HOW TO INCORPORATE A COMPANY IN ZAMBIA
First step in the process of incorporating or registering a Company
The first step towards incorporating or registering a company is to complete a Name Clearance Form requesting for a particular proposed name to be cleared. This service carries a fee of K56. For more details on how a name is cleared, see guidelines on name clearance.
Types of Companies obtainable in Zambia
There are broadly two (2) types of companies that can be incorporated in Zambia, namely:
1. Private Limited Companies; and,
2. Public Limited Companies (PLC).
The following are the types of Private Limited Companies that can be incorporated:
1. Company limited by Shares;
2. Company limited by Guarantee; and
3. Unlimited Company.
Private Company Limited by Shares
A Private Companies Limited by shares has a share capital and is formed or incorporated for purposes of carrying on business to derive a profit. Currently, the minimum required authorised capital for a private company other than banks, insurance and other financial institution, is K10,000.
A Private Limited Company may not have more than fifty (50) shareholders. It nevertheless may have the capacity to enter into any type of legal activities as long as its articles do not restrict it. This type of company is however prohibited from making any invitation to the public to purchase its shares or debentures. In the event that it winds 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.
An application for incorporation of Private Company Limited by shares consist of a set of the following; Companies Form 2, Form 5 and Form 11. These Forms should be typewritten and may be accompanied by Articles of Association. To view the Standard Articles of Association click here Standard Articles of Association.
The registration fees for a Private Limited Company with minimum capital of K10,000 is K474.
Company Limited by Guarantee
A Company Limited by Guarantee does not have a share capital and is not permitted to carry on business for the purpose of making a profit for its members or for anyone concerned in its promotion or management. This type of Company is normally formed in order to help the community benefit from a certain project. Mostly, these are organisations such as churches, foundations, trusts etc.
At the time of formation, each member must sign a declaration of guarantee, specifying the amount that he undertakes to contribute if the company is wound up. And in case it winds up and the assets are insufficient to cover its liabilities, the liability of its members is limited to the amount so guaranteed.
The application for incorporating a Company Limited by Guarantee is made on; Companies Form 3, Form 5 and Form 11. As in the case with Companies Limited by Shares, these Forms should be typewritten and may be accompanied by Articles of Association specifically for this type of Company.
The registration fees for a Private Limited Company by Guarantee is K500.
An Unlimited Company is one that has a share capital but whose members have unlimited liability for the company’s debts and other liabilities. In other words, whatever is incurred by the company is also deemed to have been incurred by the members.
In terms of membership, it may not have more than fifty (50) shareholders, although there are exceptions to this. In order to incorporate an Unlimited Company, Companies Form 4, Form 5, and Form 11 are used.
The registration fees for an Unlimited Company with a minimum capital of K10,000 is K474.
Public Limited Company
A Public Limited Company states in its articles of association that it is a" Public Limited Company". Its name always ends with the words "Public Limited Company" mostly abbreviated as "PLC". It has a share capital and its authorised minimum capital is K1,000,000.00. It has the capacity of entering into any business activity unless restricted by its articles.
In order to incorporate a Public Limited Company, Companies Form 1, Form 5, and Form 11 are used.
The registration fees for a public limited company with a minimum nominal capital of K1,000,000 minimum is K25,224.
What documents must accompany the application for incorporation?
As stated above, an application for incorporation must be lodged together with:
1. Proposed Articles of Association of the Company, if any;
2. A signed consent from each person named in the application as a Director or Secretary of the Company (Form 5);
3.A declaration of guarantee by each subscriber if the Company is to be limited by guarantee (Form 3); and,
4.A statutory declaration (Companies Form 11) that the requirements of the Companies Act have been complied with, signed by:
a) a legal practitioner holding a practicing certificate who was engaged in the formation of the Company; or
b) a person named in the application for incorporation as a first Director or Secretary of the Company.
Who is eligible to incorporate a Company in Zambia?
Any two (2) or more persons associated for any legal purpose may form an incorporated company by subscribing their names to an application for incorporation and lodging it with the Registrar.
Who is NOT eligible to subscribe to an application for incorporation?
1. Any person under eighteen years of age;
2. An undischarged bankrupt under Zambian Laws;
3. Subject to an order by the court, an undischarged bankrupt under laws of another country;
4. Anyone who is of unsound mind and has been declared so by the court or a court of competent jurisdiction of another country.
What are Articles of Association?
These are Regulations that regulate the relationship between the company and members thereto. Click here to view Standard Articles of Association.
What is the procedure for incorporating (registering) a Company?
To register a company, the promoters who have expressed their desire to be formed into a company with a specific name and objects and have prepared documents (in this case the application for incorporation and other relevant documents) should lodge these documents with the Registrar of Companies. If these documents are in order, they will then be registered upon payment of the relevant fees and the Registrar will issue Certificates of Incorporation and Share Capital which are conclusive evidence that the Company has been incorporated or registered.
What is the Minimum Authorized Share Capital for the various types of Companies?
|1.||Private Company -Minimum Nominal Capital||K10,000|
|2.||Public Company - Minimum Capital||K1,000,000|
|3.||Bureau de Change - Minimum Capital||K250,000|
Local Bank - Nominal Capital
Foreign Bank - Nominal Capital