Companies Act (Chapter 24:03)

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This legislation was repealed on 13 Feb 2020 by

Companies and Other Business Entities Act, 2019 (Chapter 24:31)

.

Zimbabwe

Companies Act

Chapter 24:03

  • Commenced on 1 April 1952

  • [This is the version of this document at 31 December 2016 and includes any amendments published up to 31 December 2017.]
  • [Note: This version of the Act was revised and consolidated by the Law Development Commission of Zimbabwe]
  1. [Repealed by Companies and Other Business Entities Act, 2019 (Act 4 of 2019) on 13 February 2020]


AN ACT to consolidate and amend the laws in force in Zimbabwe relating to the constitution, incorporation, registration, management, administration and winding up of companies and other associations, and for other purposes incidental thereto.


Part I – Preliminary

1. Short title

This Act may be cited as the Companies Act [Chapter 24:03].

2. Interpretation

In this Act—accounts” includes a company’s group accounts, whether prepared in the form of accounts or not;articles” means the articles of association of a company as originally framed, or as altered by special resolution, and includes, so far as they apply to a company, the regulations set out in Table A in the First Schedule to the Companies Ordinance, 1895, or Table A in the First Schedule;body corporate” has the meaning given to it by subsection (2) of section six;books or papers” and “books and papers” include accounts, deeds, writings and other documents;certified”, in relation to a copy or translation of any document, means certified in the prescribed manner tobe a true copy or a correct translation;company” means a company limited by shares or a company limited by guarantee as in section seven described, or an existing company;contributory” has the meaning given to it by section two hundred and two;co-operative company” has the meaning given it by section thirty-six;court”, in relation to any company, means the High Court, and in relation to any offence against this Act, includes a magistrates court having jurisdiction in respect of that offence;creditors’ voluntary winding up” has the meaning given to it by subsection (2) of section two hundred and forty-six;debenture” includes debenture stock or bonds;default fine” has the meaning given to it by subsection (1) of section three hundred and forty;director” includes any person occupying the position of director or alternate director of a company, by whatever name he may be called;equity share capital” has the meaning given to it by subsection (6) of section one hundred and forty-three;existing company” has the meaning given to it by subsection (1) of section four;expert” means any person whose professional or technical training gives authority to a statement made by him;financial year”, in relation to any body corporate, means the period in respect of which any profit and loss account of the body corporate laid before it in general meeting is made up, whether that period is a year or not;foreign company” means a company or other association of persons incorporated outside Zimbabwe which has established a place of business in Zimbabwe;foreign country” means any state or territory other than Zimbabwe;foreign language” means any language other than English;group accounts” has the meaning given to it by subsection (1) of section one hundred and forty-four;holding company” means a holding company as defined by section one hundred and forty-three;issued generally”, in relation to a prospectus, means issued to persons who are not existing members or debenture holders of the company;judicial manager” includes a provisional judicial manager and a final judicial manager;manager”, in relation to a company, means any person who is the principal executive officer of the company, by whatever title he may be designated and whether or not he is a director;Master” means the Master of the High Court or any person acting in that capacity;members’ voluntary winding up” has the meaning given to it by subsection (2) of section two hundred and forty-six;memorandum” means the memorandum of association of a company as originally framed or as altered in pursuance of any law hitherto in force or of this Act;minimum subscription” has the meaning given to it by subsection (2) of section sixty-five;Minister” means the Minister of Justice, Legal and Parliamentary Affairs or any other Minister to whom the President may, from time to time, assign the administration of this Act;officer”, in relation to a company, includes a director, manager or secretary;officer who is in default” has the meaning given to it by subsection (2) of section three hundred and forty;ordinary resolution” has the meaning given to it by subsection (4) of section one hundred and thirty-three;petition” means an application to the court made in the appropriate form prescribed in rules of court;prescribed” means prescribed by rules or regulations made under section three hundred and fifty-nine or three hundred and sixty, as the case may be;prescribed form” means a form set out in the First, Third, Fifth or Sixth Schedule or any form added to or altered in the said Schedule by this Act or any form prescribed by rules or regulations made under section three hundred and fifty-nine or three hundred and sixty, as the case may be;printed” includes typed, handwritten in ink, lithographed, cyclostyled or any other mode of representing words, figures or symbols in a permanent visible form, but unless prescribed does not include any carbon copy of a document;private company” has the meaning given to it by section thirty-three;promoter”, in relation to a prospectus, means any person who is a party to the preparation of the prospectus but does not include any person by reason of his acting in a professional capacity for persons engaged in procuring the formation of a company;prospectus” means any prospectus, notice, circular, advertisement or other printed invitation offering to the public for subscription or purchase any shares or debentures of a company;public company” means any company, including a co-operative company, which is not a private company or a company licensed under section twenty-six;quoted”, in relation to any share, debenture or other security, means an investment for which a quotation or permission to deal has been granted in respect of a securities exchange registered under the Securities Act [Chapter 24:25] or in respect of a securities exchange of good repute outside Zimbabwe, and “un-quoted” shall be construed accordingly;[definition as amended by section 120 of Act No. 17 of 2004]Registrar” means the Chief Registrar of Companies or a registrar of companies appointed in terms of section five;repealed laws” means the laws specified in the Second Schedule;secretary” includes any official of a company, by whatever name called, who is performing the duties normally performed by a secretary of a company;share” means a share in the share capital of a company and includes stock, except where a distinction between stock and shares is expressed or implied;special notice” has the meaning given to it by section one hundred and thirty-five;special resolution” means a resolution passed at a general meeting of a company in manner provided by subsections (1), (2) and (3) of section one hundred and thirty-three;subsidiary” and “wholly owned subsidiary” have the meanings given to them by section one hundred and forty-three;unable to pay its debts”, in relation to a company, has the meaning given to it by section two hundred and five and, in relation to an unregistered association, has the meaning given to it by paragraph (d) of section three hundred and twenty-three;unregistered association” has the meaning given to it by section three hundred and twenty-two;winding-up order” means any order whereby a company is placed under liquidation or under provisional liquidation when such order for provisional liquidation has not been set aside;Zimbabwe Stock Exchange[definition repealed by section 120 of Act No. 17 of 2004]

3. Non-application of Act to certain institutions

(1)Nothing in this Act contained shall apply to any building societies, co-operative societies or private business corporations, the formation, registration and management whereof are governed by any other enactment, save as may be otherwise provided in any such enactment.
(2)This Act shall not be construed as applying to—
(a)a trade union or an employers’ organization; or
(b)a friendly society, other than a friendly society which was at the 1st April, 1952, registered under any of the repealed laws.
(3)In this section—“employers’ organization” and “trade union” have the meanings given to them respectively by section 2 of the Labour Relations Act [Chapter 28:01];“friendly society” has the meaning given to it by section 2 of the Friendly Societies Act [Chapter 195 of 1974];“private business corporation” has the meaning given to it by section 2 of the Private Business Corporations Act [Chapter 24:11].

4. Application of Act to existing companies and savings

(1)This Act shall apply to every company which, having been formed and registered under any of the repealed laws, is in Zimbabwe registered as a company at the 1st April, 1952, in the same manner as if the company had been formed and registered under this Act as a company; and every company to which this Act is so applicable shall be deemed to be duly incorporated and registered under this Act and is in this Act referred to as “an existing company”:Provided that—
(i)nothing in this Act shall affect the validity of the incorporation of any existing company;
(ii)reference in this Act, expressed or implied, to the date of registration shall be construed as a reference to the date at which an existing company was registered under any of the repealed laws;
(iii)nothing in this Act contained shall affect any right or privilege acquired, or liability incurred, whether by agreement or otherwise, before the 1st April, 1952, by an existing company, or affect the validity of an existing company’s articles, which, being in force at such date, are not in conflict with this Act, save in so far as those articles may be affected by subsection (2).
(2)Those articles of any existing company which should have been contained in a memorandum of association if the company had been formed under this Act shall, for the purpose of this Act, he deemed to be the memorandum of association or part of the memorandum of association of the company, and shall be subject in all respects to the provisions of this Act relating to a memorandum of association.
(3)Any new or supplementary deed or articles of association registered prior to the 1st April, 1952, under any of the repealed laws and embodying any alteration, consolidation, subdivision, conversion, increase or reduction of its registered capital, shall be of the same legal force and effect as if such alteration, consolidation, subdivision, conversion, increase or reduction had been fully effected under this Act.

5. Registrar and offices for registration of companies

(1)There shall be an office in Harare and an office in Bulawayo called the Companies Registration Offices, for the registration of companies under this Act.
(2)There shall be—
(a)a Chief Registrar of Companies, who shall exercise general supervision and direction of the Companies Registration Offices; and
(b)such numbers of registrars of companies, assistant registrars of companies and other officers as may be necessary for the purposes of this Act; and whose offices shall be public offices and form part of the Public Service.
(3)An assistant registrar of companies or other officer referred to in paragraph (b) of subsection (2) shall, if the Minister so directs, have the power to do any act or thing which may lawfully be done by a registrar of companies under this Act or any other enactment.
(4)As from the 1st April, 1952, all registers of companies and other documents pertaining to companies filed of record under the repealed laws shall be incorporated in and form part of the register of companies and files kept in the offices established under this section.

Part II – Incorporation of companies and matters incidental thereto

Prohibition of partnership exceeding twenty members

6. Prohibition of association or partnership exceeding twenty persons

(1)No company, association, syndicate or partnership consisting of more than twenty persons shall be formed in Zimbabwe for the purpose of carrying on any business that has for its object the acquisition of gain by the company, association, syndicate or partnership, or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of some other law, Letters Patent or Royal Charter:Provided that an association, syndicate or partnership which—
(a)consists solely of persons who are members of a designated profession or calling; and
(b)is formed for the purpose of practising or carrying on in Zimbabwe that designated profession or calling;

may consist of more than twenty persons.

(2)No association of persons formed after the 1st April, 1952, for the purpose of carrying on any business that has for its object the acquisition of gain by the association or by the individual members thereof shall be a body corporate, unless it is registered as a company under this Act or is formed in pursuance of some other law, Letters Patent or Royal Charter.
(3)The President may, by proclamation in the Gazette, declare any profession or calling which is controlled and regulated by a council or other body established by or under any Act in force in Zimbabwe to be a designated profession or calling for the purposes of the proviso to subsection (1).

Memorandum of association

7. Mode of forming company

Any one or more persons associated for any lawful purpose may, by subscribing their names to a memorandum of association and otherwise complying with the requirements of this Act in respect of registration, form an incorporated company either—

(a)a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them, in this Act termed a company limited by shares; or
(b)if a licence is granted in terms of section twenty-six, a company having no share capital but having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up, in this Act termed a company limited by guarantee.

8. Memorandum of company

(1)In the case of a company limited—
(a)by shares, the memorandum shall be in the English language and must state—
(i)the name of the company which shall, unless a licence has been granted under section twenty-six, have “Limited” as the last word and shall also have included therein—
(A)in the case of a private company, the term “(Private)” as the penultimate word;
(B)in the case of a co-operative company, the word “Co-operative” or the abbreviation “Co-op”;
(ii)the objects of the company;
(iii)that the liability of the members is limited;
(iv)the amount of share capital with which the company proposes to be registered and the division thereof into shares of a fixed amount;
(b)by guarantee, the memorandum shall be in the English language and must state—
(i)the name of the company;
(ii)the objects of the company;
(iii)that the liability of the members is limited;
(iv)that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member or within one year after he ceases to be a member for payment of the debts and liabilities of the company contracted before he ceases to be a member and of the costs, charges and expenses of the winding up and for the adjustment of the rights of the contributories among themselves such amount as may be required, not exceeding a specified amount.
(2)No subscriber to the memorandum of a company limited by shares may take less than one share.
(3)Each subscriber to the memorandum of a company limited by shares must in his own handwriting state in words opposite to his name the number of shares he takes:Provided that where the subscriber is—
(a)a company, association, syndicate or other corporate body, a director of the company or the authorised representative of any other corporate body; or
(b)a partnership, one of the partners; or
(c)a minor, the guardian;

as the case may be, shall indicate in their handwriting the number of shares taken.[proviso inserted by Act 5 of 2006]

(4)A public company which converts itself into a private company in terms of section thirty-three shall, within one month after the conversion, insert the term “(Private)” before the word “Limited” in its name and, notwithstanding anything to the contrary contained—
(a)in the Deeds Registries Act [Chapter 20:05], the Registrar of Deeds shall, upon lodgement with him of the amended certificate of incorporation and the registered deed wherein the name of the company appears, amend without charge the registered deed and the relevant registers;
(b)in any other enactment, any person keeping a register in terms of any enactment shall, upon lodgement with him of the amended certificate of incorporation, amend without charge such register.
(5)The insertion of the term “(Private)” in the name of a company in compliance with subsection (4) shall not be regarded as a change of name for the purposes of subsection (1) of section twenty-five.

9. Capacity and powers of company

A company shall have the capacity and powers of a natural person of full capacity in so far as a body corporate is capable of exercising such powers.

10. Effect of statement of objects

(1)The effect of a statement of the objects of a company, whether in its memorandum or elsewhere, shall not be to invalidate any transaction which exceeds those objects and which was made by the company or entered into by the company with any other person, notwithstanding that the other person was aware of the statement of the objects.
(2)Without derogation from any remedy that may be available to the person concerned—
(a)any member or debenture holder of a company may, prior to the event, apply to court for and may obtain an interdict restraining the company from making or entering into any transaction which exceeds its objects, whether stated in its memorandum or elsewhere;
(b)where any transaction which exceeds a company’s objects, whether stated in its memorandum or elsewhere, has been made or entered into and has resulted in loss to the company, any member or debenture holder may claim on behalf of the company compensation for such loss from any officer of the company who took part in the transaction concerned:Provided that, where it appears to the court that the officer against whom the claim is made acted honestly and reasonably and that, having regard to all the circumstances of the case, it would be just and fair to do so, the court may decline to award compensation against him or may make an award for part only of the compensation or may make any other order or award that the court thinks fit.

11. No constructive notice of company’s documents

No person shall be deemed to have notice or knowledge of the contents of a company’s memorandum, articles or other document by reason only of the fact that the memorandum, articles or document has been registered by the Registrar or is available for inspection at the company’s registered office.

12. Presumption of regularity

Any person having dealings with a company or with someone deriving title from a company shall be entitled to make the following assumptions, and the company and anyone deriving title from it shall be estopped from denying their truth—

(a)that the company’s internal regulations have been duly complied with;
(b)that every person described in the company’s register of directors and secretaries, or in any return delivered to the Registrar by the company in terms of section one hundred and eighty-seven, as a director, manager or secretary of the company, has been duly appointed and has authority to exercise the functions customarily exercised by a director, manager or secretary, as the case may be, of a company carrying on business of the kind carried on by the company;
(c)that every person whom the company, acting through its members in general meeting or through its board of directors or its manager or secretary, represents to be an officer or agent of the company, has been duly appointed and has authority to exercise the functions customarily exercised by an officer or agent of the kind concerned;
(d)that the secretary of the company, and every other officer or agent of the company having authority to issue documents or certified copies of documents on behalf of the company, has authority to warrant the genuineness of the documents or the accuracy of the copies so issued;
(e)that a document has been sealed by the company if it bears what purports to be the seal of the company attested by what purports to be the signature of a person who, in accordance with paragraph (b), can be assumed to be a director of the company:

Provided that—

(i)a person shall not be entitled to make such assumptions if he has actual knowledge to the contrary or if he ought reasonably to know the contrary;
(ii)a person shall not be entitled to assume that any one or more of the directors of the company have been appointed to act as a committee of the board of directors or that an officer or agent of the company has the company’s authority merely because the company’s articles provide that the authority to act in the matter may be delegated to a committee or to an officer or agent.

13. Liability not affected by fraud

A company shall be bound in terms of section twelve, notwithstanding that the officer or agent concerned acted fraudulently or forged a document purporting to be sealed or signed on behalf of the company.

14. Signing of memorandum

The memorandum shall be printed and shall be signed and dated, in the presence of at least one attesting witness, by each subscriber and opposite every such signature of a subscriber or a witness there shall be written in legible characters his full name, occupation, and full residential or business address:Provided that where the subscriber is—

(a)a company, association, syndicate or other corporate body, a director of the company or the authorised representative of any other corporate body; or
(b)a partnership, one of the partners; or
(c)a minor, the guardian;

as the case may be, shall sign the memorandum.[proviso inserted by Act 5 of 2006]

15. Restriction on alteration of memorandum

A company may not alter the conditions contained in its memorandum except in the cases and in the mode and to the extent for which express provision is made in this Act.

16. Alteration of conditions in memorandum which could have been contained in articles and alteration of objects of company

(1)A company may by special resolution
(a)subject to section one hundred and ninety-five, alter any condition contained in its memorandum which could lawfully have been contained in articles of association:Provided that this paragraph shall not apply where the memorandum itself provides for or prohibits the alteration of all or any of the said conditions, and shall not authorize any variation or abrogation of the special rights of any class of members;
(b)alter its memorandum with respect to the objects of the company:Provided that, if the name of the company describes the main objects of that company and such objects are to be altered so that the name of the company would no longer describe its main objects, the memorandum shall not be so altered unless the name of the company is changed accordingly in terms of section twenty-five.
(2)Notwithstanding subsection (1), if an application is made to the court in accordance with this section for an alteration in terms of paragraph (a) or (b) of subsection (1) to be cancelled, the alteration shall not have effect except in so far as it is confirmed by the court.
(3)An application made under this section may be made—
(a)in respect of an alteration in terms of paragraph (a) or (b) of subsection (1), by the holders of not less in the aggregate than fifteen per centum in nominal value of the company’s issued share capital or any class thereof;
(b)in respect of an alteration in terms of paragraph (b) of subsection (1), by the holders of not less than fifteen per centum of the company’s debentures entitling the holders to object to alterations of its objects:

Provided that an application shall not be made by any person who has consented to or voted in favour of the alteration.

(4)An application under this section shall be made within one month after the date on which the resolution altering the condition contained in the memorandum or the company’s objects, as the case may be, was passed, and may be made on behalf of the persons entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.
(5)On an application under this section the court may make an order confirming the alteration either wholly or in part and on such terms and conditions as it thinks fit, and may, if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the court for the purchase of the interests of dissentient members, and may give such directions and make such orders as it may think expedient for facilitating or carrying into effect any such arrangement:Provided that no part of the capital of the company shall be expended in any such purchase.
(6)The debentures entitling the holders to object to alterations of a company’s objects shall be any debentures secured by notarial bond which were issued or first issued before the 1st April, 1952, or form part of the same series as any debentures so issued, and a special resolution altering the company’s objects shall require the same notice to the holders of any such debentures as to members of the company. In default of any provisions regulating the giving of notice to any such debenture holders, the company’s articles regulating the giving of notice to members shall apply.
(7)In the case of a company which is, by virtue of a licence from the Minister, exempt from the obligation to use the word “Limited” as part of its name, a resolution altering the company’s objects shall require the same notice to the Minister as to members of the company, and where such a company alters its objects the Minister, unless he sees fit to revoke the licence, may vary the licence by making it subject to such conditions and regulations as he thinks fit, in place of or in addition to the conditions and regulations, if any, to which the licence was formerly subject.
(8)Where a company passes a resolution altering its objects—
(a)if no application is made with respect thereto under this section, it shall within one month from the end of the period for making such an application deliver to the Registrar a copy of its memorandum as altered; and
(b)if such an application is made, it shall—
(i)forthwith give notice of that fact to the Registrar; and
(ii)within one month from the date of any order cancelling or confirming the alteration, deliver to the Registrar a certified copy of its memorandum as altered.

The court may by order at any time extend the time for the delivery of documents to the Registrar under paragraph (b) for such period as the court may think proper.

(9)If a company makes default in giving notice or delivering any document to the Registrar as required by subsection (8), the company shall be guilty of an offence and liable to a default fine not exceeding level one.
(10)The validity of an alteration of a company’s memorandum with respect to the objects of the company shall not be questioned on the ground that it was not authorized by subsection (1) except in proceedings taken for the purpose, whether under this section or otherwise, before the expiration of one month after the date of the resolution in that behalf; and where any such proceedings are taken otherwise than under this section, subsections (8) and (9) shall apply in relation thereto as if they had been taken under this section and as if an order declaring the alteration invalid were an order cancelling it and as if an order dismissing the proceedings were an order confirming the alteration.[section as amended by Act No. 22 of 2001]

Articles of association

17. Articles prescribing regulations for companies

Articles of association signed by the subscribers to the memorandum of a company and prescribing its regulations may be registered with such memorandum.

18. Application of table A and void provisions

(1)Articles of association may adopt all or any of the regulations contained in Table A in the First Schedule.
(2)In the case of a company limited—
(a)by shares, if articles of association are not registered, or if articles of association are registered in so far as the articles do not exclude or modify the regulations contained in Table A, those regulations shall, so far as applicable, be the regulations of the company in the same manner and to the same extent as if they were contained in duly registered articles;
(b)by guarantee, articles of association prescribing regulations for the company shall be registered with the memorandum of association.
(3)Any provision contained in a company’s articles shall be void in so far as it would have the effect either—
(a)of excluding the right to demand a poll at a general meeting on any question other than the election of the chairman of the meeting or the adjournment of the meeting; or
(b)of making ineffective a demand for a poll on any such question which is made—
(i)by not less than five members having the right to vote at the meeting; or
(ii)by a member or members representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or
(iii)by a member or members holding shares in the company conferring a right to vote at the meeting, being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

19. Form and signature of articles

Articles shall be in the English language, shall be printed and shall—

(a)be divided into paragraphs numbered consecutively; and
(b)be signed and dated by each subscriber to the memorandum in the presence of at least one attesting witness and opposite every such signature of a subscriber or a witness there shall be written in legible characters his full name, occupation and full residential or business address.

20. Alteration of articles

Subject to the conditions contained in its memorandum, a company may by special resolution alter or add to its articles and any alteration or addition so made in the articles shall be as valid as if originally contained therein, and be subject in like manner to alteration by special resolution.

Registration

21. Registration of memorandum and articles

(1)The memorandum and the articles, if any, together with either a duplicate original or a printed notarial copy, shall be delivered to the Registrar:Provided that in the case of a company to be registered in Bulawayo there shall be delivered in addition either a further duplicate original or a further printed notarial copy.
(2)Subject to due compliance with section one hundred and seventy-one, whenever that section is applicable and upon payment of the prescribed fees, the Registrar shall, if the memorandum and the articles, if any, are in accordance with this Act, register the same, and shall return to the company a duplicate original or one notarial copy of the memorandum and of the articles, if any, with the date of the registration endorsed thereon.

22. Effect of registration and use of seal

(1)On registering the memorandum of a company the Registrar shall certify under his hand that the company is incorporated, and the date of such incorporation.
(2)From the date of incorporation, the subscribers to the memorandum, together with such other persons as may from time to time also become members of the company, shall be a body corporate by the name contained in the memorandum, capable of exercising all the functions of an incorporated company, and having perpetual succession, but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up as is mentioned in this Act.
(3)A company may have a seal and, if it has, such seal shall be affixed to instruments in the manner prescribed in its articles.

23. Conclusiveness of certificate of incorporation

A certificate of incorporation given by the Registrar in respect of any association shall be conclusive evidence that all the requirements of this Act, in respect of registration and of matters precedent and incidental thereto, have been complied with, and that the association is a company authorized to be registered under this Act.

Provisions with respect to names of companies

24. Prohibition of undesirable name

(1)The Registrar may on written application reserve a name pending registration of a company or a change of name by a registered company. Such reservation shall be for a period of one month or such longer period, not exceeding in all two months, as the Registrar may, for special reasons, allow:Provided that a name shall not be reserved in terms of this subsection unless it has first been ascertained by search and examination that the name is available for registration and the appropriate fee for such search has been paid.
(2)No name shall be reserved and no company shall be registered by a name which is identical with that for which a reservation is current or with that of a registered company or a registered foreign company or a private business corporation registered under the Private Business Corporations Act [Chapter 24:11] or which so nearly resembles any such name as to be likely to deceive unless the registered company or registered foreign company or private business corporation, as the case may be, is in liquidation and signifies its consent to the registration in such manner as the Registrar may require.
(3)The Registrar may, unless otherwise ordered by the Minister, refuse to register a company by a name which in his opinion is likely to mislead the public or to cause offence to any person or class of persons or is suggestive of blasphemy or indecency or which he considers to be undesirable for any other reason.
(4)Where, by any enactment, a person—
(a)is prohibited from using in his name or in the description or title under which he may carry on business any word or combination of letters, the Registrar shall refuse to register a company by a name which contains such word or combination of letters;
(b)is prohibited from using in his name or in the description or title under which he may carry on business any word or combination of letters unless he has the permission of an authority specified in that enactment, the Registrar shall refuse to register a company by a name which contains such word or combination of letters unless that authority has indicated that the necessary permission would be given.
(5)The Registrar shall refuse to register a company under a name in which the word “Co-operative” or any contraction or imitation thereof forms a part unless the memorandum and articles of the company complies with section thirty-six.
(6)The Minister may make regulations in terms of section three hundred and sixty prohibiting a company from being registered by a name which includes specified words or words which import or suggest that it enjoys the patronage of a particular person, government or authority and no company shall be registered by a name which includes any such words unless the Minister has consented in writing thereto:Provided that nothing in this subsection contained shall be construed as preventing the name by which a company is registered under any law in force prior to the date on which that name is so prescribed from being retained on the register as the name of that company.
(7)If the Registrar, after due inquiry and considering any evidence that may be placed before him, considers that a company is registered, whether originally or by reason of a change of name, by a name which—
(a)in his opinion, is likely to mislead the public or to cause offence to any person or class of persons or is suggestive of blasphemy or indecency; or
(b)he considers to be in conflict with the provisions of this section or undesirable for any other reason;

he may order the company in writing to change its name, and the company shall thereupon do so within a period of six weeks from the date of the written order or such longer period as the Registrar may see fit to allow:Provided that the Registrar may not make such an order if a period of more than twelve months has elapsed since the date of the registration of the company or the change of name of the company, as the case may be.

(8)If a company makes default in complying with an order under subsection (7), the company shall be guilty of an offence and liable to a default fine not exceeding level one.
(9)Before making any order in terms of subsection (7) the Registrar shall comply with such procedure as may be prescribed for the purpose of ensuring that the company concerned is given an opportunity of being heard.
(10)For the purposes of any proceedings before the Registrar in terms of subsections (7) and (9), the Registrar shall have the same powers, rights and privileges as are conferred upon a commissioner by the Commissions of Inquiry Act [Chapter 10:07], other than the power to order a person to be detained in custody, and sections 9 to 13 and 15 to 19 of that Act shall apply, mutatis mutandis, in relation to the hearing and determination before the Registrar under subsections (7) and (9) and to any person summoned to give evidence or giving evidence before him.
(11)Any person who is aggrieved by an order of the Registrar in terms of subsection (5) may appeal to a judge of the court who may refer the matter to the court for argument.
(12)On any appeal in terms of subsection (9) a judge of the court or the court, as the case may be, may—
(a)confirm the order of the Registrar; or
(b)direct the Registrar to vary or revoke his order.
(13)The court may at any time, on application by any person, order a company to change its name within such period as may be specified by the court on the grounds that the name of the company
(a)is likely to mislead the public or gives so misleading an indication of the nature of its activities as to be likely to cause harm to the public; or
(b)is likely to cause damage to any other person.

[section as amended by Act No. 22 of 2001]

25. Change of name

(1)A company may, by special resolution and with the written approval of the Registrar, change its name. The Registrar shall not give such approval unless there has been published in the Gazette and in a daily newspaper circulating in the district in which the registered office of the company is situated an advertisement stating that application will be made to the Registrar for his approval not less than fourteen days after the last publication of the advertisement.
(2)Where the name of a company is changed in terms of this section, the Registrar shall enter the new name on the register in place of the former name, and shall issue a certificate of incorporation altered to meet the circumstances of the case, or a certificate that the new name is entered on the register in place of the former name.
(3)Upon the production by a company to the Registrar of Deeds or a mining commissioner or other officer proper for the registration of deeds or mining titles of a certificate by the Registrar in terms of subsection (2), together with the relevant documents and application in writing, and on payment of the prescribed fees, such Registrar of Deeds, mining commissioner or other officer shall make in his registers all such alterations as are necessary by reason of the changed name and shall endorse the change of name on the said documents.
(4)The change of name shall not affect any rights or obligations of the company, or render defective any legal proceedings by or against the company, and any legal proceedings that might have been continued or commenced by or against it by its former name may be continued or commenced under its new name.

26. Power to dispense with “Limited” in certain cases

(1)Where the Minister is satisfied that an association exists for any lawful purpose, the pursuit of which is calculated to be in the interests of the public, or any section of the public, and intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members, and that it is desirable that such association should be incorporated, the Minister may, if the association submits to him a memorandum complying with section eight, by licence under his hand direct that the association be registered as a company without the addition of the word “Limited” to its name, and the association may thereupon be registered accordingly.
(2)The association, upon such registration, shall enjoy all the privileges of a company and be subject to all the obligations thereof, except those of using the word “Limited” as any part of its name and of complying with sections sixty-five, sixty-six, seventy-one, one hundred and fourteen, one hundred and twenty-three, one hundred and twenty-four, one hundred and forty-nine and one hundred and seventy-one.
(3)A licence under this section may at any time be revoked by the Minister and upon revocation the Registrar shall enter the word “Limited” at the end of the name of the association upon the register, and the association shall thereupon cease to enjoy the exemptions and privileges granted by this section.Before a licence is so revoked the Minister shall give to the association notice in writing of his intention, and shall afford it an opportunity of submitting in writing arguments in opposition to revocation.An association whose licence has been revoked may appeal to the court within such period and in accordance with such rules as may be prescribed under section three hundred and fifty-nine and on any such appeal the court may make such order as it deems fit.
(4)Whenever it is proved to the satisfaction of the Minister that the objects of a company are those defined in subsection (1) and objects incidental or conducive thereto, and that by its constitution the company is required to apply its profits, if any, or other income in promoting its objects and is prohibited from paying any dividend to its members, the Minister may by licence authorize the company to change its name by special resolution by the omission therefrom of the word “Limited”, and as from the date of the receipt of the certificate of the Registrar recording the registration of such special resolution passed pursuant to such licence the company shall be deemed to be a company licensed under this section.
(5)Section twenty-five shall apply to a change of name under this section.
(6)A licence by the Minister under this section may be granted on such conditions and subject to such regulations as he may think fit, and those conditions and regulations shall be binding upon the association or company and shall, if the Minister so directs, be inserted in the memorandum and articles, or in one of those documents.
(7)No alteration of the memorandum or articles of association in respect of which a licence under this section is in force shall take effect until such alteration is approved by the Minister, and if the Minister approves the alteration he may vary the licence by making it subject to such conditions and regulations as he thinks fit, in lieu of or in addition to the conditions and regulations, if any, to which the licence was formerly subject.

General provisions with respect to memorandum and articles

27. Effect of memorandum and articles

(1)Subject to this Act, the memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed by each member and contained undertakings on the part of each member to observe all the provisions of the memorandum and of the articles.
(2)All money payable by any member to the company under the memorandum or articles shall be a debt due from him to the company.

28. Copies of memorandum and articles to be given to members

(1)Every company shall send to every member at his request, on payment of one United States dollar or such less sum as the company may prescribe, a copy of the memorandum and of the articles, if any, or shall afford to every member or to his duly authorized agent reasonable facilities for making a copy of the memorandum and of the articles, if any.[subsection amended by Act 9 of 2011]
(2)If a company makes default in complying with subsection (1) the company and every officer of the company who is in default shall be guilty of an offence and liable to a fine not exceeding level one for each default.[subsection amended by Act No. 22 of 2001]

29. Copies of memorandum and articles to embody alterations

(1)Where an alteration is made in the memorandum or articles of a company every copy of the memorandum or articles issued after the date of the alteration shall be in accordance therewith.
(2)If, where any such alteration has been made, the company at any time after the date of the alteration issues any copy of the memorandum or articles which is not in accordance with the alteration, the company and every officer of the company who is in default shall be guilty of an offence and liable to a fine not exceeding level one for each copy so issued.[section as amended by Act No. 22 of 2001]

Membership of company

30. Definition of member

(1)The subscribers to the memorandum of a company shall be deemed to have agreed to become members of the company and on its registration shall be entered as members in its register of members.
(2)Every other person who agrees to become a member of a company and whose name is entered in its register of members shall be a member of the company.

31. Membership of holding company

(1)Except in the cases hereafter in this section mentioned, a body corporate cannot be a member of a company which is its holding company, and any allotment or transfer of shares in a company to its subsidiary shall be void.
(2)Nothing in this section shall apply where the subsidiary is concerned as personal representative, or where it is concerned as trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.
(3)This section shall not prevent a subsidiary which is, at the 1st April, 1952, a member of its holding company, from continuing to be a member but, subject to subsection (2), the subsidiary shall have no right to vote at meetings of the holding company or any class of members thereof.
(4)Subject to subsection (2), subsections (1) and (3) shall apply in relation to a nominee for a body corporate which is a subsidiary, as if references in subsections (1) and (3) to such a body corporate included references to a nominee for it.

32. Personal liability or member where business carried on with no members

If a company has no members and carries on business for more than six months without members, any person who knowingly causes it to do so shall be liable, jointly and severally with the company, for all debts incurred by it after the six months have elapsed.

Private companies

33. Definition of private company

(1)The expression “private company” means a company other than a co-operative company, which by its articles
(a)restricts the right to transfer its shares; and
(b)limits the number of its members to fifty, not including persons who are in the employment of the company and persons who, having been formerly in the employment of the company, were while in that employment and have continued, after the determination of that employment, to be members of the company; and
(c)prohibits any invitation to the public to subscribe for any shares or debentures of the company.
(2)Where two or more persons hold one or more shares in a company jointly they shall, for the purposes of this section, be treated as a single member.
(3)With the sanction of a special resolution and subject to confirmation by the court, a public company may convert itself into a private company.

34. Consequences of default in complying with conditions for private company

Where the articles of a company include the provisions which, under section thirty-three, are required to be included in the articles of a company in order to constitute it a private company but default is made in complying with any of those provisions, the company shall cease to be entitled to the privileges and exemptions conferred on private companies by this Act and the provisions thereof shall in all respects apply to the company as if it were not a private company:Provided that the court, on being satisfied that the failure to comply with the conditions was accidental or due to inadvertence or to some other sufficient cause, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any other person interested and on such terms and conditions as seem to the court just and expedient, order that the company be relieved from such consequences as aforesaid.

35. Statement in lieu of prospectus on ceasing to be private company

(1)If a company, being a private company, alters its articles in such manner that they no longer include the provisions which, under section thirty-three, are required to be included in the articles of a company in order to constitute it a private company, the company shall, as on the date of the alteration, cease to be a private company and shall, within a period of one month after the said date, remove the term “(Private)” from its name and deliver to the Registrar for registration a statement in lieu of prospectus in the form and containing the particulars set out in Part I of the Third Schedule and, in the cases mentioned in Part II of that Schedule, setting out the reports specified therein, and the said Parts I and II shall have effect subject to the provisions contained in Part III of that Schedule:Provided that a statement in lieu of prospectus need not be delivered if within the said period a prospectus relating to the company which complies with the Fourth Schedule is issued and is lodged with the Registrar as required by section fifty-six.
(2)Every statement in lieu of prospectus delivered under subsection (1) shall, where the persons making any such report as aforesaid have made therein or have, without giving the reasons, indicated therein any such adjustments as are mentioned in paragraph 5 in Part III of the said Schedule, have endorsed thereon or attached thereto a written statement signed by those persons setting out the adjustments and giving reasons therefor.
(3)If default is made in complying with subsection (1) or (2) the company and every officer of the company who is in default shall be guilty of an offence and liable to a default fine of not exceeding level two.
(4)Subsections (5) and (6) of section sixty-six shall apply, mutatis mutandis, to every statement in lieu of prospectus lodged under this section as they apply to a statement in lieu of prospectus lodged under that section.
(5)The removal of the term “(Private)” from the name of a company in compliance with subsection (1) shall not be regarded as a change of name for the purposes of subsection (1) of section thirty-three.[section as amended by Act No. 22 of 2001]

Co-operative companies

36. Definition of co-operative company

(1)A co-operative company is a company, other than a private company, which—
(a)in its memorandum states that its main object is one or other or both of the following—
(i)the provision for its members of a service facilitating the production or marketing of agricultural produce or livestock;
(ii)the sale of goods to its members;

and

(b)by its articles
(i)restricts the right to transfer its shares; and
(ii)provides that its ordinary shares shall be of one class only; and
(iii)subject to section thirty-nine, fixes a limit to the number of shares which may be held by any one member; and
(iv)regulates the voting rights of its members in accordance with section thirty-nine; and
(v)limits the dividend which may be paid on its shares to a rate not exceeding ten per centum per annum on the amounts paid up thereon; and
(vi)provides for the distribution of a part or the whole of its profits amongst its members on the basis of certain or all of their business transactions with the company.
(2)With the sanction of a special resolution and subject to confirmation by the court, a public company, which is not a co-operative company, may convert itself into a co-operative company.
(3)For the purposes of paragraph (a) of subsection (1)—member”, in relation to a co-operative company, includes any person who is a member of a co-operative company which is a member of the first-mentioned co-operative company.

37. Co-operative company to maintain reserve fund

(1)Every co-operative company shall maintain a reserve fund which may be used for any purpose for which the share capital of the co-operative company may be used but which shall not be available for distribution to members except in the event of the winding-up of the co-operative company.
(2)The articles of the co-operative company shall provide for the creation and operation of its reserve fund and for the method of determining the amount to be appropriated thereto from the annual surplus of the co-operative company.

38. Consequences of default in complying with conditions for co-operative company

Where the memorandum and articles of a company include the provisions which under section thirty-six are required to be included in the memorandum and articles of a company in order to constitute it a co-operative company but default is made in complying with any of those provisions the company shall cease to be entitled to the privileges and exemptions conferred on co-operative companies by this Act and the provisions thereof shall in all respects apply to the company as if it were not a co-operative company:Provided that the court, on being satisfied that the failure to comply with the conditions was accidental or due to inadvertency or to some other sufficient cause, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any other person interested and on such terms and conditions as to the court seem just and expedient, order that the company be relieved from such consequences as aforesaid.

39. Voting rights of members of co-operative company

(1)Subject to subsection (2), every member of a co-operative company shall have at least one vote in respect of the conduct of the affairs of the co-operative company but, save in the case where the membership of the co-operative company is less than one hundred members or is restricted solely to other co-operative companies, no member may exercise more than one per centum of the total votes in respect of the conduct of the affairs of the co-operative company which are accorded to all the members thereof:Provided that—
(i)the articles of a co-operative company may provide that votes shall be accorded to the members thereof in relation to their shareholding in the co-operative company or their transactions with the co-operative company during a specified period or to both such factors but in no case shall a member be entitled to be accorded more than six votes in respect of either such factor or twelve votes in respect of both;
(ii)if a co-operative company has been permitted by the Minister, in terms of section forty-one to form a subsidiary co-operative company or to acquire another co-operative company as its subsidiary the first-mentioned co-operative company shall be entitled to exercise in respect of the conduct of the affairs of the subsidiary such number or percentage of the total votes accorded to all members of the subsidiary which does not exceed such number or percentage as may be specified by the Minister from time to time;
(iii)in the case of a co-operative company, where the membership is less than one hundred members and is not restricted solely to other co-operative companies, no member thereof shall have more than one vote in the conduct of the affairs of the co-operative company unless provision has been made in the articles of the co-operative company as envisaged by proviso (i).
(2)The holder of a preference share in a co-operative company shall have no vote in respect of the conduct of the affairs of the co-operative company:Provided that the articles of the co-operative company may provide that such a holder may have a vote, subject to the provisions of subsection (1), in respect of matters affecting the rights of any such holder of any such preference shares or the dissolution of the co-operative company.

40. Application of surplus assets on liquidation of co-operative company

If in any winding up of a co-operative company after the application of the assets thereof in terms of section two hundred and ninety-one, there remains any surplus of assets the liquidator shall distribute such surplus, including the capital reserve and any other reserves of the co-operative company, in the following order—

(a)amongst the holders of the preference shares of the co-operative company which are preferent as to capital, if any, in repayment of the amounts paid up by them on such preference shares;
(b)amongst the holders of shares of the co-operative company, not referred to in paragraph (a), in repayment of the amounts paid up by them on such shares;
(c)if the articles of the co-operative company so provide, in payment to the holders of the preference shares of the co-operative company, if any, of a dividend, which shall not in any case exceed a rate of ten per centum per annum on the amounts paid up thereon, for any period for which no disposal of profits was made;
(d)if the articles of the co-operative company so provide, in payment to the holders of the ordinary shares of the co-operative company of a dividend, which shall not in any case exceed a rate of ten per centum per annum on the amounts paid up thereon, for any period for which no disposal of profits was made;
(e)any remaining surplus shall be paid to existing members in proportion to the number of ordinary shares in the co-operative company held by each of them multiplied by the number of completed months which has elapsed since—
(i)the date of the issue of such shares; or
(ii)the date of registration of such shares in the name of the present holders;

whichever of such cases may be provided for in relation to any particular circumstances in the articles of the co-operative:Provided that, where there are different amounts paid up on the shares in question, the proportion payable shall be adjusted accordingly.

41. Subsidiary co-operative company

A co-operative company may, with the permission of the Minister, and subject to such conditions as he may from time to time impose, form one or more subsidiary co-operative companies or acquire one or more co-operative companies as its subsidiary co-operative companies.

42. Special method for reduction of share capital

Notwithstanding, but without derogation from, this Act a share in a co-operative company may be cancelled and the amount paid up thereon refunded in such circumstances relating to the termination of membership or otherwise as are authorized in its articles:Provided that no such cancellation of a share or refund of the amount paid up thereon shall—

(a)affect the liability of a contributory in terms of this Act; or
(b)be made;

unless there is appropriated from the free reserves, surplus or profit of the co-operative company and added to its capital reserve an amount equal to the nominal value of such cancelled share.

43. Disposal of produce of members to or through co-operative company

(1)A co-operative company which has as one of its objects the disposal of any produce or livestock of its members may provide in its articles or may otherwise contract with its members—
(a)that no member shall dispose of any such produce or livestock or any part of such produce or livestock by sale or barter other than by sale to or through the co-operative company;
(b)that any member who contravenes any such articles or commits a breach of any such contract shall pay to the co-operative company as liquidated damages a sum ascertained or assessed in such manner as is provided in the articles or contract.
(2)Whenever any produce or livestock or any part thereof is delivered to a co-operative company by a member thereof in accordance with its articles or a contract referred to in subsection (1) for the purpose of disposal to or through the co-operative company or its agents, whether statutory bodies or otherwise, no creditor of the member delivering the same may attach or charge such produce or livestock or part thereof or the proceeds of the sale thereof that remain under the control of the co-operative company.

44. Shares or interest of members: charge and set-off, and immunity from attachment or sale in execution

(1)A co-operative company shall have a charge upon the shares, interest in the capital and deposits of a member, past member or deceased member and upon any dividend, bonus or profits payable to a member, past member or estate of a deceased member in respect of any debt due to the co-operative company from such member, past member or estate and may set-off any sum credited or payable to a member, past member or estate of a deceased member in or towards payment of any such debt.
(2)Subject to subsection (1), the share or interest of a member in the capital of a co-operative company shall not be liable to attachment or sale under an order of any court in respect of any debt or liability incurred by such member:Provided that nothing in this subsection contained shall prohibit the cancellation of the share or the transfer or sale of the share or interest of a member in accordance with the articles of such co-operative company.

45. Company ceasing to be a co-operative company

(1)If a company being a co-operative company alters its memorandum or articles in such a manner that they no longer include the provisions which, under section thirty-six are required to be included in the memorandum and articles of a company in order to constitute it a co-operative company, the co-operative company shall as on the date of the alteration cease to be a co-operative company and shall within a period of one month after the said date remove the term “Co-operative” or any contraction or imitation thereof from its name.
(2)The removal of the term “Co-operative” or any contraction or imitation thereof from the name of a company in terms of subsection (1) shall not be regarded as a change of name for the purposes of subsection (1) of section twenty-five.
(3)If default is made in complying with subsection (1) the company and every officer of the company who is in default shall be guilty of an offence and liable to a default fine of not exceeding level two.[section as amended by Act No. 22 of 2001]

Private business corporations

46. Conversion of private business corporation into company

(1)In this section—“private business corporation” means a private business corporation incorporated under the Private Business Corporations Act [Chapter 24:11].
(2)A private business corporation that wishes to convert to a company shall deliver to the Registrar
(a)an application in the prescribed form signed by all its members; and
(b)all documents necessary for the formation of a company under this Act.
(3)If the Registrar is satisfied that the private business corporation has complied with subsection (2) and is not in default under the Private Business Corporations Act [Chapter 24:11], he shall proceed in accordance with sections twenty-one and twenty-two.
(4)A company registered in accordance with this section shall be a company for all purposes under this Act and shall be the same body corporate as the private business corporation from which it was converted.

Contracts, etc.

47. Ratification of contracts

Any contract made in writing by a person professing to act as agent or trustee for a company not yet formed, incorporated or registered shall be capable of being ratified or adopted by or otherwise made binding upon and enforceable by such company after it has been duly registered as if it had been duly formed, incorporated and registered at the time when the contract was made, if—

(a)the memorandum on its registration contains as one of the objects of such company the adoption or ratification of or the acquisition of rights and obligations in respect of such contract; and
(b)the contract or a certified copy thereof is delivered to the Registrar simultaneously with the delivery of the memorandum in terms of section twenty-one.

48. Form of contracts

(1)Contracts on behalf of a company may be made in the following manner—
(a)any contract which, if made between private persons, would be by law required to be in writing and signed by the parties, may be made on behalf of the company in writing and signed by any person acting under its authority, expressed or implied, and may in the same manner be varied or discharged;
(b)any contract which, if made between private persons, would by law be valid though made verbally only and not reduced to writing, may be made verbally on behalf of the company by any person acting under its authority, expressed or implied, and may in the same manner be varied or discharged.
(2)All contracts made in accordance with subsection (1) shall be effectual in law and shall bind the company and its successors and all other parties thereto.

49. Promissory notes and bills of exchange

(1)A bill of exchange or promissory note shall be deemed to have been made, accepted or endorsed on behalf of a company if made, accepted or endorsed in the name of, or by or on behalf or on account of, the company by any person acting under its authority.
(2)All documents, other than the documents mentioned in subsection (1) and section forty-eight, shall, if executed on behalf of a company, be signed as prescribed in section forty-eight by any person acting under its authority, expressed or implied, unless the articles otherwise provide.

50. Execution of deeds in external countries

A company may, by writing, which if it has a seal shall be under its seal and the hand of one of its directors or, if it has not a seal, shall be under the hands of two of its directors or of one director and of the secretary, empower any person, either generally or in respect of any specified matters, as its agent, to execute deeds on its behalf in any foreign country; and every deed signed by such agent, on behalf of the company, shall bind the company, if valid in other respects.

51. Official seal for use in foreign countries

(1)Any company whose objects require or comprise the transaction of business in foreign countries may, if authorized by its articles, have for use in any foreign country an official seal, which shall be a facsimile of the seal of the company, if any, with the addition on its face of the name of the foreign country where it is to be used.
(2)A company having such an official seal may, by writing, which if it has a seal for use in Zimbabwe shall be under that seal and the hand of one of its directors or, if it has not such a seal, shall be under the hands of two of its directors or of one director and of the secretary, empower any person appointed for the purpose in any foreign country to affix the said official seal to any deed or other document to which the company is party.
(3)The authority of any such agent shall, as between the company and any person dealing with the agent, continue during the period, if any, mentioned in the instrument conferring the authority, or if no period is there mentioned, then until notice of the revocation or determination of the agent’s authority has been given to the person dealing with him.
(4)The person affixing any such official seal shall, by writing under his hand, on the deed or other document to which the seal is affixed, certify the date and the place of affixing the same.
(5)A deed or other document to which such an official seal is duly affixed shall bind the company, if valid in other respects.

52. Authentication of documents

A document or proceeding requiring authentication by a company may be signed by a director, secretary or other authorized officer of the company, and need not be under its seal.

Part III – Share capital and debentures

Prospectus

53. Dating of prospectus

A prospectus issued by or on behalf of a company or in relation to an intended company shall be dated and that date shall, unless the contrary is proved, be taken as the date of publication of the prospectus.

54. Matters to be stated and reports to be set out in prospectus

(1)Every prospectus issued by or on behalf of a company or on behalf of any person who is or has been engaged or interested in the formation of the company shall be in the English language and must state the matters specified in Parts I and II of the Fourth Schedule and set out—
(a)the reports specified in Part II of that Schedule, and the said Parts I and II shall have effect subject to the provisions contained in Part III of that Schedule;
(b)the report of any expert who is mentioned in the prospectus or an abstract from such report certified by the expert as truly conveying the substance of his report and of his opinions and conclusions.
(2)A condition requiring or binding an applicant for shares in or debentures of a company to waive compliance with any requirement of this section, or purporting to affect him with notice of any contract, document or matter not specifically referred to in the prospectus, shall be void.
(3)It shall not be lawful to issue, distribute or deliver or cause to be issued, distributed or delivered any form of application for shares in or debentures of a company unless the form is issued with and attached to a prospectus which complies with the requirements of this section:Provided that this subsection shall not apply if it is shown that the form of application was issued either —
(a)in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures; or
(b)in relation to shares or debentures which were not offered to the public.

If any person contravenes this subsection he shall be guilty of an offence and liable to a fine not exceeding level ten or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment.

(4)In the event of non-compliance with or contravention of any of the requirements of this section, a director or other person responsible for the prospectus shall not incur any liability by reason of the non-compliance or contravention if—
(a)as regards any matter not disclosed, he proves that he was not cognizant thereof; or
(b)he proves that the non-compliance or contravention arose from an honest mistake of fact on his part; or
(c)the non-compliance or contravention was in respect of matters which in the opinion of the court dealing with the case were immaterial or was otherwise such as ought, in the opinion of that court, having regard to all the circumstances of the case, reasonably to be excused:

Provided that, in the event of failure to include in a prospectus a statement with respect to the matters specified in paragraph 15 of the Fourth Schedule, no director or other person shall incur any liability in respect of the failure unless it be proved that he had knowledge of the matters not disclosed.

(5)Any person who becomes a director of a company after the issue of any prospectus by or on behalf of that company and prior to the first general meeting of the company at which directors are elected or appointed shall be deemed to be a person responsible for the prospectus and to have incurred liability in the same manner as a director or a proposed director who has signed the prospectus or on whose behalf the prospectus was signed by an agent.
(6)This section shall not apply to—
(a)the issue to existing members or debenture holders of a company of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures will or will not have the right to renounce in favour of other persons; or
(b)the issue of a prospectus or form of application relating to shares or debentures which are or are to be in all respects uniform with shares or debentures previously issued and for the time being dealt in or quoted on a securities exchange registered under the Securities Act [Chapter 24:25] or on a stock exchange of good repute outside Zimbabwe;[paragraph as amended by section 120 of Act No. 17 of 2004]

but, subject as aforesaid, this section shall apply to a prospectus or a form of application whether issued on or with reference to the formation of a company or subsequently.

(7)Nothing in this section shall limit or diminish any liability which any person may incur under the common law or this Act apart from this section.
(8)Every newspaper or other advertisement whatsoever offering or calling attention to an offer or intended offer of shares in or debentures of a company to the public for subscription or purchase shall be deemed to be a prospectus issued by the person responsible for publishing or disseminating the advertisement (and all enactments and rules of law as to the contents of prospectuses and as to liability in respect of statements in and omissions from prospectuses or otherwise relating to prospectuses shall apply and have effect accordingly), unless it contains a statement as to the places at and times during which copies of the prospectuses may be obtained and no more than the following—
(a)the number and description of the shares or debentures concerned;
(b)the name and date of registration of the company;
(c)the general nature of the main business or proposed main business of the company;
(d)the names of the directors or proposed directors.

No statement that or to the effect that the advertisement is not a prospectus shall avail to prevent the operation of this subsection.[section as amended by Act No. 22 of 2001]

55. Expert’s consent to issue of prospectus containing statement by him

(1)A prospectus inviting persons to subscribe for shares in or debentures of a company and including a statement purporting to be made by an expert shall not be issued unless—
(a)he has given and has not, before delivery of a copy of the prospectus for registration, withdrawn his written consent to the issue thereof with the statement included in the form and context in which it is included; and
(b)a statement that he has given and has not withdrawn his consent as aforesaid appears in the prospectus.
(2)If any prospectus is issued in contravention of subsection (1), the company and every person who is knowingly a party to the issue thereof shall be guilty of an offence and liable, in the case of the company, to a fine not exceeding level ten and, in the case of any such person, to a fine not exceeding level ten or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment.[section as amended by Act No. 22 of 2001]

56. Registration of prospectus

(1)No prospectus shall be issued by or on behalf of a company or in relation to an intended company unless, on or before the date of its publication, a copy thereof has been filed with and registered by the Registrar. Such copy shall be signed by every person who is named therein as a director or proposed director of the company, or by his agent authorized in writing, and shall have endorsed thereon or attached thereto—
(a)any consent to the issue of the prospectus required by section fifty-five from any person as an expert; and
(b)in the case of a prospectus issued generally, also—
(i)a copy of any contract required by paragraph 14 of the Fourth Schedule to be stated in the prospectus or, in the case of a contract not reduced to writing, a memorandum giving full particulars thereof; and
(ii)where the persons making any report required by Part II of that Schedule have made therein, or have, without giving the reasons, indicated therein any such adjustments as are mentioned in paragraph 26 of that Schedule, a written statement signed by those persons setting out the adjustments and giving the reasons therefor.

The references in subparagraph (i) of paragraph (b) to the copy of a contract required thereby to be endorsed on or attached to a copy of the prospectus shall, in the case of a contract wholly or partly in a foreign language, be taken as references to a copy of a certified translation of the contract or a copy embodying a certified translation of the parts in a foreign language, as the case may be.

(2)Every prospectus shall, on the face of it—
(a)specify the date of its registration under subsection (1); and
(b)specify or refer to statements included in the prospectus which specify any documents required by this section to be endorsed on or attached to the copy so delivered.
(3)The Registrar shall not register a prospectus unless it is dated and the copy thereof signed in manner required by this section and unless it has endorsed thereon or attached thereto the documents, if any, specified as aforesaid.
(4)If a prospectus states that the whole or portion of the share capital or debentures offered for subscription has been underwritten the prospectus shall not be registered until there is lodged with the Registrar the documents required by section sixty.
(5)The Registrar shall not register any prospectus which names any person as the auditor, legal practitioner, banker or broker of the company or proposed company unless it is accompanied by the consent in writing of the person so named to act in the capacity stated, but such person shall not be deemed thereby to have authorized the issue of the prospectus.
(6)No prospectus shall be issued more than three months after the date of its registration by the Registrar and if a prospectus is so issued it shall be deemed to be a prospectus a copy of which has not been registered.
(7)If a prospectus is issued—
(a)without a copy thereof being filed with and registered by the Registrar; or
(b)without the copy so filed and registered having endorsed thereon or attached thereto the required documents;

the company and every person who is knowingly a party to the issue of the prospectus shall be guilty of an offence and liable, in the case of the company, to a fine not exceeding level ten and, in the case of any such person, to a fine not exceeding level ten or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment.[section as amended by Act No. 22 of 2001]

57. Restriction on alteration of terms mentioned in prospectus or in statement in lieu of prospectus

A company not being a private company shall not previously to the statutory meeting vary in any material respect the terms of a contract referred to in the prospectus, or statement in lieu of prospectus, except subject to the approval of the statutory meeting.

58. Civil liability for mis-statements in prospectus

(1)Subject to this section, where a prospectus invites persons to subscribe for shares in or debentures of a company, the following persons shall be liable to pay compensation to all persons who subscribe for any shares or debentures on the faith of the prospectus for the loss or damage they may have sustained by reason of any untrue statement included therein, that is to say—
(a)every person who is a director of the company at the time of the issue of the prospectus; and
(b)every person who has in writing authorized himself to be named and is named in the prospectus as a director or as having agreed to become a director, either immediately or after an interval of time; and
(c)every person being a promoter of the company; and
(d)every person who has authorized the issue of the prospectus:

Provided that—

(i)where, under section fifty-five, the consent of a person is required to the issue of a prospectus and he has given that consent, he shall not by reason of his having given it be liable under this subsection as a person who has authorized the issue of the prospectus except in respect of an untrue statement purporting to be made by him as an expert;
(ii)no person whose ordinary business or part of whose ordinary business it is to do secretarial or administrative work, shall be liable under this subsection as a person who has authorized the issue of the prospectus by reason only that he is employed by the company to perform on its behalf the secretarial and administrative work of the issue of shares or debentures to which the prospectus relates and is named in the prospectus as secretary or manager for the issue.

(2)No person shall be liable under subsection (1) if he proves—
(a)that, having consented to become a director of the company, he withdrew his consent in writing before the issue of the prospectus and that it was issued without his authority or consent; or
(b)that the prospectus was issued without his knowledge or consent and that, on becoming aware of its issue, he forthwith gave reasonable public notice that it was issued without his knowledge or consent; or
(c)that, after the issue of the prospectus and before allotment thereunder, he, on becoming aware of the untrue statement, made an immediate written withdrawal of his consent thereto and gave reasonable public notice of such withdrawal and of the reason therefor; or
(d)that—
(i)as regards every untrue statement, not purporting to be made on the authority of an expert or of a public official document or statement, he had reasonable grounds to believe and did up to the time of the allotment of the shares or debentures, as the case may be, believe that the statement was true; and
(ii)as regards every untrue statement purporting to be a statement by an expert or contained in what purports to be a copy of or extract from a report or valuation of an expert, it fairly represented the statement, or was a correct and fair copy of or extract from the report or valuation, and he had reasonable grounds to believe and did up to the time of the issue of the prospectus believe that the person making the statement was competent to make it and had given the consent required by section fifty-five to the issue of the prospectus and had not withdrawn that consent before delivery of a copy of the prospectus for registration or, to the defendant’s knowledge, before allotment thereunder; and
(iii)as regards every untrue statement purporting to be a statement made by an official person or contained in what purports to be a copy of or extract from a public official document, it was a correct and fair representation of the statement or copy of or extract from the document:

Provided that this subsection shall not apply in the case of a person liable, by reason of his having given a consent required of him by section fifty-five, as a person who has authorized the issue of the prospectus in respect of an untrue statement purporting to be made by him as an expert.

(3)A person who apart from this subsection would under subsection (1) be liable, by reason of his having given the consent required of him by section fifty-five, as a person who has authorized the issue of a prospectus in respect of an untrue statement purporting to be made by him as an expert shall not be so liable if he proves—
(a)that, having given his consent under section fifty-five to the issue of the prospectus, he withdrew it in writing before delivery of a copy of the prospectus for registration; or
(b)that, after delivery of a copy of the prospectus for registration and before allotment thereunder, he, on becoming aware of the untrue statement, made an immediate written withdrawal of his consent and gave reasonable public notice of such withdrawal and of the reason therefor; or
(c)that he was competent to make the statement and that he had reasonable ground to believe and did up to the time of the allotment of the shares or debentures, as the case may be, believe that the statement was true.
(4)Where—
(a)the prospectus contains the name of a person as a director of the company, or as having agreed to become a director thereof, and he has not consented in writing to become a director or has in writing withdrawn his consent before the issue of the prospectus and has not authorized or consented to the issue thereof; or
(b)the consent of a person is required under section fifty-five to the issue of the prospectus and he either has not given that consent or has withdrawn it before the issue of the prospectus;

the directors of the company, except any without whose knowledge or consent the prospectus was issued, and any other person who authorized the issue thereof shall be liable, jointly and severally, to indemnify the person named as aforesaid or whose consent was required as aforesaid, as the case may be, against all damages, costs and expenses to which he may be made liable by reason of his name having been inserted in the prospectus or of the inclusion therein of a statement purporting to be made by him as an expert, as the case may be, or in defending himself against any action or legal proceeding brought against him in respect thereof:Provided that a person shall not be deemed for the purposes of this subsection to have authorized the issue of a prospectus by reason only of his having given the consent required by section fifty-five to the inclusion therein of a statement purporting to be made by him as an expert.

59. Criminal liability for mis-statements in prospectus

(1)Where a prospectus issued after the 1st April, 1952, includes any untrue statement, any person who authorized the issue of the prospectus shall be guilty of an offence and liable to a fine not exceeding level twelve or to imprisonment for a period not exceeding five years or to both such fine and such imprisonment unless he proves either that the statement was immaterial or that he had reasonable grounds to believe and did, up to the time of the issue of the prospectus, believe that the statement was true.
(2)A person shall not be deemed for the purposes of subsection (1) to have authorized the issue of a prospectus by reason only of his having given the consent required by section fifty-five to the inclusion therein of a statement purporting to be made by him as an expert.[section as amended by Act No. 22 of 2001]

60. Underwriting contract and affidavit to be delivered to Registrar

(1)If the whole or portion of the share capital or debentures of a company being offered for subscription has been or is being underwritten, the company shall deliver to the Registrar, not later than the date of the proposed offer of shares or debentures, a copy of the underwriting contract and an affidavit sworn by the person named as underwriter or, if such underwriter be a company, by two directors of such company, stating that to the best of the deponent’s knowledge and belief the underwriter is and will be in a position to carry out his obligations even if no shares or debentures, as the case may be, are applied for.
(2)The underwriter shall furnish the company within seven days of a written request by the company with the affidavit required by subsection (1).
(3)If the underwriter fails to comply with subsection (2), he shall be guilty of an offence and liable to a fine not exceeding level five or to imprisonment for a period not exceeding six months or to both such fine and such imprisonment.
(4)In the event of any underwriter, if such an affidavit is sworn, being unable, when duly called upon, to carry out his obligations under the underwriting contract, the affidavit shall be deemed to have been sworn without reasonable ground for belief that the person named as underwriter was or would be in a position to carry out his obligations under that contract; and the person swearing such affidavit, unless he proves that he did so believe and had reasonable ground for the belief, shall be guilty of an offence and liable to a fine not exceeding level seven or to imprisonment for a period not exceeding one year or to both such fine and such imprisonment.
(5)If default is made in complying with subsection (1) the company shall be guilty of an offence and liable to a fine not exceeding level three.[section as amended by Act No. 22 of 2001]

61. Document containing offer of shares or debentures for sale to be deemed prospectus

(1)Where a company allots or agrees to allot any shares in or debentures of the company with a view to all or any of those shares or debentures being offered for sale to the public, any document by which the offer for sale to the public is made shall for all purposes be deemed to be a prospectus issued by the company, and this Act shall apply and have effect accordingly, as if the shares or debentures had been offered to the public for subscription and as if persons accepting the offer in respect of any shares or debentures were subscribers for those shares or debentures, but without prejudice to the liability, if any, of the persons by whom the offer is made, in respect of mis-statements contained in the document or otherwise in respect thereof.
(2)In this Act, it shall, unless the contrary is proved, be evidence that an allotment of, or an agreement to alot, shares or debentures was made with a view to the shares or debentures being offered for sale to the public if it is shown—
(a)that an offer of the shares or debentures or of any of them for sale to the public was made within six months after the allotment or agreement to allot; or
(b)that at the date when the offer was made the whole consideration to be received by the company in respect of the shares or debentures had not been so received.
(3)Section fifty-four as applied by this section shall have effect as if it required a prospectus to state, in addition to the matters required by that section to be stated in a prospectus
(a)the net amount of the consideration received or to be received by the company in respect of the shares or debentures to which the offer relates; and
(b)the place and time at which the contract under the said shares or debentures have been or are to be allotted may be inspected;

and section fifty-six as applied by this section shall have effect as though the persons making the offer were persons named in a prospectus as directors of a company.

(4)Where an offer to which this section relates is made by a company or a partnership it shall be sufficient if the document aforesaid is signed on behalf of the company or partnership by two directors of the company or not less than half of the partners, as the case may be, and any such director or partner may sign by his agent authorized in writing.

62. Interpretation of provisions relating to prospectus

In this Act—

(a)a statement included in a prospectus shall be deemed to be untrue if it is misleading in the form and context in which it is included;
(b)a statement shall be deemed to be included in a prospectus if it is contained therein or in any report or memorandum appearing on the face thereof or by reference incorporated therein or issued therewith;
(c)if any matter which ought, under sections fifty-four and fifty-five and the Fourth Schedule or under subsection (3) of section sixty-one, to be inserted in a prospectus is omitted therefrom and if such omission is calculated to mislead then the prospectus shall be deemed, in respect of such omission, to be a prospectus in which an untrue statement is included.

63. Construction of references to offering shares or debentures to public

(1)Any reference in this Act to offering shares or debentures to the public shall, subject to any provision to the contrary contained therein, be construed as including a reference to offering them to any section of the public, whether selected as members or debenture holders of the company concerned or as clients of the person issuing the prospectus or in any other manner, and references in this Act or in a company’s articles to invitations to the public to subscribe for shares or debentures shall, subject as aforesaid, be similarly construed.
(2)Subsection (1) shall not be taken as requiring any offer or invitation to be treated as made to the public if it can properly be regarded, in all the circumstances, as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation, or otherwise as being a domestic concern of the persons making and receiving it, and in particular—
(a)a provision in a company’s articles prohibiting invitations to the public to subscribe for shares or debentures shall not be taken as prohibiting the making to members or debenture holders of an invitation which can properly be regarded as aforesaid; and
(b)provisions of this Act relating to private companies shall be construed accordingly.

64. Restrictions on offering shares for subscription or sale

(1)It shall not be lawful for any person to go from house to house, or from farm to farm, offering shares or debentures for subscription or purchase to the public or any member of the public.In this subsection, “house” shall include any office, shop or business premises, save the office or business premises of a person whose ordinary business or part of whose ordinary business it is to deal in shares or debentures, whether as principal or agent.
(2)No person shall either verbally or in writing, including any newspaper advertisement—
(a)make an offer of shares for sale to the public or any member of the public; or
(b)invite offers from the public or any member of the public to purchase any shares;

and no person shall issue, distribute or publish any material which in its form and context is calculated to be understood as an offer or invitation as aforesaid unless the offer, invitation or material is accompanied either by a prospectus complying with this Act or by a written statement containing the particulars required by this section to be included therein.The said statement shall be dated and signed by the person or persons making the offer or invitation or issuing, distributing or publishing the said material and, if such person is a company, by every director thereof:Provided that this subsection shall not apply—

(a)if the shares to which the offer or invitation or material relates are shares which are quoted on, or in respect of which permission to deal has been granted by, a securities exchange registered under the Securities Act [Chapter 24:25] or a stock exchange of good repute outside Zimbabwe, and the person making the offer or invitation or publishing the material so states in writing specifying the stock exchange; or[paragraph as amended by section 120 of Act No. 17 of 2004]
(b)if the shares in question are shares which a company has allotted or agreed to allot with a view to their being offered for sale to the public; or
(c)if the offer or invitation is made or the material is published only to persons whose ordinary business or part of whose ordinary business it is to deal in shares or debentures whether as principals or agents; or
(d)to an offer for sale to the public of or an invitation to the public to tender for unquoted shares made in the course of winding up a company in liquidation or in a deceased, insolvent or assigned estate or in an estate held under curatorship or in execution of a judgment of any competent court; or
(e)to an offer or invitation made in respect of unquoted shares by a person who is at the time of the offer or invitation the bona fide registered beneficial owner of them.

(3)The said statement shall contain particulars with respect to the following matters—
(a)whether the person making the offer is acting as principal or agent, and if as agent the name of his principal and an address in Zimbabwe where that principal can be served with process and the nature and extent of the remuneration received or receivable by the agent for his services;
(b)the date on which and the country in which the company was incorporated and the address of its registered or principal office in Zimbabwe or, if none, the address of its principal office outside Zimbabwe;
(c)the authorized share capital of the company and the amount thereof which has been issued, the classes into which it is divided and the rights of each class of members in respect of capital, dividends and voting and the number and amount of shares issued for cash and the number and amount thereof issued for a consideration other than cash, giving the dates on which and the prices at which or the consideration for which such shares were issued;
(d)the dividends, if any, paid by the company on each class of shares during each of the five financial years immediately preceding the offer or such lesser period as the company may have operated and, with respect to the rates of such dividends, particulars of each such class of shares on which such dividends have been paid, and if no dividend has been paid in respect of shares of any particular class during any of those years, a statement to that effect;
(e)the total amount of any debentures issued by the company and outstanding at the date of the statement, together with the rate of interest payable thereon;
(f)the names and addresses of the directors of the company;
(g)whether or not the shares offered are fully paid up and, if not, to what extent they are paid up;
(h)whether or not the shares are quoted on, or permission to deal therein has been granted by, a securities exchange registered under the Securities Act [Chapter 24:25] or any stock exchange outside Zimbabwe, and, if so, which, and, if not, a statement that they are not so quoted or that no such permission has been granted;
(i)if the offer relates to units, particulars of the names and addresses of the persons in whom the shares represented by the units are vested, the date of and the parties to any document defining the terms on which those shares are held and an address in Zimbabwe where that document or a copy thereof can be inspected;
(j)particulars of the dates on which and the prices at which the shares offered were—
(i)originally issued by the company; and
(ii)acquired by the person making the offer, or by his principal, giving the reasons for any difference between such prices and the prices at which the shares are being offered.

In this subsection the expression “company” means the company by which shares to which a statement relates were or are to be issued.

(4)If any person contravenes this section he shall be guilty of an offence and liable to a fine not exceeding level ten or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment.
(5)If a person convicted of an offence under this section is a company, whether a company within the meaning of this Act or not, every director of the company shall be guilty of the like offence and subject to the like penalties unless he proves that the act constituting the offence took place without his knowledge or consent.
(6)In this section, unless the context otherwise requires, the expression “offer” includes an invitation to make an offer, the expression “shares” means the shares of a company, whether a company within the meaning of this Act or not, and includes debentures and units, and the expression “unit” means any right or interest, by whatever name called, in a share, and for the purposes of this section a person shall not, in relation to a company, be regarded as not being a member of the public by reason only that he is a holder of shares in the company or a purchaser of goods from the company.
(7)If any person is convicted of having made an offer in contravention of this section the court before which he is convicted may order that any contract made as a result of the offer shall be void and, where it makes any such order, may give such consequential directions as it thinks proper for the repayment of any money or the retransfer of any shares.[section as amended by Act No. 22 of 2001]

Allotment

65. Prohibition of allotment unless minimum subscription received

(1)No allotment shall be made of any share capital of a company offered to the public for subscription unless the amount stated in the prospectus as the minimum amount which, in the opinion of the directors, must be raised by the issue of share capital in order to provide for the matters specified in paragraph 4 of the Fourth Schedule has been subscribed, and the sum payable on application for the amount so stated has been paid to and received by the company. For the purposes of this subsection an amount stated in any cheque received by the company in payment shall be deemed not to have been paid to and received by the company
(a)until the amount of the cheque has been credited to the account of the company with its bankers;
(b)if the company has at any time delivered to the payer and has not been repaid the amount or value of any money, bill, promissory note, cheque or other valuable consideration otherwise than in discharge of a debt bona fide due by the company to such payer, then to the extent of the amount or value of such money, bill, promissory note, cheque or other valuable consideration.
(2)The amount so stated in the prospectus shall be reckoned exclusively of any amount payable otherwise than in cash and is in this Act referred to as “the minimum subscription”.
(3)The amount payable on application on each share shall be the same in respect of all shares of the same class in any one issue and shall not be less than ten per centum of the nominal amount of the share.
(4)The amount paid on application shall be set apart by the directors in a separate bank account and shall not be available for the purposes of the company or for the satisfaction of its debts until the minimum subscription has been made up.
(5)If the conditions aforesaid have not been complied with on the expiration of sixty days after the first issue of the prospectus, all money received from applicants for shares shall forthwith be repaid to them without interest and, if any such money is not so repaid within seventy days after the issue of the prospectus. the directors of the company shall be guilty of an offence and liable to a fine not exceeding level ten and, further, shall be jointly and severally liable to repay that money with interest at the rate prescribed in the Prescribed Rate of Interest Act [Chapter 8:10] from the expiration of the seventieth day:Provided that a director shall not be guilty of an offence nor personally liable to repay the money if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part.[subsection as amended by section 16 of Act No. 12 of 1997]
(6)Any condition requiring or binding any applicant for shares to waive compliance with any requirements of this section shall be void.[section as amended by Act No. 22 of 2001]

66. Prohibition of allotment in certain cases unless statement in lieu of prospectus delivered to Registrar

(1)This section shall not apply to a private company.
(2)A company which does not issue a prospectus on or with reference to its formation, or which has issued such a prospectus but has not proceeded to allot any of the shares offered to the public for subscription, shall not allot any of its shares or debentures unless at least three days before the first allotment of either shares or debentures there has been delivered to the Registrar for registration a statement in lieu of prospectus signed by every person who is named therein as a director or a proposed director of the company or by his agent authorized in writing, in the form and containing the particulars set out in Part I of the Fifth Schedule and, in the cases mentioned in Part II of that Schedule, setting out the reports specified therein, and the said Parts I and II shall have effect subject to Part III of that Schedule.
(3)Every statement in lieu of prospectus delivered under subsection (2) shall, where the persons making any such report as aforesaid have made therein or have, without giving the reasons, indicated therein any such adjustments as are mentioned in paragraph 5 of the Fifth Schedule, have endorsed thereon or attached thereto a written statement signed by those persons setting out the adjustments and giving the reasons therefor.
(4)If a company contravenes subsection (2) or (3) the company and every director of the company who knowingly and wilfully authorizes or permits the contravention shall be guilty of an offence and liable to a fine not exceeding level five
(5)Where a statement in lieu of prospectus delivered to the Registrar under subsection (2) includes any untrue statement, any person who authorized the delivery of the statement in lieu of prospectus for registration shall be guilty of an offence and liable to a fine not exceeding level twelve or to imprisonment for a period not exceeding five years or to both such fine and such imprisonment, unless he proves either that the untrue statement was immaterial or that he had reasonable grounds to believe and did up to the time of the delivery for registration of the statement in lieu of prospectus believe that the untrue statement was true.
(6)For the purposes of this section—
(a)a statement included in a statement in lieu of prospectus shall be deemed to be untrue if it is misleading in the form and context in which it is included; and
(b)a statement shall be deemed to be included in a statement in lieu of prospectus if it is contained therein or in any report or memorandum appearing on the face thereof or by reference incorporated therein; and
(c)if any matter which ought, under the provisions of the Fifth Schedule, to be inserted in a statement in lieu of prospectus is omitted therefrom and if such omission is calculated to mislead then the statement in lieu of prospectus shall be deemed, in respect of such omission, to be a statement in lieu of prospectus in which an untrue statement is included.

[section as amended by Act No. 22 of 2001]

67. Effect of irregular allotment

(1)An allotment made by a company in contravention of section sixty-five or sixty-six shall be voidable at the instance of the applicant within one month after the holding of the statutory meeting and not later; or in any case, where the company is not required to hold a statutory meeting, or where the allotment is made after the holding of the statutory meeting, within one month after the date of the allotment, and not later, and shall be so voidable notwithstanding that the company is in course of being wound up.
(2)If any director of a company knowingly contravenes, or permits or authorizes the contravention of section sixty-five or sixty-six he shall be liable to compensate the company and the allottee, respectively, for any loss, damages or costs which the company or the allottee may have sustained or incurred thereby:Provided that proceedings to recover any such loss, damages or costs shall not be commenced after the expiration of two years from the date of the allotment.

68. Allotment voidable if application form not attached to prospectus

Where an application form is required by section fifty-four to be attached to a prospectus, every allotment of shares or debentures made otherwise than in pursuance of an application form which was attached to a prospectus as required by subsection (3) of section fifty-four shall be voidable at the instance of the allottee within one month after allotment, unless it is shown that the allottee at the time of his application was in fact possessed of a copy of the prospectus or was aware of its contents.

69. Application for and allotment of shares

(1)No allotment shall be made of any shares in or debentures of a company in pursuance of a prospectus issued generally and no proceedings shall be taken on applications made in pursuance of a prospectus so issued, until the beginning of the third day after that on which the prospectus is first so issued or such later time, if any, as may be specified in the prospectus.The beginning of the said third day or such later time as aforesaid is in this Act referred to as “the time of the opening of the subscription lists”.
(2)In subsection (1) the reference to the day on which the prospectus is first issued generally shall be construed as referring to the day on which it is first issued as a newspaper advertisement:Provided that, if it is not so issued as a newspaper advertisement before the third day after that on which it is first so issued in any other manner, the said reference shall be construed as referring to the day on which it is first so issued in any manner.
(3)The validity of an allotment shall not be affected by any contravention of the foregoing provisions of this section but, in the event of any such contravention, the company and every officer of the company who is knowingly a party to the default shall be guilty of an offence and liable to a fine not exceeding level seven
(4)In the application of this section to a prospectus offering shares or debentures for sale, the foregoing subsections shall have effect with the substitution of references to sale for references to allotment, and with the substitution for the reference to the company and every officer of the company who is knowingly a party to the default of a reference to any person by or through whom the offer is made and who knowingly and wilfully authorizes or permits the contravention.
(5)An application for shares in or debentures of a company which is made in pursuance of a prospectus issued generally shall not be revocable until after the expiration of the third day after the time of the opening of the subscription lists, or the giving before the expiration of the said third day, by some person responsible under section fifty-eight for the prospectus, of a public notice having the effect under that section of excluding or limiting the responsibility of the person giving it.
(6)In reckoning for the purposes of this section and of section seventy the third day after another day, any intervening day which is a Saturday or Sunday or which is a public holiday in Zimbabwe shall be disregarded and if the third day, as so reckoned, is itself a Saturday or Sunday or a public holiday there shall for the said purposes be substituted the first day thereafter which is none of them.[section as amended by Act No. 22 of 2001]

70. Allotment of shares and debentures to be dealt in on stock exchange

(1)Where a prospectus, whether issued generally or not, states that application has been or will be made for permission for the shares or debentures offered thereby to be dealt in on any stock exchange, any allotment made on an application in pursuance of the prospectus shall, whenever made, be void if the permission has not been applied for before the third day after the first issue of the prospectus or if the permission has been refused before the expiration of twenty-one days from the date of the closing of the subscription lists or such longer period not exceeding forty-two days as may, within the said twenty-one days, be notified to the applicant for permission by or on behalf of the stock exchange.
(2)Where the permission has not been applied for as aforesaid, or has been refused as aforesaid, the company shall forthwith repay without interest all money received from applicants in pursuance of the prospectus, and, if any such money is not repaid within eight days after the company becomes liable to repay it, the directors of the company shall be jointly and severally liable to repay that money with interest at the rate prescribed in the Prescribed Rate of Interest Act [Chapter 8:10] from the expiration of the eighth day:Provided that a director shall not be liable if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part.[subsection as amended by section 16 of Act No. 12 of 1997]
(3)All money received as aforesaid shall be kept in a separate bank account and shall not be available for the purposes of the company or for the satisfaction of its debts so long as the company may become liable to repay it under subsection (2) and, if default is made in complying with this subsection, the company and every officer of the company who is in default shall be guilty of an offence and liable to a fine not exceeding level ten or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment.
(4)Any conditions requiring or binding any applicant for shares or debentures to waive compliance with any requirement of this section shall be void.
(5)For the purposes of this section, permission shall not be deemed to be refused if it is intimated that the application for it, though not at present granted, will be given further consideration.
(6)This section shall have effect—
(a)in relation to any shares or debentures agreed to be taken by a person underwriting an offer thereof by a prospectus as if he had applied therefor in pursuance of the prospectus; and
(b)in relation to a prospectus offering shares for sale with the following modifications, that is to say—
(i)references to sale shall be substituted for references to allotment; and
(ii)the persons by whom the offer is made, and not the company, shall be liable under subsection (2) to repay money received from applicants, and references to the company’s liability under that subsection shall be construed accordingly; and
(iii)for the reference in subsection (3) to the company and every officer of the company who is in default there shall be substituted a reference to any person by or through whom the offer is made and who knowingly and wilfully authorizes or permits the default.

[section as amended by Act No. 22 of 2001]

71. Register and return as to allotments

(1)Every company shall keep a register of allotments at his registered office.
(2)A company, whenever it makes any allotment of its shares, shall, within one month thereafter, lodge with the Registrar
(a)a return of the allotments, stating the number and nominal amount of the shares comprised in the allotment, the names and addresses of the allottees and the amount, if any, paid or due and payable on each share; and
(b)in the case of shares allotted as fully or partly paid up otherwise than in cash, a contract in writing and signed by the parties thereto, constituting the title of the allottee to the allotment, together with any contract of sale or for services or other consideration in respect of which that allotment was made, and a return stating the number and nominal amount of shares so allotted, the extent to which they are to be treated as paid up and the consideration for which they have been allotted:

Provided that it shall not be necessary for a return referred to in paragraph (a) to state the names and addresses of the allottees in the case of an allotment of a class which has been prescribed as being one in relation to which the names and addresses of the allottees shall not be stated in the return.

(3)Where a contract such as is referred to in paragraph (b) of subsection (2) has not been reduced to writing, the company shall, within one month after the allotment of its shares, lodge with the Registrar such particulars of the contract as may be prescribed.
(4)If default is made in complying with the requirements of this section the company and every officer of the company who is knowingly a party to the default shall be guilty of an offence and liable to a default fine not exceeding level two:Provided that in case of default in lodging with the Registrar within one month after the allotment any document required to be lodged by this section, the company, or any person liable for the default, may apply to the court for relief and the court, if satisfied that the omission to lodge the document was accidental or due to inadvertence or that it is just and equitable to grant relief, may make an order extending the time for the lodging of the documents for such period as the court may think proper.[section as amended by Act No. 22 of 2001]

Commissions and discounts

72. Power to pay certain commissions and prohibition of payment of all other commissions, discounts

(1)It shall be lawful for a company to pay a commission to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the company if—
(a)the payment of the commission is authorized by the articles; and
(b)the commission paid or agreed to be paid does not exceed five per centum of the price at which the shares are issued or the amount or rate authorized by the articles, whichever is the less; and
(c)the amount or rate per centum of the commission paid or agreed to be paid is—
(i)in the case of shares offered to the public for subscription, disclosed in the prospectus; or
(ii)in the case of shares not offered to the public for subscription, disclosed in the statement in lieu of prospectus or in a statement in the prescribed form signed in like manner as a statement in lieu of prospectus and delivered, before payment of the commission, to the Registrar for registration, and where a circular or notice, not being a prospectus, inviting subscription for the shares is issued, also disclosed in that circular or notice;

and

(d)the number of shares which persons have agreed for a commission to subscribe absolutely is disclosed in manner aforesaid.
(2)Save as aforesaid, no company shall apply any of its shares or capital money, either directly or indirectly, in payment of any commission, discount or allowance to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the company, whether the shares or money be so applied by being added to the purchase money of any property acquired by the company or to the contract price of any work to be executed for the company, or the money be paid out of the nominal purchase money or contract price, or otherwise.
(3)Nothing in this section shall affect the power of any company to pay such brokerage as it has heretofore been lawful for a company to pay.
(4)A vendor to, promoter of or other person who receives payment in money or shares from a company, shall have and shall be deemed always to have had power to apply any part of the money or shares so received in payment of any commission, the payment of which, if made directly by the company, would have been legal under this section.
(5)If default is made in complying with the provisions of this section relating to the delivery to the Registrar of the statement in the prescribed form the company and every officer of the company who is in default shall be guilty of an offence and liable to a default fine not exceeding level one.[section as amended by Act No. 22 of 2001]

73. Financial assistance by company for purchase of its own or its holding company’s shares

(1)It shall not be lawful for a company to give, whether directly or indirectly, and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the company or, where the company is a subsidiary company, in its holding company unless—
(a)such assistance is given in accordance with a special resolution of the company; and
(b)immediately after such assistance is given, on a fair valuation the company’s assets, excluding any asset resulting from the giving of the assistance, exceed its liabilities and it is able to pay its debts as they become due in ordinary course of its business.
(2)If a company gives financial assistance in contravention of subsection (1)—
(a)any transaction relating to such assistance and any transfer or allotment of shares arising therefrom may be set aside by the court at the suit of the company or its liquidator or any member or creditor of the company or of any party to the transaction; and
(b)whether or not the court makes an order in terms of paragraph (a), every officer of the company who made or took part in the decision that the company should enter into the transaction may be ordered by the court at the suit of the company or its liquidator or any member or creditor of the company or of any party to the transaction, to compensate the company and any other party to the transaction who entered into it in good faith for any loss resulting from the contravention of subsection (1):

Provided that no compensation for loss of anticipated profits shall be awarded to the company.

Issue of shares at premium or discount and redeemable preference shares

74. Application of share premiums

(1)If a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account called “the share premium account” and provisions of this Act relating to the reduction of a company’s share capital shall apply, except as provided in this section, as if the share premium account were part of its paid-up share capital.
(2)A company may apply its share premium account—
(a)in paying up unissued shares to be allotted to its members, directors or employees, or to a trustee for such persons, as fully paid bonus shares; or
(b)in writing off—
(i)the company’s preliminary expenses; or
(ii)the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company; or
(c)in providing for the premium payable, if any, on redemption of any redeemable preference shares or of any debentures of the company.

75. Power to issue shares at a discount

(1)Subject to this section, it shall be lawful for a company to issue at a discount shares in the company of a class already issued:Provided that—
(i)the issue of the shares at a discount must be authorized by special resolution of the company and must be sanctioned by the court;
(ii)the special resolution must specify the maximum rate of discount at which the shares are to be issued;
(iii)not less than one year must, at the date of the issue, have elapsed since the date on which the company was entitled to commence business;
(iv)the shares to be issued at a discount must be issued within thirty days after the date on which the issue is sanctioned by the court or within such extended time as the court may allow.
(2)Where a company has passed a special resolution authorizing the issue of shares at a discount, it may apply to the court for an order sanctioning the issue, and on any such application the court, if, having regard to all the circumstances of the case, it thinks proper so to do, may make an order sanctioning the issue on such terms and conditions as it thinks fit.
(3)Every prospectus relating to the issue of the shares must contain particulars of the discount allowed on the issue of the shares or of so much of that discount as has not been written off at the date of the issue of the prospectus.If default is made in complying with this subsection the company and every officer of the company who is in default shall be guilty of an offence and liable to a default fine not exceeding level one.[section as amended by Act No. 22 of 2001]

76. Power to issue redeemable shares

(1)Subject to this section and sections seventy-seven, seventy-eight, eighty-three and eighty-four, a company may, if authorized by its articles, issue shares which are to be redeemed or which are liable to be redeemed at the option of the company or the shareholder concerned.
(2)No redeemable shares shall be issued at a time when there are no issued shares of the company which are not redeemable.
(3)Redeemable shares may not be redeemed unless they are fully paid, and the terms of redemption shall provide for payment on redemption.

77. Financing at redemption

(1)Subject to subsection (2) and subsection (4) of section eighty-four—
(a)redeemable shares shall be redeemed only out of profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption; and
(b)any premium payable for redemption shall be paid out of profits of the company which would otherwise be available for dividend.
(2)If redeemed shares were issued at a premium, any premium payable on their redemption may be paid out of the proceeds of a fresh issue of shares made for the purposes of the redemption, up to an amount equal to—
(a)the aggregate of the premiums received by the company on the issue of the shares redeemed; or
(b)the current amount of the company’s share premium account, including any sum transferred to that account in respect of the premiums on the new shares;

whichever is the lesser, and in that event the amount of the company’s share premium account shall be reduced by a sum corresponding, or by sums in the aggregate corresponding, to the amount of any payment made by virtue of this subsection out of the proceeds of the issue of the new shares.

(3)Subject to this section and to sections seventy-eight, eighty-three and eighty-four, redemption of shares may be effected on such terms and in such manner as may be provided by the company’s articles.
(4)Shares redeemed under this section shall be treated as cancelled on redemption and the amount of the company’s share capital shall be diminished by the nominal value of those shares, but the redemption of shares by a company shall not be taken as reducing the amount of the company’s authorized share capital.
(5)Without prejudice to subsection (4), where a company is about to redeem shares, it shall have power to issue shares up to the nominal value of the shares to be redeemed as if those shares had never been issued, and accordingly the share capital of the company shall not, for the purposes of any law relating to stamp duty, be deemed to be increased by the issue of shares in pursuance of this subsection:Provided that, where new shares are issued before the redemption of the old shares, the new shares shall not, so far as relates to stamp duty, be deemed to have been issued in pursuance of this subsection unless the old shares are redeemed within one month after the issue of the new shares.

78. Power of company to purchase own shares

(1)Subject to this section and to sections seventy-nine to eighty-four, a company may, if authorized by its articles, purchase its own shares, including any redeemable shares.
(2)Sections seventy-six and seventy-seven shall apply, mutatis mutandis, to the purchase by a company of its own shares save that the terms and manner of purchase need not be determined by the articles as required by subsection (3) of section seventy-seven.
(3)A company shall not purchase its own shares if as a result of the purchase there would no longer be any member holding shares other than redeemable shares.

79. Authority required by company to purchase its own shares

(1)A company shall not purchase its own shares unless the purchase has been authorized in advance by the company in general meeting.
(2)An authority granted by the company in general meeting shall not be valid for the purposes of subsection (1)—
(a)unless it specifies—
(i)the price, or the maximum and minimum prices, at which the shares may be acquired; and
(ii)the maximum number of shares which may be acquired and the class thereof; and
(iii)the date on which the authority will expire;
(b)where the shares are to be purchased otherwise than on a securities exchange registered under the Securities Act [Chapter 24:25] if any person holding shares to which the authority relates has voted for the resolution conferring the authority:Provided that this paragraph shall not apply in the case of a private company or in the case of a public company when a class of shares are all to be purchased or are to be purchased pro rata from all the shareholders who hold shares of the class concerned.

80. Cession or renunciation of rights

(1)Where a company has obtained rights to purchase shares pursuant to an authority obtained in terms of section seventy-nine—
(a)such rights shall not be capable of being ceded;
(b)any agreement to renounce such rights shall not be valid unless the renunciation has been authorized in advance by the company in general meeting.
(2)An authority granted by the company in general meeting shall not be valid for the purposes of paragraph (b) of subsection (l)—
(a)unless it specifies the shares or the number of shares concerned; or
(b)where the purchase is to be effected otherwise than on the a securities exchange registered under the Securities Act [Chapter 24:25], if any person holding shares to which the authority relates has voted for the resolution conferring the authority:Provided that this paragraph shall not apply in the case of a private company or in the case of a public company when a class of shares are all to be purchased or are to be purchased pro rata from all the shareholders who hold shares of the class concerned.[paragraph as amended by section 120 of Act No. 17 of 2004]

81. Payments for rights to purchase or for release thereof

(1)A payment made by a company in consideration of—
(a)acquiring any right to purchase its shares pursuant to an authority granted in terms of section seventy-nine; or
(b)the release of any obligation to purchase shares in pursuance of an authority granted in terms of section seventy-nine;

shall be made out of the profits that would otherwise be available for dividend.

(2)If the requirements of subsection (1) are not complied with, the purchase or release concerned, as the case may be, shall be void.

82. Disclosure by company of purchase of own shares

(1)Within the period of twenty-eight days next following the date of delivery of any of its own shares purchased by it, a company shall deliver to the Registrar a return in the prescribed form showing, with respect to each class of shares purchased—
(a)the number and nominal value of the shares; and
(b)the date on which the shares were delivered to the company; and
(c)the aggregate amount paid by the company for the shares; and
(d)the maximum and minimum prices paid in respect of shares of each class purchased.
(2)Particulars of shares delivered to the company on different dates and under different authorities to purchase may be included in a single return to the Registrar and, when this is done, the amount to be stated in terms of paragraph (c) of subsection (1) shall be the aggregate amount paid by the company for all the shares to which the return relates.
(3)Where a company has purchased its own shares it shall keep a copy of the contract of purchase or, if the purchase is not in terms of any written contract, a memorandum of the terms of the purchase at its registered office for a period of ten years reckoned from the date of completion of the purchase of all the shares concerned or, as the case may be, from the date of termination of the contract.
(4)The copy of the contract or memorandum, as the case may be, required to be kept in terms of subsection (3) shall be available for inspection, at all reasonable times, free of charge by any person.
(5)Every officer of a company who is in default in complying with subsection (3) or (4) shall be guilty of an offence and liable to a default fine not exceeding level two.
(6)The obligation to keep and to allow inspection of a copy of any contract or a memorandum in terms of subsections (3) and (4) shall apply, mutatis mutandis, to any variation of the contract.[section as amended by Act No. 22 of 2001]

83. Capital redemption reserve

(1)Where shares of a company are redeemed or purchased wholly out of the company’s profits, the amount by which the company’s issued share capital is diminished in accordance with subsection (4) of section seventy-seven on cancellation of the shares concerned shall be transferred to a reserve, to be called “the capital redemption reserve”.
(2)If shares are redeemed or purchased by a company wholly or partly out of the proceeds of a fresh issue and the aggregate amount of those proceeds is less than the nominal value of the shares redeemed or purchased, the amount of the difference shall be transferred to the capital redemption reserve.
(3)The provisions of this Act relating to the reduction of a company’s share capital shall apply to any reduction of the capital redemption reserve as if the capital redemption reserve were paid-up share capital of the company:Provided that the reserve may be applied by the company in paying up its unissued shares to be allotted to its members, directors or employees, or to a trustee for such persons, as fully paid bonus shares.

84. Effect of failure by company to redeem or purchase shares

(1)Where a company has, on or after the 22nd October, 1993—
(a)issued shares on terms that they are or are liable to be redeemed; or
(b)agreed to purchase any of its own shares;

the company shall not be liable in damages in respect of any failure on its part to redeem or purchase any of the shares, and no order for specific performance of the terms of redemption or purchase shall be made by any court if the company shows that it is unable to meet the costs of redeeming or purchasing, as the case may be, the shares in question out of profits of the company that would otherwise be available for dividend.

(2)Subject to subsection (3), if a company is wound up and at the commencement of the winding up any shares referred to in subsection (1) have not been redeemed or purchased by the company, the terms of redemption or purchase may be enforced against the company, and when shares are redeemed or purchased under this subsection they shall be treated as cancelled.
(3)Subsection (2) shall not apply if—
(a)the terms under which the shares were to be redeemed or purchased provided for the redemption or purchase to take place at a date later than that of the commencement of the winding up; or
(b)during the period commencing with the date on which the redemption or purchase was to have taken place and ending with the commencement of the winding up, the company could not at any time have lawfully paid a dividend to shareholders equal in value to the price at which the shares were to have been redeemed or purchased.
(4)There shall be paid in priority to any amount which the company is liable in terms of subsection (2) to pay in respect of any shares—
(a)all other debts and liabilities of the company, other than any due to members in their capacity as such; and
(b)