New Companies Act almost ready
Africa Moyo, Harare Bureau
A brand new Companies Act is set to be signed into law in the near future, amid indications the Bill is now in the Attorney General’s office for proofreading.
The development brings fresh hope to the business community that was increasingly getting frustrated by the slow pace of concluding the critical law.
Team leader for the technical working group on “Starting a Business and Protection of Minority Investors”, Mr Willie Mushayi who is also the Deputy Chief Registrar of Companies under the Ministry of Justice, told our Harare Bureau that delays in bringing a new Companies Act into force were necessitated by continued stakeholder consultations and inputs, including from the World Bank.
“This is a major law of the country and all contributions had to be included (but) there is movement; it was passed by Parliament,” he said. “It’s now with the Attorney General’s office going through what they call proofreading before it’s signed into law.”
Moves to overhaul the Companies Act started in August 2015 but serious stakeholder participation saw the draft Companies Bill being rejected as it was felt that it excluded key contributions by stakeholders.
Government initiated the process of reforming the Companies Act as part of improving the ease of doing business in the country as some sections and/or provisions of the existing law have been obsolete, and frustrated potential investors.
But since the coming in of the Second Republic led by President Mnangagwa, it is no longer business as usual, especially as Government spearheads the ‘Zimbabwe is Open for Business’ policy.
Mr Mushayi said the new Act seeks, among other things, to increase protection of minority shareholders, promote transparency and replace most criminal penalties with civil penalties.
“There is increased accountability, disclosure and transparency of directors; improved protection for minority shareholders; replacement of most criminal penalties with civil penalties, and an obligation to companies to disclose beneficial ownership of shares,” he said.
“There is also electronic filing and electronic register of companies; provisions for mergers and takeovers. The Bill also seeks to repeal the current Companies Act and the Private Business Corporations Act. Those are some of the highlights.”