Zimbabwe's New Companies Act (Chapter 24:31) and It's Impact On Corporate Governance

The new Companies and Other Business Entities Act [Chapter 24:31] (hereinafter referred to as the new act) came into effect on the 13th of February 2020, repealed and replaced the Companies Act [Chapter 24:03], (hereinafter referred to as the old companies act). 

The changes to the old Companies Act brought various changes and amongst them is a change in the documents that are to be submitted upon company registration and any other documents relating to companies.

1. Directorship.

The list of directorship and secretaries under the old Companies A ct was submitted to the Registrar of companies using the CR14 form. Under the new act which is the Companies and Other Business Entities Act, directorship and secretarial posts is now submitted in CR6 format.

2. Share capital

Upon registration of a company under the repealed Companies Act, the shares of the company were issued at a fixed value and share capital/ nominal capital used to be presented in form CR2. However, the new Act brought amongst other changes the issuance of shares at non-par value rather than shares with a fixed value together with provisions for the valuation of non-par value shares. Share capital unlike in the old act where it was presented in form CR2, is now shown in form CR22,

3. Increase in share capital or authorized share nominal capital.

Where a companyhas consolidated and divided its share capital into shares of larger amount than its existing shares, or converted any shares into stock, reconverted stock into shares, subdivided its shares or any of them, redeemed any redeemable preference shares , it shall within one month after so doing, give notice thereof to the Registrar, specifying, the shares consolidated, divided, converted, subdivided, redeemed or cancelled or the stock reconverted. 
Zimbabwe's New Companies Act
Zimbabwe's New Companies Act
This notice of the increase was submitted in form CR5 but however under the new Act the notice of increases in share capital is now submitted to the Registrar in form CR10.
 

4. Notice of conversion, consolidated and split of share capital.

Notice to Registrar of consolidation of share capital, conversion ofshares into stock, or if the company has consolidated and divided its share capital into shares of larger amount than its existing shares, or converted any shares into stock, or reconverted stock into shares, or redeemed any redeemable preference shares, cancelled any shares, otherwise than in connection with a reduction of share capital within one month after so doing, it shall give notice thereof to the Registrar specifying, as the case may be, the shares consolidated, divided, converted, subdivided, redeemed or cancelled or the stock reconverted. Under the old Companies Act, this notice of conversion, consolidation and split of share would be submitted to the Registrar in form CR4. However under the Companies and other business entities Act, the notice for consolidation, conversion and split of share capital is now submitted in form CR9.

5. Return of allotment

Whenever a company makes, any allotment of itsshares, it is required to lodge with the Registrar to within one month, the return of the allotments, stating the number and nominal amount of the shares comprised in the allotment, the names and addresses of the allots and the amount, if any, paid or due and payable on each share. Return of allotments would be filed with the Registrar in form CR2 under the old Companies Act. The returns of allotments under the new Companies Act, the return of allotment are filed with the Registrar in form CR11.

6. Name search

Where a company intends to be registered, the law requires that they make an application to the Registrar to check the availability of the name. Under the old Companies Act, this application would be submitted to the Registrar in form CR21. The form has since changed with the coming of the new act into place and application for search of the availability of the name is now submitted under form CR2.

7. Statement by directors for strike off and voluntary winding up.

In the event where a company chooses to strike off (removal from the companies register by the Registrar) the form which was used was CR16 and was supposed to be signed by all directors. The new Companies and other business entities Act provides that where a company wish to be struck off or where it has exercised its right of voluntary winding up, that application should be submitted in form CR14 which is to be signed by all directors.

8. Special resolutions

Under the old companies act, all special resolutions passed by the company at the general meeting would be submitted to the Registrar of companies for registration. In the old Companies Act, the special resolution was to be submitted in form CR11 together with the contents of the special resolution. Under the Companies and other Business entities Act, it is still a mandatory requirement to submit special resolutions passed by the company but the form has changed. Special resolutions are to be submitted in form CR8.

9. Notice of situation and postal address of a company's registered office or of a foreign company's principal place of business and of any change thereto.

Notice of situation and postal address of a company's registered office or of a foreign company's principal place of business and of any change thereto used to be submitted to the Registrar of companies in form CR6. Under the new Act, the notice is now submitted to the Registrar using form CR5.

10. Conversion from a PBC to a company

When a Private Business Corporation intends to convert to a company, under the old Companies Act, they would make an application for conversion to the Registrar in from CR22. Under the new Act, that same application is now done in form CR15.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Written Plaxedes Tavirai (ChimwaMurombe Legal Practice)

Disclaimer: The contents of this website are for general information purposes only. They do not constitute our legal or professional advice. Readers are advised not to act on the basis of the information contained herein alone. Every situation depends on its own facts and circumstances. We accept no responsibility for any loss or damage of whatsoever nature which may arise from reliance on any of the information published herein without consulting a professional legal practitioner.

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