SCHOOL OF BUSINESS, ECONOMICS AND MANAGEMENT

STUDENT NAME: ALEX NKOLE MULENGA

STUDENT NUMBER: BBA1712848

LECTURERS NAME: MS NTEMENA MWANAMWAMBWA

COURSE CODE: BBA 350

COURSE NAME: COMPANY LAW

MODE OF STUDY: DISTANCE

ASSIGNMENT NO: 02

DUE DATE: 4TH MAY 2020

1. Discuss how you will convene the AGM taking into account the restrictions
put in place by government.

Section 83(b)(i) of the companies Act 2017 imposes the company secretary to Inform
the board of directors on the legislation relevant to or affecting the meetings of
members and the board. Due to the recent outbreak of corona virus and sanctions
the president has announced to help prevent further spreading of the disease. I
would recommend Section 56(2) of the companies act 2017 which states A meeting
called in accordance with this part at which voting will be conducted or documents
tabled may be held by teleconferencing or other electronic means. As the meeting is
going on as planned 50 people will be allowed to be physically present at the AGM
while other members will join in using online video conferencing. A day before the
meeting will commence a notice consisting of guidelines on how to participate or
contribute, which platform the meeting will be live streamed on and how to login will
be sent out as to every shareholder or stakeholder whose entitled to attend the
meeting.

2. Discuss how a personal representative of a deceased member who had the

right to vote at AGM and a trustee in bankruptcy of a bankrupt member who
had the right to vote at AGM, have the right to attend an AGM.

According to section 141(1) of the companies Act 2017 a share in a company is

personal property and further section 141(2)(a) imposes a share in a company
confers on the holder the right to one vote on a poll at a meeting of the company on
any resolution. A deceased member owned a share in a company which was their
personal property before their untimely death and as such was entitled to receive
notice of a general meeting but due to their death Section 62(1)(b) of the companies
Act 2017 comes into play and imposes a person on whom the ownership of a share
devolves by reason of the person being a legal personal representative, receiver or
assignee in bankruptcy of a member and of whom the company has received notice.
The personal representative of a deceased member has the right to attend the
general meeting as they represent the estate of the deceased member, they can
either be an executor or administrator.

As for a bankrupt member when their declared bankrupt their shares are not taken
away but there are precluded or prevented from exercising their shareholding in the
company. They are not allowed to vote or attend any meetings in the company.
When your declared bankrupt the court appoints someone to handle your affairs as
such they step into the position of the bankrupt person and are permitted to attend
and vote at an AGM of which section 62 above clearly states and section 66(b) of the
companies Act 2017 clearly states the following people are entitled to attend and to
speak at a meeting of a company a person on whom the ownership of a share
devolves by reason of that person being personal representative successor in title
receiver or assignee in bankruptcy of a member this allows them to vote at an AGM.

3. Agenda number 4 is: to consider and adopt the recommendation for the re-
appointment of Deloitte & Touché (Zambia) as Auditors for the year ending 31
December 2020 and authorise the Directors to fix their remuneration. Discuss
the four (4) qualification conditions which apply to Deloitte & Touché (Zambia).
[10 marks]

According to section 257(1) of the companies Act 2017 an auditor may be

reappointed by an ordinary resolution by the company at the annual general
meeting. An ordinary resolution simply means a majority vote of 50+1, and so before
the ordinary resolution the conditions in section 254 of the companies act 2017 must
be considered.

Section 254 of the companies act imposes An auditing firm may be appointed to be
the auditor of a company if

(a) At least one partner of the firm is ordinarily resident in Zambia, and the
company will look at the partners of the firm to see if there is at least one
partner who is resident in Zambia and looking at this being a recommendation
for reappointment they will have to check after the term if there is a partner
who is still resident in Zambia.
(b) All or some of the partners including the partner who is ordinarily resident in
Zambia, are qualified for appointment as auditors, The company will have to
scrutinise each partner in order to find out if they are qualified as auditors.
The company would have carried out investigations on each member to check
if they have not lost their qualification to practice or audit.
(c) The firm is not indebted to the company this means that the firm should not
owe the company any money, because if an auditing firm owes the company
 money then the company can influence the auditors reports which can be
referenced to the Enron and Arthur and Anderson case, This should be
considered before reappointment.
(d) A partner of the firm is not a member, director or employee of the company or
a related company. As referenced above there can be interference or conflict
of interest. As such this should be scrutinized before reappointment.

4. Based on agenda number 2, Lafarge Zambia Plc’s financial year ended on

31 December 2019. By what last date should the company have filed its annual
returns?

According to Section 270(1) of the Companies Act 2017 a company shall within
ninety days after the end of each financial year, lodge with the registrar, an annual
return in the prescribed form and as such after December 2019 the company has 90
days to file an annual return. According to the question the last date to file annual
returns is 31st march 2020 failure to which will attract a penalty.

5. What six (6) documents must have been filed at the Patents and Companies
Registration Agency (PACRA) by Lafarge Zambia Plc when filling its annual
returns?

According to Section 273 of the Companies Act 2017 imposes a public company
shall lodge with the registrar, together with the annual return, a certified copy of
every financial statement, statement of comprehensive income, group accounts,
directors report and auditors report sent to members and debenture holders since
the last annual return was made.

6. Agenda number 3 is: To consider, and if thought fit, not declare a dividend.
In what specific circumstance can a company declare and pay out dividends to
its shareholders? What is the purpose behind such a safeguard?

According to Section 158(1) of the Companies Act 2017 it states subject to this act
and articles, the board of directors may, if satisfied that the company shall
immediately after a distribution of dividends satisfy the solvency test authorise a
distribution of dividends by the company, in an amount stated and to a shareholder
that may be entitled and so Section 159 of the companies is also included a
company shall not distribute dividends to shareholders except out of the profits
arising or accumulated from the business of the company the purpose behind this is
the company should consider the following factors when paying cash dividends they
are usually paid out from retained earnings or after tax profit of which if the after tax
profit is below projections the company will not pay out dividends for it needs money
to operate.

Another factor is when the firm or company is considering lowering the cost structure
by either paying out existing debt, increasing operations or buying out other
businesses when this factor is put into consideration the directors can see fit to not
pay dividends.
Bibliography

Companies Act 2017

Slav Federov 2018,Dividend Profitability, viewed 3 rd May 2020

https://pocketsense.com/dividend-payment-factors-2470.html