The Justice Legal and Parliamentary Affairs Chairperson Hon. Misheck Mataranyika (ZANU PF Makoni South) on Thursday tabled the Companies and Other Entities Bill report following public hearings that were held across the country last month.
The public hearings supported by SAPST were held from 25 February 2019 to 1 March 2019 in Harare, Bulawayo, Masvingo and Mutare.
The Bill seeks to repeal the current Companies Act [Chapter 24:03] as well as the Private Business Corporation Act [Chapter 24:11]. It proposes the updating of the law relating companies and private business corporation (PBCs).
The proposed law exempts from its application, bankers, building societies, co-operative societies, insurers and other entities that are regulated under specific statutes as well as trade unions and employer’s organisations.
The Bill lists registrable business entities as public and private limited companies, companies limited by guarantee (no share capital), co-operative companies, foreign companies, private business corporations, partnerships, syndicates and joint ventures.
In his presentation of the Report, Hon. Mataranyika said the Bill will maintain order in the corporate sector and ride on corporate governance principles that have been developed in the last forty years. Furthermore, he said that since the Bill makes provision for electronic based administrative systems, it complements the Ease of Doing Business strategy.
Some of the major features to be included in the Bill are as follows;
- Provision for the issuance of non-par-value shares rather than shares with a fixed value, together with provisions for the valuation of no-par-value shares;
- The introduction of an Electronic Registry for the incorporation and registration of domestic and foreign companies and private business corporations;
- The substitution of criminal penalties by civil penalties wherever possible;
- To establish an inspectorate to better, enforce the provisions of this Bill;
- To make new provision for the merger and take-over of companies and other business entities;
- The licensing of business entity incorporation agents and business entity service providers;
- To clarify and improve the common law principle of bona vacantiaby instituting a fair and transparent method of declaring such properties to be bona vacantia (i.e. the vesting in the State of unclaimed properties of defunct companies and private business corporations);
- To make the beneficial ownership of companies more transparent; it seeks to do this through the introduction of a continuous system of updating the Registry;
- To introduce further provision to combat the use of the company form for criminal purposes;
- To define in greater detail, the corporate responsibilities of directors and boards of companies and to encourage good corporate governance;
- To include additional measures to protect shareholders and investors, in particular minority shareholders and investors;
Parliamentarians will resume debate of the Bill this Tuesday.