee. Powers of official
receiver where no committee of inspection

(2) Where the official receiver is the liquidator and there is no committee of
inspection, the official receiver may in his discretion do any act or thing which is by
this Act required to be done by, or subject to any direction or permission given by, the
committee.

336. Any person aggrieved by any act or decision of the liquidator may apply to the
court, which may confirm, reverse, or modify the act or decision complained of and
make such order as it thinks just. Appeal against decision of liquidator

337. (1) A liquidator shall, within fourteen days after his appointment, lodge with the
Registrar and with the official receiver notice of his appointment and of the situation
of his office and of his postal address and, in the event of any change in the situation
of his office or in his postal address, shall within twenty-one days after the change
lodge with the Registrar and with the official receiver notice of the change.
Notice of appointment and address

(2) Service made by leaving any document at the office of the liquidator given in
such a notice, or by sending it in a properly addressed and prepaid registered letter
posted to the postal address given in such a notice, shall be good service upon the
liquidator and upon the company.

217
(3) A liquidator shall, within twenty-one days after his resignation or removal from
office, lodge notice thereof with the Registrar and with the official receiver.

(4) If a liquidator fails to comply with this section, he shall be guilty of an offence,
and shall be liable on conviction to a fine not exceeding three monetary units for each
day that the failure continues.

338. (1) A liquidator shall, within one month after- Liquidator's accounts

(a) the end of the period of six months from the date of his appointment;

(b) the end of every subsequent period of six months; and

(c) ceasing to act as liquidator or obtaining an order of release;


lodge with the Registrar and, if the liquidator is not the official receiver, with the
official receiver, accounts of his receipts and payments and a statement of the position
in the wind-up, verified by a statutory declaration.

(2) The official receiver may cause the accounts of any liquidation to be audited by
an auditor approved by him, and for the purpose of the audit the liquidator shall
furnish the auditor with such vouchers and information as he requires, and the auditor
may at any time require the production of and inspect any books or accounts kept by
the liquidator.

(3) A copy of the accounts or, if audited, a copy of the audited accounts, shall be kept
by the liquidator at his office and shall there be open to the inspection of any member
or creditor or of any other person interested in accordance with section one hundred
and ninety-three.

(4) The liquidator shall, when he is next forwarding any report or notice to the
creditors and members generally-

(a) give notice to every member and creditor that the accounts have been
prepared; and

(b) in the notice inform members and creditors that the accounts may be inspected
at his office and state the times during which inspection may be made.

218
(5) The cost of an audit under this section shall be fixed by the official receiver and
be part of the expenses of winding-up.

(6) A liquidator other than the official receiver who fails to comply with this section
shall be guilty of an offence, and shall be liable to a fine not exceeding five hundred
monetary units.

339. (1) Where a company is being wound-up, every invoice, order of goods or
business letter issued by or on behalf of the company or a liquidator of the company
or a receiver of any property of the company, being a document on or in which the
name of the company appears, shall have the words, "in liquidation" added after the
name of the company where it first appears therein. Notification that a company is in
liquidation

(2) If the company fails to comply with subsection (1), the company, and each officer
in default, shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding three monetary units in respect of each document.

340. (1) Where a company is being wound-up, all books and papers of the company
and of the liquidator that are relevant to the affairs of the company at or subsequent to
the commencement of the winding-up of the company shall, as between the members
and creditors of the company, be prima facie evidence of the truth of all matters
purporting to be therein recorded. Books of company

(2) Subject to this section, when a company has been wound-up, the liquidator shall
retain the books and papers referred to in subsection (1) (other than vouchers) for a
period of seven years from the date of dissolution of the company.

(3) The books and papers referred to in subsection (1) may be destroyed within a
period of seven years after dissolution of the company-

(a) in accordance with the directions of the court, in the case of a winding-up by
the court;

(b) as the company by resolution directs, in the case of a members' voluntary


winding-up; and

(c) as the committee of inspection, or, if there is no such committee, as the


creditors of the company direct, in the case of a creditors' voluntary winding-up.

219
(4) A liquidator who fails to comply with subsection (2) shall be guilty of an offence,
and shall be liable on conviction to a fine not exceeding five hundred monetary units.

(5) No responsibility shall rest on the company or the liquidator by reason of any
such book or paper not being forthcoming to any person claiming to be interested
therein if the book or paper has been destroyed in accordance with this section.

341. (1) Whenever the cash balance standing to the credit of a company in
liquidation is in excess of the amount which, in the opinion of the committee of
inspection, is required for the time being to answer demands on the company, the
committee may authorise the liquidator, unless the court on application by any
creditor directs otherwise, to invest the sum or any part thereof in securities issued by
the Government of Zambia or place it on deposit at interest with any bank, and any
interest received in respect thereof shall form part of the assets of the company.
Investment of surplus funds

(2) Where there is no committee of inspection, the liquidator, may form the opinion
for the purposes of subsection (1), and the authorisation of the committee referred to
in that section shall be dispensed with.

(3) Whenever any part of the money so invested is, in the opinion of the committee of
inspection, required to answer any demands in respect of the company's estate, the
committee of inspection may direct the sale or realisation of such part of the securities
as is necessary.

(4) If there is no committee of inspection, subsection (2) shall apply as if a reference


to the committee were a reference to the liquidator.

342. (1) Where a liquidator has in his hands or under his control- Unclaimed assets

(a) any unclaimed dividend or other moneys which have remained unclaimed for
more than six months from the date when the dividend or other moneys became
payable; or

(b) any unclaimed or undistributed moneys arising from the property of the
company after making final distribution;
he shall forthwith pay those moneys to the official receiver to be placed to the credit
of the Companies Liquidation Account and shall be entitled to a certificate or receipt
for the moneys so paid, which certificate shall be an effectual discharge to him in
respect thereof.

220
(2) The court may at any time-

(a) on the application of the official receiver, order any liquidator to submit to it
accounts of any unclaimed or undistributed funds, dividends or other moneys in his
hands or under his control, verified by affidavit;

(b) direct an audit thereof; and

(c) direct the liquidator to pay those moneys to the official receiver to be placed to
the credit of the Companies Liquidation Account.

(3) This section shall not deprive any person of any other right or remedy to which he
is entitled against the liquidator or any other person.

(4) If a claimant makes any demand for any moneys placed to the credit of the
Companies Liquidation Account, the official receiver, upon being satisfied that the
claimant is the owner of the money, shall authorise payment thereof to be made to
him out of the Account.

(5) A person dissatisfied with the decision of the official receiver in respect of a
claim made in pursuance of subsection (5) may appeal to the court, which may
confirm, disallow or vary the decision.

(6) Where any unclaimed moneys paid to any claimant are afterwards claimed by any
other person, that other person shall not be entitled to any payment out of the
Account, but such a person may have recourse against the claimant to whom the
unclaimed moneys have been paid.

(7) Any unclaimed moneys paid to the credit of the Companies Liquidation Account,
to the extent to which they have not been under this section paid out of the Account,
shall, on the expiration of six years from the date of the payment of the moneys to the
credit of the account, be paid into the General Revenues of the Republic.

343. (1) Unless expressly directed to do so by the official receiver pursuant to


subsection (2), a liquidator shall not incur any expense in relation to the winding-up
of a company unless there are sufficient available assets. Expenses of winding-up
where assets insufficient

221
(2) The official receiver may, on the application of any creditor or member, direct a
liquidator to incur a particular expense on condition that the creditor or member
indemnify the liquidator in respect of the recovery of the amount expended and, if the
official receiver so directs, gives such security to secure the amount of the indemnity
as the official receiver thinks reasonable.

344. (1) The court may, as to all matters relating to the winding-up of a company,
have regard to the wishes of the members or creditors as proved to it by any sufficient
evidence, and may if it thinks fit for the purpose of ascertaining those wishes, direct
meetings of the members or creditors to be convened, held and conducted in such
manner as the court directs, and may appoint a person to act as chairman of any such
meeting and to report the result thereof to the court. Meetings to ascertain wishes of
members or creditors

(2) In the case of creditors, regard shall be had to the value of each creditor's debt.

(3) In the case of members, regard shall be had to the number of votes held by each
member under this Act or the articles.

345. (1) In every winding-up, subject to this section, debts payable on a contingency,
and all claims against the company, present or future, certain or contingent,
ascertained or sounding only in damages, shall be admissible to proof against the
company, a just estimate being made so far as possible of the value of such debts or
claims as are subject to any contingency or sound only in damages or for some other
reason do not bear a certain value. Proof of debts

(2) Subject to section three hundred and forty-six, the same rules shall apply in the
winding-up of an insolvent company with regard to the respective rights of secured
and unsecured creditors and debts provable and the valuation of annuities and future
and contingent liabilities as apply in relation to the estates of bankrupt persons under
the law relating to bankruptcy.

346. (1) Subject to this Act, in a winding-up there shall be paid in priority to all other
unsecured debts- Preferential debts

(a) the costs and expenses of the winding-up including the taxed costs of a
petitioner payable under section two hundred and seventy-four, the remuneration of
the liquidator, and the costs of any audit carried out pursuant to section three hundred
and thirty-eight;

(b) all amounts due-

222
(i) by way of wages or salary (whether or not earned wholly or in part by way of
commission) accruing to any employee within the period of three months before the
commencement of the winding-up;
(ii) in respect of leave accruing to any employee within the period of two years
before the commencement of the winding-up;
(iii) in respect of any paid absence (not being leave) accruing to any employee
within the period of three months before the commencement of the winding-up;
(iv) by way of recruitment expenses or other amounts reimbursable under any
contract of employment;

(c) an amount equal to three months' wages or salary, by way of severance pay, to
each employee;

(d) all amounts due in respect of workers' compensation under any written law
relating to workers' compensation accrued before the commencement of the winding-
up;

(e) any tax, duty or rate payable by the company in respect of any period prior to
the commencement of the winding-up, whether or not payment has become due after
that date;

(f) all Government rents not more than five years in arrears at the commencement
of the winding-up; and

(g) all rates from the company to a local authority having become due and payable
within the period of three years before the date of commencement of the winding-up.

(2) Debts having priority shall rank as follows-

(a) firstly, the debts referred to in paragraph (a);

(b) secondly, the debts referred to in paragraphs (b), (c) and (d);

(c) thirdly, the debts referred to in paragraphs (e) and (f);

(d) fourthly, the debts referred to in paragraph (g);


of subsection (1).

223
(3) Debts having the same priority shall rank equally between themselves, and shall
be paid in full, unless the property of the company is insufficient to meet them, in
which case they shall abate in equal proportions between themselves.

(4) Where a payment has been made to any employee of the company on account of
wages or salary out of money advanced by a person for that purpose, the person by
whom the money was advanced shall, in a winding-up, have a right of priority in
respect of the money so advanced and paid, up to the amount by which the sum in
respect of which the employee would have been entitled to priority in the winding-up
has been diminished by reason of the payment, and shall have the same right of
priority in respect of that amount as the employee would have had if the payment had
not been made.

(5) So far as the assets of the company available for payment of general creditors are
insufficient to meet any preferential debts specified in subsection (1) and any amount
payable in priority by virtue of subsection (3), those debts shall have priority over the
claims of the holders of debentures under any floating charge created by the company,
and shall be paid accordingly out of any property comprised in or subject to that
charge.

(6) Where the company is, under a contract of insurance entered into before the
commencement of the winding-up, insured against liability to third parties, then if any
such liability is incurred by the company (either before or after commencement of the
winding-up) and an amount in respect of that liability is or has been received by the
company or the liquidator from the insurer, the amount shall, after deducting any
expenses of or incidental to getting the amount, be paid by the liquidator to the third
party in respect of whom the liability was incurred to the extent necessary to
discharge that liability or any part of that liability remaining undischarged in priority
to all payments in respect of the debts referred to in subsection (1).

(7) If the liability of the insurer to the company is less than the liability of the
company to the third party nothing in subsection (5) shall limit the third party in
respect of the balance.

(8) Subsections (5) and (6) shall have effect notwithstanding any agreement to the
contrary entered into after the commencement of this Act.

(9) Notwithstanding anything in subsection (1)-

(a) paragraph (d) of that subsection shall not apply in relation to the winding-up
of a company in any case where-
(i) the company has entered into a contract with an insurer in respect of any
liability under any law relating to workmen's compensation;

224
(ii) the company is being wound-up voluntarily merely for the purpose of
reconstruction or of amalgamation with another company; and
(iii) the right to the compensation has, on the reconstruction or amalgamation, been
preserved to the person entitled thereto; and

(b) where a company has given security for the payment or repayment of any
amount to which paragraph (e), (f) or (g) of that subsection relates, that paragraph
shall apply only in relation to the balance of any such amount remaining due after
deducting therefrom the net amount realised from the security.

(10) Where, in any winding-up-

(a) assets have been recovered under an indemnity for costs of litigation given by
certain creditors;

(b) assets have been protected or preserved by the payment of moneys or the
giving of indemnity by creditors; or

(c) expenses in relation to which a creditor has indemnified a liquidator have been
recovered;
the court may make such order as it thinks just with respect to the distribution of those
assets and the amount of those expenses so recovered with a view to giving those
creditors an advantage over others in consideration of the risk run by them in so
doing.

(11) Subject to this Act, all debts proved in the winding-up shall be paid pari passu.

(12) An amount paid to an employee under paragraph (c) of subsection (1) shall be
deducted from any amount payable as severance pay due to the employee under any
law or agreement.

(13) This section shall be deemed to have commenced on 1st November, 1994.
(As amended by Act No. 6 of 1995)

347. (1) Any conveyance, transfer, mortgage, delivery of goods, payment, execution
or other act relating to property made or done by or against a company which, had it
been made or done by or against an individual, would in his bankruptcy under the law
of bankruptcy be void or voidable, shall, if the company is wound-up, be void or
voidable in the same way. Avoidance of preference

225
(2) For the purposes of this section, the date which corresponds with the date of
presentation of the bankruptcy petition in the case of an individual shall be the date
upon which the winding-up commenced.

(3) Any transfer or assignment by a company of all its property to trustees for the
benefit of all its creditors shall be void.

348. A floating charge on the undertaking or property of the company created


within twelve months before the commencement of the winding-up shall, unless it is
proved that the company immediately after the creation of the charge was solvent, be
invalid except to the amount of any cash paid to the company at the time, or
subsequently, in consideration for the charge, together with interest on that amount at
the rate fixed by the terms of the charge. Avoidance of floating charge

349. (1) Where any property, business or undertaking has been acquired by a
company within the period of two years before the commencement of the winding-up
of the company- Liquidator's right to recover in respect of certain sales to or by
company

(a) from a person who was at the time of the acquisition a director of the
company; or

(b) from a second company of which, at the time of the acquisition, a person was
a director who was also a director of the first company;
the liquidator may recover from the person or company from which the property,
business or undertaking was acquired any amount by which the value of the
consideration given exceeded the value of the property, business or undertaking at the
time of its acquisition.

(2) Where any property, business or undertaking has been sold by a company within
the period of two years before the commencement of the winding-up of the company-

(a) to a person who was at the time of the sale a director of the company; or

(b) to a second company of which at the time of the sale a person was a director
who was also a director of the first company; the liquidator may recover from the
person or company to which the property, business or undertaking was sold any
amount by which the value of the property, business or undertaking at the time of the
sale exceeded the value of the consideration received.

226
(3) For the purposes of this section the value of the property, business or undertaking
includes the value of any goodwill or profits which might have been made from the
business or undertaking and any similar consideration.

350. (1) Where any part of the property of a company consists of- Disclaimer of
onerous property

(a) any estate or interest in land which is burdened with onerous covenants;

(b) shares in any body corporate that are subject to restrictions on transfer;

(c) unprofitable contracts; or

(d) any other property that is unsaleable, or not readily saleable, by reason of its
binding the possessor thereof to the performance of any onerous act, or to the
payment of any sum of money;
the liquidator of the company, notwithstanding that he has endeavoured to sell or has
taken possession of the property or exercised any act of ownership in relation thereto,
may, with the leave of the court or the committee of inspection and subject to this
section, by writing signed by him, disclaim the property at any time within twelve
months after-

(i) the commencement of the winding-up; or

(ii) the property in question came to the knowledge of the liquidator, if it did not
do so within one month after the commencement of the winding-up;
or within such extended period as is allowed by the court.

(2) The disclaimer shall operate to determine, as from the date of disclaimer, the
rights, interests and liabilities of the company and the property of the company in or
in respect of the property disclaimed, but shall not, except so far as is necessary for
the purpose of releasing the company and the property of the company from liability,
alter the rights or liabilities of any other person.

(3) The court or committee of inspection, before or on granting leave to disclaim,


may require such notices to be given to persons interested, and impose such terms as a
condition of granting leave, and make such other orders in the matter, as the court or
committee thinks just.

227
(4) The liquidator shall not disclaim if an application in writing has been made to him
by any person interested in the property requiring him to decide whether he will or
will not disclaim, and the liquidator has not, within a period of twenty-eight days after
the receipt of the application or such further period as is allowed by the court, given
notice to the applicant that he intends to apply to the court or the committee for leave
to disclaim.

(5) In the case of a contract, if the liquidator, after an application referred to in


subsection (4), does not within that period or further period disclaim the contract, the
liquidator shall be deemed to have adopted it.

(6) The court may, on the application of a person who is, as against the liquidator,
entitled to the benefit or subject to the burden of a contract made with the company,
make an order rescinding the contract on such terms as to payment by or to either
party of damages for the non-performance of the contract, or otherwise, as the court
thinks just, and any damages payable under the order to that person may be proved by
him as a debt in the winding-up.

(7) The court may, on the application of a person who claims an interest in any
disclaimed property or is under any liability not discharged by this Act in respect of
any disclaimed property, and on hearing such persons as it thinks fit, make an order
for the vesting of the property in or the delivery of the property to-

(a) any person entitled thereto;

(b) any person to whom it seems just that the property should be delivered by way
of compensation for such liability; or

(c) a trustee for such a person;


on such terms as the court thinks just.

(8) On any such vesting order being made and a copy thereof being lodged with-

(a) the Registrar;

(b) the official receiver; and

(c) the appropriate authority concerned with the recording or registration of


dealings in the land, if the order relates to land;

228
the property shall vest accordingly without any further conveyance, transfer or
assignment.

(9) Notwithstanding anything in subsection (7), where the property disclaimed is of a


leasehold nature, the court shall not make a vesting order in favour of any person
claiming under the company, whether as under-lessee or as mortgagee, except upon
the terms of making that person-

(a) subject to the same liabilities and obligations as those to which the company
was subject under the lease in respect of the property at the commencement of the
winding-up; or

(b) if the court thinks fit, subject only to the same liabilities and obligations as if
the lease had been assigned to that person at that date;
and in either event, if the case so requires, as if the lease had comprised only the
property comprised in the vesting order.

(10) A mortgagee or under-lessee who declines to accept a vesting order on the terms
referred to in subsection (9) shall be excluded from all interests in and security upon
the property, and, if there is no person claiming under the company who is willing to
accept an order upon such terms, the court may vest the estate and interest of the
company in the property in any person liable personally or in a representative capacity
and either alone or jointly with the company to perform the lessee's covenants in the
lease, freed and discharged from all estates, incumbrances and interests created
therein by the company.

(11) Any person injured by the operation of a disclaimer under this section shall be
deemed to be a creditor of the company to the amount of the injury, and may
accordingly prove the amount as a debt in the winding-up.

351. (1) Where a creditor has issued execution against the goods or land of a
company or has attached any debt due to the company and the company is
subsequently wound-up, he shall not be entitled to retain the benefit of the execution
or attachment against the liquidator unless he has completed the execution or
attachment before- Restriction of rights of creditor as to execution or attachment

(a) the date on which he had any notice of a meeting at which a resolution for
voluntary winding-up was to be proposed; or

(b) the date of the commencement of the winding-up, if he had no such notice.

229
(2) A person who purchases in goods faith under a sale by the sheriff any goods of a
company on which an execution has been levied shall, in all cases, acquire a good title
to them against the liquidator.

(3) The rights conferred by subsection (1) on the liquidator may be set aside by the
court in favour of the creditor to such extent and subject to such terms as the court
thinks just.

(4) For the purposes of this section-

(a) an execution against goods is completed by seizure and sale;

(b) an attachment of a debt is completed by receipt of the debt; and

(c) an execution against land is completed by sale or, in the case of an equitable
interest, by the appointment of a receiver.

(5) For the purposes of this section, "goods" includes all chattels personal.

352. (1) Subject to subsection (3), where any goods of a company are taken in
execution and, before the sale thereof or the completion of the execution by the
receipt or recovery of the full amount of the levy, notice is served on the sheriff that-
Duties of sheriff as to goods taken in execution

(a) a provisional liquidator has been appointed;

(b) a winding-up order has been made; or

(c) a resolution for voluntary winding-up has been passed;


the sheriff shall, on being required, deliver to the liquidator the goods and any money
seized or received in part satisfaction of the execution.

(2) The costs of the execution shall be a first charge on the goods or moneys so
delivered, and the liquidator may sell the goods, or a sufficient part thereof, for the
purpose of satisfying that charge.

(3) Subject to this section, where, under an execution in respect of a judgement for a
sum exceeding fifty monetary units, the goods of a company are sold or money is paid

230
in order to avoid sale, the sheriff shall deduct the costs of the execution from the
proceeds of the sale or the money paid, and shall retain the balance for fourteen days.

(4) If, within that period of fourteen days, notice is served on him of an application
for the winding-up of the company having been presented or of a meeting having been
called at which there is to be proposed a resolution for the voluntary winding-up, the
sheriff shall, when an order is made or a resolution is passed for the winding-up, pay
the balance to the liquidator who shall be entitled to retain it as against the execution
creditor.

(5) The rights conferred by this section on the liquidator may be set aside by the court
in favour of the creditor to such extent and subject to such terms as the court thinks
fit.

(6) For the purposes of this section, "goods" includes all chattels personal.

353. (1) A person who, being a past or present officer or a past or present member of
a company which is being wound-up- Offences by officers of companies in
liquidation

(a) does not to the best of his knowledge and belief fully and truly reveal to the
liquidator all the property real and personal of the company, and how and to whom
and for what consideration and when the company disposed of any part thereof,
except such part as has been disposed of in the ordinary way of the business of the
company;

(b) does not deliver up to the liquidator, or as he directs-


(i) all the real and personal property of the company in his custody or under his
control and which he is required by law to deliver up; or
(ii) all books and documents in his custody or under his control belonging to the
company and which he is required by law to deliver up;

(c) within twelve months before the commencement of the winding-up or at any
time thereafter-
(i) has concealed any part of the property of the company having a value of more
than ten monetary units, or has concealed any debt due to or from the company;
(ii) has fraudulently removed any part of the property of the company having a
value of more than ten monetary units;
(iii) has concealed, destroyed, mutilated or falsified, or has been privy to the
concealment, destruction, mutilation or falsification of, any book or document
affecting or relating to the property or affairs of the company;

231
(iv) has made or has been privy to the making of any false entry in any book or
document affecting or relating to the property or affairs of the company;
(v) has fraudulently parted with, altered or made any omission in, or has been privy
to fraudulent parting with, altering or making any omission in, any document
affecting or relating to the property or affairs of the company;
(vi) by any false representation or other fraud, has obtained any property for or on
behalf of the company on credit which the company has not subsequently paid for;
(vii) has obtained on credit, or for or on behalf of the company, under the false
pretence that the company is carrying on business, any property which the company
has not subsequently paid for; or
(viii) has pawned, pledged or disposed of any property of the company which has
been obtained on credit and has not been paid for, except where the pawning,
pledging or disposing was in the ordinary way of the business of the company;

(d) makes any material omission in any statement relating to the affairs of the
company;

(e) knowing or believing that a false debt has been proved by any person, fails for
a period of one month to inform the liquidator thereof;

(f) prevents the production of any book or paper affecting or relating to the
property or affairs of the company;

(g) within the period of twelve months before the commencement of the winding-
up or at any time thereafter has attempted to account for any part of the property of
the company by fictitious losses or expenses; or

(h) within the period of twelve months before the commencement of the winding-
up or at any time thereafter has made any false representation or committed any other
fraud for the purpose of obtaining the consent of the creditors of the company or any
of them to an agreement with reference to the affairs of the company or to the
winding-up;
shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding
two thousand monetary units or to imprisonment for a period not exceeding two years,
or to both.

(2) It shall be a defence to a charge under paragraph (a), (b) or (d) or subparagraph
(i), (vii) or (viii) of paragraph (c) of subsection (1) if the accused proves that he had
no intent to defraud, and to a charge under paragraph (f) or subparagraph (iii) or (iv)
of paragraph (c) of subsection (1) if he proves that he had no intent to conceal the
state of affairs of the company or to defeat the law.

232
(3) Where a person pawns, pledges or disposes of any property in circumstances
which amount to an offence under subparagraph (viii) of paragraph (c) of subsection
(1), every person who takes in pawn or pledge or otherwise receives the property,
knowing it to be pawned, pledged or disposed of in those circumstances shall be
guilty of an offence, and shall be liable on conviction to a fine not exceeding five
hundred monetary units or to imprisonment for a period not exceeding six months, or
to both.

354. Any person who gives or agrees or offers to give to any member or creditor of
a company any valuable consideration with a view to securing the appointment of the
person, or of any other person, as the company's liquidator shall be guilty of an
offence, and shall be liable on conviction to a fine not exceeding five hundred
monetary units or to imprisonment for a period not exceeding six months, or to both.
Inducement to be appointed liquidator

355. Every officer or member of any company being wound-up who destroys,
mutilates, alters or falsifies any books, documents or securities, or makes or is privy
to the making of any false or fraudulent entry in any register, book or document
belonging to the company with intent to defraud or deceive any person shall be guilty
of an offence, and shall be liable on conviction to a fine not exceeding two thousand
monetary units or to imprisonment for a period not exceeding two years, or to both.
Penalty for falsification of books

356. If, when a company is wound-up, it is shown that the company failed to keep
accounting records in accordance with section one hundred and sixty-two for any
period during the period of two years before the commencement of the winding-up,
each officer in default, unless he acted honestly and shows that in the circumstances
in which the business of the company was carried on the failure was excusable, shall
be guilty of an offence, and shall be liable on conviction to a fine not exceeding one
thousand monetary units or to imprisonment for a period not exceeding twelve
months, or to both. Liability where proper accounts not kept

357. (1) If an officer of a company who is knowingly a party to the contracting of a


debt by the company has, at the time the debt is contracted, no reasonable or probable
ground of expectation (after taking into consideration the other liabilities, if any, of
the company at the time) of the company's being able to pay the debt, the officer shall
be guilty of an offence, and shall be liable on conviction to a fine not exceeding two
hundred and fifty monetary units or to imprisonment for a period not exceeding three
months, or to both. Liability for contracting debt

(2) Where a person has been convicted of an offence against this section, the court,
on the application of the liquidator or any creditor or member of the company, may
make an order that the person shall be personally responsible, without any limitation
of liability, for the debts or other liabilities of the company or for such of those debts
or other liabilities as the court directs.

233
(3) An order under this section may provide for measures to give effect to the
liabilities of the person under the order, and in particular may provide that those
liabilities shall be a charge on any debt or obligation due from the company to him, or
on any interest in the company of which he has, directly or indirectly, the benefit.

(4) The court may make such further orders as it thinks necessary to enforce any
charge imposed under this section.

358. (1) If, in the course of winding-up, it appears that any person who has taken
part in the formation or promotion of the company, or any past or present liquidator or
officer- Power of court to assess damages against delinquent officers

(a) has misapplied or retained, or become liable or accountable for, any money or
property of the company; or

(b) has been guilty of any misfeasance or breach of trust or duty in relation to the
company;
the court may, on the application of the liquidator or of any creditor or member,
inquire into the conduct of that person, liquidator or officer and compel him to repay
or restore the money or property, or any part thereof, with interest at such rate as the
court thinks just, or to contribute such a sum to the assets of the company by way of
compensation in respect of the misapplication, retainer, misfeasance or breach of trust
or duty as the court thinks just.

(2) This section shall apply to and in respect of the receipt of any money or property
by an officer of the company during the two years preceding the commencement of
the winding-up, whether by way of salary or otherwise, that appears to the court to be
unfair or unjust.

(3) This section shall apply to the conduct of a person notwithstanding that the person
is criminally liable for the conduct.

359. (1) If it appears to the court, in the course of either a winding-up by the court or
a voluntary winding-up, that any past or present officer, or any member, of the
company has been guilty of an offence in relation to the company for which he is
criminally liable, the court may, either on the application of any person interested in
the winding-up or of its own motion, direct the liquidator to report the matter to the
Director of Public Prosecutions. Prosecution of delinquent officer and members

(2) If-

234
(a) it appears to the liquidator, in the course of a voluntary winding-up, that any
past or present officer, or any member, of the company has been guilty of any offence
in relation to the company for which he is criminally liable; or

(b) the liquidator in any winding-up is given a direction under subsection (1);
he shall forthwith report the matter to the Director of Public Prosecutions and shall, in
respect of information or documents in his possession or under his control which
relate to the matter in question, furnish the Director of Public Prosecutions with such
information and give to him such access to and facilities for inspecting and taking
copies of any documents as he may require.

(3) Where the Director of Public Prosecutions receives a report under this section, he
may refer the matter to the Registrar for further inquiry, and the Registrar shall
thereupon investigate the matter, and may apply to the court for an order conferring
on any person designated by the court for the purpose, with respect to the company
concerned, all such powers of investigating the affairs of the company as are provided
by this Act in the case of a winding-up by the court.

(4) If the Director of Public Prosecutions institutes proceedings in a matter reported


to him under this section, the liquidator and every officer and agent of the company
past and present, other than the defendant in the proceedings, shall give the Director
of Public Prosecutions all assistance in connection with the prosecution which he is
reasonably able to give.

(5) For the purposes of subsection (4) "agent of the company" includes any banker or
legal practitioner of the company and any person appointed by the company as
auditor.

(6) If any person fails to comply with subsection (4), the court may, on the
application of the Director of Public Prosecutions, direct that person to comply with
that subsection, and where any application is made under this subsection with respect
to a liquidator, the court may, unless it appears that the failure or neglect to comply
was due to the liquidator not having in his hands sufficient assets of the company to
enable him so to do, direct that the costs of the application shall be borne by the
liquidator personally.

360. A person who, while an officer of a company which is subsequently ordered to


be wound-up by the court or which subsequently passes a resolution for voluntary
winding-up-
(a) induced any person to give credit to the company by false pretences or by
means of any other fraud;

235
(b) with intent to defraud creditors of the company, made or caused to be made
any gift or transfer of charges on, or caused or connived at the levying of any
execution against, the property of the company; or
(c) with intent to defraud creditors of the company, concealed or removed any
part of the property of the company within two months before the date of any
unsatisfied judgement or order for payment of money obtained against the company;
shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding
two thousand monetary units or to imprisonment for a period not exceeding two years,
or to both.
Division 13.8-Dissolution of defunct companies Frauds by officers of companies
which have gone into liquidation

361. (1) Where the Registrar has reasonabe cause to believe that a company is not
carrying on business or is not in operation, he may send to the company by registered
post a letter to that effect and also stating that, if an answer showing cause to the
contrary is not received within one month from the date of the letter, a notice will be
published in the Gazette with a view to dissolving the company under this section.
Power of Registrar to strike defunct company off register

(2) If the Registrar, at the expiration of the period of one month after the sending of
the letter, is not satisfied that the company is carrying on business or is in operation,
he may at any time thereafter cause to be published in the Gazette and send to the
company by registered post a notice that at the expiration of three months from the
date of that notice, unless cause is shown to the contrary, the company will be
dissolved.

(3) Where a company is being wound-up and the Registrar has reasonably cause to
believe that-

(a) no liquidator is acting;

(b) the affairs of the company are fully wound-up and for a period of six months
the liquidator has been in default in lodging any return required to be made by him;

(c) the affairs of the company have been fully wound-up and there are no assets,
or the assets available are not sufficient to pay the costs of obtaining an order of the
court dissolving the company; or

(d) the affairs of the company have been fully wound-up and that it is not
necessary in the circumstances of the case to obtain an order of the court dissolving
the company;

236
he may cause to be published in the Gazette and send to the company or the
liquidator, if any, a notice to the same effect as that referred to in subsection (2).

(4) Where a company-

(a) by ordinary resolution requests the Registrar to strike it off the register; and

(b) lodges with the Registrar a copy of the resolution, summary of accounts, and a
statutory declaration of two or more directors showing what disposition the company
has made of its assets and that the company has no debts or liabilities;
the Registrar shall cause to be published in the Gazette a notice to the same effect as
that referred to in subsection (2).

(5) After the expiration of three months from the publication in the Gazette of a
notice under this section, the Registrar shall, unless cause to the contrary is shown,
strike the name of the company off the register, and shall cause notice thereof to be
published in the Gazette.

(6) On the publication in the Gazette of the notice that name of the company has been
struck off the register, the company shall be dissolved, but-

(a) the liability, if any, of every officer and member of the company shall
continue and may be enforced as if the company had not been dissolved; and

(b) nothing in this subsection shall affect the power of the court to wind-up a
company which has been dissolved under this section.

(7) A notice to be sent under this section to a liquidator may be addressed to the
liquidator at his last known place of business.

(8) The fees of the Registrar in respect of the dissolution of a company under this
section and the costs incurred by him in publishing notices in the Gazette shall be
payable by the company and recoverable from it.

362. (1) Where a company has been dissolved under section two hundred and ninety-
three, three hundred and twenty-four or three hundred and sixty-one, the court may at
any time within two years after the date of dissolution, on application by the
liquidator of the company or by any other person who appears to the court to be
interested, make an order upon such terms as the court thinks fit declaring the

237
dissolution to have been void, and thereupon such proceedings may be taken as might
have been taken if the company had not been dissolved, except that, for the purposes
of any period of limitation, time shall not be deemed to run during the period between
the dissolution and the date of the order, or of such other date as the order specifies.
Power of court to declare dissolution of company void

(2) The court may by the order give such directions and make such provisions as it
thinks just for placing the company and all other persons in the same position as
nearly as may be as if the company had never been dissolved.

(3) The person on whose application the order is made shall, within seven days after
the making of the order or such further time as the court may allow, lodge with the
Registrar and with the official receiver a copy of the order, and the Registrar shall
thereupon cause notice thereof to be published in the Gazette or otherwise as the court
may direct.

(4) If the person fails to comply with subsection (3), he shall be guilty of an offence,
and shall be liable on conviction to a fine not exceeding three monetary units for each
day that the failure continues.

363. (1) Where, after a company has been dissolved, the Registrar is satisfied-
Registrar to act as representative of defunct company in certain events

(a) that the company, if still existing, would be legally or equitably bound to carry
out, complete or give effect to some dealing, transaction or matter; and

(b) that in order to carry out, complete or give effect thereto, some purely
administrative and not discretionary act should have been done by or on behalf of the
company, or should be done by or on behalf of the company if it were still existing;
the Registrar may, as representing the company or its liquidator; do or cause to be
done any such act.

(2) The powers of the Registrar under subsection (1) shall include the powers to
execute or sign any relevant instrument or document, and the Registrar shall, when so
executing or signing an instrument or document, endorse thereon a note or
memorandum to the effect that he has done so under this section, and such an
execution or signature shall have the same force, validity and effect as if the company
had been in existence and had executed the instrument or document.

(3) Neither the Registrar nor the Government shall incur any liability to any person
by reason of any act done or caused to be done by the Registrar under this section.
Division 13.9-Winding-up of other bodies corporate

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364. (1) Subject to this section, this Part shall apply, with the necessary
modifications, to any body corporate incorporated in Zambia, not being a company.
Winding-up of other Zambian bodies corporate

(2) This section shall not apply to a body corporate incorporated by or under any
written law of Zambia if the law makes specific provisions for the winding-up of
bodies corporate formed by or under it.

(3) A winding-up by the court under this section may be made only on the petition of
the body corporate.

365. (1) In this section, "external company" means a body corporate incorporated in
a foreign country, not being a foreign company, that has assets or an undertaking in
Zambia. Winding-up of other foreign bodies corporate

(2) Subject to this section, this Part shall apply with the necessary modifications to
the operations and business and assets in Zambia of an external company, as if it were
a company incorporated in Zambia, carrying on the operations or business of the
external company in Zambia, whose only assets are the assets of the external company
in Zambia.

(3) An external company may be wound-up under this section whether or not it has
been dissolved or has otherwise ceased to exist according to the law of the country of
its incorporation.

(4) An external company may be wound-up under this section on the following
grounds in addition to those referred to in section two hundred and seventy-two:

(a) if it is in the course of being wound-up, voluntarily or otherwise, in the


country of its incorporation;

(b) if it is dissolved in the country of its incorporation or has ceased to carry on


business in Zambia, or is carrying on business for the purposes only of winding-up its
affairs;

(c) if the court is of the opinion that the company is being operated in Zambia for
any unlawful purposes.

239
(5) The court may, in the winding-up order or on subsequent application by the
liquidator, direct that all transactions in Zambia by or with the external company shall
be deemed to be, or have been, validly done notwithstanding that they occurred after
the date when the body corporate was dissolved or otherwise ceased to exist
according to the law of the country of its incorporation, and may make the order on
such terms and conditions as it deems fit.

PART XIV
MISCELLANEOUS

Division 14.1-Administration of Act

366. (1) There is hereby established an office to be known as the Office of the
Registrar of Companies. The Office of the Registrar of Companies

(2) There shall be-

(a) a Registrar of Companies;

(b) at least one Deputy Registrar of Companies; and

(c) at least one Assistant Registrar of Companies.

(3) The Office of the Registrar of Companies shall consist of the Registrar, the
Deputy Registrars and Assistant Registrars and the staff referred to in section three
hundred and sixty-eight.

(4) The Registrar shall exercise the powers conferred on the Registrar under this Act,
and shall administer the Act through the Office of the Registrar of Companies.

(5) Anything in this Act, including the signing of a document, permitted or required
to be done to or by the Registrar may be done to or by a Deputy Registrar or Assistant
Registrar or to or by a member of the staff of the Office of the Registrar of Companies
authorised in writing for the purpose by the Registrar or a Deputy Registrar or
Assistant Registrar.

(6) The Registrar shall have a seal and the seal shall bear the words "Registrar of
Companies, Republic of Zambia".

240
367. (1) The Registrar, the Deputy Registrars and the Assistant Registrars shall be
persons appointed under the Service Commissions Act, 1991. Appointment of
Registrar and Deputies
Cap. 259

(2) A person shall not be appointed as Registrar or Deputy Registrar unless he is, or
is qualified to be, a legal practitioner and has been so qualified for a period of three
years.

368. The staff of the Office of the Registrar of Companies required for the purposes
of this Act shall be persons appointed or employed under the Service Commissions
Act, 1991. Staff of the Office
Cap. 259

369. (1) The Registrar shall maintain the registers required under this Act together
with any other registers that he thinks necessary or convenient for the purposes of this
Act. Keeping of registers and lodged documents

(2) Where a document is lodged under this Act, the Registrar shall keep the
document, or a copy thereof, and register it.

(3) The registers and other documents may be recorded or stored in written or printed
form or by electronic or photographic process or otherwise.

(4) The Registrar shall ensure that, as far as practicable-

(a) all the particulars in the registers; and

(b) all the documents, or the copies thereof, lodged with the Registrar,
in respect of a particular company can be made available to a person who requests
them within two hours after the making of the request.

(5) For the purposes of this section-

(a) the information in any register kept under the former Act shall, if it is
information that would have been required to be kept on a register had this Act been
in force, be deemed to be information required to be kept on a register under this Act;
and

241
(b) any document lodged for the purposes of the former Act shall be deemed to be
a document lodged under this Act.

370. (1) Where this Act requires any document or particulars to be lodged with the
Registrar, the Registrar shall register them in the manner prescribed or, if no manner
is prescribed for the document or particulars, as determined by the Registrar.
Registration of documents

(2) For the purposes of this Act, a document or particulars shall be deemed not to
have been lodged with the Registrar until any fee prescribed under section three
hundred and seventy-seven has been paid to the Registrar.

(3) Subject to this Act, where this Act requires a document or particulars to be lodged
under this Act, each company concerned shall lodge a separate document or set of
particulars.

(4) All documents and particulars which are lodged with the Registrar shall be
printed or typewritten on good quality paper to the satisfaction of the Registrar.

(5) If the Registrar is of opinion that any document or particulars lodged with him-

(a) contain matter or matters contrary to law;

(b) by reason of any error, omission or misdescription have not been duly
completed;

(c) are insufficiently legible;

(d) are written on paper insufficiently durable; or

(e) otherwise do not comply with the requirements of this Act;


he may refuse to register the document or particulars in that state and direct that they
be amended or completed in a specified manner and re-submitted.

(6) If the Registrar gives a direction under subsection (5), the document or particulars
shall be deemed not to have been lodged.

242
(7) The Registrar may require that a document or a fact stated in a document lodged
with him shall be verified by statutory declaration.

(8) Where the Registrar is required or permitted under this Act to cause a copy or
particulars of a document lodged with him to be published in the Gazette, he may
require the lodgement with him of any such document in duplicate, or the provision of
any such particulars, and may withhold registration of the document until the
requirement has been complied with.

(9) The Registrar may alter a document if so authorised by the person who lodged the
document or his representative.

371. (1) Where under this Act a document is required to be lodged with the Registrar
within a specified period, the period shall be extended by fourteen days in relation to a
document executed or made in a place outside Zambia. Extension of time for
lodgement

(2) The Registrar may, before the end of any period fixed for the lodgement of a
document or particulars, at the request of the person concerned, extend the period for
lodgement by such a period, and on such terms, as he thinks reasonable in the
circumstances.

(3) Subject to this section, where any document or particulars are lodged with the
Registrar after the end of the period fixed for its lodgement, the Registrar shall accept
it for registration upon payment of such additional fee as may be prescribed.

(4) The Registrar may reduce or waive any additional fee imposed under subsection
(3) if he is satisfied that the failure to lodge the document or particulars was caused or
continued solely through administrative oversight and that no person is likely to have
suffered damage or to have been prejudiced as a result of the failure.

372. (1) Subject to this Act, where this Act requires a document or register to be
prepared, kept, maintained or lodged, the document shall be in English. Documents
to be in approved language

(2) Where the Registrar approves the lodgement of a document all or part of which is
in a language other than English, he may require a certified translation into English to
be annexed to it.

243
373. (1) Where this Act provides that a document to be lodged shall be "in the
prescribed form", the Registrar shall accept for lodgement and registration a
document that contains all the information required and varies from the prescribed
form in inessential respects only. Prescribed forms

(2) In the period of six months from the commencement of this Act, where this Act
provides that a document to be lodged shall be "in the prescribed form" and no form
has been prescribed by the regulations for the purposes of the provision, the document
shall be in a form approved by the Registrar.

374. (1) A person may inspect any document registered by the Registrar upon
payment of such fee as may be prescribed for each inspection of the documents
relating to one company. Inspection copies and evidence

(2) On the payment of the appropriate prescribed fee, the Registrar shall provide a
person with-

(a) a certificate of incorporation of a company;

(b) a certificate of share capital of a company; or

(c) a copy of any other document, or any part of any other document, registered
by the Registrar;
certified under the hand of the Registrar.

(3) A document kept by the Registrar shall not be required to be produced for the
purpose of any proceedings except by an order of the court.

375. (1) A copy of, or extract from, any document registered by the Registrar, being
a copy or extract certified by the Registrar to be a true copy or extract, shall be
admitted in any proceedings as of equal validity to the original document.
Evidentiary provisions

(2) In any proceedings, a court shall take judicial notice of the office of the Registrar.

(3) A document purporting-

(a) to be-

244
(i) an order, certificate, licence or approval made or issued by the Registrar for
the purposes of this Act; or
(ii) a revocation of such an order, certificate, licence or approval; and

(b) to be sealed with the seal of the Registrar or to be signed by him, or on his
behalf by a Deputy Registrar or other authorised officer;
shall be presumed to be such a document, or to be duly sealed or signed.

(4) A certificate signed by the Registrar that an order made, certificate issued, or act
done is the order, certificate, or act of the Registrar shall be conclusive evidence or
the fact certified.

376. (1) For the purpose of ascertaining whether a company or an officer is


complying with this Act or any regulations made under this Act, the Registrar may, on
giving fourteen days written notice to the company, call for the production of or
inspect any book required to be kept by the company. Enforcement of duty to
make returns

(2) If a body corporate or any officer, receiver or liquidator of a body corporate;

(a) fails to comply with any provision of this Act which requires it, or him, to
lodge or deliver any return, account, or other document, or to give notice of any
matter;

(b) continues to fail to comply with the provision for the period of fourteen days
after the service of a notice on it or him requiring him to do so;
the court may, on an application by the Registrar or by any member or creditor of the
body corporate, or by any other person claiming an interest which the court thinks
sufficient, make an order directing the body corporate and any officer thereof, or the
receiver or liquidator, to comply with the provision within such time as may be
specified in the order, and may provide that all costs of and incidental to the
application shall be borne by the body corporate or by any officer, receiver or
liquidator of the body corporate responsible for the failure.

377. (1) The regulations may prescribe fees in respect of- Fees

(a) the performance by the Registrar of his functions under this Act, including the
receipt by him of any notice or other document which under this Act is required to be
lodged with him; and

(b) the inspection of documents kept by him under this Act.

245
(2) Where the regulations provide that an additional fee is payable, by reason of the
late lodgement of a document for registration or otherwise, the Registrar may in his
discretion remit the whole or any part of the additional fee.

(3) Where the regulations provide that an additional fee is payable, by reason of the
late lodgement of a document for registration or otherwise, the additional fee shall be
payable notwithstanding that the company or any other person may be criminally
liable in respect of the same act or omission.

(4) Where a provision in this Act refers to a prescribed fee and no fee has been
prescribed for the purposes of the provision, the provision shall be read as if the
reference were omitted.

378. (1) Fees paid to the Registrar under this Act shall be paid by him into the
General Revenues of the Republic, or such other account as may be directed by the
Minister of finance. Fees to be paid into general revenues

379. Subject to this Act, a person aggrieved by a decision of the Registrar may
within fourteen days after the date on which he is notified of the decision, appeal to
the court against the decision, and the court may confirm, reverse or vary the decision
or make such order or give such directions in the matter as it thinks fit. Appeal
against a decision of the Registrar

380. (1) The Registrar may issue an order requiring companies generally, or any
class of companies, to furnish, by the time specified in the order, specified
information or statistics with regard to their constitutions or working, in relation to
periods specified in the order.Collection of information and statistics from companies

(2) The Registrar may issue an order requiring a person, being a company or a person
who is, or has at any time been, an officer or employee of the company, to furnish, by
the time specified in the order, specified information or statistics with regard to the
company's constitution or working, in relation to periods specified in the order.

(3) An order under this section shall not have the effect of requiring a person to
furnish any information less than fourteen days after the date on which the person was
notified of the order.

(4) An order under subsection (1) shall be published in the Gazette and may, as the
Registrar thinks fit, be published in a newspaper or newspapers circulating generally
in Zambia or served on individual companies.

246
(5) An order under subsection (2) shall be served on the person subject to the order.

(6) A person shall be deemed to have been notified of an order on the earliest of the
following dates:

(a) the date on which the order was served on the person;

(b) the date on which the order was published in the Gazette;

(c) the date on which the order was published in a newspaper circulating generally
in Zambia.

(7) For the purpose of satisfying himself that any information or statistics furnished
in pursuance of an order under this section is correct and complete, the Registrar may
require a person subject to the order-

(a) to produce specified records or documents in his possession or under his


control for inspection, before a specified officer and at a specified time; or

(b) to furnish specified further information or statistics within a specified time.

(8) The Registrar may, in writing, authorise a person to make an inquiry-

(a) for the purpose of obtaining any information or statistics which a company has
failed to furnish as required of it by an order under subsection (1); or

(b) for the purpose of-


(i) satisfying the Registrar that any information or statistics furnished by a
company in pursuance of an order made under subsection (1) is correct and complete;
and
(ii) obtaining such information or statistics as may be necessary or make the
information or statistics furnished correct and complete;
and the person authorised shall, for the purposes of such an inquiry, have such powers
as may be prescribed.

247
(9) If a company fails to comply with an order under this section to provide
information and statistics about itself, or knowingly furnishes any information or
statistics which is incorrect or incomplete in any material respect, the company, and
each officer in default, shall be guilty of an offence, and shall be liable on conviction
to a fine not exceeding two hundred and fifty monetary units or to imprisonment for a
period not exceeding three months, or to both.

(10) A person who wilfully fails to comply with an order under this section shall be
guilty of an offence, and shall be liable on conviction to a fine not exceeding two
hundred and fifty monetary units or to imprisonment for a period not exceeding three
months, or to both.

(11) For the purposes of this section, where a body corporate incorporated outside
Zambia carries on business in Zambia having established an office within Zambia, a
reference to a company in this section includes a reference to the body corporate in
relation, and only in relation, to that business.
Division 14.2-Penalties and liabilities

381. (1) A person who, in any return, report, certificate, account or other document
required by or for the purposes of this Act makes a statement that he knows to be false
in any material particular shall be guilty of an offence, and shall be liable on
conviction to a fine not exceeding two thousand monetary units or to imprisonment
for a term not exceeding two years, or to both. Penalty for false statements

(2) This section shall not affect the liability of a body corporate or other person under
another section of this Act or any other written law, but the penalties imposed by this
section shall be alternative, and not additional, to any penalties imposed by the other
section or written law.

382. (1) A person who, not being a body corporate, trades or carries on business in
Zambia under a name or title which includes the word "incorporated", "corporation"
or any contraction or imitation thereof, or any equivalent in a language other than
English shall be guilty of an offence, and shall be liable on conviction to a fine not
exceeding ten monetary units for each day that he trades or carries on business under
that name or title. Penalty for improper use of "Incorporated" or "Limited"

(2) A person who, not being a body corporate whose members have limited liability
under the laws of the country of its incorporation, trades or carries on business in
Zambia under a name or title the last word of which is "limited" or any contraction or
imitation thereof, or any equivalent in a language other than English, shall be guilty of
an offence, and shall be liable on conviction to a fine not exceeding ten monetary
units for each day that he trades or carries on business under that name or title.

248
383. (1) In the course of the winding-up of a company or any proceedings against a
company, the court may, on the application of the liquidator or any creditor or
member of the company, if it is satisfied that a person was knowingly a party to the
carrying on of any business of the company for a fraudulent purpose, make an order
that the person shall be personally responsible, without any limitation of liability, for
the debts or other liabilities of the company or for such of those debts or other
liabilities as the court directs. Civil liability for fraudulent trading

(2) An order under this section may provide for measures to give effect to the
liabilities of the person under the order, and in particular may provide that those
liabilities shall be a charge on any debt or obligation due from the company to him or
on any interest in the company of which he has, directly or indirectly, the benefit.

(3) The court may make such further orders as it thinks necessary to enforce any
charge imposed under this section.

(4) This section shall apply whether or not the person concerned has been convicted
of an offence against section three hundred and eighty-four or of any other offence in
respect of the matters on the ground of which the order is made.

384. A person who is knowingly a party to the carrying on of any business of the
company for a fraudulent purpose shall be guilty of an offence, and shall be liable on
conviction to a fine not exceeding one thousand monetary units or to imprisonment
for a period not exceeding twelve months, or to both. Offence of fraudulent
trading

385. Where a court issues a warrant under section three hundred and eleven of the
Criminal Procedure Code for the commitment of a person to prison for a failure by
him to pay a fine imposed on him for an offence under this Act, the period of
imprisonment specified in the warrant shall not exceed one day for every three
monetary units of the fine that remain unpaid. Imprisonment for failure to pay
fine
Cap. 160

386. Where a body corporate with limited liability is a plaintiff in any legal
proceedings, the court may, if the court is satisfied that there is reason to believe that
the body corporate will be unable to pay the costs of the defendant if the defendant is
successful in his defence, require sufficient security to be given for those costs, and
may stay all proceedings until the security is given. Costs in actions by limited
companies

387. Where more than one person is liable (whether as an officer of a body
corporate or otherwise) to pay any damages, costs, compensation, debt or monetary

249
penalty to an aggrieved party under, or in respect of any breach of, any section of this
Act-
(a) the persons shall have a right of contribution amongst themselves; and
(b) in any action to enforce liability or in an action to recover contribution, the
court may- Contributions between joint wrongdoers

(i) award contribution on such terms as it considers equitable in all the


circumstances; and

(ii) exempt any person from liability to make contribution or direct that the
contribution to be recovered from any other person shall amount to a complete
indemnity.

388. (1) If the court is satisfied that a member, officer, receiver, liquidator, auditor,
or trustee for debentures of a company might be civilly liable under this Act in respect
of some matter, but that he had acted honestly and reasonably in the matter and that,
having regard to all the circumstances or the case, he ought fairly to be excused, the
court may relieve him in whole or in part from his liability on such terms as the court
thinks fit. Power to grant relief from civil liability

(2) Relief of a person under this section may be granted-

(a) in proceedings against the person in relation to the matter, or

(b) on the application of the person, if he has reason to apprehend that such
proceedings may be instituted.

389. No person shall be liable to any action in damages for anything done or
omitted to be done by any person in the exercise or performance of any power or
function conferred or imposed on him by or under this Act unless the act or omission
was in bad faith or was due to a want of reasonable care of diligence.
Division 14.3-Transitional provisions Exemption from liability for acts or
omissions of public officers

390. (1) Any certificate or document made, executed, or issued under the former Act
and in force and operative at the commencement of this Act, shall so far as it could
have been made, executed, or issued under this Act, have effect as if made, executed
or issued under this Act. Certificates and documents made or lodged under
former Act

250
(2) Any document that, in accordance with the former Act, was duly lodged by it
with the Registrar, or duly registered by the Registrar, shall be deemed to have been
duly lodged or registered under this Act.

391. (1) An existing company shall be deemed to have, on and from the
commencement of this Act, articles consisting of- Articles of existing companies

(a) those provisions of the memorandum of association and articles of association


of the company, within the meaning of the former Act, which regulate the operation
of the company and are not inconsistent with the former Act; and

(b) any provisions of Table A of the former Act which, under the former Act,
applied to the company;
whether or not the articles so deemed are consistent with this Act.

(2) The articles of an existing company under subsection (1) shall be valid, and this
Act shall not apply to the company to the extent of any inconsistency with them, until-

(a) the company adopts new articles in accordance with subsection (3); or

(b) the last day of the first financial year of the company to commence after the
commencement of this Act;
whichever is earlier.

(3) An existing company shall, not later than the last day of the first financial year of
the company to commence after the commencement of this Act, in accordance with
section eight, adopt articles expressed in terms of and consistent with this Act.

(4) Where an existing company has lodged with the Registrar new articles for the
purposes of subsection (3), the Registrar shall issue to the company-

(a) a replacement certificate of incorporation; and

(b) a replacement certificate of share capital, in the case of a company with share
capital;
worded to meet the circumstances of the case.

251
(5) An existing company shall not amend its articles unless, after the amendment, the
articles are expressed in terms of and consistent with this Act.

(6) Until subsection (3) has been complied with, an existing company may satisfy the
requirements of section twenty-nine in relation to the articles of the company and the
certificate of share capital by supplying to a member a copy of its memorandum of
association and articles of association within the meaning of the former Act.

(7) If an existing company fails to comply with subsection (3), the company, and
each officer of the company in default, shall be guilty of an offence, and shall be
liable on conviction to a fine not exceeding ten monetary units for each day that the
failure continues.

392. (1) Section fifteen shall not apply to an existing company that is a public
company from the commencement of this Act until- Minimum capital for existing
companies

(a) the end of the period of six months after the commencement of this Act; or

(b) it receives a certificate under subsection (2) of section fifteen;


whichever is earlier, but the provisions of the former Act relating to minimum capital
shall continue to apply to it during that period while it remains a public company.

(2) An existing company that, immediately before the commencement of this Act,
satisfied the provisions of that Act applying to the company relating to minimum
capital, shall be deemed to satisfy section eighteen.

393. (1) The register of members of an existing company kept for the purposes of the
former Act shall be deemed to be part of the register of members for the purposes of
this Act. Registers, accounts etc., of existing companies

(2) Where both a provision of the former Act and a corresponding provision of this
Act require a fund or account to be kept or opened, such a fund or account kept or
opened by an existing company to satisfy the provision of the former Act shall be
deemed to satisfy the corresponding provision of this Act.

394. Where an existing company has, immediately before the commencement of


this Act, property which is subject to a charge of any kind, the company shall, within
three months after the commencement of this Act-
(a) enter in the register referred to in section ninety-seven the particulars referred
to in that section in relation to each such charge; and

252
(b) lodge with the Registrar a statement containing the particulars referred to in
section ninety-nine in relation to each such charge to which that section applies.
Registration of charges

395. Sections one hundred and seventy-seven to one hundred and eighty-one shall
not apply to a directors' report in respect of a financial year of an existing company
that began before the commencement of this Act. Director's reports for existing
companies

396. Section forty-four shall not apply to an existing company until the date on
which it is required to lodge its first annual return after the commencement of this
Act. Related bodies corporate of existing companies

397. (1) A corporation which holds office as a director of an existing company


immediately before the commencement of this Act shall, on that commencement,
cease to hold office and the vacancy may be filled as a casual vacancy in accordance
with this Act and the articles. Directors of existing companies

(2) Where an existing company has, immediately before the commencement of this
Act, a single director, the company shall not be required to appoint a second director
until-

(a) the director vacates his office; or

(b) three months after the end of the first financial year of the company to be
completed after the commencement of this Act.

398. For the purposes of section two hundred and forty-six, a body corporate
incorporated outside Zambia, being a body corporate which was not registered as a
foreign company under the former Act but which, immediately before the
commencement of this Act, had an established place of business in Zambia, shall be
deemed to have established that place of business on the date of commencement of
this Act.
Division 14.4-GeneralBodies corporate formed outside Zambia with existing business
in Zambia

399. Nothing in this Act shall abrogate or affect any special legislation relating to
companies carrying on the business of banking, insurance or any other business.
Companies subject to other legislation

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400. (1) The Minister may, by statutory instrument, make regulations for or with
respect to any matter that by this Act is required or permitted to be prescribed, or that
is necessary or convenient to be prescribed for carrying out or giving effect to this
Act, other than a matter required or permitted to be prescribed by the Minister or any
other person or body. Regulations

(2) Without limiting the generality of subsection (1), such regulations may be made
on the following matters;

(a) the conduct of the business of the office of the Registrar;

(b) the form and content of any application, notice, return, account, book, record,
certificate, licence or other document required for the purposes of this Act;

(c) the payment of fees and charges in respect of any matter or anything done or
supplied under this Act;

(d) the procedure to be followed in connection with any application or request to


the Registrar or any proceeding before him;

(e) the provision of copies of any documents under this Act, and the certification
of such copies;

(f) the making of inspections and searches under this Act, including the times
when they may be made;

(g) the conduct of any winding-up or other proceeding or transaction under this
Act;

(h) the service of notices and other documents under this Act;

(i) any matter necessary or convenient to be provided for in relation to the


transition between the former Act and this Act.

(3) The regulations may be made so as-

(a) to make prescription vary depending on the circumstances;

254
(b) to be of general or specifically limited application; or

(c) to permit any matter to be determined from time to time by any person or body
specified in the regulations.

401. The Chief Justice may make Rules of Court governing the practice and
procedure for the winding-up of companies in Zambia and with respect to the
procedure in any application to the court under this Act, and enabling all or any of the
powers and duties conferred and imposed on the court in respect of the winding-up of
companies to be exercised or performed by the Registrar or by the official receiver, or
by the liquidator as an officer of the court and subject to the control of the court.
Rules of court

402. The Companies Act is hereby repealed. Repeal of former Act Cap. 686 of
the former edition

FIRST SCHEDULE

(Section 2)

STANDARD ARTICLES

REGULATIONS FOR MANAGEMENT OF A COMPANY LIMITED BY SHARES

Table of Divisions
1. Interpretation
2. Share Capital and Variation of Rights
3. Calls on Shares
4. Lien
5. Forfeiture of Shares
6. Transfer of Shares
7. Transmission of Shares
8. Conversion of Shares into Stock
9. Alteration of Capital
10. General Meetings
11. Proceedings at General Meetings
12. Directors
13. Borrowing Powers
14. Proceedings of Directors
15. Managing Director

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16. Associate Directors
17. Secretary
18. Seal
19. Inspection of Records
20. Dividends and Reserves
21. Capitalisation of Profits
22. Winding up
23. Indemnity

1-Interpretation

1. (1) In these regulations, unless the context otherwise requires:


"Act" means the Companies Act, 1994;
"prescribed rate of interest" means the rate of interest prescribed in regulations made
under the Act for the purposes of the Standard Articles;
"seal" means the common seal of the company and includes any official seal of the
company;
"resolution" means an ordinary resolution of the company;
"secretary" means any person appointed to perform the duties of a secretary of the
company.
(2) Unless the context otherwise requires an expression, if used in a provision of
these regulations that deals with a matter dealt with by a particular provision of the
Act, has the same meaning as in that provisions of the Act.

2-Share Capital and Variation of Rights

2. Without prejudice to any special rights previously conferred on the holders of any
existing shares or class of shares, but subject to the Act, shares in the company may
be issued by the directors and any such share may be issued with such preferred
deferred or other special rights or such restrictions, whether with regard to dividend,
voting, return of capital or otherwise, as the director, subject to a resolution,
determine.
3. The directors shall not issue any rights or options to shares in favour of any
persons unless the issue has been authorised at a general meeting by a special
resolution.
4. Subject to the Act, any preference shares may, with the sanction of a resolution,
be issued on the terms that they are, or at the option of the company are liable to be
redeemed.
5. (1) If at any time the share capital is divided into different classes of shares, the
rights attached to any class (unless otherwise provided by the terms of issue of the
shares of that class) may, whether or not the company is being wound-up, be varied
with the consent in writing of the holders of three-quarters of the issued shares of that
class, or with the sanction of a special resolution passed at a separate meeting of the
holders of the shares of the class.

256
(2) The provisions of the Act and these regulations relating to general meetings apply
so far as they are capable of application and with the necessary modifications to every
such class meeting except that-
(a) where a class has only one member-that member shall constitute a meeting;
(b) in any other case- a quorum shall be constituted by two persons who, between
them, hold or represent by proxy one-third of the issued shares of the class; and
(c) any holder of shares of the class, present in person or by proxy, may demand a
poll.
(3) The rights conferred upon the holders of the shares of any class issued with
preferred or other rights shall, unless otherwise expressly provided by the terms of
issue of the shares of that class, be varied by the creation or issue of further shares
ranking equally with the first-mentioned shares.
6. (1) The Company may make payments by way of brokerage or commission on the
issue of shares.
(2) Such payments shall not exceed the rate of 10 per cent of the price at which the
shares are issued or an amount equal to 10 per cent of that price, as the case may be.
(3) Such payments may be made in cash, by the allotment of fully or partly paid
shares or partly by the payment of cash and partly by the allotment of fully or partly
paid shares.
7. (1) Except as required by law, the company shall not recognise a person as
holding a share upon any trust.
(2) The company shall not be bound by or compelled in any way to recognise
(whether or not it has notice of the interest or rights concerned) any equitable,
contingent, future or partial interest in any share or unit of a share or (except as
otherwise provided by these regulations or by law) any other right in respect of a
share except an absolute right of ownership in the registered holder.
8. (1) A person whose name is entered as a member in the register of members shall
be entitled without payment to receive a certificate in respect of the share under the
seal of the company in accordance with the Act but, in respect of a share or shares
held jointly by several persons, the company shall not be bound to issue more than
one certificate.
(2) Delivery of a certificate for a share to one of several joint holders shall be
sufficient delivery to all such holders.
(3) If a share certificate is defaced, lost or destroyed, it may be renewed on payment
of the fee allowed by the Act, or such lesser sum, and on such terms (if any) as to
evidence and the payment of costs to the company of investigating evidence as the
directors decide.

3-Calls on Shares

9. (1) The directors may make calls upon the members in respect of any money
unpaid on the shares of the members (whether on account of the nominal value of the
shares or by way of premium) and not by the terms of issue of those shares made
payable at fixed times, except that no call shall exceed one-quarter of the sum of
nominal values of the shares or be payable earlier than one month from the date fixed
for the payment of the last preceding call.

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(2) Each member shall, upon receiving at least fourteen days notice specifying the
time or times and place of payment, pay to the company, at the time or times and
place so specified the amount called on his shares.
(3) The directors may revoke or postpone a call.
10. A call shall be deemed to have been made at the time when the resolution of the
directors authorising the call was passed and may be required to be paid by
instalments.
11. The joint holders of a share are jointly and severally liable to pay all calls in
respect of the share.
12. If a sum called in respect of a share is not paid before or on the day appointed
for payment of the sum, the person from whom the sum is due shall pay interest on
the sum from the day appointed for payment of the sum to the time of actual payment
at such rate not exceeding the prescribed rate of interest as the directors determine,
but the directors may waive payment of that interest wholly or in part.
13. Any sum that, by the terms of issue of a share, becomes payable on allotment or
at a fixed date, whether on account of the nominal value of the share or by way of
premium, shall for the purposes of these regulations be deemed to be a call duly made
and payable on the date on which by the terms of issue the sum becomes payable, and,
in case of non-payment, all the relevant provisions of these regulations as to payment
of interest and expenses, forfeiture or otherwise apply as if the sum had become
payable by virtue of a call duly made and notified.
14. The directors may, on the issue of shares, differentiate between the holders as to
the amount of calls to be paid and the times of payment.
15. (1) The directors may accept from a member the whole or a part of the amount
unpaid on a share although no part of that amount has been called up.
(2) The directors may authorise payment by the company of interest upon the whole
or any part of an amount so accepted, until the amount becomes payable, at a rate
agreed upon between the directors and the member paying the sum subject to
subregulation (3).
(3) For the purposes of subregulation (2), the rate of interest shall not be greater than-
(a) if the company has, by resolution, fixed a rate-rate the so fixed; and
(b) in any other case the prescribed rate of interest.

4-Lien

16. (1) The company has a first and paramount lien on every share (not being a fully
paid share) for all money (whether presently payable or not) called or payable at a
fixed time in respect of that share.
(2) The company also has a first and paramount lien on all shares (other than fully
paid shares) registered in the name of a sole holder for all money presently payable by
him or his estate to the company.
(3) The directors may at any time exempt a share wholly or in part from the
provisions of this regulation.
(4) The company's lien (if any) on a share extends to all dividends payable in respect
of the share.

5-Forfeiture of Shares

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17. (1) If a member fails to pay a call or instalment of a call on the day appointed for
payment of the call or instalment, the directors may, at any time thereafter during such
time as any part of the call or instalment remains unpaid, serve a notice on him
requiring payment of so much of the call or instalment as is unpaid, together with any
interest that has accrued.
(2) The notice shall name a further day (not earlier than the expiration of fourteen
days from the date of service of the notice) on or before which the payment required
by the notice is to be made and shall state that, in the event of non-payment at or
before the time appointed, the shares in respect of which the call was made will be
liable to be forfeited.
18. (1) If the requirements of a notice served under regulation 17 are not complied
with, any share in respect of which the notice has been given may at any time
thereafter, before the payment required by the notice has been made, be forfeited by a
resolution of the directors to that effect.
(2) Such a forfeiture shall include all dividends declared in respect of the forfeited
shares and not actually paid before the forfeiture.
19. A forfeited share may be sold or otherwise disposed of on such terms and in
such manner as the directors think fit, and, at any time before a sale or disposition, the
forfeiture may be cancelled on such terms as the directors think fit.
20. A person whose shares have been forfeited shall cease to be a member in respect
of the forfeited shares, but shall remain liable to pay to the company all money that, at
the date of forfeiture, was payable by him to the company in respect of the shares
(including interest at the prescribed rate of interest from the date of forfeiture on the
money for the time being unpaid if the directors think fit to enforce payment of the
interest), but his liability shall cease if and when the company receives payment in
full of all the money (including interest) so payable in respect of the shares.
21. A statement in writing declaring that the person making the statement is a
director or a secretary of the company, and that a share in the company has been duly
forfeited on a date stated in the statement, shall be prima facie evidence of the facts
stated in the statement as against all persons claiming to be entitled to the share.
22. (1) The company may receive the consideration (if any) given for a forfeited
share on any sale or disposition of the share and may execute a transfer of the share in
favour of the person to whom the share is sold or disposed of.
(2) Upon the execution of the transfer, the company shall register the transferee as the
holder of the share.
(3) The transferee shall not be bound to see to the application of any money paid as
consideration.
(4) The title of the transferee to the share shall not be affected by any irregularity or
invalidity in connection with the forfeiture, sale or disposal of the share.
23. The consideration referred in regulation 22 shall be applied by the company in
payment of such part of the amount in respect of which the lien exists as is presently
payable, and the residue (if any) shall (subject to any like lien for sums not presently
payable that existed upon the shares before the sale) be paid to the person entitled to
the shares immediately before the transfer.
24. The provisions of these regulations as to forfeiture shall apply in the case of
non-payment of any sum that, by the terms of issue of a share, becomes payable at a
fixed time, whether on account of the nominal value of the shares or by way of

259
premium, as if that sum had been payable by virtue of a call duly made and notified.

6-Transfer of Shares

25. (1) Subject to these regulations, a member may transfer all or any of his shares
by instrument in writing in a form prescribed for the purposes of section fifty-seven of
the Act or in any other form that the directors approve.
(2) An instrument of transfer referred to in subregulation (1) shall be executed by or
on behalf of both the transferor and the transferee.
26. The instrument of transfer shall be left for registration at the registered office of
the company, together with such fee (if any) not exceeding two monetary units as the
directors require, accompanied by the the certificate of the shares to which it relates
and such other information as the directors properly require to show the right of the
transferor to make the transfer, and thereupon the company shall subject to the powers
vested in the directors by these regulations, register the transferee as a shareholder.
27. The directors may decline to register a transfer of shares, not being fully paid
shares, to a person of whom they do not approve and may also decline to register any
transfer of shares on which the company has a lien.
28. The directors may refuse to register any transfer that is not accompanied by the
appropriate share certificate, unless the company has not yet issued the share
certificate or is bound to issue a renewal or copy of the share certificate.
29. The registration of transfers may be suspended at such times and for such
periods as the directors from time to time determine, provided that the periods do not
exceed in the aggregate thirty days in any year.

7-Transmission of Shares

30. In the case of the death of a member, the survivor where the deceased was a
joint holder, and the legal personal representatives of the deceased where he was a
sole holder, shall be the only persons recognised by the company as having any title to
his interest in the shares, but this regulation does not release the estate of a deceased
joint holder from any liability in respect of a share that had been jointly held by him
with other persons.
31. (1) Subject to any written law relating to bankruptcy, a person becoming entitled
to a share in consequence of the death or bankruptcy of a member may, upon such
information being produced as is properly required by the directors, elect either to be
registered himself as holder of the share or to have some other person nominated by
him registered as the transferee of the share.
(2) If the person becoming entitled elects to be registered himself, he shall deliver or
send to the company a notice in writing signed by him stating that he so elects.
(3) If he elects to have another person registered, he shall execute a transfer of the
share to that other person.
(4) All the limitations, restrictions and provisions of these regulations relating to the
right to transfer, and the registration of the transfer of share are applicable to any such

260
notice or transfer as if the death or bankruptcy of the member had not occurred and
the notice or transfer were a transfer signed by that member.
32. (1) Where the registered holder of a share dies or becomes bankrupt, his personal
representatives or the trustee of his estate, as the case may be, shall be upon the
production of such information as is properly required by the directors, entitled to the
same dividends and other advantages, and to the same rights (whether in relation to
meetings of the company, or to voting or otherwise), as the registered holder would
have been entitled to if he had not died or become bankrupt.
(2) Where two or more persons are jointly entitled to any share in consequence of the
death of the registered holder, they shall, for the purposes of these regulations, be
deemed to be joint holders of the shares.

8-Conversion of Shares into Stock

33. The company may, by resolution, convert all or any of its paid up shares into
stock and reconvert any stock into paid up shares of any nominal value.
34. (1) Subject to subregulation (2), where shares have been converted into stock, the
provisions of these rules relating to the transfer of shares apply, so far as they are
capable of application, to the transfer of the stock or of any part of the stock.
(2) The directors may fix the minimum amount of stock transferable and restrict or
forbid the transfer of fractions of that minimum, but the minimum shall not exceed the
aggregate of the nominal values of the shares from which the stock arose.
35. (1) The holders of stock shall have, according to the amount of the stock held by
them, the same rights, privileges and advantages as regards dividends, voting at
meetings of the company and other matters as they would have if they held the shares
from which the stock arose.
(2) No privilege or advantage shall be conferred by any amount of stock that would
not, if existing in shares, have conferred that privilege or advantage.
36. The provisions of these regulations that are applicable to paid up shares shall
apply to stock, and references in those provisions to share and shareholder shall be
read as including references to stock and stockholder, respectively.

9-Alteration of Capital

37. The company may by resolution-


(a) increase its authorised share capital by the creation of new shares of such
amount as is specified in the resolution;
(b) consolidate and divide all or any of its authorised share capital into shares of
larger amount than its existing shares;
(c) subdivide all or any of its shares into shares of smaller amount than is fixed by
the certificate of share capital, but so that in the subdivision the proportion between
the amount paid and the amount (if any) unpaid on each such share of a smaller
amount is the same as it was in the case of the share from which the share of a smaller
amount is derived; and

261
(d) cancel shares that, at the date of passing of the resolution, have not been taken
or agreed to be taken by any person or have been forfeited, and reduce its authorised
share capital by the amount of the shares so cancelled.
38. (1) Subject to any resolution to the contrary, all unissued shares shall, before
issue, be offered to such persons as at the date of the offer are entitled to receive
notices from the company of general meetings in proportion, as nearly as the
circumstances allow, to the sum of the nominal values of the shares already held by
them.
(2) The offer shall be made by notice specifying the number of shares offered and
delimiting a period within which the offer, if not accepted, will be deemed to be
declined.
(3) After the expiration of that period or on being notified by the person to whom the
offer is made that he declines to accept the shares offered, the directors may issue
those shares in such manner as they think most beneficial to the company.
(4) Where, by reason of the proportion that shares proposed to be issued bear to
shares already held, some of the first-mentioned shares cannot be offered in
accordance with sub-regulation (1), the directors may issue the shares that cannot be
so offered in such manner as they think most beneficial to the company.
39. Subject to the Act, the company may, by special resolution, reduce its share
capital, any capital redemption reserve fund or any share premium account.

10-General Meetings

40. (1) A director may, whenever he thinks, fit, convene a general meeting.
(2) If no director is present within Zambia, any two members may convene a general
meeting in the same manner, or as nearly as possible, as that in which such meetings
may be convened by a director.
(3) A general meeting shall be held in Zambia unless all the members entitled to vote
at that meeting agree in writing to a meeting at a place outside Zambia.
41. (1) A notice of a general meeting shall specify the place, the day and the hour of
meeting and, except as provided by subregulation (2), shall state the general nature of
the business to be transacted at the meeting.
(2) It shall not be necessary for a notice of an annual general meeting to state that the
business to be transacted at the meeting includes the declaring of a dividend, the
consideration of annual accounts and the reports of the directors and auditors, the
election of directors in the place of those retiring or the appointment and fixing of the
remuneration of the auditors.

11-Proceedings at General Meetings

42. (1) No business shall be transacted at any general meeting unless a quorum of
members is present at the time when the meeting proceeds to business.
(2) For the purpose of determining whether a quorum is present, a person attending as
a proxy, or as representing a body corporate or association that is a member, shall be
deemed to be a member.

262
43. If a quorum is not present within half an hour after the time appointed for the
meeting-
(a) where the meeting was convened upon the requisition of members-the meeting
shall be dissolved; or
(b) in any other case-
(i) the meeting shall stand adjourned to such day, and at such time and place, as
the directors determine or, if no determination is made by the directors, to the same
day in the next week at the same time and place; and
(ii) if a quorum is not present at the adjourned meeting within half an hour after
the time appointed for the meeting-
(a) two members shall constitute a quorum; or
(b) the meeting shall be dissolved, if two members are not present.
44. (1) If the directors have elected one of their number as chairman of their
meetings, he shall preside as chairman at every general meeting.
(2) Where a general meeting is held and-
(a) a chairman has not been elected as provided by sub-regulation (1); or
(b) the chairman is not present within fifteen minutes after the time appointed for
the holding of the meeting or is unwilling to act;
the member present shall elect one of their number to be chairman of the meeting.
45. (1) The chairman may with the consent of any meeting at which a quorum is
present, and shall if so directed by the meeting, adjourn the meeting from time to time
and from place to place, but no business shall be transacted at any adjourned meeting
other than the business left unfinished at the meeting from which the adjournment
took place.
(2) When a meeting is adjourned for thirty days or more, notice of the adjourned
meeting shall be given as in the case of an original meeting.
(3) Except as provided by subregulation (2), it shall not be necessary to give any
notice of an adjournment or of the business to be transacted at an adjourned meeting.
46. (1) At any general meeting a resolution put to the vote of the meeting shall be
decided on a show of hands unless a poll is (before or on the declaration of the result
of the show of hands) demanded-
(a) by the chairman;
(b) by at least three members present in person or by proxy;
(c) by a member or members present in person or by proxy and representing not
less than one tenth of the total voting rights of all the members having the right to
vote at the meeting; or
(d) by a member or members holding shares in the company conferring a right to
vote at the meeting being shares on which an aggregate sum has been paid up equal to
not less than one-tenth of the total sum paid up on all the shares conferring that right.
(2) The demand for a poll may be withdrawn.
47. (1) If a poll is duly demanded, it shall be taken in such manner and (subject to
sub-regulation (2)) either at once or after an interval or adjournment or otherwise as
the chairman directs, and the result of the poll shall be the resolution of the meeting at
which the poll was demanded.
(2) A poll demanded on the election of a chairman or on a question of adjournment
shall be taken forthwith.
48. In the case of an equality of votes, whether on a show of hands or on a poll, the
chairman of the meeting at which the show of hands takes place or at which the poll is
demanded, in addition to his deliberative vote (if any), shall have a casting vote.

263
49. (1) Subject to any rights or restrictions for the time being attached to any class or
classes of shares at meetings of members or classes of members-
(a) each-
(i) registered member, or registered member of that class;
(ii) person on whom the ownership of a share of such a registered member has
evolved by operation of law;
(iii) proxy or attorney of a person referred to in paragraph (i) or (ii), if the person is
not present at the meeting;
shall be entitled to vote;
(b) on a show of hands, each person present who is entitled to vote shall have one
vote; and
(c) on a poll, every person present who is entitled to vote shall have votes in
accordance with section one hundred and forty-seven of the Act.
50. In the case of joint holders, the vote of the senior who tenders a vote whether in
person or by proxy or by attorney, shall be accepted to the exclusion of the votes of
the other joint holders and, for this purpose, seniority shall be determined by the order
in which the names stand in the register of members.
51. If a member is of unsound mind or is a person whose person or estate is liable to
be dealt with in any way under the law relating to mental health, his committee or
trustee or such other person as properly has the management of his estate may
exercise any rights of the member in relation to a general meeting as if the committee,
trustee or other person were the member.
52. A member shall not be entitled to vote at a general meeting unless all polls and
other sums presently payable by him in respect of shares in the company have been
paid.
53. (1) An objection may be raised to the qualification of a voter only at the meeting
or adjourned meeting at which the vote objected to is given or tendered
(2) Any such objection shall be referred to the chairman of the meeting, whose
decision shall be final.
(3) A vote not disallowed pursuant to such an objection shall be valid for all
purposes.
54. (1) An instrument appointing a proxy shall be in writing under the hand of the
appointer or of his attorney duly authorised in writing or, if the appointer is a body
corporate, either under seal or under the hand of an officer or attorney duly
authorised.
(2) An instrument appointing a proxy may specify the manner in which the proxy is
to vote in respect of a particular resolution and, where an instrument of proxy so
provides the proxy shall not be entitled to vote in the resolution except as specified in
the instrument.
(3) An instrument appointing a proxy shall be deemed to confer authority to demand
or join in demanding a poll.
(4) A proxy need not be member of the company.
(5) An instrument appointing a proxy shall be in the following form or in as similar a
form as the circumstances allow.

____________________________
(name of Company)
I/we , of
being a

264
member/members of the above named company, hereby
of
or, in his absence.
of
as my/our proxy to vote for
me/us on my/our behalf at the annual/extraordinary general meeting of the company
to be held on the .................................... day of 19........ and at any adjournment of that
meeting:
*in favour of/
against resolution No..........................................
*in favour of/
against resolution No..........................................
*in favour of/
against resolution No..........................................
Unless otherwise instructed, the proxy will vote as he thinks fit.
Signed..................................................................
Date......................................................................
*Strike out whichever is not desired.
55. An instrument appointing a proxy shall not be treated as valid unless the
instrument, and the power of attorney or other authority (if any) under which the
instrument is signed or a notarially certified copy of that power or authority, is or are
deposited, not less than forty-eight hours before the time for holding the meeting or
adjourned meeting at which the person named in the instrument proposes to vote, or,
in the case of a poll, not less than twenty-four hours before the time appointed for the
taking of the poll, at the registered office of the company or at such other place in
Zambia as is specified for that purpose in the notice convening the meeting.
56. A vote given in accordance with the terms of an instrument of proxy or of a
power of attorney shall be valid notwithstanding the previous death of unsoundness of
mind of the principal, the revocation of the instrument (or of the authority under
which the instrument was executed) or of the power, or the transfer of the share in
respect of which the instrument or power is given, unless notice in writing of the
death, unsoundness of mind, revocation or transfer has been received by the company
at the registered office before the commencement of the meeting or adjourned
meeting at which the instrument is used or the power is exercised.

12-Directors

57. The company may by ordinary resolution fix a share qualification for directors,
but unless and until a qualification is so fixed, there shall be no share qualification.
58. In addition to the circumstances in which the office of a director becomes vacant
by virtue of the Act, the office of a director shall become vacant if the director makes
any arrangement or composition with his creditors generally.

13-Borrowing powers

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59. (1) Subject to subregulation (2), the directors may exercise the powers of the
company to borrow money, to charge any property or business of the company or all,
or any of its uncalled capital and to issue debentures or give any other security for a
debt, liability or obligation of the company or of any other person.
(2) The amount of any borrowings outstanding at any time shall not exceed the
amount of issued share capital of the company at the time.

14-Proceedings of Directors

60. The provisions of subsection (7) of section two hundred and eighteen of the Act
(providing that a director who is materially interested in a contract or arrangement to
be considered at a meeting of the company or of the directors should not be counted in
the quorum or vote on the matter) may be suspended or relaxed, whether generally or
in respect of a particular transaction, by a resolution of the company.
61. (1) A director may, if the other directors approve, appoint a person as an
alternate director in accordance with the Act.
(2) An alternate director shall be entitled to notice of meetings of the directors.
(3) An alternate director may, subject to the instrument of appointment, exercise any
powers that the appointer may exercise.
62. At a meeting of directors, the quorum shall be two, or such larger number as is
determined by resolution of the company.
63. In the event of a vacancy or vacancies in the office of a director or offices of
directors, the remaining directors may act but, if the number of remaining directors is
not sufficient to constitute a quorum at a meeting of directors, they may act only for
the purpose of increasing the number of directors to a number sufficient to constitute
such a quorum or of convening a general meeting of the company.
64. (1) The directors shall elect one of their number as chairman of their meetings
and may determine the period for which he shall hold office.
(2) Where meeting of directors is held and-
(a) a chairman has not been elected as provided by subregulation (1); or
(b) the chairman is not present within ten minutes after the time appointed for the
holding of the meeting or is unwilling to act;
the directors present shall elect one of their number to be a chairman of the meeting.
65. (1) The directors may delegate any of their powers to a committee or committees
consisting of such of their number as they think fit.
(2) A committee to which any powers have been so delegated shall exercise the
powers delegated in accordance with any directions of the directors and a power so
exercised shall be deemed to have been exercised by the directors.
(3) The members of such a committee may elect one of their number as chairman of
their meetings.
(4) Where such a meeting is held and-
(a) a chairman has not been elected as provided by subregulation (3); or
(b) the chairman is not present within ten minutes after the time appointed for the
holding of the meeting or is unwilling to act;
the members present may elect one of their number to be chairman of the meeting.
(5) A committee may meet and adjourn as it thinks proper.
(6) Questions arising at a meeting of a committee shall be determined by a majority
of votes of the members present and voting.

266
(7) In the case of an equality of votes, the chairman, in addition to his deliberative
vote (if any), has a casting vote.

15-Managing Director

66. (1) The directors may, upon such terms and conditions and with such restrictions
as they think fit, appoint a managing director in accordance with the Act and confer
upon him any of the powers exercisable by them.
(2) Any powers so conferred may be concurrent with, or be to the exclusion of the
powers of the directors.
(3) The directors may at any time withdraw or vary any of the powers so conferred
on a managing director.

16-Associate Directors

67. (1) The directors may from time to time appoint any person to be an associate
director and may from time to time terminate any such appointment.
(2) The directors may from time to time determine the powers, duties and
remuneration of any person so appointed.
(3) A person so appointed shall not be required to hold any shares to qualify him for
appointment but, except by the invitation and with the consent of the directors, shall
not have any right to attend or vote at any meeting of directors.

17-Secretary

68. A secretary of the company shall hold office on such terms and conditions, as to
remuneration and otherwise, as the directors determine.

18-Seal

69. (1) The directors shall provide for the safe custody of the seal.
(2) The seal shall be used only by the authority of the directors, or of a committee of
the directors authorised by the directors to authorise the use of the seal, and every
document to which the seal is affixed shall be signed by a director and be
countersigned by another director, a secretary or another person appointed by the
directors to countersign that document or a class of documents in which that
document is included.

19-Inspection of Records

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70. Subject to the Act, the directors shall determine whether and to what extent, and
at what time and places and under what conditions, the accounting records and other
documents of the company or any of them will be open to the inspection of members
other than directors, and a member other than a director shall not have the right to
inspect any document of the company except as provided by law or authorised by the
directors or by a resolution of the company.

20-Dividends and Reserves

71. (1) The company by resolution may declare a dividend if, and only if, the
directors have recommended a dividend.
(2) A dividend shall not exceed the amount recommended by the directors.
72. The directors may authorise the payment by the company to the members of
such interim dividends as appear to the directors to be justified by the profits of the
company.
73. Interests shall not be payable by the company in respect of any dividend.
74. A dividend shall not be paid except out of profits of the company.
75. (1) The directors may, before recommending any dividend, set aside out of the
profits of the company such sums as they think proper as reserves, to be applied, at
the discretion of the directors, for any purpose for which the profits of the company
may be properly applied.
(2) Pending any such application, the reserves may, at the discretion of the directors,
be used in the business of the company or be invested in such investments as the
directors think fit.
(3) The directors may carry forward so much of the profits remaining as they
consider ought not to be distributed as dividends without transferring those profits to a
reserve.
76. (1) Subject to the rights of persons (if any) entitled to shares with special rights
as to dividend, all dividends shall be declared and paid according to the amounts paid
or credited as paid on the shares in respect of which the dividend is paid.
(2) All dividends shall be apportioned and paid proportionately to the amounts paid
or credited as paid on the shares during any portion or portions of the period in respect
of which the dividend is paid, but, if any share is issued on terms providing that it will
rank for dividend as from a particular date, that share shall rank for dividend
accordingly.
(3) An amount paid or credited as paid on a share in advance of a call shall not be
taken for the purposes of this regulation to be paid or credited as paid on the share.
77. The directors may deduct from any dividend payable to a member all sums of
money (if any) presently payable by him to the company on account of calls or
otherwise in relation to shares in the company.
78. (1) If the company declares a dividend it may by resolution direct the directors to
pay the dividend wholly or partly by the distribution of specific assets, including paid
up shares in, or debentures of, any other corporation.
(2) Where a difficulty arises in regard to such a distribution, the directors may settle
the matter as they consider expedient and in particular may issue fractional certificates
and fix the value for distribution of the specific assets or any part of those assets, and
may determine that cash payments will be made to any members on the basis of the

268
value so fixed in order to adjust the rights of all parties, and may vest any such
specific assets in trustees as the directors consider expedient.
79. (1) Any dividend, interest or other money payable in cash in respect of shares
may be paid by cheque sent through the post directed to-
(a) the registered address of the holder or, in the case of joint holders, to the
registered address of the joint holder named first in the register of members; or
(b) to such other address as the holder or joint holders in writing directs or direct.
(2) Any one of two or more joint holders may give effectual receipts for any
dividends, interests or other money payable in respect of the shares held by them as
joint holders.

21-Capitalisation of Profits

80. (1) Subject to subregulation (2), the company may resolve-


(a) to capitalise any sum, being the whole or a part of the amount for the time
being standing to the credit of any reserve account or the profit and loss account or
otherwise available for distribution to members; and
(b) to apply the sum, in any of the ways mentioned in subregulation (3), for the
benefit of members in the proportions to which those members would have been
entitled in a distribution of that sum by way of dividend.
(2) The company shall not pass a resolution under subregulation (1) unless it has
been recommended by the directors.
(3) The ways in which a sum may be applied for the benefit of members under
subregulation (1) shall be-
(a) in paying up any amounts unpaid on shares held by members;
(b) in paying up in full unissued shares or debentures to be issued to members as
fully paid; or
(c) partly under paragraph (a) and partly under paragraph (b).
(4) The directors shall do all things necessary to give effect to the resolution and, in
particular, to the extent necessary to adjust the rights of the members among
themselves, may-
(a) issue fractional certificates or make cash payments in cases where shares or
debentures become issuable in fractions; and
(b) authorise any person to make, on behalf of all the members entitled to any
further shares or debentures upon the capitalisation, an agreement with the company
providing for the issue to them, credited as fully paid up, of any such further shares or
debentures or for the paying up by the company on their behalf of the amounts or any
part of the amounts remaining unpaid on their existing shares by the application of
their respective proportions of the sum resolved to be capitalised;
and any agreement made under an authority referred to in paragraph (b) shall be
effective and binding on all the members concerned.

22-Winding up

81. (1) If the company is wound up, the liquidator may, with the sanction of a special
resolution, divide among the members in kind the whole or any part of the property of

269
the company and may for that purpose set such value as he considers fair upon any
property to be so divided and may determine how the division is to be carried out as
between the members or different classes of members.
(2) The liquidator may, with the sanction of a special resolution, vest the whole or
any part of any such properly in trustees upon such trusts for the benefit of the
contributories as the liquidator thinks fit, but so that no member is compelled to
accept any shares or other securities in respect of which there is any liability.

23-Indemnity

82. Every officer, auditor or agent of the company shall be indemnified out of the
property of the company against any liability incurred by him in his capacity as
officer, auditor or agent in defending any proceedings, whether civil or criminal, in
which judgment is given in his favour or in which he is acquitted or in connection
with any application in relation to any such proceedings in which relief is under the
Act granted to him by the court.

SECOND SCHEDULE

(Section 164)

ANNUAL ACCOUNTS

Preliminary

1. The annual accounts of a company shall give a true and fair view of the state of
affairs and the operation and results thereof of the company, together with any
material matters not specifically described by the Act or this Schedule which have
affected or are likely to affect the business of the company.
2. The view shall be given both by way of figures, and by narrative report
complementing and explaining, where necessary, figures in financial statements.
3. A company may, in addition to matter expressly permitted by this Schedule to be
given in notes, give any information required by this Schedule to be stated in a
balance sheet or profit and loss account in the form of a note or annexure thereto if
such presentation would be more effective or convenient.
4. Nothing in this Schedule shall require disclosure of items that are not material.

Interpretation

5. (1) In this Schedule, unless the context otherwise requires:

270
"distributable reserve" means, subject to subclause (2), any amount which has been
carried to reserves and which may, in accordance with generally acceptable
accounting practice and legal principles, be treated as income and distributed by way
of dividend, and does not include any amount retained by way of providing for any
known liability and "non distributable reserve" shall be construed accordingly;
"listed investment" means an investment in regard to which permission has been
granted to deal therein on any stock exchange of repute: and "unlisted investment"
shall be construed accordingly;
"material", in relation to an amount or a fact in respect of a company's accounts,
means material from the point of view of the interests of the members of the
company;
"provision" means, subject to subclause (2), any amount-
(a) written off or retained by way of providing for depreciation, renewals or
diminution in the value of assets; or
(b) retained by way of providing for any known liability, including the liability for
income or any other tax;
where the amount cannot be determined with substantial accuracy.
(2) If the directors are of the opinion that-
(a) any amount written off or retained by way of provision for depreciation,
renewal or diminution in value of assets; or
(b) any amount retained by way of provision for any known liability;
is in excess of that which in the opinion of the directors and the auditor is reasonably
necessary for the purpose, the excess shall be treated for the purposes of this Schedule
as a reserve and not as a provision, but, if the auditor disagrees with the directors on
the point, he shall report specifically on the subject in the auditor's report.

PART A-BALANCE SHEET

Share capital and shares

6. The balance sheet shall state-


(a) the authorised and issued share capital;
(b) the classes of shares into which the authorised share capital is divided and
their respective numbers and nominal values;
(c) the number of the issued shares and the amount of the issued shares capital in
respect of each class of shares;
(d) in respect of redeemable preference shares-
(i) the earliest and latest dates on which the company has power to redeem them;
(ii) whether they must be redeemed in any event or are liable to be redeemed at
the option of the company; and
(iii) the premium, if any, payable on redemption; and
(e) in respect of preference shares or other shares or liabilities convertible into
ordinary shares-
(i) the conditions of conversion; and
(ii) rights of conversion;
or a place where these conditions may be inspected.

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Reserves and provisions

7. The balance sheet shall state the respective aggregate amounts, if material, of
reserves and provisions (other than provisions for depreciation, or diminution in value
of assets) under separate headings and subheadings indicating the types of reserves
and provisions.
8. The balance sheet shall state, in respect of the financial year concerned-
(a) the source of and the amount of any transfers to reserves and aforesaid
provisions; and
(b) the amount and the application of any transfer from reserves and aforesaid
provisions.
unless it is shown in the profit and loss account or a statement or report annexed
thereto, or the amount involved is not material.

LIABILITIES

General

9. (1) The liabilities shall be summarised with such particulars as are necessary to
disclose their general nature and shall be classified under headings and subheadings
appropriate to the company's business (including a statement of current liabilities).
(2) Where the amount of any class of liability is not material, it may be included
under the same heading as some other class.

Debentures

10. The balance sheet shall state-


(a) the amount and classes of debentures issued and, if convertible into shares, the
conditions of conversion and the dates on which debentures may, or shall, be
redeemed, or the place where these conditions may be inspected;
(b) the nominal amount of any debentures held by a nominee and the amount at
which they are stated in the books of the company; and
(c) particulars of any redeemed debentures which the company has power to
reissue.

Overdrafts, loans and dividends

11. There shall be shown under separate headings-


(a) the aggregate amount of bank borrowings and overdrafts;
(b) in relation to each loan made to the company-
(i) the amount;

272
(ii) whether the date of repayment of the loan is more than one year after the
accounting date;
(iii) the dates of repayment and, if repayable in instalments, the amounts thereof;
and
(c) the aggregate amount which has been declared or is recommended for
distribution by way of dividend.
(2) The matters referred to in paragraph (b) of subclause (1) may be set out in a note.

Secured liabilities

12. Where any liability of the company is secured over any assets of the company,
otherwise than by operation of law, that fact shall be stated, specifying the liability
and the assets over which it is secured, and the amount at which such assets are shown
in the balance sheet.

Indebtedness to related bodies corporate

13. There shall be shown under separate headings-


(a) the amount of indebtedness (whether by way of loan or otherwise) to each of
the company's subsidiaries; and
(b) the amount of the company's indebtedness to every other related body
corporate, distinguishing between indebtedness in respect of debentures and
otherwise.

ASSETS

General

14. (1) The assets shall be summarised with such particulars as are necessary to
disclose their general nature and shall be classified under headings and subheadings
appropriate to the company's business.
(2) Where the amount of any class of assets is not material, it may be included under
the same heading as some other class.
15. Fixed assets, current assets and assets that are neither fixed nor current shall be
separately identified.
16. The method or methods used to arrive at the amount of the fixed assets and the
assets which are neither fixed nor current, under each heading, shall be stated.

Fixed assets

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17. (1) The method of arriving at the amount of any fixed asset (and asset neither
fixed nor current) shall be, subject to subclause (2), to take the difference between-
(a) its cost, or if it stands at the company's books at a valuation, the amount of the
valuation; and
(b) the aggregate amount provided or written off since the date of acquisition or
valuation, as the case may be, by way of depreciation or diminution of value.
(2) Subclause (1) shall not apply-
(a) to any listed and unlisted investments;
(b) to interests of the company in its subsidiaries; or
(c) to goodwill or intellectual property.
(3) In respect of the assets under each heading whose amount is arrived at in
accordance with subclause (1), there shall be stated-
(a) the aggregate of the amounts referred to in paragraph (1) (a); and
(b) the aggregate of the amounts referred to in paragraph (1) (b).
(4) As regards any land and buildings which are fixed assets, there shall also be
stated-
(a) a description of the land and buildings and the situation thereof, distinguishing
between land owned absolutely and land owned for a term of years or other period;
(b) the date of their acquisition by the company;
(c) their purchase price; and
(d) the costs of additions or improvements since the date of acquisition or
valuation, which costs shall be analysed to indicate the years in which the additions
and improvements to buildings were carried out.
(5) The information required under subclause (4) may be provided in a schedule or
register, in which case the balance sheet shall state that the schedule or register shall
be open for inspection by members or their duly authorised agents at the registered
records office of the company in accordance with section one hundred and ninety-
three of the Act. Such a schedule or register shall be part of the company's accounting
records.
(6) As regards any fixed asset referred to in subclause (4), the amount of which is
arrived at by reference to a valuation, the provisions of paragraphs (4) (b) and (c) shall
not apply, but there shall be stated the years in which the assets were severally valued
and the several values and, in the case of assets that have been valued during the
financial year concerned, the names and qualifications of the persons who valued
them and the basis of valuation used by them.
(7) Where there are more than five different items of land and buildings which have
over the years been severally valued for the purposes of subclause (6), a company
may, if it considers that compliance with that subclause would be inconvenient or
cumbersome, include the information in a schedule or register, in which case the
balance sheet shall state that the schedule or register shall be open for inspection by
members or their duly authorised agents at the registered records office of the
company in accordance with section one hundred and ninety-three of this Act.

Interests in subsidiaries

18. If the company has subsidiaries, the amount of interests of the company
consisting of shares of its subsidiaries or amounts owed to it (whether by way of loan

274
or otherwise) by its subsidiaries, distinguishing shares from indebtedness, shall be set
out in the balance sheet separately from the other assets of the company.

Indebtedness of related bodies corporate

19. The amount of the indebtedness to the company of all related bodies corporate,
shall be set out, distinguishing between indebtedness in respect of debentures and
otherwise.

Loans to employees and other persons

20. The aggregate amounts of any outstanding loans under sections eighty-three and
one hundred and sixty-eight of this Act shall be shown under separate headings. The
amount outstanding of loans to each person who is, or at any time during the currency
of the loan has been, a director shall be shown separately.

Goodwill and intellectual property

21. (1) If the amount of the goodwill and of any intellectual property, or part of that
amount, is shown as a separate item in, or is otherwise ascertainable from, the
accounting records, from any contract for the sale or purchase of any property to be
acquired by the company, or from any documents in the possession of the company,
the amount so shown or ascertainable, so far as it is not written off, shall be stated as a
separate item.
(2) Nothing in this clause shall require the amount of the goodwill and intellectual
property to be stated otherwise than as a single item.

Investments

22. (1) There shall be shown under separate headings the aggregate amounts
respectively of the company's listed and unlisted investments, other than interests in
those subsidiaries of the company covered by group accounts (if any).
(2) There shall be shown-
(a) in respect of the company's listed investments, the aggregate market value
where it differs from the amount of the investments as stated; and
(b) in respect of the company's unlisted investments and unless they are dealt with
under subclause (3), the aggregate of the directors' valuation of the investments.
(3) Where no directors' valuation is shown for the purposes of subclause (2), the
following information shall be stated in a note to be annexed to the balance sheet:
(a) the aggregate amount of the company's income for the financial year
concerned that is ascribable to the investments;

275
(b) the amounts of the company's share, before and after taxation, of the net
aggregate profits or losses of the companies of which shares are held (and the extent
by which such profits have been affected by abnormal items), being profits for the
several financial years in respect of which they have issued accounts during the
company's financial year concerned, after deducting those companies' losses for those
periods;
(c) the amount of the company's share of the aggregate of the share capital,
distributable and non-distributable reserves and undistributed profits accumulated by
the companies of which shares are held since the dates when the investments were
acquired, after deducting the losses accumulated by them since that time; and
(d) the manner in which any losses have been dealt with in the company's accounts.
23. (1) There shall be shown in the balance sheet or in an annexure thereto, unless
the aggregate amount of the interest of the company consisting of shares in other
bodies corporate and amounts owing to it (whether by way of loan or otherwise) by
other bodies corporate is not material, the names of all bodies corporate of which the
company beneficially owns shares and, in each case, either the number of shares so
held or the percentage of the amount of such shares in the aggregate amount of the
listed or unlisted investments.
(2) Where a percentage is so given there shall be a statement as to whether this is a
percentage of the aggregate book value, market value or directors' valuation, as the
case may be.
(3) For the purposes of this clause, a company shall not be regarded as beneficially
owning shares in a body corporate by reason only that it owns shares in a holding
company of the body corporate.
24. (1) Where the proceeds or any part of the profit made on the realisation of any
investments is applied to write down the amount of the remaining investments, that
fact and the amount so applied shall be stated in the balance sheet.
(2) This clause shall not apply in respect of the proceeds or profits on the realisation
of investments dealt with under paragraph 36 (1) (a).

Current Assets

25. (1) For the purposes of this clause, "stock" includes any property, whether
corporeal or incorporeal, which the company, in the ordinary course of its business,
buys, manufacturers, processes, develops for sale or sells.
(2) The amount of stock shall be shown as a separate item and, where the amount of
stock and work in progress is material in relation to either the trading results or the
financial position, it shall be classified under appropriate subheadings which shall
include, where applicable-
(a) raw materials (including component parts);
(b) finished goods;
(c) merchandise, including any form of stock not mentioned in subclause (1) and
which may itself be shown under appropriate subheadings;
(d) consumable stores (including maintenance spares);
(e) work in progress (including standing crops); and
(f) contracts in progress.
(3) Where directors are of the opinion that classification into some or all of the
categories referred to in subclause (2) would result in a failure to present a fair view,

276
the classification should be reduced to those categories where a fair view would be
obtained, and the reasons given for not indicating all categories.
(4) In regard to the method of determining the value of stock, there shall be stated-
(a) whether it is consistent with the method of the previous financial year;
(b) whether it is the lower of cost or net realisable or replacement value or some
other expressly specified value or values;
(c) the accounting basis which has been used in determining the value of stock to
have been used or, if the directors are of the opinion that a statement of all the bases
used would be the little value to the shareholders, an intelligible summary of the bases
used;
(d) whether the value includes both direct costs and overheads; and
(e) in the case of spares held for maintenance purposes, the method employed in
providing for obsolescence.
(5) There shall be stated any additional information required fairly to present the
value of the stock including, in the case of contracts in progress, whether profits or
losses have been taken into account and, if so, to what extent.
(6) If the directors are of the opinion that any of the current assets do not have a value
on realisation in the ordinary course of the company's business at least equal to the
amount at which they are stated, the fact that the directors are of that opinion and the
extent of the estimated shortfall shall be stated.

Preliminary expenses, commission and discounts

26. There shall be stated under separate subheadings so far as they are not written
off-
(a) the preliminary expenses incurred in incorporation;
(b) any expenses incurred in connection with any issue of shares or debentures;
(c) any sums paid by way of commission in respect of any shares or debentures;
and
(d) any sums allowed by way of discount in respect of any debentures.

Corresponding amounts of preceding year

27. Except in the case of the first balance sheet, the corresponding amounts at the
end of the immediately preceding financial year in respect of all items shown in the
balance sheet shall be stated.

Notes to balance sheet


28. The matters stated in clause 29 to 35 may be stated by way of a note or in a
statement or report annexed to the balance sheet.

Shares or debentures held by subsidiary or nominee

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29. There shall be stated the number, description and amounts of the shares and
debentures of the company held by its subsidiaries or their nominees, but excluding
any such shares or debentures which a subsidiary holds in a representative capacity or
as a trustee under a trust in which neither the company nor any subsidiary is
beneficially interested otherwise than by way of security for the purposes of a
transaction entered into by it in the ordinary course of business which includes the
lending of money.

Options and preferential rights to shares

30. The number, description and amount of any shares of the company which any
person has an option to subscribe for or in respect of which any person has any
preferential right of subscription, shall be stated together with the following
particulars-
(a) the period during which the option or right is exercisable; and
(b) the price, or the formula for fixing the price, to be paid for shares subscribed
for under it.

Directors' authority to issue shares

31. The amount of any share capital or the number of shares which the directors are
authorised to issue by resolution of the shareholders, the terms of such authority and
the period for which it was granted, shall be stated.

Arrear dividends

32. The amount of any arrears of fixed cumulative dividends on each class of the
company's shares and the period for which the dividends are in arrears, shall be stated.

Contingent liabilities

33. (1) Particulars of any encumbrance on the assets of the company to secure the
liabilities of any other person, including, where practicable, the amount secured, shall
be stated.
(2) The general nature of any other contingent liabilities not provided for and, where
practicable, the aggregate or estimated amount of those liabilities if it is material, shall
be stated.

Contracts for capital expenditure

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34. Where practicable, the aggregate amount or estimated amount, if it is material,
of contracts for capital expenditure, not otherwise provided for and the aggregate
amount or estimated amount, if it is material, of capital expenditure authorised by the
directors which has not been contracted for, shall be stated. There shall also be stated
the source from which funds to meet such expenditure will be provided.

Basis for currency conversion

35. The basis on which foreign currencies have been converted into Zambian
currency, where the amount of the assets or liabilities affected is material, shall be
stated.

PART B-PROFIT AND LOSS ACCOUNT

36. (1) The profit and loss account shall show separately-
(a) profits or losses on share transactions, showing the application of profits or
part thereof to write down the amount of the remaining investment, if not already
dealt with under clause 24;
(b) the amount of income from investment, distinguishing between listed and
unlisted investment;
(c) the aggregate amount of income from related bodies corporate, stating whether
dividends, interest, fees or other specified income;
(d) the aggregate amount of the dividends paid and proposed, and if such
dividends are provided partly or wholly from capital profits, a statement to that effect;
(e) the aggregate amount of profits and losses on the realisation, scrapping or
other disposal of non-trading, fixed and other non-current assets;
(f) the amount charged to revenue by way of provisions (other than provisions for
diminution in values of current assets, unless material to the understanding of the
accounts) specifying the nature of each provision or the amount withdrawn from such
provisions and not applied for the purpose thereof;
(g) the amount provided for taxation (specifying, where material, the origin and
different classes of taxes) in respect of the financial year concerned and the amount, if
any, so provided in respect of any other financial year;
(h) the amounts respectively set above for redemption of shares and of loans;
(i) the amount set aside or proposed to be set aside to, or withdrawn from,
reserves;
(j) the amount of any credit or charge arising in consequence of an event in a
preceding financial year;
(k) the amount of interest (or other consideration) on any loans made to the
company, including debentures and bank overdrafts;
(l) the amount paid by way of leasing charges for the use of any asset, other than
immovable property, which would have been subject to a charge for depreciation if
owned by the company;

279
(m) the respective amounts paid as remuneration for managerial, technical,
administrative or secretarial services, however described, other than to the bona fide
employees of the company;
(n) the amount of the remuneration of the auditor, distinguishing between the fee
for the audit, the fee for other services and his expenses; and
(o) the total amount of any gifts or donations made by the company.
(2) Nothing in this clause shall require the separate listing of any item that is not
material.
37. (1) There shall be shown separately the information required by section one
hundred and sixty-seven of this Act in relation to directors' emoluments.
(2) The amounts to be shown for any financial year shall be the sums receivable in
respect of that year whenever paid or, in the case of sums not receivable in respect of
a period, the sums paid during that year, except that any sums paid in advance of the
financial year to which they are expressed to relate shall be shown in the accounts for
the financial year in which they are paid.
(3) Where it is necessary so to do for the purpose of making any distinction required
by this clause, the directors may apportion any payments in such manner as they think
appropriate between the matter in respect of which they have been paid or are
receivable.
38. (1) There shall be shown-
(a) the aggregate amount of the turnover for the financial year concerned; or
(b) the increase or decrease of the aggregate turnover for the financial year
concerned expressed as a percentage of the aggregate turnover for the preceding
financial year.
(2) If the nature of the business is such that there could be any doubt as to what is
meant by turnover, there shall be indicated (by way of note) the basis upon which
turnover has been determined.
(3) The method employed to determine the amount of turnover shall be stated and, if
a method different to that employed in the preceding financial year is used, that fact
shall be stated.
39. Except in the case of the first profit and loss account, the corresponding amount
for the immediately preceding financial year for all items shown in the profit and loss
account shall be stated.

Notes to the profit and loss account


40. The matters referred to in clauses 41 and 42 shall be stated by way of a note, or
in a statement or report annexed to the balance sheet.
41. (1) If provision for depreciation, replacement or the diminution in value of fixed
assets is made by some method other than a depreciation charge, or provision for
renewals or diminution in value or is not provided for, the method by which it is
provided for, or the fact that it is not provided for, shall be stated.
(2) If any of the items are shown net of income or any other tax, that fact shall be
stated.
42. There shall be stated any material respects in which any items included in the
profit and loss account (stating in each case the amount involved) are affected by-
(a) transactions of a sort not usually undertaken by the company or otherwise by
circumstances of an exceptional or non recurrent nature;
(b) any change in the basis of accounting; or

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(c) any change in the methods for the determination of the amount of any assets.

PART C-STATEMENT OF SOURCE AND APPLICATION OF FUNDS

43. There shall be annexed to the balance sheet or separately contained therein a
statement showing the source and the application of any funds received and applied
during the financial year specifying-
(a) funds derived from-
(i) net income (before deduction of taxes, dividends paid and proposed, and
internal provisions and retentions);
(ii) the disposal of specified fixed and other non-current assets;
(iii) the proceeds of loans raised and debentures issued;
(iv) the proceeds of shares issued;
(v) repayments received on loans and advances made; and
(vi) any reduction in net working capital (being current assets less current
liabilities); and
(b) funds applied to-
(i) meeting any loss;
(ii) the acquisition of specified fixed and other non-current assets;
(iii) the redemption of any loans and debentures;
(iv) loans and advances made and the purposes for which they were made;
(v) liability for taxes;
(vi) dividends paid and proposed; and
(vii) any increase in net working capital (being current assets less current
liabilities).

PART D-GROUP ACCOUNTS

Preliminary

44. Clauses 45 to 48 shall apply to all forms of group accounts and shall also apply
in respect of the requirements of clauses 54 to 57 in relation to subsidiaries not dealt
with in group accounts.
45. Any material profit or loss arising from transactions within the group of
companies (other than bona fide arm's-length transactions), insofar as those profits or
losses were realised or incurred in respect of a transaction with a person outside the
group, shall be excluded in determining the total group profit or loss, or the interest of
the holding company in the profit or loss of any subsidiary.
46. Inter-group balances, were shown, shall be excluded in determining the total
assets and liabilities of the group.
47. (1) Dividends declared by a subsidiary out of profits accrued prior to the date on
which it became a subsidiary of the holding company, being pre-acquisition profits so
far as they are material and reasonably ascertainable, shall not, in the hands of that

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holding company, form part of its profits available for distribution by way of
dividends unless-
(a) the holding company is itself the subsidiary of another body corporate
incorporated or registered in Zambia;
(b) the shares in the subsidiary were acquired by the holding company from the
other body corporate;
(c) the subsidiary was, before the acquisition, a subsidiary of the other body
corporate; and
(d) the profits out of which the dividend is declared accured after the subsidiary
had become a subsidiary of the other body corporate.
(2) For the purposes of establishing whether any profit accrued prior to the
acquisition of the shares of the subsidiary, the profit or loss for any financial year of
the subsidiary may, if it is not practicable to apportion it with reference to the facts, be
treated as if it had accrued from day to day during that financial year and be
apportioned accordingly.
48. There shall be stated any qualifications contained in the reports of the auditors
of the subsidiaries on their financial statements and any note or saving contained in
those financial statements to call attention to the matter which, apart from the note or
saving, would properly have been referred to in such a qualification, insofar as the
matter which is the subject of the qualification is not covered by the holding
company's own accounts of the group accounts and is material from the point of view
of its members.

Group accounts in the form of consolidated accounts

49. Subject to clauses 50 to 52, the consolidated balance sheet and the consolidated
profit and loss account shall combine the information contained in the separate
balance sheets and profit and loss accounts of the holding company and of the
subsidiaries dealt with in the consolidated accounts, with such adjustment as may be
appropriate and necessary to give a true and fair view of the state of affairs of the
group of companies as at the end of the financial year and the results of the operations
of the group of companies during the financial year.
50. Subject to clauses 51 and 52 the consolidated accounts shall, in giving the
information, comply as far as is practicable with the requirements of this Act and this
Schedule as if they were the accounts of a single company.
51. Section one hundred and sixty-seven of this Act shall not require the disclosure
in consolidated accounts of the remuneration of directors of the subsidiaries of the
holding company.
52. In relation to any subsidiaries of the holding company not dealt with in the
consolidated accounts-
(a) clause 13 (concerning indebtedness to bodies corporate in the group), clause
18 (concerning interests in subsidiaries) and clause 29 (concerning shares or
debentures held by subsidiaries), shall apply for the purposes of such consolidated
accounts as if those accounts were the accounts of a single company of which they
were the subsidiaries; and
(b) there shall be annexed the information required by clauses 54 to 57 in respect
of subsidiaries not dealt with in group accounts but as if reference therein to a holding
company's accounts were a reference to the consolidated accounts.

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Group accounts in a form other than consolidated accounts

53. (1) Where group accounts are prepared in a form other than consolidated
accounts, they shall, as far as practicable, present the same or equivalent information
concerning the state of affairs and the results of the operations of the group as would
be contained in the consolidated accounts, including the aggregate amounts of-
(a) the excess (if any) of the cost of the shares of the subsidiaries in the group
over the net asset value of the shares at the date of acquisition and the non-
distributable reserve (if any) arising in consequence of the excess of the net value of
the assets at the date of acquisition over the cost of shares of the subsidiaries;
(b) the holding company's shares of the non-distributable reserves of subsidiaries;
(c) the interest of outside shareholders, being shareholders other than the holding
company and its subsidiaries or their nominees, in subsidiaries of the group; and
(d) the interest of the holding company, insofar as it has been disclosed in the
group accounts in-
(i) the accumulated revenue profits or losses and accumulated distributable
reserves of subsidiaries for the period after the dates on which they respectively
became subsidiaries to the end of the preceding financial year; and
(ii) the revenue profits or losses of subsidiaries for the financial year.
(2) For the purposes of paragraph (1) (a), non-distributable reserves arising from the
acquisition of shares in a subsidiary may be set off against of shares of other
subsidiaries over the net asset

Requirements in respect of subsidiaries not dealt with in group accounts

54. Where a subsidiary is not dealt with in group accounts under subsection (3) of
section one hundred and sixty-five of this Act and the interest in the subsidiary is
material in relation to the financial position or the results of the holding company,
there shall be included in the accounts of the holding company the information
required to be stated under clauses 55 to 57 or, if any such information is not
obtainable, the reasons why it is not obtainable.
55. The reasons shall be stated why the subsidiaries or any of them are not dealt
with in the group accounts.
56. (1) In regard to the shareholders' equity, liabilities and assets of the subsidiaries
not dealt with in group accounts, there shall be stated the aggregate amounts of-
(a) the cost of the holding company's investment in shares of the subsidiaries;
(b) the excess (if any) of the cost of the shares of the subsidiaries over the net
asset value of the shares at the date of acquisition, and the non-distributable reserve (if
any) arising in consequence of the excess of the net value of the assets at the date of
acquisition over the cost of the shares of subsidiaries;
(c) the holding company's shares of the non-distributable reserves of subsidiaries;
(d) the interest of outside shareholders, being shareholders other than the holding
company and its subsidiaries or their nominees, in the subsidiaries;
(e) long-term loans owing to the subsidiaries by the bodies corporate in the group;
(f) fixed assets;

283
(g) net current assets;
(h) goodwill (if any) shown in the books of the subsidiaries insofar as it has not
already been absorbed in the calculation referred to in paragraph (b); and
(i) separately stated assets not included in paragraphs (f), (g) and (h).
(2) For the purposes of paragraph (1) (b), non-distributable reserves arising on the
acquisition of shares in a subsidiary may be set off against any excess of the cost of
shares of other subsidiaries over the net value of such shares.
57. In regard to revenue profits or losses and distributable reserves not dealt with in
group accounts, there shall be stated the aggregate interest of the holding company in-
(a) the accumulated revenue profits or losses and accumulated distributable
reserves of the subsidiaries for the period from the dates on which they respectively
became subsidiaries to the end of the preceding financial year;
(b) the revenue profits or losses and distributable reserves attributable to any
shares of the subsidiaries disposed of during the financial year;
(c) the revenue profits or losses of the subsidiaries for the financial year;
(d) dividends paid or declared by the subsidiaries during the financial year; and
(e) the revenue profits or losses and distributable reserves at the end of the
financial year not dealt within the accounts of the holding company.

THIRD SCHEDULE

(Section 185)

ANNUAL RETURN

In this Schedule, a reference to the date of a return is a reference to the date as at


which the return states the position of the company in accordance with section one
hundred and eighty-four of this Act.
An annual return shall contain the information specified below.
1. The name of the company.
2. The nature of the business of the company or, if the company is not carrying on a
business, the nature of its objects.
3. The address of the registered office and the registered postal address of the
company.
4. The address of the registered records office of the company.
5. The address of the company's principal place of business in Zambia.
6. All such particulars with respect of the persons who at the date of the return are
the directors and secretary of the company as are required by section two hundred and
twenty-four of this Act to be contained in the register of directors and secretary.
7. Particulars of the total amount of the indebtedness of the company in respect of
all charges to which section ninety-nine of this Act applies.
8. The names, countries of incorporation, and nature of the business of-
(a) all bodies corporate related to the company; and
(b) all bodies corporate in which the company is beneficially entitled to equity
shares conferring the right to exercise more than 25 per cent of the votes exercisable
at a general meeting of the body corporate.

284
9. If the company has share capital-
(a) the amount of the share capital of the share capital of the company and the
number of shares into which it is divided;
(b) the number of its authorised shares of each class;
(c) the number of its issued shares of each class;
(d) the total amount of any unpaid instalments or calls which are due and payable
and the number and class of shares concerned;
(e) the total amount of any unpaid liability, on shares of each class, which is not
yet due for payment;
(f) the total number of shares forfeited; and
(g) the total amount of share capital for which share warrants are outstanding at
the date of the return and of share warrants issued and surrendered respectively since
the date of the last return, and the number of shares comprised in each warrant.
10. A list-
(a) containing the names and addresses of all persons who are registered members
of the company and of persons who have ceased to be members since the date of the
last return or, in the case of the first return, since the incorporation of the company;
(b) stating the number of shares held by each registered member, at the date of the
return, specifying shares transferred since the date of the last return (or, in the case of
the first return, since the incorporation of the company) by persons who are still
members and have ceased to be members respectively and the dates of registration of
the transfers; and
(c) having annexed thereto an index sufficient to enable the name of any person
therein to be easily found, if the names are not arranged in alphabetical order.

FOURTH SCHEDULE

(Sections 124, 126, 127, 131 and 135)

CONTENTS OF PROSPECTUS

1. In this Schedule, unless the context otherwise requires-


"company" includes a company proposed to be formed;
"proposed subsidiary", in relation to a company, means a body corporate in which the
company proposes to acquire securities and which, by reason of the acquisition or
anything to be done in consequence thereof or in connection therewith, will become a
subsidiary of the company.
2. The prospectus shall state at its head:
"A copy of this prospectus has been delivered to the Registrar of Companies for
registration. The Registrar has not checked and will not check the accuracy of the
statements made and accepts no responsibility therefor or for the financial soundness
of the company or the value of the securities concerned."
3. The reports set out in a prospectus for purposes of Part B shall be made by a
person or persons duly qualified under Part VIII of this Act to be appointed as
auditors of the company.

285
4. Where reports prepared for the purposes of Part B would not otherwise give a
true and fair view of the matters required to be covered by the reports, the persons
charged with the preparation of the reports shall add such information and
explanations as well give a true and fair view of those matters.
5. If any of the information required for the purposes of reports for the purposes of
Part B is for reasons beyond the power of the company not available, that fact and the
reasons therefor shall be stated.

PART A-MATTERS TO BE SPECIFIED IN PROSPECTUS

6. The full name of the company.


7. (1) A full description of the securities which the public are being invited to
acquire, and of the terms on which they are being invited to acquire them, including-
(a) the date prior to the expiration of which applications will not be accepted or
treated as binding;
(b) the total amount payable for each share or debenture and the amount thereof
payable on application and allotment, if securities are being offered for subscription
or purchase; and
(c) the policy which will be adopted if applications exceed the shares or
debentures on offer.
(2) Where the securities are unsecured debentures they shall be described as
"unsecured".
8. Whether or not an application has been or is being made to a stock exchange for
permission to deal in the securities concerned, and-
(a) if so, the name of the stock exchange; or
(b) if not, a statement that there will not be a market for the securities and that any
holder wishing to dispose of his securities may be unable to do so.
9. The full name (including any former or other names), residential and postal
addresses and business occupation of each person making the invitation, other than
the company.
10. The situation of the company's registered office, and its postal address.
11. The full name (including any former or other names), residential and postal
addresses and business occupation of every director or proposed director and of the
secretary or proposed secretary of the company, and particulars of all other
directorships held by each director or proposed director.
12. Other than for a proposed company, the names, addresses and professional
qualifications of the company's auditors.
13. The name and address of any underwriter of the invitation.
14. The names and addresses of the company's bankers, stockbrokers and legal
practitioners.
15. If the invitation relates to debentures, the names and addresses of any trustees
for debentureholders, the date of the resolutions creating the debentures, and short
particulars of the security therefor or, if the debentures are unsecured, a statement to
that effect.
16. The nature of the business or businesses of the company or, if the company has
no business, its principal objects.
17. The restrictions, if any, upon the business of the company contained in the
articles.

286
18. A brief summary of the history of the company.
19. The names, countries of incorporation, and nature of the businesses of all
subsidiaries of the company and of all bodies corporate in which the company is
beneficially entitled to equity shares conferring the right to exercise more than 25 per
cent of the votes exercisable at a general meeting of the body corporate.
20. If the company is a subsidiary, the name, country of incorporation and nature of
the business of each holding company and, in the case of a holding company that is a
member of the company, the number of shares in each class of the company held by
the holding company.
21. The name, country of incorporation, and nature of the business of any proposed
subsidiary of the company.
22. Where the company is proposing to acquire a business, a full description, of the
nature of that business.
23. The situation, area and tenure (including, where appropriate, the rent and
unexpired term of any lease or concession) of the main places of business of the
company and its subsidiaries and proposed subsidiaries.
24. A statement as to-
(a) the financial and trading prospects of the company together with any material
information which may be relevant thereto; and
(b) any material changes in the financial or trading position of the company which
may have occurred since the end of the last completed financial year of the company.
25. A statement by the directors of the company that in their opinion the company's
working capital is sufficient or, if not, how it is proposed to provide the additional
working capital thought by the directors to be necessary.
26. The amount or estimated amount of the expenses incidental and preliminary to
the invitation (including the expenses of any application to a stock exchange for
permission to deal in the securities concerned in the invitation) and by whom such
expenses are payable.
27. Particulars of any commissions payable, or paid within the two preceding years,
as commission for acquiring any shares or debentures of the company or of any of its
subsidiaries and proposed subsidiaries.
28. Where the company is inviting the public to subscribe for any of its shares or
debentures-
(a) a statement or an estimate of the net proceeds of the issue and a statement as to
how such proceeds were or are to be applied;
(b) the minimum amount which in the opinion of the company's directors must be
raised by the issue in order to provide the sums, or, if part thereof is to be defrayed in
any other manner, the balance of the sums, required to be provided in respect of each
of the following matters:
(i) the purchase price of any property purchased or to be purchased which is to be
defrayed in whole or in part out of the proceeds of the issue;
(ii) any expenses incidental and preliminary to the invitation and issue (including
the expenses of any application to a stock exchange for permission to deal in the
shares or debentures) payable by the company, and any commission be payable to any
person in consideration of his agreeing to subscribe for, or of his procuring or
agreeing to procure subscriptions for any share or debentures of the company;
(iii) the repayment of any moneys borrowed by the company in respect of any of
the foregoing matters;
(iv) working capital; and

287
(c) the amounts to be provided in respect of the matters stated in paragraph (b)
otherwise than out of the proceeds of the issue, and the sources out of which these
amounts are to be provided.
29. Where a person other than the company is inviting the public to purchase any
shares or debentures of the company (whether or not the invitation is also made by the
company)-
(a) if the shares or debentures were issued by the company for cash-a statement of
the price per share or debenture at which those shares or debentures were issued, and
of the total net proceeds of the issue;
(b) if the shares or debentures were issued by the company for a consideration
other than cash-a statement of the nature of the consideration and an estimate by the
directors of its fair value and of the price per share or debenture which it represents;
(c) if the person making the invitation did not acquire the shares or debentures
directly from the company on their issue-
(i) if he purchased them for cash-a statement of the price per share or debenture at
which he purchased them (or, if purchased over a period of time at different prices,
the lowest and highest prices) and the total purchase price paid by him; or
(ii) if he acquired them for a consideration other than cash-a statement of the
nature of the consideration and an estimate by him of its fair value and of the price per
share or debenture which it represents.
30. The authorised capital of the company and the number and description of the
company's authorised shares of each class and issued shares of each class.
31. The amount paid on the issued shares of each class-
(a) in cash; and
(b) otherwise than in cash.
32. The amount, if any, remaining payable on the shares of each class previously
issued, distinguishing between the amount presently due for payment and the amount
not yet due for payment.
33. The number of unissued shares of each class agreed to be issued and the
amounts payable therefor, distinguishing between amounts payable in cash and
amounts payable otherwise than in cash.
34. If the company's shares are divided into different classes, the rights in respect of
voting, repayment, and dividends and other special rights attached to the several
classes and a statement as to the consents necessary for the variation of such rights.
35. The amounts of the dividends (if any) per share paid by the company in respect
of each class of shares in each of the ten completed financial years of the company
immediately preceding the date of publication of the prospectus, or in respect of each
of the financial years since the incorporation of the company if this occurred less than
ten years before the publication, and particulars of any cases in which no dividends
have been paid in respect of any class of shares in any of those years.
36. If any of the company's shares are redeemable preference shares, the earliest
date on which the company has power to redeem them.
37. The name of each person who holds more than 25 per cent of the company's
shares or any class of shares and the number and description of the shares held or
owned.
38. So far as is known to the company, the name of each person who is the
beneficial owner of more than 25 per cent of the company's shares or any class of
shares and the number and description of the shares held or owned.

288
39. The amount of the outstanding debentures issued or agreed to be issued by the
company and any of its subsidiaries and proposed subsidiaries or, if none, a statement
to that effect.
40. Particulars of any bank overdrafts of the company and any of its subsidiaries and
proposed subsidiaries as at the latest practical date (which shall be stated) or, if there
are no bank overdrafts, a statement to that effect.
41. The nature of the consideration for the issue of any of the company's shares or
debentures issued or proposed to be issued otherwise than for cash.
42. Particulars of any share or debentures of any of the company's subsidiaries and
proposed subsidiaries which have, within two years immediately proceeding the
publication of the prospectus, been issued, or which are proposed to be issued
otherwise than for cash and the nature of the consideration.
43. Particulars of any shares or debentures of the company or any of its subsidiaries
and proposed subsidiaries which have, within two years immediately proceeding the
publication of the prospectus, been issued, or which are proposed to be issued, for
cash, the price and terms upon which the same have been or are to be issued and (if
not already fully paid) the dates when any instalments are payable.
44. Particulars of any shares or debentures of the company or any of its subsidiaries
and proposed subsidiaries which are under option, or agreed conditionally or
unconditionally to be put under option, with the price to be paid for the securities
option, the duration of the option, the consideration for which the option was granted,
and-
(a) where the option is to all the shareholders or debenture holders or any class
thereof or to employees generally-a statement of that fact; or
(b) in any other case-the name and address of each grantee.
45. (1) Subject to subclause (2), where any property has been acquired or is proposed
to be acquired by the company or any of its subsidiaries and proposed subsidiaries-
(a) the names and addresses of the vendors;
(b) the amount paid or to be paid in cash, shares, debentures or otherwise to the
vendor, and, where there is more than one separate vendor or the company or
subsidiary or proposed subsidiary is a sub-purchaser, the amount so paid or to be paid
to cash vendor, distinguishing between the amounts paid or to be paid-
(i) in cash;
(ii) in shares;
(iii) in debentures;
(c) the nature of, and value attributed to, any other consideration;
(d) the amount (if any) paid or payable for goodwill;
(e) full particulars of the nature and extent of the interest, direct or indirect, of
every director or proposed director of the company or any of its subsidiaries and
proposed subsidiaries in the property; and
(f) short particulars of the property.
(2) Subclause (1) shall not apply where the contract for the acquisition of the property
was-
(a) completed, and any purchase money fully paid, more than two years before the
date of publication of the prospectus; or
(b) entered into in the ordinary course of business and there is no connection
between the contract and the invitation.
46. Unless more than two years have elapsed since the registration of the company-

289
(a) the amount or estimated amount of the expenses incidental or preliminary to
the promotion and registration of the company and by whom those expenses have
been paid or are payable;
(b) the names of the promoters of the company;
(c) the amount of any cash or securities paid, or benefit given or proposed to be
given, to any promoter and the consideration for such payment or benefit; and
(d) full particulars of the nature and extent of the interest of every director and
proposed director in the promotion of the company.
47. Where the prospectus includes a statement purporting to be made by an expert, a
statement that the expert has given and has not withdrawn his written consent to the
publication of the prospectus with the statement included in the form and in the
context in which it is included.
48. The dates of, parties to, and general nature of, every material contract (other
than contracts entered into in the ordinary course of business or completed more than
two years before the date of publication of the prospectus).
49. (1) A reasonable time (not being less than twenty-eight days) during which, and
place at which, subject to this clause, the following documents (or certified copies
thereof), may be inspected-
(a) the company's certificate of incorporation, certificate of share capital and
articles;
(b) where the invitation relates to debentures-the debenture trust deed;
(c) each contract disclosed pursuant to clause 48 of this Schedule or, in the case of
a contract not reduced to writing, a memorandum giving full particulars thereof;
(d) the annual accounts (including any group accounts), auditor's report and
directors' report for each of the last five financial years, or, where part of that period
fell before the commencement of this Act, all similar accounts and reports produced
by the company in respect of that part of the period;
(e) the annual accounts (including any group accounts), auditors' report and
directors' report in respect of each subsidiary and proposed subsidiary, for each of the
last five financial years, or where-
(i) part of that period fell before the commencement of this Act; or
(ii) the subsidiary or proposed subsidiary is not a company to which this Act
applies;
all similar accounts and reports produced by the subsidiary or proposed
subsidiary in respect of that period or part of the period;
(f) all other reports, letters, balance sheets, valuations and statements by an expert
any part of which is extracted or referred to in the prospectus; and
(g) a written statement, signed by the accountants making the report required
under Part B of this Schedule, setting out the adjustments made by them in arriving at
the figures shown in their report and giving the reasons therefor.
(2) If any part of any of the above-mentioned documents is in a language other than
English, a certified translation into English of that part of the document shall be made
available for inspection instead of the original or a certified copy.
(3) Paragraph (1) (e) shall not require to be made available for inspection the profit
and loss accounts and balance sheets of a subsidiary or business in respect of any
financial years in which the profits or losses and assets and liabilities of the subsidiary
or business are dealt with in the accounts or group accounts of the company.
50. The names and addresses of the persons making the reports required under Part
B of this Schedule.

290
PART B-REPORTS TO BE SET OUT IN PROSPECTUS

51. A report with respect to-


(a) the profits or losses of the company in respect of-
(i) each of the ten completed financial years immediately proceeding the
publication of the prospectus, (or since the incorporation of the company if less than
ten years); and
(ii) the period from the end of the last financial year to the latest practicable date
being a date less than three months before the date of the publication of the
prospectus, if the last financial year of the company ended three months or more
before the date of the publication of the prospectus; or
(b) if the company has subsidiaries-a report as required by paragraph (a) with
respect to the profits or losses of the company and of its subsidiaries, so far as such
profits or losses can properly be regarded as attributable to the interests of the
company.
52. A report with respect to-
(a) the assets and liabilities of the company as at the end of its last financial year
or, if the financial year ended three months or more before the date of publication of
the prospectus, as at the latest practicable date, being a date less than three months
before the date of publication of the prospectus; or
(b) if the company has subsidiaries-a report of the kind required by paragraph (a)
with respect to the assets and liabilities of the company, and of its subsidiaries so far
as such assets can properly be regarded as attributable to the interests of the company.
53. A report with respect to the aggregate emoluments paid by the company to the
directors of the company or any related body corporate during the last period for
which the accounts have been made up and the amount, if any, by which such
emoluments would differ from the amounts payable under any arrangement in force at
the date of publication of the prospectus.
54. (1) A report with respect to profits or losses of-
(a) each proposed subsidiary of the company;
(b) each business acquired by the company within ten years before the date of
publication of the prospectus; and
(c) each body corporate that became a subsidiary of the company within ten years
before the date of publication of the prospectus;
in respect of-
(i) each of the ten financial years immediately preceding the publication of the
prospectus, (or each financial year since the commencement of that business or the
incorporation of that subsidiary or proposed subsidiary, if less than ten years); and
(ii) if the last financial year of that business, subsidiary or proposed subsidiary
ended three months or more before the date of the publication of the prospectus-the
period from the end of the last financial year to the latest practicable date, being a date
less than three months before the date of the publication of the prospectus.
(2) The report shall deal with such of the profits or losses of a subsidiary or proposed
subsidiary as can properly be regarded as attributable to the interests of the company.
(3) Where the report relates to any financial year before the subsidiary became a
subsidiary of the company or relates to a proposed subsidiary, only such of its profits
or losses shall be regarded as attributable to the interests of the company as would
have been properly so attributable if the company had held the securities in the

291
subsidiary or proposed subsidiary which it holds at the date of publication of the
prospectus or proposes to acquire.
(4) Where any such subsidiary or proposed subsidiary itself has subsidiaries, the
report shall extend to the profits or losses of its subsidiaries so far as the same can
properly be regarded as attributable to the interests of the company.
(5) The report need not extend to any period in respect of which the profits or losses
of that business or the appropriate part of the profits or losses of that subsidiary are
dealt with in the report required under clause 51.
55. (1) A report with respect to the assets and liabilities of each proposed subsidiary
of the company and each business or subsidiary acquired since the latest date up to
which the accounts of the company have been made, as at the end of the last financial
year of the business, subsidiary or proposed subsidiary, or, if the financial year ended
three months or more before the date of publication of the prospectus, as at the latest
practicable date not being more than three months before the date of publication of the
prospectus.
(2) The report shall deal with the assets and liabilities of the business, subsidiary or
proposed subsidiary so far as such assets and liabilities can properly be regarded as
attributable to the interests of the company.
(3) In relation to a proposed subsidiary, only such assets and liabilities shall be
regarded as attributable to the interests of the company as would have been properly
so attributable if the company had held the securities in the proposed subsidiary which
it proposes to acquire.
(4) Where any such subsidiary or proposed subsidiary itself has subsidiaries, the
report shall extend to the assets and liabilities of its subsidiaries so far as the same can
properly be attributable to the interest of the company.
56. A report with respect to any other matters which appear to the persons charged
with making the reports to be relevant having regard to the purposes of the reports.

SUBSIDIARY LEGISLATION

SECTION 400-THE COMPANIES (TRANSITIONAL PROVISIONS)


REGULATIONS Statutory Instrument
15 of 1995

Regulations by the Minister

1. These Regulations may be cited as the Companies (Transitional Provisions)


Regulations. Title

2. (1) The operation of sections three hundred and sixty-seven and three hundred and
sixty-eight of the Act is hereby suspended until- Suspension of staff provisions

(a) 31st December, 1997; or

292
(b) such date as the Registrar may appoint by notice published in the Gazette;
whichever is earlier.

(2) All persons who, immediately before the commencement of the Act, performed
functions and held responsibilities under the former Act shall continue to perform
those functions and hold those responsibilities under the same terms and conditions.
Cap. 686 of the 1971 Edition

3. (1) The operation of Divisions 8.2 and 8.3 of the Act are suspended in relation to a
private company until 1st January, 1997. Suspension of audit and director's report
requirements for private companies

(2) On and from 1st January, 1997, those Divisions shall apply to a private company
as if the Act had commenced on that day.

SECTION 400-THE COMPANIES (FEES) REGULATIONS. Statutory


Instrument
16 of 1995.

Regulations by the Minister

1. These Regulations may be cited as the Companies (Fees) Regulations. Title

2. The several fees set out in the Schedule are the prescribed fees for the matters
mentioned therein. Fees

SCHEDULE

TABLE 1

FEES PAYABLE BY A COMPANY (OTHER THAN A FOREIGN COMPANY)


UNDER THE ACT

Part 1-Companies Limited by Shares

Fee units

293
1. Registration of the company; for every K200 of the nominal capital
of the company (but in no case shall the nominal capital be less
than five hundred thousand kwacha) 1
2. Registration of any increase of capital after the first registration of
the company; for every K200 of the increase or part thereof 1
3. Certificate of incorporation 100
4. Registration of an altered memorandum of association and order of
court to confirm the same 130
5. Registration of change of name and issue of certificate thereof 600
6. Registration of any prospectus pursuant to section one hundred and
twenty-six of the Act 250
7. Registration of any document required to be registered on
incorporation of a company-
(a) Consent to act as director- Companies Form 5 20
(b) Declaration of compliance- Companies Form 11 20
(c) Any document not specified above, including annual returns 40
(d) Alteration or change of registered particulars of directors,
or of the registered office of the company 50
8. Registration of a mortgage, debenture or other charge 500
9. Copies of any deed or other document-
(a) when prepared by an official 50
(b) when prepared by the applicant 40
(c) for any certificate issued 50
10. Inspection of any document relating to any company filed with
the Registrar 40
11. Inspection of entries in the registers kept by the Registrar relating
to any one company 50
12. Name search or clearance 50
13. Collating documents for certification, for every folio 10
14. Name reservation 200
15. Late filing of any of the prescribed forms:
(a) For documents filed later than thirty days, but not later
than three months, after the prescribed date 200
(b) For documents filed later than three months, but not
later than six months, after the prescribed date 400
(c) For documents filed later than six months after the
prescribed date 800

Part 2-Companies Limited by Guarantee

Fee units
1. Registration of the company:
(a) where the number of members is stated in the Articles
of Association to be 5 or less than 5 125
(b) for each additional 5 members or fraction thereof 100
2. Conversion into a company limited by shares at K500,000
share capital Nil
3. Certificate of incorporation 100

294
4. Registration of altered memorandum of association and order
of court confirming the same 300
5. Registration of change of name and issue of certificate thereof 600
6. Registration of any document or the recording of any authorised
document required to be registered or recorded or required to
be delivered, sent or forwarded to the Registrar and not
previously specified 40

TABLE 2

TABLE OF FEES PAYABLE BY A FOREIGN COMPANY UNDER THE ACT

Fee units
1. Registration of the certified copy of the charter, statutes or
memorandum and articles of association of the company or
other instrument constituting or defining the constitution
of the company (in English) 1,000
2. Registration of any alteration in any such instrument 400
3. Registration of any document or making a record of any fact
authorised to be delivered, sent, or forwarded to the Registrar
and not previously specified 150
4. Any certificate issued by the Registrar 150
5. Inspection of any document relating to any company filed
with the Registrar 100
6. Inspection of entries in the register kept by the Registrar relating
to any one company 60
7. Copies of any instrument-
(a) when prepared by an official, for every folio 100
(b) when prepared by the applicant, for every folio 60
8. Collating document for certificate, for every folio or part thereof 10

SECTION 400-THE COMPANIES (PRESCRIBED FORMS) REGULATIONS


Statutory Instrument
17 of 1995

Regulations by the Minister

1. These Regulations may be cited as the Companies (Prescribed Forms)


Regulations. Title

2. The forms set out in the Schedule shall be the prescribed forms for the purposes
of the sections of the Act mentioned in the several forms. Prescribed forms

295
SCHEDULE

(Regulation 2)
Companies Form 1

APPLICATION FOR INCORPORATION AS A PUBLIC COMPANY

(Section 6)
NOTE: A public company must have share capital (section 14). It has the capacity to
enter any business, unless restricted by its articles (section 22). However, it is bound
by its acts even if they are contrary to restrictions in its articles (sections 23 and 24). If
it is wound up and its assets are insufficient to cover its liabilities, the liability of its
shareholders is limited to the amount left unpaid on their shares (sections 265 and
266)
(1) Name of company: PLC
(2) General nature of business:
(a) Principal business:

(b) Other business:

(3) *The articles do not restrict the business that the company may conduct.

OR
*The articles restrict the business that the company may conduct as follows:
(4) Situation of registered office:

(5) Postal address of the company

(6) Nominal capital:


K..........................................................
divided into........................................................shares of K ,
(7) *The articles place no limit on the number of shareholders of the company.

OR
*The articles limit on the number of shareholders to
(8) Date of beginning of second financial year (if not anniversary of date of
incorporation):

*Delete whichever is not applicable.

(9) Particulars of first directors:

296
Present forenames and surnames
Former forenames or surnames Nationality
and NRC No.
or passport No.

Residential and postal addresses Occupation, and other bodies corporate in which
directorship is held

(10) Particulars of first secretary of company


(a) (if an individual):

Present
forenames and
surnames Former
forenames or
surnames
Nationality and
NRC No. or
passport No.
Residential
any postal
addresses Occupation, ant other
secretaryship held

(b) (if a body corporate):

Name of body corporate

Registered office of body corporate

Registered postal address Names of any other body corporate in which a secretary
ship is held- Address of principal office, if different from registered office

297
Note: Where all the partners in a firm are joint secretaries, the name and address of
the principal officer of the firm (and, if that address is outside Zambia, the address of
the principal officer of the firm in Zambia) may be given, instead of the particulars of
each partner.
Where the Secretary is a body corporate name and its registered or principal office
(and, if that office is outside Zambia, the address of the body corporate in Zambia)
should be given.

WE, the several persons whose names and addresses are subscribed, wish to be
formed into a PUBLIC COMPANY in pursuance of this application, and we
respectively agree to take the number of shares in the capital of the company set
opposite our respective names:

Forenames and surname Nationality and NRC number or passport number


Residential address
Postal address No. and class of
shares to be taken
Signature of subscriber

Dated the .............................................day of...................................19........


Witness to the above signatures:
............................................. ...................................... ..........................................
...... .....................................................
Name Address Occupation Signature
Name and address of individual lodging the application:
................................................................................

Companies Form 2
APPLICATION FOR INCORPORATION AS A PRIVATE COMPANY LIMITED
BY SHARES

(Section 6)

298
NOTE: This Application is for a private company with share capital (section 17). It
may not have more than 50 shareholders (section 16). It has the capacity to enter any
business, unless restricted by its articles (section 22). However, it is bound by its acts
even if they are contrary to restrictions in its articles (sections 23 and 24). The articles
may restrict the right to transfer shares. It is prohibited from making any invitation to
the public to purchase its shares or debentures (section 122). If it is wound up and its
assets are insufficient to cover its liabilities, the liability of its shareholders is limited
to the amount left unpaid on their shares (sections 265 and 266).
(1) Name of Company: Limited.
(2) General nature of business:
(a) Principal business:

(b) Other business:

(3) *The articles do not restrict the business that the company may conduct

OR
*The articles restrict the business that the company may conduct as follows:

(4) Situation of registered office:

(5) Postal address of the company

(6) Nominal capital:


K............................................
divided into ...........................................................shares of K
(7) The articles limit the number of shareholders to
(8) Date of beginning of second financial year (if not anniversary of date of
incorporation):

*Delete whichever is not applicable

(9) Particulars of first directors:

Present forenarmes and surnames


Former forenames or surnames
Nationality and NRC No. or passport No.

Residential and postal address Occupation and


other bodies
corporate in which directorship is held

299
(10) Particulars of first secretary of company
(a) (if an individual):

Present forenarmes and surnames Former forenames or surnames Nationality


and NRC No. or passport No.
Residential and postal address Occupation,
any other
secretaryship held

(b) (if a body corporate):

Name of body corporate Registered office of body corporate Registered postl


address Name of any other body corporate in which a secretarysip is held
Address of principal
office, if different from registered office

Note: Where all the partners in a firm are joint secretaries, the name and address of
the principal officer of the firm (and, if that address is outside Zambia, the address of
the principal officer of the firm in Zambia) may be given, instead of the particulars of
each partner.
Where the Secretary is a body corporate name and its registered or principal office
(and, if that office is outside Zambia, the address of the body corporate in Zambia)
should be given.

WE, the several persons whose names and addresses are subscribed, wish to be
formed into a PRIVATE COMPANY LIMITED BY SHARES in pursuance of this
application, and we respectively agree to take the number of shares in the capital of
the company set opposite our respective names.

Forenames and surname


Nationality and NRC number or passport number
Residential address
Postal address No. and class of shares to be taken
Signature of subscriber

300
Dated the .........................................................day
of..............................................................19........
Witness to the above signatures:
.................................. ........................................ .........................................
................................
Name Address Occupation Signature
Name and address of individual the application

Companies Form 3
APPLICATION FOR INCORPORATION AS A COMPANY LIMITED BY
GUARANTEE

(Section 6)
Note: A company limited by guaranteed does not have share capital. It must not carry
on business for the purpose of making profits for its members or for anyone
concerned in its promotion or management (section 19). It may not have more than 50
members (section 16). It is prohibited from making any invitation to the public to
purchase its debentures (section 122). It has the capacity to enter into any activity,
unless restricted by its articles (section 22). However, it is bound by its acts even if
they are contrary to restrictions in its articles (sections 23 and 24). Each member must
sign a declaration of guarantee, specifying the amount that he undertakes to contribute
if the company is wound up. If it is wound up and its assets are insufficient to cover
its liabilities, the liability of its members is limited to the amount so guaranteed
(sections 265 and 266).
(1) Name of company Limited
(2) General nature of activities:
(a) Principal activities

(b) Other activities:

(3) The articles do not restrict the activities that the company may conduct

OR
*The articles restrict the activities that the company may conduct as follows:

301
(4) Situation of registered office:

(5) Postal address of the company:

(6) Total amount guaranteed by subscribers:


K.................................................
(7) The articles limit the number of shareholders to
(8) Date of beginning of second financial year (if not anniversary of date of
incorporation):

*Delete whichever is not applicable

(9) Particulars of first directors:

Present forenames and surnames

Former forenames or surnames


Nationality and NRC No. or passport No.

Residential and postal addresses


Occupation, and other bodies corporate in which directorship is held

(10) Particulars of first secretary of company


(a) (if an individual):

Present forenames and surnames Former forenames or surnames Nationality


and NRC No. or passport No.
Residential and postal addresses Occupation, any other secretaryship held

(b) (if a body corporate):

Name of body corporate Registered office of body corporate Registered postal


address Name of any other body corporate in which a secretary-ship is held
Addres of principal office, if different from registered office

302
Note: Where all the partners in a firm are joint secretaries, the name and address of
the principal officer of the firm (and, if that address is outside Zambia, the address of
the principal officer of the firm in Zambia) may be given, instead of the particulars of
each partner.
Where the Secretary is a body corporate name and its registered or principal of
fice (and, if that office is outside Zambia, the address of the body corporate in
Zambia) should be given.

WE, the several persons whose names and addresses are subscribed, wish to be
formed into a COMPANY LIMITED BY GUARANTEE in pursuance of this
application, and:
(1) we agree that if, upon the winding up of the company, there remains after the
discharge of all its debts and liabilities any property of the company, that property
will not be distributed among the members, but will be transferred to some other
company having similar objects, or applied to some other charitable object, such other
company or charity to be determined by ordinary resolution of the members in general
meeting prior to the dissolution of the company;
(2) we respectively declare that if, upon the winding up of the company, the assets
of the company prove insufficient to discharge all the debts and liabilities of the
company, we guarantee to contribute to the discharge of those debts and liabilities an
amount not exceeding the amount set against our respective names:

Forenames and
surname Nationality and NRC number or passport number
Residential adress

Postal address Amount declared to be guaranteed by the abscriber


Signature of subscriber

Dated the ...............................................................day


of............................................19........
Witness to the above signatures:
................................. ............................. ................................ ..................
.........
Name Address Occupation Signature
Name and address of individual lodging the application:

303
Companies Form 4
APPLICATION FOR INCORPORATION AS AN UNLIMITED COMPANY

(Section 6)
NOTE: An unlimited company is a private company with share capital (sections 13
and 20). It may not have more than 50 shareholders (section 16). It has the capacity to
enter any business, unless restricted by its articles (section 22). However, it is bound
by its acts even if they are contrary to restrictions in its articles (sections 23 and 24).
The articles may restrict the right to transfer shares. It is prohibited from making any
invitation to the public to purchase its shares or debentures (section 122). If it is
wound up and its assets are insufficient to cover its liabilities, the liability of its
shareholders to contribute to the discharge of those liabilities is unlimited (sections 20
and 265).
(1) Name of company: Limited
(2) General nature of business:
(a) Principal business:

(b) Other business:

(3) *The articles do not restrict the business that the company may conduct

OR
*The articles restrict the business that the company may conduct as follows:

(4) Situation of registered office:

(5) Postal address of the company:

(6) Nominal capital:


K...........................................
divided into............................................................shares of K ,
(7) The articles limit the number of shareholders to
(8) Date of beginning of second financial year (if not anniversary of date of
incorporation):

*Delete whichever is not applicable

(9) Particulars of first directors:

Present forenames and surnames Forner forenames or surnames Nationality


and NRC No. or passport No.
Residential and postal addresses Occupation, and other bodies corporate in which
directorship is held

304
(10) Particulars of first secretary of company
(a) (if an individual):

Present forenames and surnames


Forner forenames or surnames Nationality and NRC No. or passport No.
Residential and postal address
Occupation, any other secretaryship held

(b) (if a body corporate):

Name of body corporate


Registered office of body corporate
Registered postal address Name of any other body corporate in which a
secretaryship is held Address of principal office, if different from registered office

Note: Where all the partners in a firm are joint secretaries, the name and address of
the principal officer of the firm (and, if that address is outside Zambia, the address of
the principal officer of the firm in Zambia) may be given, instead of the particulars of
each partner.
Where the Secretary is a body corporate name and its registered or principal office
(and, if that office is outside Zambia, the address of the body corporate in Zambia)
should be given.

WE, the several persons whose names and addresses are subscribed, wish to be
formed into an UNLIMITED COMPANY in pursuance of this application, and we
respectively agree to take the number of shares in the capital of the company set
opposite our respective names:

Forenames and surname Nationality and NRC number or passport number


Residential address
Postal address
No. and class of shares to be taken
Signature of subscriber

305
Dated the ......................day of.........................19........
Witness to the above signatures:
............................... .................................. ................................. ..................
.............
Name Address Occupation Signature
Name and address of individual lodging the application

Companies Form 5
DECLARATION OF CONSENT TO ACT AS DIRECTOR OR SECRETARY

(Section 6)
Company Registration No. .....................................

To: THE REGISTRAR OF COMPANIES:


*I/*We, the undersigned, hereby testify *my/*our consent to act as director or
secretary to the proposed company

..........................................................................................................................................
.....
(company name)
pursuant to paragraph (1) (c) of the Companies Act 1994.

Signature Address Description

Note: If a director or secretary signs by his agent authorised in writing, the authority
must be produced and a copy field.
Dated this..................................day of..................................19.........

Companies Form 6
CERTIFICATE OF INCORPORATION OF A PUBLIC COMPANY

306
(Section 10)
Company Registration No. .....................................
This is to certify that
PLC (company name)
is on and from the day of........................................19.......
incorporated as a public company.
Given under my hand and seal in Lusaka, Zambia, this day
of.................................................................19.........

........................................................................
Registrar of Companies

[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 7
CERTIFICATE OF INCORPORATION OF A PRIVATE COMPANY LIMITED BY
SHARES

(Section 10)
Company Registration No. .....................................
This is to certify that
limited (company name)
is on and from the day of....................................19........incorporated
as a private company limited by shares.
Given under my hand and seal in Lusaka, Zambia, this
day of...........................................................19........

........................................................................
Registrar of Companies

[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 8
CERTIFICATE OF INCORPORATION OF A COMPANY LIMITED BY
GUARANTEE

(Section 10)
Company Registration No. .....................................
This is to certify that

307
Limited (company name)
is on and from the day of.....................................19.......incorporated
as a company limited by guarantee.
Given under my hand and seal in Lusaka, Zambia, this
day of............................................................19.......

........................................................................
Registrar of Companies

[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 9
CERTIFICATE OF INCORPORATION OF AN UNLIMITED COMPANY

(Section 10)
Company Registration No. .....................................
This is to certify that
(company name)
is on and from the day of..............................19.........incorporated as an
unlimited company.
Given under my hand and seal in Lusaka, Zambia, this
day of...........................................................19........

........................................................................
Registrar of Companies

[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 10
CERTIFICATE OF SHARE CAPITAL

(Section 10)
Company Registration No. .....................................
This is to certify that
(company name)
has the nominal capital of K
divided into.................................................share of K each
...................................................................shares of K each
...................................................................shares of K each
Given under my hand and seal in Lusaka, Zambia, this

308
day of...........................................................19........

........................................................................
Registrar of Companies

[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 11
DECLARATION OF COMPLIANCE

(Section 9)
Company Registration No. .....................................
To: THE REGISTRAR OF COMPANIES:
I,
of

do solemnly and sincerely declare that I am: *a legal practitioner engaged in the
formation of the company a first director named in the application for incorporation of
the first secretary named in the application for incorporation
of
(name of company)
and that all the requirements of the Companies Act, 1994, in respect of matters
precedent to the incorporation of the Company and incidental thereto have been
complied with. And I make this solemn declaration conscientiously believing the
same to be true and by virtue of the provisions of the Statutory Declarations Act,
1835, of the United Kingdom.
Declared at
the day of............................................................, 19...........
Before me,

...............................................................................................................
(Commissioner for Oaths, or Notary Public)

*Delete whichever is not applicable

Companies Form 12
DECLARATION OF COMPLIANCE WITH MINIMUM CAPITAL
REQUIREMENTS FOR A PUBLIC COMPANY

309
(Section 15)
Company Registration No. .....................................
To: THE REGISTRAR OF COMPANIES:
I,
of
being *the secretary/*a director of the company PLC
(name of
company)
do solemnly and sincerely declare:
(1) That the company has not transacted any business, exercised any borrowing
powers or incurred any indebtedness, except for a purpose incidental to its
incorporation or the obtaining of subscriptions to or payment for its shares;
(2) That the amount fixed by the articles or named in the prospectus as the
minimum subscription upon which the company may proceed to transact any business
is

K..................................................
(being not less than the minimum provided under the Act);
(3) That the nominal value of share capital of the company allotted is

K..................................................
(being not less than the minimum provided under the Act);
(4) That the amount paid up on the alloted share capital of the company (whether
paid in cash or otherwise) is

K..................................................
(being not less than the minimum provided under the Act);
(5) That the amount, or estimated amount, of the preliminary expenses that have been
paid or are payable is

K..................................................
And I make this solemn declaration conscientiously believing the same to be true and
by virtue of the provisions of the Statutory Declarations Act, 1835, of the United
Kingdom.
Declared at
the day of.......... 19..........
Before me

..........................................................................................................................................
(Commissioner for Oaths, or Notary Public)

*Delete whatever is not applicable

310
Companies Form 13
CERTIFICATE OF MINIMUM CAPITAL

(Section 15)
Company Registration No. .....................................
This is to certify that the company
(full name of company)
satisfies the requirements of section 15 of the Companies Act and is entitled to
commence business as a public company.
Given under my hand and seal in Lusaka, Zambia, this
.......................................................day of....................................................... 19..........

........................................................................
Registrar of Companies

[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 14
APPLICATION FOR CONVERSION OF COMPANY

(Section 36)
Company Registration No. .....................................
Company Name:

The above-named company, having satisfied the requirements of section


*............................................ hereby applies to the Registrar for conversion of the
company in accordance with the resolution or agreement of the company.
........................................................................
Secretary of the Company
*Enter number of the appropriate conversion section of the Companies Act (sections
30-35).
NOTE: This form must be accompanied by the documents referred to in subsection
36(4) of the Companies Act, 1994.

Companies Form 15
REPLACEMENT CERTIFICATE OF INCORPORATION FOR A COMPANY
CONVERTED TO A PUBLIC COMPANY

(Section 36)

311
Company Registration No. .....................................
This is to certify that
(company name)
having been:
*a private company limited by shares
*a company limited by guarantee
*an unlimited company
incorporated on the day of........................................19........
is on and from the day of........................................19........
converted to a public company in accordance with a special resolution passed on
the.......................day
of....................................................19.......
Given under my hand and seal in Lusaka, Zambia, this day
of....................................................19........

........................................................................
Registrar of Companies
*Delete whichever is not applicable
[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 16
REPLACEMENT CERTIFICATE OF INCORPORATION FOR A COMPANY
CONVERTED TO A
PRIVATE COMPANY LIMITED BY SHARES

(Section 36)
Company Registration No. .....................................
This is to certify that
(company name)
having been:
*a public company
*a company limited by guarantee
*an unlimited company
incorporated on the day of....................................19......., is on and from
the day of........................................, 19........converted to a
private company limited by shares in accordance with a special resolution passed on
the
.................................................day of................................, 19.......
Given under my hand and seal in Lusaka, Zambia this day of............................
19............

........................................................................
Registrar of Companies
*Delete whichever is not applicable

312
[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 17
REPLACEMENT CERTIFICATE OF INCORPORATION FOR A COMPANY
CONVERTED TO A
COMPANY LIMITED BY GUARANTEE

(Section 36)
Company Registration No. .....................................
This is to certify tha
(company name)
having been:
*a public company
*a private company limited by shares
*an unlimited company
incorporated on the day of........................................19.......,
is on and from the day of............................................, 19.......converted
to a company limited by guarantee in accordance with a special resolution passed on
the
............................................day of................................., 19.......
Given under my hand and seal in Lusaka, Zambia, this day of............................
19............

........................................................................
Registrar of Companies
*Delete whichever is not applicable
[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 18
REPLACEMENT CERTIFICATE OF INCORPORATION FOR A COMPANY
CONVERTED TO AN
UNLIMITED COMPANY

(Section 36)
Company Registration No. .....................................
This is to certify that
(company name)
having been:
*a public company
*a company limited by shares

313
*a company limited by guarantee
incorporated on the day of.............................................19........
is on and from the day of.............................................19........
converted to an unlimited company in accordance with a special resolution passed on
the
..............................day of..............................19.......
Given under my hand and seal in Lusaka, Zambia, this day
of............................................, 19.......

........................................................................
Registrar of Companies
*Delete whichever is not applicable
[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 19
APPLICATION FOR RESERVATION OF NAME

(Section 38)
Company Registration No. .....................................
The persons specified below, proposing to form a company, hereby request that the
name:

be reserved by Registrar for that purpose.


Details of applicants:

Forenames and Surname

Address/
Registered Office
Postal address/ Registered postal address Signature (of Secretary in case of a body
corporate)

Companies Form 20

314
NOTICE OF RESERVATION OF NAME

(Section 38)
To (name of applicant)
The name
is available for registration of a company under the Companies Act, and is
reserved for the applicant for a period of 3 months from the date of this notice.
Dated this........................................day of...................................., 19........

........................................................................
Registrar of Companies

Companies Form 21
APPLICATION FOR CHANGE OF NAME OF COMPANY

(Section 40)
Company Registration No. .....................................
Company Name

The above-named company hereby notifies the Registrar that it intends to change its
name to:

for the following reasons:

and requests the Registrar to consider whether the proposed name is available for
registration.
Date........................................................................................................................
Address for notice

Companies Form 22
REPLACEMENT CERTIFICATE OF INCORPORATION FOR CHANGE OF
NAME OF A PUBLIC COMPANY

(Section 40)
Company Registration No.......................................
This is to certify that is
a public company and was incorporated on the day

315
of........................................19........, having been known before the day
of........................................19........ by the name:

Given under my hand and seal in Lusaka, Zambia, this day


of........................................19........

........................................................................
Registrar of Companies
*Delete whichever is not applicable
[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 23
REPLACEMENT CERTIFICATE OF INCORPORATION FOR CHANGE OF
NAME OF A
PRIVATE COMPANY LIMITED BY SHARES

(Section 40)
Company Registration No. .....................................
This is to certify that
is a private company limited by shares and was incorporated on theday
of........................................19........, having been known before the day
of........................................19........ by the name:

Given under my hand and seal in Lusaka, Zambia, this day


of........................................19.........

........................................................................
Registrar of Companies
*Delete whichever is not applicable
[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 24
REPLACEMENT CERTIFICATE OF INCORPORATION FOR CHANGE OF
NAME OF A
COMPANY LIMITED BY GUARANTEE

(Section 40)
Company Registration No. .....................................
This is to certify that is
a company limited by guarantee and was incorporated on the day

316
of........................................19........, having been known before the day
of........................................19........, by the name:

Given under my hand and seal in Lusaka, Zambia, this day


of........................................19.........

........................................................................
Registrar of Companies
*Delete whichever is not applicable
[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 25
REPLACEMENT CERTIFICATE OF INCORPORATION FOR CHANGE OF
NAME OF AN
UNLIMITED COMPANY

(Section 40)
Company Registration No. .....................................
This is to certify that
Is an unlimited company and was incorporated on the day
of........................................19........., having been known before the day
of........................................19........., by the name:

Given under my hand and seal in Lusaka, Zambia, this day


of........................................19.........

........................................................................
Registrar of Companies
*Delete whichever is not applicable
[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 26
NOTICE OF CHANGE OF FINANCIAL YEAR

(Section 42)
Company Registration No. .....................................
To: THE REGISTRAR OF COMPANIES:
Name of company

317
Notice is hereby given that the above-mentioned company intends to change its
financial year by changing the accounting date that would have fallen
on of........................................19.........
to of........................................19.........
Notice of the change has been sent to each registered member and to the auditors of
the company.
Date..................................................................... ......................................................
..................
Secretary

Companies Form 27
FORM OF TRANSFER OF FULLY-PAID SHARES IN COMPANY LIMITED BY
SHARES

(Secction 57)
Company Registration No. .....................................
I,

(full name, address and occupation of transferor)


in consideration of
hereby transfer to

(full name, address and occupation of transferee)

.........................................................................fully
paid.........................................................................
(number of shares) (class of shares)
shares, numbered........................................................to (inclusive)

(distinguishing numbers of shares if any)


in

(name of company)
Dated this day of........................................19........

........................................................................
Signature of transferor
(If the transfer is not made by the registered holder of a share, the name(s) and
capacity (eg. Executor) of the person making the transfer should also be stated)

318
ACKNOWLEDGEMENT BY THE TRANSFEREE

I, the said
hereby
acknowledge the transfer.

........................................................................
Signature of transferee

Companies Form 28
RETURN OF ALLOTMENT OF SHARES

(Section 63)
Company Registration No. .....................................
To: THE REGISTRAR OF COMPANIES:
Name of Company
The shares referred to in this return were allotted:
*on the day of................................19........
*from the day of................................19........
to the day of................................19........
*delete whichever is not applicable-if the return covers only allotments made on one
date, the first applies, if it covers allotments made on several dates, the second
applies, and the dates of the first and last allotments covered should be entered.
Number of the† shares allotted payable in cash:..............................
Number of the† shares allotted payable in cash:..............................
Nominal amount of the† shares to allotted:....................................................
Nominal amount of the† shares to allotted:....................................................
Amount due and payable on each such share:
Nominal amount of shares so allotted:
Amount to be treated as paid on each such share:
The consideration for which the shares have been allotted is as follows:

† Distinguish between ordinary, preference, etc.

NAMES, ADDRESSES AND DESCRIPTION OF THE ALLOTTEES

No. of shares allotted


Surname (or company name in case of company) Forenames (or company
registration No.)

319
Address
Description
Preference
Ordinary

Dated
this....................................................................................................................................
....day of......................................................19...............
Signature of
*Director/*Secretary .......................................................................................................
..................................................
*Delete whichever is inapplicable

Companies Form 29
NOTICE OF ALTERATION IN CAPITAL

(Section 74)
Company Registration No. ....................................
To: THE REGISTRAR OF COMPANIES:
Notice is hereby given in respect of:
(name of company)
that by a Resolution of the Company
passed on the 19........, the nominal
capital of the company has been varied, as permitted by section 74 of the Companies
Act, as follows:

320
and that the capital of the company now stands as follows:
a nominal share capital of K................................................
divided into:.................................shares of K....................................each
divided into:.................................shares of K....................................each
divided into:.................................shares of K....................................each

Date......................................................................... ......................................................
..................
Secretary

Companies Form 30
REPLACEMENT CERTIFICATE OF SHARE CAPITAL

(Sections 74 and 79)


Company Registration No. ....................................
This is to certify that
(name of company)
has the nominal share capital of K
divided into:....................................................shares of K each
divided into:....................................................shares of K each
divided into:....................................................shares of K each
having varied its nominal share capital from a nominal share capital of K.............
divided into:....................................................shares of K each
divided into:....................................................shares of K each
divided into:....................................................shares of K each
Given under my hand and seal in Lusaka, Zambia, this day
of........................................................................19........

........................................................................
Registrar of Companies
[Note that this certificate is not valid unless the official seal of the Registrar of
Companies has been affixed]

Companies Form 31
PARTICULARS OF CHARGE OR MORTGAGE

(Section 99)
Company Registration No. .....................................
Name of Company:
Registered office:
Presented by:

321
Address:
date and description of instrument creating or evidencing the mortgage:

Amount secured by the mortgage or charge


Short particulars of all the property mortgaged:

Name(s) address(es) and description(s) of the mortgagee(s) or charge(s) or the


person(s) entitled to the mortgage or charge:

Particulars of any commission, allowance or discount:

Signature of person delivering particulars:


Position in relation to company, if any
Date..............
NOTE: A copy of the instrument, if any, creating the mortgage or charge, certified to
be a true and complete copy of the original instrument, must be delivered to the
Registrar with these particulars, unless the mortgage or charge is registered under
some other Act, in which case particulars of the instrument sufficient to identify it
should be given.

Companies Form 32
PARTICULARS OF A MORTGAGE OR CHARGE SUBJECT TO WHICH
PROPERTY HAS BEEN ACQUIRED

(Section 99)
Company Registration No. .....................................
Name of Company:
Registered office:
Presented by:
Address:
Date and description of instrument creating or evidencing the mortgage:

Amount secured by the mortgage or charge:


Date of acquisition of the property:
Short particulars of all the property mortgaged:

322
Name(s) address(es) an description(s) of the mortgagee(s) or chargee(s) or the
person(s) entitled to the mortgage or charge:

Signature of person delivering particulars:


Position in relation to company, if any
Date.............................................
NOTE: A copy of the instrument, if any, creating the mortgage or charge, certified to
be a true and complete copy of the original instrument, must be delivered to the
registrar with these particulars, unless the mortgage or charge is registered under
some other Act, in which case particulars of the instrument sufficient to identify it
should be given.

Companies Form 33
PARTICULARS OF SERIES OF DEBENTURES WHERE PROPERTY IS
CHARGED

(Section 99)
Company Registration No. .....................................
Name of Company:
Registered office:
Particulars of the series of debentures:

Total amount secured by the series of debentures:


Date(s) of resolution(s)
Authorising issue of series:
Date of document (if any) by which the charge is created or defined:
Short particulars of all the property charged:

Date and amount of present issue (if any) of debentures of the series
Names, addresses and descriptions of the trustees (if any) for the debenture-holders

Signature of person delivering particulars:


Position in relation to company, if any
Date........................................
NOTE: 1. If the debentures contain or given a charge by reference to some other
instrument, the date of that instrument should be given. If there is no such instrument,
the date be given of the first execution of any debenture of the series.
2. This form should be used for registration of particulars of the entire series. When
more than one issue of debentures in the series is made, particulars of the date and

323
amount of each issue subsequent to the first should be given to the Registrar in Form
34.
3. A copy of the instrument, if any, creating or containing the charge, certified to be a
true and complete copy of the original instrument, must be delivered to the Registrar
with these particulars. If there is no such instrument, a certified copy of one of the
debentures of the series must be delivered.

Companies Form 34
PARTICULARS OF AN ISSUE OF DEBENTURES IN A SERIES

(Section 97)
Company Registration No. .....................................
Name of company:
Registered office:
Particulars of the series of debentures:

Total amount secured by the series of debentures:


Date and amount of present issue of debentures of the series
Signature of person delivering particulars:
Position in relation to company, if any
Date..........................................
NOTE: For registration of particulars of the whole series, Form No. 35 should be
used.

Companies Form 35
MEMORANDUM OF SATISFACTION AND RELEASE FROM MORTGAGE OR
CHARGE

(Section 102)
Company Registration No. .....................................
Name of Company:
Registered office:
Presented by:
Address:
Notice is hereby given in relation to the above named company and the registered
charge
(registration number)
That, on..........................................................................................................................,
19......:
*1. The debt for which the charge was created was wholly paid or satisfied;

324
*2. The debt for which the charge was created was partly paid or satisfied to
the extent of ..................................................................................................................;
*3. Part of the property or undertaking charged was released from the charge
so that the following property is no longer subject to the charge (give particulars):

*4. The following property or undertaking, formerly part of the property or


undertaking subject to the charge, ceased to form part of the property or undertaking
(give particulars of property):

*Delete whichever is inapplicable


Signed on behalf of company
Position in relation to company
Date:..........................................
Signed by person(s) entitled to the charge

Date:..........................................

Companies Form 36
NOTICE OF VARIATION IN A MORTGAGE OR CHARGE

(Section 103)
Company Registration No. .....................................
Name of company:
Registered office:
Presented by:
Address:
Notice is hereby given in relation to the above named company and the registered
charge
(registration number)
That, on , 19........the terms
of the charge were varied as follows:

(Identify each term varied, and state how it is varied)

Signed on behalf of company

325
Position in relation to company
Date:........
Signed by person(s) entitled to the charge

Date:..........................................
NOTE: Notification of the satisfaction of a mortgage or charge (in whole or in part),
or of the release of part of the property or undertaking from a mortgage or charge
secured over it, or of part of that property or undertaking, should be given to the
Registrar on Form No. 35 and not in this form.

Companies Form 37
NOTICE OF ENTRY INTO POSSESSION AS MORTGAGE

(Section 104)
Company Registration No. .....................................
To: THE REGISTRAR OF COMPANIES:
Notice is hereby given in relation to (name of company whose property is mortgaged)

that (name and address of mortgagee)


being the mortgagee of the company under registered
mortgage.........................................(registration number) in relation to the following
property:

has entered into possession of the property on the.......... 19..., under the following
powers contained in the registered mortgage:

Signature:............................................................
Capacity in which this notice is given:......................................................................
Date:..........................................

Companies Form 38
NOTICE THAT MORTGAGEE HAS GONE OUT OF POSSESSION

(Section 104)
Company Registration No. .....................................

326
To: THE REGISTRATION OF COMPANIES:
Notice is hereby given in relation to (name of company whose property is mortgaged)

that (name and address of mortgagee)

being the mortgagee in possession of the company under registered mortgage


(registration number) in relation to the following property:

has gone out of possession of the property on the


19.........
Signature:
Capacity in which this notice is given:
Date:................................................

Companies Form 39
NOTICE OF APPOINTMENT OF RECEIVER OR RECEIVER AND MANAGER

(Section 109)

(Notice by the appointer)


Company Registration No. .....................................
To: THE REGISTRAR OF COMPANIES:
Notice is hereby given in relation to (name of company)

that (full name and address)

has been appointed receiver*/receiver and manager* in relation to the following


business and property of the company:

on the , 19........ under:


*1. Çthe following order of the court; or
*2. powers contained in the following instrument:
**

327
Full name and address of person who obtained the court order or made the
appointment under the instrument:

Signature:...............................................
Date:.......................................................
*Delete as appropriate
**Where the appointment is under the order of a court, insert the name of the court
and particulars of the order. Where the appointment is under an instrument, insert
particulars identifying the instrument and setting out the power used.

Companies Form 40
NOTICE OF ADDRESS OF RECEIVER OR RECEIVER AND MANAGER

(Section 109)

(Notice by the receiver)


Company Registration No. .....................................
To: THE REGISTRAR OF COMPANIES:
I ,
having been appointed receiver*/receiver and manager* in relation to (name of
company)
, on
the........................................................................................day of ,
19........, hereby give notice that my postal address, for the purposes of my business as
receiver, is:
,
and the physical address of my office is:

Signature:...............................................
Date:.......................................................
*Delete as appropriate.

Companies Form 41
NOTICE OF CEASING TO ACT AS RECEIVER OR RECEIVER AND
MANAGER

328
(Section 109)

(Notice by the receiver)


Company Registration No. .....................................
To: THE REGISTRAR OF COMPANIES:
I, ,
having been appointed receiver*/receiver and manager* in relation to (name of
company)...................
hereby give notice that I ceased so to act on
the...................................................day of , 19.......
Signature:...............................................
Date:.......................................................
*Delete as appropriate.

Companies Form 42
ANNUAL RETURN OF A COMPANY

(Section 184)
Company Registration No. .....................................
Annual return of

made up to the...........................................................................................................,
19........
Note:Under section 184, the return should be made up to the date of the annual
general meeting or, if there is no annual general meeting, any date within three
months after the end of the financial year.
(2) Nature of the business or businesses of the company or, if the company is not
carrying on a business, the nature of its objects:

(3) Situation of the company's registered office

Post Office Box No.


(4) Situation of the company's registered records office, if different from registered
office:

(5) Situation of the company's principal place of business in Zambia:

(6) Situation(s) at which company's register of members and register of debenture


holders are kept, if elsewhere than at registered records office:

329
(7) Summary of share capital and debentures:
(a) Nominal share capital:
(1) Nominal share capital K.......divided into:
Number Class Value
.............................. ..............................shares of
..............................each
.............................. ..............................shares of
..............................each
.............................. ..............................shares of
..............................each
.............................. ..............................shares of
..............................each
(b) Issued share capital and debentures:
Number Class
(2) Number of shares of................................ ..............................shares
of each class issued
up to the date of this....................................... ..............................shares
return (which number
must agree with the........................................ ..............................shares
total shown in the
list as held by
existing members)........................................... ..............................shares
(3) Amount called up on number of shares of each class:
(3) ..............................per share on..............................
..............................shares
(3) ..............................per share on..............................
..............................shares
(3) ..............................per share on..............................
..............................shares
(3) ..............................per share on..............................
..............................shares
(4) Total amount of calls received, (Note 3)
K........................................................................
(4)
(5) Total amount of calls unpaid
K..........................................................................................
(6) Amount of unpaid liability on shares in each class, not yet due for
payment:
(6) ..............................per share on..............................
..............................shares
(6) ..............................per share on..............................
..............................shares
(6) ..............................per share on..............................
..............................shares
(6) ..............................per share on..............................
..............................shares
(7) Total amount of unpaid liability K..........
(9) Total number of shares of each class forfeited:

330
Number Class
.............................. ..............................shares
.............................. ..............................shares
(10) Total amount paid (if any) on shares forfeited:
K....................................................................
(11) Total amount of shares for which share warrants to bearer are outstanding
K.........................
(12) Total amount of share warrants to bearer surrendered since the date of the last
return K.............................................
(13) Number of shares comprised in each share warrant to bearer, specifying in the
case of warrants of different kinds, particulars of each kind:
Number Kind
.............................. ............................................................
.............................. ............................................................
.............................. ............................................................
(8) Particulars of indebtedness:
Total amount of indebtedness of the company in respect of all mortgages and charges
which are required to be registered with the Registrar of Companies:
K........................................

(9) Particulars of first directors:

Present forenames and surnames Former forenames or surnames Nationality


and NRC No. or passport No.
Residential and postal addresses Occupation, and other bodies corporate in which
directorship is held

(10) Particulars of secretary of company (a) (if an individual):

Present forenames and surnames Former forenames or surnames Nationality


and NRC No. or passport No.
Residential and postal addresses
Occupation, any other secretaryship held

(b) (if a body corporate):

Name of body corporate Registered office of body corporate


Registered postal address Name of any other body corporate in which a
secretaryship is held Address of principal office, if different from registered office

331
Note: Where all the partners in a firm are joint secretaries, the name and address of
the principal officer of the firm (and, if that address is outside Zambia, the address of
the principal officer of the firm in Zambia) may be given, instead of the particulars of
each partner.
Where the secretary is a body corporate name and its registered or principal office
(and, if that office is outside Zambia, the address of the body corporate in Zambia)
should be given.

(11) Particulars of:


(a) persons holding shares in the company
on .....................................................................................................................................
.................................(date to which this return is made up): and
(b) persons who held shares in the company at any time during the period
since............................................................................................................, 19...............
(Date of previous annual return)

Names,addresses and occupations


Folio in register with details Surname Forenames Address
Occupation Shares held on return day Shares acquired during year
Shares divested during year Remarks
Number Date Number Date

Companies Form 43
NOTICE OF CHANGE OF SITUATION OF REGISTERED OFFICE OR OF
REGISTERED POSTAL ADDRESS

(Section 190)
Company Registration No. .....................................
To: THE REGISTRAR OF COMPANIES:
Notice is hereby given in relation to (name of company)

that:
*1. the registered address of the company will change to:

on and
from........................................................................................................................,
19.......

332
*2. the registered postal address of the company will change to:

on and
from........................................................................................................................,
19.......

Date:....................................................... ............... ..........................................


...............
Secretary
*Delete if not applicable

Companies Form 44
NOTICE OF CHANGE OF SITUATION OF REGISTERED RECORDS OFFICE

(Section 190)
Company Registration No. .....................................
To: THE REGISTRAR OF COMPANIES:
Notice is hereby given in relation to (name of company)

that the situation of the registered records office of the company will change to:...........

on and
from ..............................................................................................................................,
19........
(Full physical address must be given; Post Office Box number is not sufficient, but
may be provided in addition to full address)
Date:........................................................................ ......................................................
..................
Secretary
*Delete if not applicable

Companies Form 45
NOTICE OF CHANGES IN DIRECTORS OR SECRETARIES

(Section 226)
Company Registration No...........
To: THE REGISTRAR OF COMPANIES:
To: Notice is hereby given in relation to
(name of company)

333
that the following are the present directors and secretary of the company. The changes
since the last notice was given are recorded in the sixth column.
Directors:

Present forenames and surnames


Former forenames or surnames Nationality and NRC number or passport
number
Residential and postal addresses bodies corporate in which a directorship is held
(if none, say no)

Changes (see note)

NOTE: The List should contain the names of each person who has a director at the
time of the last return, and each who is a director at the time of the present return. The
"changes" column should mark the changes since the last return e.g., by placing
against the name of a person no longer a director "dead" or "resigned",etc. and against
the name of a new director "in place of (name)",etc.

Secretary:
(a) (if an individual):

Present
forenames and surnames
Former forenames or surnames
Nationality and NRC No. or passport No.
Residential and postal addresses
Occupation,
any other secretaryships held

(b) (if a body corporate):

334
Name of body corporate

Registered office of body corporate

Registered postal
address Name of any other body corporate in which a secretary shp is held
Address of
principal office,
if different from registered office

NOTE: Where all the partners in a firm are joint secretaries, the name and address of
the principal officer of the firm (and, if that address is outside Zambia, the address of
the principal officer of the firm in Zambia) may be given, instead of the particulars of
each partner.
Where the Secretary is a body corporate name and its registered or principal office
(and, if that office is outside Zambia, the address of the body corporate in Zambia)
should be given.
I confirm that each of the persons appointed to office as director or secretary has
consented in writing to act in that capacity.
Signed on behalf of the company
Position in relation to the company
Date:.......................................................

Companies Form 46
APPLICATION FOR REGISTRATION AS A FOREIGN COMPANY

STATEMENT OF PARTICULARS OF A FOREIGN COMPANY

(Section 245)
1. Name of company
2. Country of incorporation
3. Date of incorporation
4. Is the liability of its members limited or unlimited?
If limited, state nature of limitation on liability

5. Nature of business or businesses or other main objects of the company

6. Particulars of the persons who are to be the local directors of the company are as
shown in Appendix A (1) to this Form; or

335
7. The share structure of the company is constituted as shown in Appendix B (...) to
this Form.
(Appendix B consists of three forms, B (1) to B (3) inclusive. Use particular form
appropriate to the share structure of the company)
8. The address of the registered or principal office of the company in the country of
its incorporation is:

9. The address of the established place of business of the company in Zambia is:

10. (a) The full name and residential address of the documentary agent of the
company in Zambia
is:

(b) The business address in Zambia of such documentary agent is:

(c) The Post Office Box number in Zambia of such documentary agent is:

(d) The said documentary agent is a bona fide resident of Zambia at the date of this
statement, and I am informed by him, and believe, that he intends to continue to reside
in Zambia for an indefinite period of time.
11. (a) Particulars of all charges on or affecting any property of the company in
Zambia-
(i) created prior to the date the company established a place of business in Zambia;
and
(ii) create prior to the 1st day of February, 1972, are as shown in Appendix "C" to
this Form.
(b) There are no subsisting charges on, or affecting, any property of the company in
Zambia at the date of this statement.

(Delete (a) or (b) where not applicable)


This statement is made by me
for and on behalf of the said........................

I have been duly authorised in that behalf by Letter of Authority executed by the said
company on the day of........................................19........which
said Letter of Authority is hereto attached, and I state that this statement is true of my
knowledge, save where otherwise appears.
Made at.........................., ............................ this...............................day
of............................, 19.......

336
Signed.....................................................

Appendix "A (1)"

PARTICULARS OF LOCAL DIRECTORS OF FOREIGN COMPANY

Name of company
The names and particulars of local directors of the above-named company, appointed
pursuant to section 245 of the Act, are as follows-
Name (present forename of forenames and surname)

Any former forename or forenames and surname

Nationality

Usual residential address in Zambia

Other Business occupation or directorships, if any. If none, state so

Mr........................................ (No. above-named)


has been designated chairman of local directors by the company, All of the above-
named persons have consented in writing to act as local directors of the company.
Dated this................................................day of........................................19........

..........................................................................................................................................
.............
Signature of persons authorised to make statement

Companies Form 47
NOTICE OF ALTERATION OF THE REGISTERED INSTRUMENT
CONSTITUTING OR DEFINING THE CONSTITUTION OF A FOREIGN
COMPANY

(Section 247)
Company Registration No. .....................................
(NOTE: This Form to be signed by not less than TWO of the local directors.)

337
To: THE REGISTRAR OF COMPANIES:
Name of foreign company:

Notice is hereby given by the above named foreign company that the instrument
constituting or defining its constitution, registered in respect thereof pursuant to
section 245, has been altered in the following respects-
(Here state nature and date of alteration)

A certified copy of .effecting the alteration is hereto attached.


Dated this................................................day of........................................19........

Local Directors

Companies Form 48
NOTICE OF ALTERATION OF REGISTERED PARTICULARS OF A FOREIGN
COMPANY

(Section 247)
Company Registration No. .....................................

(Note: This form to be signed by not less than TWO of the local directors.)
To: THE REGISTRAR OF COMPANIES:
Name of foreign company:

Notice is hereby given by the above named foreign company that particulars stated in
the application for registration as a foreign company have been altered as follows:
(Here state nature and date of alterations)

Dated this................................................day of........................................19........

338
Local Directors

Companies Form 49
NOTICE OF WINDING-UP OR DISSOLUTION OF A FOREIGN COMPANY IN
COUNTRY OF INCORPORATION

(Section 256)
Company Registration No. .....................................

(NOTE: This Form to be signed by not less than TWO of the local directors.)
To: THE REGISTRAR OF COMPANIES:
Name of foreign company:

Notice is hereby given that:


*(a) By an Order of the Court
of , the country of incorporation
(country of incorporation)
of the foreign company above-named, dated
the...............................................................day
of......................................................, 19......, it was ordered and decreed that
the said foreign company be wound up by the said Court. The following person(s)
was/were appointed Liquidator/Liquidators/Receiver/Receivers by the Court for the
purposes of the winding-up

(b) On this..........day of........., 19.......


by in accordance with the law
(resolution or other instrument)
of it was determined that the above
(country of incorporation)
named foreign company be wound up voluntarily. The following person(s)
was/were appointed Liquidator/Liquidators for the purposes of the winding-up:

(c) On the day of................................. 19........


the above named foreign company was dissolved in accordance with the law of

(country of incorporation)
*Delete whichever is not applicable.
Dated this................................................day of........................................19........

339
Local Directors

Companies Form 50
NOTICE OF CESSATION OF BUSINESS OF A FOREIGN COMPANY IN
ZAMBIA

(Section 258)
Company Registration No. .....................................

(NOTE: This Form to be signed by not less than TWO of the local directors.)
To: THE REGISTRAR OF COMPANIES:
Name of foreign company:

Notice is hereby given that the above named company is .has


as of and from the day of........................................19.......ceased
to have an established place of business in Zambia.
Dated this................................................day of........................................19........

Local Directors

Companies Form 51
RETURN OF FINAL WINDING-UP MEETING

(Section 324)
Company Registration No. .....................................
To: THE REGISTRAR OF COMPANIES:
*I/*We of................................being the liquidator(s)..............................have
to inform you that a general meeting of the Company was duly held on the .
day of......................................................, 19......, pursuant to section 324 of the
Companies Act for the purpose of having an account laid before them showing the
manner in which the Winding-up of the Company has been conducted, and the
property of the Company disposed of, and that the same was done accordingly.
Dated this................................................day of........................................19........

(To be signed by each liquidator if more than one)

340
Companies Form 52
COMPANIES FORMS-LODGEMENT SCHEDULE

Date Particulars of document


lodged Fee payable

Lodged
by......................................................................................................................................
...........................................

Companies Form 53
CERTIFICATE OF COMPLIANCE OF A PRIVATE COMPANY

To: THE REGISTRAR OF COMPANIES:


I hereby certify
that...................................................................................................Limited has not,
since the date of the last return (or, where there has been no return since the date of
incorporation of the company as, or its conversion to, a private company, since the
date of the incorporation or conversion), issued any invitation to the public to
subscribe for any shares or debentures of the company.
And I certify that the excess of the number of members of the company above 50
consists wholly of persons who, having been formerly in the employment of the
company, where while in such employment, and have continued after the
determination of such employment to be, members of the company.
Dated this................................................day of........................................19........

Director

Companies Form 54
NOTICE OF PERSONS CEASING TO BE MEMBERS OF A COMPANY
LIMITED BY GUARANTEE

341
(Section 19)
To: THE REGISTRAR OF COMPANIES:
Name of Company:
Limited
Notice is hereby given that the following persons have ceased to be members of the
company on the dates indicated:
Name Date
....................................................................................... ..........................................
......................................
....................................................................................... ..........................................
......................................
....................................................................................... ..........................................
......................................

Companies Form 54
NOTICE OF PERSONS CEASING TO BE MEMBERS OF A COMPANY
LIMITED BY GUARANTEE

(Section 19)
Company Registration No. .....................................
To: THE REGISTRAR OF COMPANIES:
Name of Company Limited
Notice is hereby given that the following persons have become members of the
company and made the declarations of guarantee indicated, on the date indicated:
WE, the several persons whose names and addresses are subscribed, respectively
declare that if, upon the winding up of the company, the assets of the company prove
insufficient to discharge all the debts and liabilities of the company, we guarantee to
contribute to the discharge of those debts and liabilities an amount not exceeding the
amount set against our respective names:

Forenames and surname


Nationality and NRC No. or passport No.
Residential address
Postal address Amount declared to be guaranteed by the subscriber
Signature of subscriber

Dated the..............................................day of............................................,


19.................
Witness to the above signatures:
............................................ ....................................... ..............................
...... .................................
Name Address Occupation Signature

342

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