Companies

Post Incorporation Requirements For Companies

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POST INCORPORATION REQUIREMENTS FOR COMPANIES

Post incorporation requirements are obligations which limited companies are supposed to fulfill subsequent to incorporation. These include filing of annual returns, change of directors or secretary, change of financial year, alteration in capital, allotment of shares, transfer of shares and change of registered office.

Why filing Annual Returns is important
Annual Returns are important as they show that a company is still legally alive and operational. The Annual Return Form must be submitted in duplicate. The Companies Act requires that the annual return forms for companies are typewritten. Details to be provided on the form include directors, shareholders and the number of shares held by each. The nominal capital of the company and the value of each share are also specified. It is import to note that annual returns are payable even when a company has not been operational. Non-filing of annual returns can result in the company being struck-off the register.

Annual Returns for companies must be filed not later than three (3) months from the date of the financial year end.

The following are the prescribed Annual Return forms:-

1.    Private Companies Limited by Shares Form 42, Form 53

2.    Companies Limited by Guarantee Form 58

3.    Public Limited Companies Form 42


What are the fees for Annual Returns?
The Annual Return fees are as follows:

(i) Private Companies Limited by Shares and by Guarantee

Normal Filing Fee per year K111


(ii) Public Limited Companies

Normal Filing Fee per year K556



 

(iii) Banks, Financial Institutions and Insurance Companies

Bank
1.    Private K1,111
2.    Public K1,667
Insurance Companies
1.    Private K1,111
2.    Public K1,667
Other Financial Institutions
1.    Private K1,111
2.    Public K1,667



Application for conversion of company
A Private Company Limited by shares, Private Company Limited by Guarantee, an Unlimited Company or indeed a Public Limited Company may be converted into another type of a company if a special resolution is passed to that effect. An application for conversion of company (section 35) is made on Form 14. The statutory fee for converting a company from one type to another is K945.

Application for Reservation of a name
If for some reason the name approved cannot be used immediately, the applicant should request the Registrar in writing to have the name reserved. A prescribed form called Companies Form 19 must be submitted together with an acceptance letter for name clearance. The name will be reserved for a period of ninety (90) days from the date of approval upon payment of  K111.

Application for change of company name
A company may pass a special resolution to change its name. An application for change of company name (Form 21) must be submitted within twenty-one days after the date of the resolution. The company should notify the Registrar through a prescribed form that the company intends to change its name to the name specified in the resolution called the "new name". The fees for change of company names are as follows:-

1.    Private and Public Limited Companies K278
2.    Company Limited by Guarantee K278
3.    Foreign Companies K1,111

The above should be accompanied by a resolution at a fee of K111.

In case of a Foreign Company, Form 48 - Notice of Alteration of the Registered Particulars of a Foreign Company is filed and the relevant statutory fee paid. Other documents submitted apart from prescribed forms are Board Resolution and the original Certificate of Incorporation or Certification of Registration of a Foreign Company. The Registrar may either accept or reject a proposed name.

If the company name is accepted, a new Certificate of Incorporation will be issued. On the other hand, if the name of the company is rejected, the applicant will be required to fill in a name clearance form and pay a search fee of K56 in case of local companies and K111 in case of foreign companies.

Directors who intend to change their company name should be mindful of the fact that 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 commenced or continued against it by its former name, and any such legal proceedings may be commenced or continued against it by its new name.

Change of financial year of a company
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. This is the date when Directors of a company are expected to prepare the statement of accounts and review the operations of a company and file annual returns to PACRA. The financial year of the company could also be the anniversaries of the date of its incorporation, if the application for incorporation did not specify such a date

A company may change an accounting date by lodging a notice of the change in the prescribed form (Form 26) with the Registrar. The filing fee for change of financial year is K111.

The notification of change of financial year must be lodged with the Registrar and given to the members of the company and to the auditors (if any) not later than the accounting date previous to the one to be changed.

Transfer of fully-paid shares in a company
Shares in a company held by other companies or individual are freely transferable. For the purpose of transfer of shares, Form 27 – Form for Transfer of Fully Paid Shares - must be completed. The filing fee for the said form is K556.

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 Registrar of Companies shall accept and register the transfer. Thereafter, the electronic database record for shareholders is amended accordingly.

Return of allotment of shares
A company with unissued shares may allot the shares to any company or individual who qualifies to be a shareholder in a company. A prescribed form called Return of allotment of shares (Form 28) and a resolution must be filed. The filing fee is K111.

A return of the allotments in the prescribed form, states 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.

Notice of alteration in capital
A company may, unless its articles provide otherwise, by special resolution, alter its share capital by increasing or reducing its share capital by new shares of such an amount as it thinks expedient. A reduction in share capital must be sanctioned by a court order. A Notice of Alteration in Capital (Form 29) and a resolution must be filed within one month from the date when the resolution for alteration in capital was passed.

The Registration fee for Notice of Alteration in Capital is 2.5.% of the increased capital plus K56. Upon payment of the relevant filing fee, the Registrar of Companies issues a Replacement Certificate of Share Capital worded to meet the circumstances of the case. The Minimum Authorized Share Capital for various companies is as follows:-

1. Private Company -Minimum Nominal Capital K10,000
2. Public Company - Minimum Capital K1,000,000
3. Bureau de Change - Minimum Capital K250,000
4.

Financial Institution - Minimum Capital

Insurance Company - Minimum Capital

Insurance Broker - Minimum Capital

Re-Insurance Company - Minimum Capital

K500,000

K1,000,000

K520,000

K5,000,000

5.

Local Bank - Nominal Capital

Foreign Bank - Minimum Capital

K1,000,000

K520, 000, 000

All companies with a nominal capital below the statutory minimum capital stated above are required to increase their capital accordingly pursuant to Statutory Instrument No. 53 of 2014.

Registration of a charge or mortgage
A company that obtains a mortgage or charge from any institution is required to register the said charge or mortgage with the Registrar of Companies. Statutory prescribed Forms called (Form 31, 33, 34 or Form 32) must be filed respectively.

The Registration fee of a mortgage, debenture or other charge is 1% of the amount borrowed but in no case shall the fees be more than K2,778.

If the particulars and documents relating to a charge or mortgage are lodged with the Registrar within  twenty-one days after the date of the creation of the charge, or after the acquisition of the property, the Registrar shall issue a certificate of the registration of the charge or mortgage stating the date of lodgment and, if applicable, the amount thereby secured, and the certificate shall be conclusive evidence that the requirements of the Companies Act as to registration have been complied with.

Registration of discharge and release from mortgage or charges
The entries of satisfaction and release of property from mortgage or charge must be registered with PACRA. The prescribed form known as Memorandum of satisfaction/discharge and release from mortgage or charges – Form 35, signed on behalf of a company and by the person entitled to charge must be submitted to PACRA. The filing fee for the said Form 35 is K556.

The Notice must state whether the debt for which the charge was given has been paid or satisfied in whole or in part; or whether 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.

Appointment of Receiver or Receiver and Manager
A receiver or receiver and manager is a person appointed for the purpose of protecting the interests of the mortgagee, the mortgagor and subsequent encumbrancers, as well as guarantors of the debt secured by the debenture. He/She has a primary duty to realise the assets charged by that debenture with a view to liquidating the debt owing to the mortgagee. A receiver's power to sell the charged assets arises from the terms of the debenture pursuant to which he is appointed together with the powers set out in a court order or deed of appointment.

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, is required to file a Notice (Form 39) with the Registrar of Companies within seven days after obtaining the order or making the appointment.

Apart from filing Form 39, a person who is appointed as a receiver of property of a company is also required to lodge with the Registrar a notice in the prescribed form (Form 40) of the physical address of the person's office and a postal address. The fees for appointment of Receiver or Receiver and Manager are as follows:-

Form 39 K556
Form 40 K111
Gazette Notice Advertisement Fee
K150
Total Amount K817


On lodgment of Form 39 and Form 40 the Registrar shall cause a notice to be published in the Gazette of the appointment of the person as Receiver or Receiver and Manager as the case may be.

Ceasing to Act as Receiver or Receiver and Manager
Where a person who has been appointed receiver of property of a company ceases to act as receiver, he or she is required to lodge with the Registrar a notice (Form 41) that he has ceased to act as receiver within seven days after so ceasing to act as receiver.

On lodgment of Form 41, the Registrar shall cause a notice to be published in the Government Gazette that the person has ceased to act as Receiver or Receiver and Manager, as the case may be. The fees for ceasing to act as Receiver or Receiver and Manager are as follows:-

Form 41 K556
Gazette Notice Advertisement Fee K150
Total Amount K706


Change of Situation of Registered Office or of Registered Postal   Address
The registered office of the company is the place the physical address of which was notified in the application for incorporation and the registered postal address is the postal address notified in the application.

A company may change its registered office or registered postal address by lodging a notice in the prescribed form (Form 43) with the Registrar, specifying the date from which the change will take effect. The Filing fee for change of physical registered office and address is K56.

Changes in Directors or Secretaries
In case of any changes in Directors or Secretary such as Appointment, Resignation, Dismissal or death of Directors or Secretaries, a company shall, within twenty-one days after any change occurs, lodge with the Registrar a notice of the change in the prescribed form (Form 45), specifying the date and nature of the change.

If a person has been appointed as a new director or secretary of the company, he or she must consent in writing to act in the relevant capacity by way of signing a prescribed Form known as Declaration of Consent to Act as Director or Secretary (Form 5).

If a person is resigning as a Director or Secretary, the company will be required to file a Notice of Change in Directors or Secretary (Form 45) only. However, if new Directors or Secretaries are appointed in place of the deceased or outgoing Directors or secretary, the company will be required to file Form 45, Form 5 and a Resolution. The Fees are as follows:-

Form 45 K111
Form 5 K56
Resolution K111

Person Becoming Members of a Company Limited by Guarantee
The members of a company limited by guarantee are those who subscribed to the application for incorporation and sign a declaration of guarantee specifying the amount that he/she undertakes to contribute to the assets of the company in the event of it being wound-up.

This means that each subscriber to the application for incorporation is, on the incorporation of the company, a member of the company.

A company limited by guarantee may appoint a person as a new member by passing a resolution. He or she will be required to sign a declaration of guarantee specifying the amount that he/she undertakes to contribute to the assets of the company in the event of its being wound-up.

Within seven days after a person becomes a member of the company, the company shall lodge with the Registrar a notice  in the prescribed form (Form 62), together with the declaration of guarantee signed by the incoming person (s).

Notice of Persons Ceasing to be Members of a Company Limited by Guarantee
The members of a company limited by guarantee are those who subscribed to the application for incorporation and sign a declaration of guarantee specifying the amount that he/she undertakes to contribute to the assets of the company in the event of it being wound-up, who have not given the company written notice of their ceasing to be members.

This means that each subscriber to the application for incorporation is, on the incorporation of the company, a member of the company.

If a person ceases to be a member of a company limited by guarantee, a Notice (Form 54) must be filed to the Registrar within seven days after a person ceases to be a member of the company. He or she must sign a notice (Form 54) in writing to that effect. The filing fee for the said Notice is K111.

Appointment of Liquidator
A liquidator is an officer appointed when a company goes into liquidation. He/she has the responsibility of collecting in all of the assets of the company and settling all claims against the company before putting the company into dissolution.

A liquidator must lodge with the Registrar and with the official receiver notice (Form 59) of his appointment and of the situation of his office and of his postal address. In the event of any change in the situation of his office or in his postal address, such changes should also be notified with the Registrar.

The fees are as follows:-

Form 59 K556
Gazette Notice Advertisement Fee K150
Total Amount K706



On lodgment of Form 59, the Registrar shall cause a notice to be published in the Government Gazette that the person has been appointed to act as a Liquidator or provisional Liquidator, as the case may be.


Ceasing to Act as Liquidator
After resignation or removal from office of a person acting as Liquidator, he/she is obliged to lodge a notice (Form 57) with the Registrar of Companies, within twenty-one days from the date of ceasing to act as such. The fees are as follows:-

Form 57 K556
Gazette Notice Advertisement Fee K150
Total Amount K706



On lodgment of a (Form 57), the Registrar shall cause a notice to be published in the Government Gazette that the person has ceased to act as a Liquidator or provisional Liquidator, as the case may be.

De-registration of a company under Section 361 (4) of the Companies Act Cap. 388 of the Laws of Zambia
Where the Directors of a Company have reasonable cause to believe that their Company is not carrying on business or is not in operation, they are required to notify the Registrar of their intention to dissolve the Company.

Directors wishing to have their Company de-registered must lodge the following documents:-

1.    Application letter for de-registration of a company to be addressed to the Registrar of Companies, P.O. Box 32020 Lusaka;
2.    Statutory Declaration by two or more directors showing what disposition the company has made of its assets and that the Company has no debts or liabilities;
3.    Summary of Accounts;
4.    Ordinary Resolution;
5.    Surrender the original Certificate of Incorporation, Certificate of Minimum Capital and Certificate of Share Capital; and,
6.    Filing fee K524.

On lodgment of the above documents and payment of the relevant filing fees, the Registrar shall cause an initial struck-off notice to be published in the Government Gazette for a period of three months.

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