Companies Act 2017 - National Assembly

1 10 201711th July, 2017 THE Companies BILL, 2017 MEMORANDUMThe object of this Bill is to (a)promote the development of the economy by encouragingentrepreneurship, enterprise efficiency, flexibility andsimplicity in the formation and maintenance ofcompanies;(b)provide for the incorporation, categorisation, managementand administration of different types of Companies ;(c)provide the procedure for the approval of company names,change of name and conversion of Companies ;(d)provide for shareholders rights and obligations, the conductof meetings and the passing of resolutions byshareholders;(e)encourage transparency and high standards of corporategovernance by providing for the functions and obligationsof company secretaries and directors;(f)provide for issue of shares, share capital requirements,procedures for alteration and reduction of share capitaland disclosure requirements of Companies ;(g)provide for the public issue of shares, the issue andregistration of charges and debentures;(h)incorporate financial reporting provisions, maintenanceof accounting records, and access to financialinformation of Companies ;(i)provide for amalgamations;(j)provide for the registration of foreign Companies doingbusiness in Zambia;(k)provide for the deregistration of Companies ;(l)repeal and replace the Companies Act, 1994; and(m)provide for matters connected with, or incidental to, KALALUKA,Attorney-GeneralCompanies[No.]

2 Of 2017 3 THE Companies BILL, 2017 ARRANGEMENTOFSECTIONSPART IPRELIMINARYPROVISONSS ection1. Short title2. Application ofAct3. Interpretation4. Definition in other laws5. Superiority of ActPART IIINCORPORATIONANDREGISTRATIONOFCOMPANIE S6. Types of Companies to be incorporated7. Public companies8. Private companies9. Private Companies limited by shares10. Companies limited by guarantee11. Private unlimited companies12. Application for incorporation13. Declaration of compliance14. Certificate of incorporation and share capital15. Certificate to be evidence of incorporation16. Legal status of registered company17. Contractual effect of incorporation18. Display of certificate of incorporation19. Rejection of application for incorporation20. Pre-incorporation contracts21. Register of Companies and Register of Beneficial OwnersPART IIICORPORATECAPACITYANDADMINISTRATION22.

3 Capacity, powers and rights of a company23. Validity of acts24. Presumption of knowledge25. Articles of association26. Effect of articles of association27. Amendment of articles of 10, 20174 No. of 2017]Companies28. Registered office and change of registered office29. Publication of name of company30. Records kept at company s registered office31. Register of directors and secretaries32. Seal of company and execution of documents33. Common seal for use abroad34. Service of documents on company35. Services of documents by companyPART IVCOMPANYNAMEANDCHANGEOFNAME36. Company name to end with PLC or Ltd37. Application to omit or dispense with Limited in name ofcompany limited by guarantee38. Revocation of approval to dispense with Limited 39. Clearance and approval of proposed name40. Rejection of application to approval of name41. Reservation of company name42.

4 Change of name43. Registrar may direct change of name44. Document with incorrect name not void45. Liability where company name incorrectly stated46. Publication of change of company name prior to public notices47. Legal effect of change of namePART VCONVERSIONOFCOMPANIES48. Conversion of private company limited by shares into companylimited by guarantee49. Conversion of private company limited by shares into unlimitedcompany50. Conversion of company limited by guarantee into companylimited by shares or unlimited company51. Conversion of unlimited company into private limited company52. Conversion of public company into private company limitedby shares53. Conversion of private company limited by shares into publiccompany54. Process of conversion55. Imposition of penalty by Registrar for 10, 2017 Companies [No. of 2017 5 PART VIMEETINGSANDRESOLUTIONS56. Types of meetings57.]

5 Annual general meeting58. Business to be transacted at annual general meeting59. Extraordinary general meeting60. Class meetings61. Requisition of general meeting62. Entitlement to receive notice of meetings63. Length of notice for convening meeting64. Meeting by order of Court65. Place of meetings66. Attendance at meetings67. Conduct of meetings and voting68. Chairperson s declaration as to result of vote69. Right to demand poll70. Voting on a poll71. Proxies72. Representation of corporates and unincorporated associationsat meetings73. Circulation of members resolutions and supporting circulars74. Circulation of members statements75. Refusal to circulate members statements76. Reference to ordinary, extraordinary, and special resolutionsin other documents77. Written resolutions for private companies78. Lodgement of resolutions79. Date of certain resolutions80.

6 Minutes of proceedings of meetings81. Inspection of minute booksPART VIICORPORATEGOVERNANCE82. Company secretary83. Responsibilities of company secretary84. Appointment of corporate as company secretary85. Appointment of directors86. Powers and duties of directors87. Limitations on powers of directors88. Delegating powers of board89. Board 10, 20176 No. of 2017]Companies90. Number of directors falling below prescribed minimum91. Residential requirements of directors92. Qualifications of director93. Disqualification by court from holding office of director94. Consent before appointment as director95. First and subsequent directors96. Appointment of directors by Court97. Alternate directors98. Removal of director from office99. Vacancy in office of director and the filing up of casualvacancy100. Notice of change of directorship and particulars101. Executive director102.

7 Acts done in dual capacity as director and secretary103. Loans to directors by company104. Directors to comply with Act and articles105. General responsibilities of directors106. Fiduciary duties of directors107. Duty to avoid conflict of interest108. Meaning of interest 109. Duty not to accept third party benefits110. Disclosure of interest of director111. Avoidance of transaction in which director has interest112. Effect of avoiding transaction onbona fidepurchase113. Use of information114. Disclosure of interest in shares issued, acquired or disposedof by director115. Restrictions on director regarding disposal of shares116. Director s liability on share dealing117. Exception for Companies dealing in securities118. Remuneration for directors119. Approval of other distributions by special resolution120. Liability of director for breach of duty121. Validity of decisions by executive officer122.

8 Liability and indemnity with regard to decisions madebonafidePART VIIISHAREHOLDERS RIGHTSANDOBLIGATIONS123. Declaration in respect of beneficial interest in share124. Beneficial ownership of 10, 2017 Companies [No. of 2017 7125. Liability of shareholders126. Liability of former shareholders127. Liability of person ceasing to be shareholder beforeshareholders liability becomes unlimited128. Shareholders not required to acquire shares by alteration toarticles129. Liability of personal representative130. Liability of assignee131. Exercise of powers reserved for shareholders132. Power to acquire shares of minority on takeover133. Rights of minority on takeover134. Remedy against oppression of minority on takeover135. Classes and interest groups136. Alteration of shareholder rights137. Shareholder requiring company to purchase shares138. Right of shareholder to commence actionPART IXSHARESANDSHARECAPITAL139.]

9 Share capital140. Alteration of share capital141. Rights and powers attaching to shares142. Types of shares and rights conferred143. Variation of class rights144. Pre-emptive rights145. No par value of shares146. Issue of shares on incorporation and amalgamation147. Issue of other shares148. Forfeiture and surrender of shares149. Return on allotment of shares150. Reduction of share capital151. Confirmation of reduction by Court152. Consideration for shares153. Consideration to be determined by Board154. Exceptions to consideration for shares155. Consideration to issue of options and convertible securities156. Subsequent issue of shares157. When share is issued158. Board to authorise distribution of 10, 20178 No. of 2017]Companies159. Dividends to be paid out of profits160. Shares in lieu of dividends161. Recovery of distributions of dividends162. Reduction of shareholder s liability and distribution163.

10 Company may acquire fully paid-up shares164. Acquisition of company s own shares165. Board may make offer to acquire shares166. Special offers to acquire shares167. Disclosure document168. Securities exchange acquisition subject to prior notice toshareholders169. Disclosure document for securities exchange acquisitions170. Securities exchange acquisitions not subject to prior noticeto shareholders171. Cancellation of shares repurchased172. Enforceability of contract to repurchase shares173. Company may hold its own shares174. Suspension of rights and obligations attaching to shares heldby company in itself175. Reissue of shares held by company in itself176. Redeemable shares177. Redemption at option of company178. Special redemption of shares179. Disclosure document180. Cancellation of redeemed shares181. Redemption at option of shareholder182. Redemption on fixed date183.