UNIT 4 REGISTRATION OF A COMPANY

The word company ordinarily means an association of a number of individuals formed

for some common purpose. As noted above, when such an association is registered
under Companies Act 2017, it becomes an artificial person with perpetual succession
and a common seal.
According to Lord Justice Lindley, a company is an association of many persons who
contribute money or money’s worth to a common stock and employed for a common
purpose. The common stock so contributed is denoted in money and is capital of the
company. The persons who contribute it are members. The proportion of capital to
which each member is entitled is his share. Shares are always transferable although
the right to transfer them is often more or less restricted.

3.1 THE PATENTS AND COMPANIES REGISTRATION AGENCY

The Patents and Companies Registration Agency (PACRA) is a semi-autonomous
executive agency of the Zambian Ministry of Commerce, Trade and Industry.

The Patents and Companies Registration Agency Act, 2010, section 3 provides for the
establishment of the Patents and Companies Registration Agency as a corporate body
with perpetual succession and a common seal, capable of suing and of being sued in its
corporate name. The functions of the Agency include the administration of the
Companies Act, the Registration of Business Names Act, the Patents Act, the Trade
Marks Act, the Registered Designs Act and the Companies (Certificates Validation) Act.

Further, Patents and Companies Registration Agency Act, 2010 section 6(1) provides
that the functions of the Agency shall be performed by a Board of part-time members
appointed by the Minister of Commerce on a three year tenure and may be re-
appointed.

4.1 FUNCTIONS OF PACRA

The principal functions of PACRA are to operate a legal system for registration and
protection of commercial and industrial property and to serve as a legal depository of
the information tendered for registration. It comprises two core departments - Industrial
Property and Commercial.
Pacra is a public office with the following main functions:
(i) Incorporation and re-registration of companies
(ii) Striking off companies.
(iii) Registration of information required under the Companies Act, the Insolvency Act
and other legislation
(iv) The provision of information to the public regarding a registered company.
ROLE OF THE REGISTRAR

REGISTER OF COMPANIES AND REGISTER OF BENEFICIAL OWNERS

The Companies Act 2017 section 21 provides that the Registrar shall establish and
maintain a Register Of Companies in manual or electronic form

REJECTION OF APPLICATION FOR INCORPORATION

The Companies Act 2017 section 19 (1) empowers the Registrar to reject an application
for incorporation of an entity where an applicant—

(a) Does not meet the requirements of this Act; or

(b) Submits false information in the application for incorporation.

For instance, the Registrar is entitled to refuse to register a company where it has been
formed for an unlawful purpose:

R v Registrar of Joint Stock Companies, ex p Moore

DE-REGISTRATION OF AN INCORPORATED COMPANY

BY THE COURT
The court may be petitioned to cancel a registration if it appears that the company has
been registered for purposes which are unlawful or contrary to public policy:
R v Registrar of Companies, ex p Attorney-General

BY THE REGISTRAR
The Companies Act 2017 section 317 (1) empowers the Registrar to deregister a
company where the—
(a) The company has not filed annual returns for two consecutive years;
(b) The Registrar has reasonable cause to believe that a company is a dormant
company;

BY THE COMPANY
The Companies Act 2017 section 318. (1) provides that a company may request to
deregister itself for reason that it is a dormant company (section 317(1)(d))
Such a request to deregister shall be accompanied by the prescribed fee and a—

(a) A copy of the special resolution signed by the shareholders or promoters of the
company to have the company deregistered;

(b) A summary of accounts, if any;

(c) A statutory declaration by two or more shareholders or promoters of the company
on the assets of the company stating that the company has no debts or liabilities.

REGISTRATION PROCEDURE

As part of the registration procedure, both public and private companies should provide
a constitution which sets out the powers of the company and allocates them to the
Company’s organs i.e. The Board of Directors and the general meeting.

However, the Companies Act 2017 has dispensed with the requirement to file the
memorandum of association. The only constitutive document the company may file is
the Articles of Association.

COMPANY FORMATION PROCEDURES

A company is registered by filing certain documents with the Registrar

PROCEDURE FOR PROMOTION: THE INCORPORATION CHECKLIST.

1) Name Clearance.

The very first step is to write to the Registrar of companies seeking to have a name
cleared. If the name is available for registration as a company name and the Registrar is
satisfied with its suitability, then he will inform the applicant accordingly and the name
will be available for a period of one month. If the company will not have been
incorporated within the one month period, the availability of the name lapses and the
applicant would have to re-apply for name clearance. If an applicant is of the view that
he/she may take longer than a month to have a company incorporated, they have an
option to apply to reserve the name for a longer period of three months at a fee. The
rationale for name clearance is to ensure that a company name proposed is not similar
to that of another existing company such as to cause confusion between the two.

2. Preparation of Documents
The next stage is to prepare and lodge several documents that are necessary for
incorporation:

i) The Application for Incorporation.

This is a prescribed document that must be signed by at least two subscribers who must
specify in the application form the following:

a. the proposed name of the company;

b. physical address that will be the registered address/office of the company

c. postal address of the registered office

d. type of company formed

e. if the company has share capital, details of the amount of share capital, the division
of it into shares of fixed amount, and the number of shares each subscriber agrees to
take.

f. particulars of the persons who will be first director and secretary of the company.

ii) The Articles of association.

These are domestic rules or regulations of the company relating to the conduct of the
company business. They constitute a contract between the company on the one hand
and each member on the other hand as well between the members inter se. Though
open or available for the public to inspect them on payment of a fee at the company
registry, they however do not constitute any contract between an outsider and the
company or its members.

iii) Consent form

This is a document signed by each person named in the application for incorporation as
a director or secretary of the company to be incorporated stating that he/she consents
to act in the said capacity.

iv) Declaration of Compliance

This is a document signed by either the person named as a director in the application
for incorporation or a legal practitioner declaring that the legal provisions for
incorporation of a company have been complied with.

v) Declaration of Guarantee

Where the company being incorporated as one limited by guarantee, an additional

document must be lodged together with the above documents. This is a document
signed by each subscriber to the application for incorporation stating or declaring that
each will contribute a specified amount of money towards the liabilities or debts of the
company in the event that the company winds up or is liquidated and is in debt.

Once all necessary documents are lodged with the Registrar of Companies, his/her role
is to scrutinise them and, once satisfied with the documents, cause the company to be
registered. The Registrar places the name of the company on the companies register.
He then issues a Certificate of Incorporation which specifies that on and from the date
indicated in the certificate the company has been incorporated and is of the type
specified in the application for incorporation. Where the company formed is one with
share capital, the Registrar also issues it with an additional document known as a
Certificate of Share Capita that states the amount of share capital of the company and
its division into shares of fixed amount.

Once incorporated, a company shall have the capacity, rights, powers and privileges of
an individual subject to such limitations as are inherent in its corporate nature.

3.1 Significance of Registration

Registration is the condition precedent to the formation of a registered company and

failure to register a proposed company will mean that it does not legally exist.

3.2 Effect of Registration

(i) The date mentioned in the certificate of incorporation is the date from which the
company’s legal existence commences.

(ii) The company’s registration constitutes it “a body corporate”. It becomes a legal

person or “corpora corporata” whose name is that appearing in the articles of
association. The certificate of incorporation is regarded as the company’s birth
certificate and the date written on it is the company’s birthday.

(iii) Once the company is registered it must be treated like any other independent
person with rights and liabilities appropriate to itself.

4.3.3 COMPANY FORMATION PROCEDURES

APPLICATION FOR INCORPORATION

12. (1) Subject to the other requirements of this Act, two or more persons may apply to
incorporate a company specified in section 6 for a lawful purpose, by subscribing their
names to an application for incorporation in accordance with this section.

(2) An application for incorporation of a company, specified in subsection (1), shall be

made in the prescribed manner and form and shall be lodged with the Registrar.

(3) The following shall accompany an application for incorporation of a company:

(a) A copy of the proposed articles of the company, or a statement that it has
adopted the Standard Articles;

(b) Declaration of compliance made in accordance with section 13;

 (c) Signed consent from each person named in the application as a director
or secretary of the company;

(d) Declaration of guarantee by each subscriber, if the company is limited by

guarantee;

(e) A statement of beneficial ownership which shall state, in respect of each

beneficial owner—

(i) The full names;

(ii) The date of birth;

(iii) The nationality or nationalities;

(iv) The country of residence;

(v) The residential address; and

(vi) Any other particulars as maybe prescribed; and

(f) A declaration by the applicants that the particulars stated in

accordance with paragraph (e) have been submitted to the
Registrar with the knowledge of the individuals to whom the
particulars relate.

(4) An application for incorporation specified in subsection (1), shall state—

(i) The name and address of the individual lodging the application;

(ii) The proposed name of the company;

(iii) The physical address of the office to be the registered office of the
company;

(iv) The registered postal address, electronic mail address and phone number
of the company where available;

(v) The type of company to be formed;

(vi) The particulars of persons who shall be the first directors of the company;

(vii) The particulars of persons who shall be the first secretary or joint
secretaries of the company; and

(viii) The nature of the company’s proposed business or proposed activity.

(5) Where a company being incorporated is required to have share capital, the applicant
shall state on the application for incorporation the—

(a) Amount of share capital of the company; and

(b) Number of shares each subscriber has agreed to take.

(6) An applicant shall specify, on the application for incorporation, the date on which the
first financial year of the company shall end, which shall not be more than twelve
months from the date of incorporation.

(7) An application for incorporation shall be signed by each subscriber in the presence
of at least one witness who attests to the signature.

(8) Subject to section 14(2), an individual shall not subscribe to an application for
incorporation if that individual is—

(a) Under eighteen years of age;

(b) An undischarged bankrupt;

(c) Of unsound mind and has been declared to be so by a court of competent

jurisdiction; or

(d) Has in the last five years prior to the application, been convicted of an
offence involving fraud or dishonesty in Zambia or elsewhere.

(9) A person shall not apply to incorporate an entity as a company, for purposes of
carrying out religious or faith based activities.

4.3.2 COMPANY NAMES

PUBLICATION OF NAME OF COMPANY

29. (1) A company shall—

(a) Paint or affix, and keep painted or affixed, the name of the company, in
easily legible Roman letters, above or adjacent to the principal entrance to
the company’s registered office, its registered records office and to every
other office or place in which the company’s business is carried on; and

(b) Have its name accurately stated in Roman letters on all business letters,
invoices, receipts, notices and other publications of the company, and in
all negotiable instruments or orders for money, goods or services issued
or signed by or on behalf of the company.
(2) If a company fails to comply with subsection (1), the company and each officer in
default commit an offence and are liable, on conviction, to a fine not exceeding one
hundred thousand penalty units.

5.2.1 Change of Name

A company’s name may be changed voluntarily or compulsorily.

(i) Voluntary change of name

A company’s name may be changed voluntarily if:

(a) A Special resolution is passed by the company for that purpose after obtaining a
written approval of the registrar (Section 20(1)).

(b) The company was inadvertently registered by a name which, in the opinion of the
Registrar, is very similar to the name by which a company in existence is already
registered.

Although the section does not make it mandatory for the company to change its name, it
is advisable for the company to take immediate steps to effect the change as soon as it
becomes aware of the situation. Any delay entails the risk of an action of passing-off
being instituted against it.

(c) The minister, by license, authorizes a company to make a change in its name.

(ii) Compulsory change of name

Section 20 (2) of the Act provides that within 6 months of registration with a particular
name, the registrar may direct a change in name if in his opinion the name is “very
similar” to that of a pre-existing company. A change of name under this section may be
made by ordinary resolution.

Failure to comply with the registrar’s directive is an offence punishable by a fine not
exceeding .......... for every day during which the default continues.

After a company changes its name, it shall give to the registrar notice thereof within
fourteen days. Upon receipt of the notice, the registrar shall:

(a) Enter the name on the register in place of the former.

(b) Issue to the company a certificate of change of name.

(c) Publish the change of name in the ..................

DECLARATION OF COMPLIANCE
13. (1) An application for incorporation, specified in section 12, shall be accompanied by
a declaration made in the prescribed form stating that the requirements of the Act
relating to incorporation, have been complied with.

(2) The declaration, referred to in subsection (1), shall be made in the prescribed
manner and form by a—

(a) Legal practitioner holding a valid practicing certificate who was engaged in
the formation of the company; or

(b) Person named, as a first director or secretary of the company, in the

application for incorporation.

(3) The Registrar may accept the declaration as prima facie evidence of compliance
with the requirements of this Act.

(4) A person who makes a declaration in accordance with this section, without having
reasonable grounds for believing that the requirements of this Act have been complied
with, commits an offence and shall be liable, on conviction, to a fine not exceeding fifty
thousand penalty units or to imprisonment for a period not exceeding six months, or to
both.

REGISTERED OFFICE AND CHANGE OF REGISTERED OFFICE

28. (1) A company shall have a registered office in Zambia to which all communications
and notices may be addressed.

(2) The registered office shall be the address for service of legal proceedings on the
company.

(3) A company may change its registered office.

(4) The company shall, where a change occurs with respect to its registered office,
notify the Registrar in the prescribed manner and form, within fourteen days of that
change.

(5) A change of the registered office shall take effect on the date the notice referred to in
subsection (4), is lodged with the Registrar.

(6) Where a company fails to comply with subsection (4), every officer of the company
commits an offence and is liable, on conviction, to a fine not exceeding one hundred
thousand penalty units.

RECORDS KEPT AT COMPANY’S REGISTERED OFFICE

30. (1) A company shall, at its registered office, keep the following records:

(a) The articles of association;

(b) A register of—

(i) Members indicating separately for each class of equity and preference
shares held by each member residing in or outside Zambia;

(ii) Beneficial owners, specifying the particulars in section 12(3)(e);

(iii) Debenture holders; and

(iv) Any other security holders;

(c) The full names and addresses of the current directors;

(d) Minutes of all meetings and resolutions of shareholders for the preceding ten
years;

(e) An interests register;

(f) Minutes of all meetings and resolutions of directors and directors’ committees
within the last ten years;

(g) Copies of all financial statements for the preceding ten years;

(h) The accounting records for the preceding ten years;

(i) Copies of instruments creating or evidencing charges required to be registered in

accordance with this Act or any other written law; and

(j) Any other document or record as maybe prescribed by the Minister.

(2) A register of members maintained in accordance with subsection (1) (b) shall have
an index of the names contained in it.

(3) The documents required to be maintained in accordance with this section may be
kept in electronic form.

(4) A company may, if authorised by its articles, keep in a country outside Zambia, in
such a manner as may be prescribed, a part of the register, referred to in subsection (1)
(b), except that such part of the register shall be publicly available in Zambia in
accordance with this Act.
(5) If a company fails to maintain a document in accordance with this section, the
company and every executive officer of the company in default commit an offence and
are liable, on conviction, to fine not exceeding one hundred thousand penalty units.

SERVICE OF DOCUMENTS ON COMPANY

34. (1) Despite this Act or any other law, a document may be served on a company
by—

(a) Delivery of the document to the registered office of the company; or

(b) Personally serving a director or secretary of the company.

(2) Where service in the manner specified in subsection (1) is not possible, a document
may be served on a company by registered mail or electronic mail.

SERVICE OF DOCUMENTS BY COMPANY

35. (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—

(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.

(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.

SEAL OF COMPANY AND EXECUTION OF DOCUMENTS

32. (1) A company shall have a common seal bearing its name and the words “ common
seal ” in legible letters.

(2) The chairperson, vice-chairperson and the secretary or any

other person authorised by a resolution of the Board, shall authenticate the affixing of
the seal.

(3) A common seal referred to in subsection (1), shall not be used for any purpose,
except in accordance with the articles and this Act.

(4) A document or deed shall be validly executed by or on behalf of a company—

(a) Ay the affixing of the common seal; or

(b) If the document or deed bears the signatures or signature of—

(i) Two authorised signatories; or

(ii) A director whose signature is attested by a witness.

(5) A document signed, in accordance with subsection (4)(b), shall have the same effect
as if executed under the common seal of the company.

(6) A seal may be kept in electronic form in accordance with the Electronic
Communications and Transactions Act, 2009.

5.2.2 Change of Registered Office

A company may change the address of its registered office on giving proper notice to
the registrar. The new address takes effect on the entry of the address on the register
but the company has 14 days after giving due notice in which to use the new address
and to transfer the registers etc, required to be kept there before it commits any
offences for using the wrong address.

The registrar must publish in the Gazette notice of the receipt by him of notice of
change in the company’s registered office.

CERTIFICATE OF INCORPORATION AND SHARE CAPITAL

Companies Act 2017 section 14 (1) Where an applicant meets the requirements of
this Act, the Registrar shall within fourteen days—

(a) Register the proposed company;

(b) Issue a certificate of incorporation in the prescribed form;

(c) Issue a certificate of share capital in the prescribed form, where a

company has share capital; and

(d) Assign a designating number to the company as its registration number.

(2) 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 section
12(8).

CERTIFICATE TO BE EVIDENCE OF INCORPORATION

If Registrar is satisfied that requirements of the Act have been met, he registers the
documents and issues a certificate of incorporation. This is the company’s "birth
certificate".

Certificate is conclusive evidence that registration requirements have been met. It is

also conclusive evidence as to the date of incorporation.

Companies Act 2017 15. (1) A certificate of incorporation issued in accordance with
section 14 shall be conclusive evidence that—

(a) The requirements of this Act regarding the incorporation of the company have
been complied with; and

(b) From the date of registration stated in the certificate, the company is incorporated
in accordance with this Act.

DISPLAY OF CERTIFICATE OF INCORPORATION

18. A company registered in accordance with this Act shall display its certificate of
incorporation in a prominent place at its business premises.