[This is the version of this document at 31 December 2014.]
[Note: This version of the Act was revised and consolidated in the Fifth Revised Edition of the Laws of Malawi (L.R.O. 1/2018), by the Solicitor General and Secretary for Justice under the authority of the Revision of the Laws Act.]
An Act to amend and consolidate the law relating to companies, and to provide for matters connected therewith and incidental thereto
Part I – Preliminary
1. Short title
This Act may be cited as the Companies Act.
2. Interpretation
In this Act, unless the context otherwise requires—"accounts" includes a company’s group accounts, whether prepared in the form of accounts or not;"alternate director" has the meaning assigned to it by section 147;"annual general meeting", in relation to a company, means a meeting of the company required to be held by section 104;"annual return" means the return required to be made by section 181, and includes any document accompanying the return;"approved auditor" means a person qualified in accordance with section 192 to be appointed as auditor of a company, or a person so qualified who has been appointed its auditor;"articles" means the articles of association of a company, as originally framed or as altered pursuant to this Act, including, so far as they apply to the company, the regulations contained (as the case may be) in Table A or Table C in the First Schedule to this Act, or the corresponding Table in the repealed Act;[First Schedule]"authorized unit trust" has the meaning assigned to it by section 179;"basic accounts requirements", in relation to an external company, has the meaning assigned to it by section 312;"body corporate" means any company or corporation incorporated under or by virtue of the laws of Malawi or of any other State, but does not include a corporation sole;"book" includes account, deed, writing, document, accounting record, and any other record of information however compiled, recorded or stored, whether in written or printed form or by electronic or photographic process or otherwise;"branch register" has the meaning assigned to it by section 38;"calendar year" means a period of twelve months commencing on the first day of January;"chairman of local directors", in relation to an external company, means the local director thereof designated as chairman of local directors pursuant to section 314;"company" means a company incorporated under this Act or an existing company;"company limited by guarantee" and "company limited by shares" have the meanings assigned to them respectively by paragraphs (1) (b) and (1) (a) of section 5;"court" means the High Court;"creditors’ voluntary winding-up" has the meaning assigned to it by section 248;"debenture" includes debenture stock, bonds and any other securities of a company, whether constituting a charge on the assets of the Company or not, and"debenture holder" includes debenture stockholder;"default", in the expression "officer in default" or "person in default", has the meaning assigned to it by section 338;"director" has the meaning assigned to it by section 140;"document" includes book, notice and register and summons, order and other legal process;"documentary agent", in relation to an external company, means a person resident in Malawi authorized by such company to accept service of writs and other documents, pursuant to section 307;"end of the company’s financial year" has the meaning assigned to it by section 183;"equity share capital", in relation to a body corporate, means its issued share capital excluding any part thereof which neither as respects dividends nor as respects capital carries any right to participate beyond a specified amount in a distribution; and"equity share" means a share comprised in the equity share capital of a body corporate;"established place of business", in relation to an external company, has the meaning assigned to it by section 306;"existing company" means any body corporate which immediately prior to the commencement of this Act was a company under the provisions of any written law repealed by this Act;"external company" has the meaning assigned to it by section 306;"financial year" means, in relation to any company, the period covered by the company’s profit and loss account in accordance with section 183, whether that period is a year or not;"group accounts" has the meaning assigned to it by section 185;"group body corporate" or "group company" means that, in relation to any other body corporate, the body corporate or company so described is—(a)the subsidiary of that other; or(b)the holding company of that other; or(c)a subsidiary of that other’s holding company; or(d)a holding company of that other’s subsidiary;"holding company", as regards a company or other body corporate, means that in relation to any other body corporate that other is its subsidiary;"invitation to the public" has the meaning assigned to it by section 165;"limited company" means a company limited by shares or a company limited by guarantee;"liquidator" includes a provisional liquidator;"local directors" in relation to an external company, has the meaning assigned to it by section 314(1);"local manager" in relation to an external company, has the meaning assigned to it by section 314;"majority", in relation to votes, means the greater number or part of the votes cast, and not the number by which the votes cast on the one side exceed those cast on the other;"Malawian company" means a company as defined by this section;"managing director" means a director to whom has been delegated any of the powers of the board of directors to direct and administer the business and affairs of the company;"member" has the meaning assigned to it by section 31, and for the purposes of Part XII, includes a past member in the circumstances set out in section 207;"members’ voluntary winding-up" has the meaning assigned to it by section 248;"memorandum" means the memorandum of association of a company, as originally framed or as altered in pursuance of any enactment;"non-Malawian company", for the purposes of Part XIII, has the meaning assigned to it by section 323;"number" in relation to shares, includes an amount of stock;"officer" in relation to a body corporate, includes—(a)any director or secretary of the body corporate;(b)any receiver and manager of any part of the undertaking of the body corporate appointed under a power contained in any instrument; and(c)any liquidator of a body corporate appointed by the members in a voluntary winding-up, but does not include—(d)any receiver of any part of the undertaking of the body corporate who is not also a manager;(e)any receiver and manager of any part of the undertaking of the body corporate appointed by the court; or(f)any liquidator of the body corporate appointed by the court or by the creditors; or(g)any auditor of the body corporate;"official receiver" means the official receiver appointed under the Bankruptcy Act or, if there is more than one such official receiver, then such one of them as the Minister may designate, or, if there is no such official receiver, then an officer appointed for the purpose by the Minister;[Cap. 11:01 s. 71]"ordinary resolution" has the meaning assigned to it by section 120;"private company" has the meaning assigned to it by section 5;"profit and loss account" includes, in relation to a company limited by guarantee or other body corporate not trading for profit, an income and expenditure account in accordance with section 186 (2);"public company" has the meaning assigned to it by section 5;"receiver" includes an official receiver, and any person appointed as both receiver and manager, and any reference to a receiver of the property of a company includes a reference to a receiver of part only of that property and to a receiver only of the income arising from that property, or from part thereof;"register of external companies" means the register of external companies kept and maintained by the registrar for the purposes of Part XIII;"registered" means registered under this Act or under the repealed Act;"registrar" means the public officer for the time being holding the office of Registrar of Companies established by section 324, and includes a Deputy or Assistant Registrar;"registration" has the meaning assigned to it by section 325;"the repealed Act" means the Companies Act in force immediately prior to the commencement of this Act;"resolution for reducing share capital" has the meaning assigned to it by section 67;"seal" means the common seal of a company or other body corporate;"secretary", in relation to a company, means the person appointed secretary of the company in accordance with section 156 and, in relation to any other body corporate, includes any person occupying the position of secretary by whatever name called;"share" means share in the share capital of a body corporate, and includes stock except where a distinction between stock and shares is expressed or implied, and a reference to a number of shares shall be construed as including an amount of stock;"special business" has the meaning assigned to it by section 113;"special resolution" has the meaning assigned to it by section 120;"subsidiary", as regards a company or other body corporate, has the meaning assigned to it in the Seventh Schedule;[Seventh Schedule]"Table A" means Table A in the First Schedule to this Act;[First Schedule]"unlimited company" has the meaning assigned to it by paragraph (1) (c) of section 5;"variation" includes cancellation and abrogation;"waiting period" has the meaning assigned to it by section 171;"wholly owned subsidiary", as regards a company or other body corporate, means that, in relation to another body corporate, it has no members except that other and that other’s wholly owned subsidiaries and its or their nominees.[17 of 1990]
3. Local participation in companies
Whenever he is satisfied that it is necessary in the economic interests of Malawi so to do, it shall be the duty of the Minister to encourage by all reasonable means the maximum practicable participation by persons in Malawi, both corporate and unincorporate, in the capital structure of companies incorporated or registered under this Act, and for that purpose the Minister shall be empowered to enter into negotiations with any such company with a view to agreeing and giving effect to a scheme whereby such participation may be effected.
Part II – Incorporation of companies and matters incidental thereto
4. Mode of forming incorporated company
Any two 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.
5. Types of company
(1)A company may be either—(a)a company having the liability of its members limited to the amount, if any, unpaid on the shares respectively held by them (in this Act termed "a company limited by shares"); or(b)a company having the liability of its members limited to such amount as the members respectively 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"); or(c)a company not having any limit on the liability of its members (in this Act termed " an unlimited company").(2)A company may be either a private company or a public company.(3)A private company is one which by its memorandum or articles—(a)restricts the right to transfer its shares, if any;(b)limits the total number of its members to fifty, not including persons who are bona fide in the employment of the company and persons who, having been formerly bonafide 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 the company from making any invitation to the public to acquire any shares or debentures of the company except where an exemption in respect of that company has been granted under section 164 for the public issue of shares and debentures.[17 of 1990]For the purposes of this subsection, where two or more persons hold one or more shares jointly, they shall be treated as a single member.(4)Where the articles of an existing company contain provisions which constituted the company a private company immediately prior to the commencement of this Act, the company shall continue to be a private company and its articles shall be deemed to include the limitations and prohibitions in paragraphs (b) and (c) of subsection (3), until it shall alter the same.(5)Any company other than a private company is a public company.(6)A company limited by guarantee shall not be registered with shares and shall not create or issue shares.[17 of 1990]
6. Requirements with respect to memorandum
(1)The memorandum of association of a company limited by shares shall be in accordance with the form in Table B in the First Schedule, and shall state—(a)the name of the company;(b)the restrictions, if any, upon the business to be carried on by the company;(c)the amount of share capital with which the company is to be registered, and the division thereof into shares of a fixed amount;(d)if there are two or more classes of shares, the rights, privileges, restrictions and conditions attaching to each class of shares;(e)that the company is a public or a private company, as the case may be;(f)that the liability of the members is limited; and(g)the full name, address and occupation of each subscriber.(2)The memorandum of association of a company limited by guarantee shall be in accordance with the form in Table C in the First Schedule, and shall state—(a)the name of the company;(b)the nature of the object or objects for which it is established;(c)that the income and property of the company shall be applied solely towards the promotion of its objects, and that no portion thereof shall be paid or transferred directly or indirectly to the members of the company except as may be permitted by law;(d)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, for payment of the debts and liabilities of the company, and of the costs of winding-up, and for adjustment of the rights of the members among themselves, such amount as may be required not exceeding a specified amount;(e)that if, upon the winding-up of the company, there remains after the discharge of all its debts and liabilities any property of the company, such property shall not be distributed among the members but shall be transferred to some other company limited by guarantee having objects similar to the objects of the company or applied to some charitable object, such other company or charity to be determined by the members prior to the dissolution of the company;(f)the maximum number, if any, of members with which the company proposes to be registered;(g)that the company is a public or a private company, as the case may be;(h)that the liability of the members is limited; and(i)the full name, address and occupation of each subscriber.[First Schedule](3)The memorandum of association of an unlimited company shall state—(a)the name of the company;(b)the restrictions, if any, on the business to be carried on by the company or (if it is not intended that the company shall carry on business) the nature of the object or objects for which it is established;(c)the number of shares with which the company is to be registered;(d)if there are two or more classes of shares, the rights, privileges, restrictions and conditions attaching to each class of shares;(e)that the company is a public or a private company, as the case may be;(f)that the liability of the members is unlimited; and(g)the full name, address and occupation of each subscriber.(4)The memorandum of association may contain any other lawful provisions relating to the constitution of the company; and where the memorandum of a company contains any provision which might instead have been contained in the articles of that company, any reference in this Act to a provision in the articles shall, where the context admits, be construed as a reference to such a provision in the memorandum.[First Schedule]
7. Subscription of memorandum
(1)The memorandum shall be dated, and shall be signed by each subscriber in the presence of a witness who shall attest the signature.(2)In the case of a company limited by shares and an unlimited company, each subscriber shall write opposite to his name the number of shares for which he subscribes.
8. Alteration of memorandum
(1)A company may by special resolution alter its memorandum:Provided that—(a)the name of the company may be altered in accordance with section 19, but not otherwise;(b)the company’s share capital may be altered in accordance with sections 64 to 70, but not otherwise;(c)the rights attached to any class of shares may be altered, and new classes of shares may be created, in accordance with section 48, but not otherwise; and(d)the restrictions upon the business to be carried on by the company and the objects for which it is established may be altered in accordance with section 10, but not otherwise.(2)Where the memorandum contains provisions which restrict or exclude the company’s power to alter all or any of the terms contained therein or impose conditions for such alteration, the memorandum may not be altered otherwise than in accordance with such provisions, except with the sanction of the court under a scheme of arrangement pursuant to section 198.(3)Except in accordance with section 198, no member of the company shall be bound by an alteration made in the memorandum after the date on which he became a member, if and so far as the alteration requires him to take more shares than the number held by him on the date on which the alteration is made or in any way increases his liability as at that date to pay money to the company, or increases or imposes any restrictions on the right to transfer the shares held by him at the date of the alteration, unless he agrees in writing, either before or after the alteration is made to be bound thereby.(4)No alteration shall be made which would have the effect of changing the status of the company as a private or a public company, or as a company limited by shares or by guarantee, or as an unlimited company, except in accordance with sections 24 to 28.(5)No alteration shall be made which conflicts with any order of the court under section 203; and an alteration may be restrained or cancelled by the court in accordance with section 203.
9. Objects of existing companies
(1)A statement contained in the memorandum of a company incorporated before the commencement of this Act which specified the objects for which the company is established shall, insofar as such objects relate to the carrying on of any business, be deemed to be a statement that the business which the company is permitted to carry on is restricted to the objects so specified, and shall be subject in all respects to the provisions of this Act.(2)A memorandum of association shall not be construed more restrictively by virtue of this section than it would have been if this Act had not been passed.
10. Alteration of authorized business or objects
(1)A company may, by special resolution, alter its memorandum by changing, imposing or removing any restriction upon the business which it is authorized to carry on or by altering the objects for which it is established:Provided that if an application is made to the court in accordance with this section for the alteration to be annulled, it shall not have effect except insofar as it is confirmed by the court.(2)Within twenty-eight days of the passing of any such resolution notice thereof shall be given to the holders of all debentures secured by a floating charge over any of the company’s property and to the trustees, if any, for such debenture holders.(3)Application to the court under this section shall be made within sixty days after the passing of the resolution.(4)An application to the court under this section may be made—(a)in the case of a private company, by any member or by anyone to whom notice has been given under subsection (2); or(b)in the case of a public company, by—(i)the holders of not less than five per cent in the aggregate of the company’s issued shares or of any class thereof or, if the company has no shares, by not less than five per cent of the company’s members;(ii)by the trustees for the holders of any debentures secured by a floating charge over any of the company’s property; or(iii)by the holders of not less than five per cent of the company’s debentures secured by a floating charge over any of the company’s property.(5)If an application to the court is made under this section the company shall forthwith deliver to the registrar for registration notice of that fact.(6)On an application under this section the court may make an order confirming the alteration in whole or in part and on such terms and conditions as it thinks fit and may adjourn the proceedings in order that an arrangement may be made to the satisfaction of the court for the purchase of the interests of dissentients and may give such directions and make such orders as it may think expedient for facilitating and carrying into effect any such arrangement. If the court shall refuse to confirm the alteration it shall make an order annulling the alteration.(7)The company shall within twenty-one days of the making by the court of any order under this section deliver a copy thereof to the registrar for registration.(8)If a company makes default in giving or publishing any notice or delivering any document as required by this section, the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.
11. Articles of association
There may be registered with the memorandumarticles of association prescribing regulations for the conduct of the company’s affairs.
12. Requirements with respect to articles
(1)Articles of a company limited by shares shall be in accordance with the form in Table A of the First Schedule, and may adopt all or any of the regulations contained in Table A.(2)Articles of a company limited by guarantee shall be in accordance with the form in Table C of the First Schedule, and may adopt all or any of the regulations contained in Table C.(3)In the case of a companyregistered after the commencement of this Act, if articles are not registered, or if articles are registered, insofar as the articles do not exclude or modify the regulations contained in Table A or Table C, as the case may be, the regulations contained in Table A shall, so far as applicable, be the regulations of the company (if limited by shares), and the regulations contained in Table C shall, so far as applicable, be the regulations of the company (if limited by guarantee), in the same manner and to the same extent as if they were contained in duly registeredarticles.(4)Articles shall be dated and shall be signed by each subscriber to the memorandum in the presence of a witness who shall attest the signature.[First Schedule]
13. Alteration of articles
(1)Subject to this Act and to the conditions contained in its memorandum, a company may by special resolution alter or add to its articles.(2)Any alteration or addition so made in the articles shall, subject to this Act, be as valid as if originally contained therein, and be subject in like manner to alteration by special resolution.
14. Registration
(1)The memorandum and the articles, if any, shall be delivered to the registrar for registration.(2)With every memorandumregistered there shall be delivered to the registrar for registration a statement in the prescribed form (hereinafter in this section referred to as "the statement") containing the following particulars—(a)the full name (together with any former or other names), residential and postal address, and occupation of each of the first directors of the company;(b)the full name (together with any former or other names), residential and postal address, and occupation of the secretary of the company;(c)the situation of the company’s registered office, and its postal address; and(d)such further particulars as may be prescribed.(3)The statement shall be signed by or on behalf of the subscribers of the memorandum and shall contain a consent signed by each of the persons named in it as directors and secretary to act in the relevant capacity.(4)Where the memorandum is delivered by a person as agent for the subscribers of the memorandum, the statement required by this section shall specify that fact and the name and residential and postal address of that person.(5)The persons named in the statement as directors and secretary shall, on the incorporation of the company, be deemed respectively to have been appointed as first directors and secretary of the company; and any appointment of a person as director or secretary of the company by any articles delivered with the memorandum shall be void unless he is named as a director or as secretary in the statement.
15. Certificate of incorporation: effect of certificate
(1)On the registration of the memorandum of a company the registrar shall issue a certificate of incorporation in the prescribed form.(2)From the date of incorporation mentioned in the certificate of incorporation, the subscribers of the memorandum, together with such other persons as may from time to time become members of the company, shall be a body corporate by the name contained in the memorandum, capable forthwith of exercising all the functions of an incorporated company, having perpetual succession and power to hold land.
16. Conclusiveness of certificate of incorporation
A certificate of incorporation given by the registrar 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 and is duly registered under this Act.
17. Contractual effect of memorandum and articles
Subject to the provisions of this Act, the memorandum and articles, when registered, shall have the effect of a contract under seal between the company and its members and between the members themselves whereby they agree to observe and perform the provisions of the memorandum and of the articles, as altered from time to time, in so far as they relate to the company or members as such.
18. Copies of memorandum and articles
(1)A company shall, on being so required by any member, send to him a copy of its memorandum and articles on payment of the sum of ten Kwacha or such less sum as the company may prescribe.(2)Where an alteration is made to the memorandum or articles, every copy thereof issued after the date of the alteration and whether to a member or otherwise shall be in accordance with the alteration.(3)Where the articles of any company include without express repetition all or any or the provisions of Table A or C, a copy of the appropriate Table or of the appropriate part thereof shall be attached to every copy of such articles.(4)If a company makes default in complying with this section the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day after the seventh day from such request during which the default continues
19. Name of company
(1)The last word of the name of a limited company shall be "Limited":Provided that such a company may use, and may be legally designated by, the abbreviation "Ltd." for any purpose.(2)No company shall be registered by a name which in the opinion of the registrar is misleading or undesirable.(3)A company may by special resolution, and with the approval of the registrar signified in writing, change its name.(4)The decision of the registrar under this section shall be final, and not subject to appeal to, or question by, any court.(5)If the Minister is of the opinion that the name under which a company is registered is misleading or undesirable he may direct such company to change its name, and the company shall change its name within six weeks of such direction or such longer period as the Minister may think fit to allow.(6)If a company makes default in complying with a direction under subsection (5), it and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.(7)Within twenty-one days after the date of the special resolution referred to in subsection (3), the company shall deliver to the registrar—(a)the company’s certificate of incorporation; and(b)a copy of the said resolution for registration in accordance with section 122.The registrar shall enter the new name on the register in place of the former name, and shall issue a new certificate of incorporation worded to meet the circumstances of the case.(8)A certificate under this section shall be conclusive evidence of the alteration to which it relates.(9)A change of name by a company shall not affect any rights or obligations of the company nor render defective any legal proceedings that may be or have been continued or commenced against it by its former name; and any such legal proceedings may be continued or commenced against it by its new name.(10)The registrar may on written application and on payment of the prescribed fee reserve a name pending registration of a company or a change of name by a company. Such reservation shall be for such period as the registrar shall think fit and may be renewed; and during the period of reservation no other company may be registered under the reserved name or under any name which in the opinion of the registrar bears too close a resemblance to the reserved name.(11)The registrar shall determine and assign to each company a designating number. A company may, if it has no other registered name, use its designating number (together, in the case of a limited company, with the word "Limited") as its name.(12)If a company has been directed under subsection (5) to change its name and fails to do so within six weeks of such direction, the registrar may revoke the name of the company, and its designating number (together, in the case of a limited company, with the word "Limited") shall thereupon become its name; and subsections (7) to (9) shall, with any necessary modifications, apply in such a case.
20. Pre-incorporation contracts
(1)Any person who purports to enter into a contract in the name of or on behalf of a company before it comes into existence shall be personally bound by the contract and entitled to the benefits thereof, except as provided in this section.(2)A company may within a reasonable time after it comes into existence, expressly, or by any action or conduct signifying its intention to be bound thereby, adopt a written contract made before it came into existence in its name or on its behalf, and upon such adoption, subject to subsection (3)—(a)the company shall for all purposes be bound by the contract and entitled to the benefits thereof as if the company had been in existence at the date of such contract and had been a party thereto; and(b)the person who purported to act in the name of or on behalf of the company shall, except as provided in subsection (3), cease to be bound by or entitled to the benefits of the contract.(3)Except as provided in subsection (4), whether or not a contract made before the coming into existence of a company is adopted by the company, the other party to the contract may apply to the court for an order fixing obligations under the contract as joint or joint and several, or apportioning liability between or among the company and the person who purported to act in the name of or on behalf of the company, and upon such application the court may make any order it thinks fit.(4)If expressly so provided in the written contract, the person who purported to act in the name of or on behalf of the company before it came into existence shall not in any event be bound by the contract nor entitled to the benefits thereof.
21. Capacity of company
(1)A company shall have and shall be deemed always to have had the capacity of a natural person of full capacity, subject only to such limitations as are inherent in its corporate nature.(2)A company shall have and shall be deemed always to have had the capacity to carry on its business and exercise its powers in any jurisdiction outside Malawi to the extent that the laws of such jurisdiction permit.
22. Unauthorized acts
(1)A company shall not carry on any business or pursue any object or exercise any power that it is restricted by its memorandum or articles from carrying on or pursuing or exercising, nor exercise any of its powers in a manner inconsistent with its memorandum or articles:Provided that (subject to subsections (2), (3) and (4)), no act of a company and no transfer of property to or by a company shall be invalid by reason only that the act or transfer may contravene or have contravened this subsection.(2)On the application of—(a)any member of the company; or(b)the holder of any debenture secured by a floating charge over all or any of the company’s property or by a trustee for the holders of any such debentures,the court may prohibit by injunction the doing of any act or the conveyance or transfer of any property in breach of subsection (1).(3)Where the act or transaction sought to be prohibited in any proceedings under subsection (2) is being or is to be performed, or made under a contract to which the company is a party, all parties to the contract shall be made parties to the proceedings, and the court may make any order as to compensation or otherwise as it may consider equitable.(4)Any breach of subsection (1) may be asserted in any proceedings under section 203 or 213 and in any action against a director or other officer of the company for breach of duty or breach of trust.
23. Companies limited by guarantee
(1)A company limited by guarantee may not lawfully be incorporated with the object of carrying on business for the purpose of making profits for its members or for anyone concerned in its promotion or management.(2)If any company limited by guarantee shall carry on business for the purpose of making such profits all officers and members thereof who shall be cognizant of the fact that it is so carrying on business shall be jointly and severally liable for the payment and discharge of all the debts and liabilities of the company incurred in carrying on such business, and the company and every such officer and member shall be liable to a fine of ten Kwacha for every day during which it shall carry on such business.(3)Subsection (2) shall not apply to any existing company for a period of six months after the commencement of this Act.
24. Conversion of company limited by shares to company limited by guarantee
(1)A company limited by shares may be converted into a company limited by guarantee if—(a)there is no unpaid liability on any of its shares;(b)all its members agree in writing to such conversion and to the voluntary surrender to the company for cancellation of all the shares held by them immediately prior to the conversion;(c)a new memorandum and articles, appropriate to a company limited by guarantee, are adopted by the company pursuant to sections 8, 10 and 13; and(d)each member agrees in writing to contribute to the assets of the company, in the event of its being wound up, such sum, if any, as may be required.(2)Upon delivery to the registrar of—(a)the company’s certificate of incorporation; and(b)a copy of the said new memorandum and articles and of the special resolutions adopting the same, together with a statutory declaration by a director and the secretary of the company confirming that the conditions of subsection (1) have been complied with,the registrar shall issue a new certificate of incorporation worded to meet the circumstances of the case; and as from the date mentioned in such certificate the company shall be converted into a company limited by guarantee and the shares therein shall be validly surrendered and cancelled notwithstanding the provision of section 67:Provided that—(i)except in accordance with section 19, the company may not change the name under which it was registered prior to the conversion; and(ii)until a new certificate of incorporation is issued the former memorandum and articles shall continue to apply and neither the surrender of the shares of the company nor the agreement to contribute to the assets of the company in the event of its being wound up shall take effect.(3)The conversion of the company pursuant to this section shall not alter the identity of the company, nor affect any rights or obligations of the company except as mentioned in this section or render defective any legal proceedings by or against the company.(4)The registrar shall make all such entries in the appropriate register as are necessary to give effect to and evidence such conversion.
25. Conversion of limited company to unlimited company
(1)A company limited by shares or limited by guarantee may be converted into an unlimited company if—(a)all its members agree in writing to its conversion; and(b)a new memorandum and articles, appropriate to an unlimited company, are adopted by the company pursuant to sections 8 and 13.(2)Upon delivery to the registrar of—(a)the company’s certificate of incorporation;(b)a copy of the said new memorandum and articles and of the special resolutions adopting the same; and(c)a statutory declaration by a director and the secretary of the company confirming that the conditions of subsection (1) have been complied with,the registrar shall issue a new certificate of incorporation worded to meet the circumstances of the case, and as from the date mentioned in such certificate the company shall be converted into an unlimited company:Provided that—(i)except in accordance with section 19, the company may not change the name under which it was registered prior to conversion, otherwise than by the omission of the word "Limited"; and(ii)until a new certificate of incorporation is issued, the former memorandum and articles shall continue to apply, and no change in the liability of the members shall take effect.(3)The conversion of the company pursuant to this section shall not alter the identity of the company, or affect any rights or obligations of the company or render defectively any legal proceedings by or against the company.(4)The registrar shall make all such entries in the appropriate registers as are necessary to give effect to and evidence such conversion.
26. Conversion of unlimited company to limited company
(1)An unlimited company may be converted into a company limited by shares or a company limited by guarantee if—(a)all its members agree in writing to its conversion; and(b)a new memorandum and articles, appropriate to a company limited by shares or a company limited by guarantee, as the case may be, are adopted by the company pursuant to sections 8 and 13.(2)Upon delivery to the registrar of—(a)the company’s certificate of incorporation;(b)a copy of the said new memorandum and articles and of the special resolutions adopting the same; and(c)a certificate by the auditor or auditors of the company, made not more than three months before the date of the application, that they have investigated the affairs of the company, and that the company is at the date of the certificate a solvent company; and(d)a statutory declaration by a director and the secretary of the company confirming that the conditions of subsection (1) have been complied with, and that they are satisfied that the company is solvent,the registrar shall issue a new certificate of incorporation worded to meet the circumstances of the case, and as from the date mentioned in such certificate the company shall be converted into a company limited by shares or limited by guarantee, as the case may be:Provided that—(i)except in accordance with section 19, the company may not change the name under which it was registered prior to conversion, otherwise than by the addition of the word "Limited"; and(ii)until a new certificate of incorporation is issued, the former memorandum and articles shall continue to apply, and no change in the liability of the members shall take effect.(3)Where a company which has been converted pursuant to this section is wound up, and the commencement of the winding-up is within three years from the date of such conversion, every person who was a member of the company at the date of such conversion shall be liable to contribute without limit to the assets of the company in respect of debts and liabilities contracted or incurred before that date.(4)Any officer of a company who makes a statutory declaration, or any auditor of a company who gives a certificate, under this section without having reasonable grounds for the opinion that the company is solvent shall be liable to imprisonment for a term of six months and to a fine of One thousand Kwacha(5)The conversion of the company pursuant to this section shall not alter the identity of the company, nor affect any rights or obligations of the company or render defective any legal proceedings by or against the company.(6)The registrar shall make all such entries in the appropriate registers as are necessary to give effect to and evidence such conversion.
27. Conversion of public company to private company
(1)Upon compliance with section 5 (3) and this section and with the other requirements of this Act in respect of private companies, a public company may by special resolution be converted into a private company.(2)Within twenty-one days after the date of the special resolution referred to in subsection (1), the company shall deliver to the registrar—(a)a copy of the said resolution for registration in accordance with section 122;(b)its certificate of incorporation; and(c)a statutory declaration by a director and the secretary of the company confirming that the conditions of subsection (1) have been complied with, and that they are satisfied that the company is solvent.(3)Upon compliance with the requirements of the foregoing provisions of this section, the registrar shall issue a new certificate of incorporation worded to meet the circumstances of the case; and thereupon the same consequences shall follow as to the rights, powers, and duties of the company as if it had originally been incorporated as a private company; but the conversion shall not alter the identity of the company, nor affect any rights or obligations of the company or render defective any legal proceedings by or against the company.(4)The registrar shall make all such entries in the appropriate registers as are necessary to give effect to and evidence such conversion.(5)If default is made in complying with subsection (2), the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.
28. Conversion of private company to public company
(1)Upon compliance with this section and with the requirements of this Act in respect of public companies, a private company may by special resolution be converted into a public company.(2)A private company shall be deemed to have resolved to be converted into a public company if it has by special resolution altered its articles in such a manner that they no longer comply with section 5(3).(3)Within twenty-one days after the date of the special resolution referred to in subsection (1) or (2), the company shall deliver to the registrar—(a)a copy of the said resolution for registration in accordance with section 122;(b)its certificate of incorporation; and(c)if the company has been incorporated for a period of eighteen months or more, a copy, certified by a director and the secretary of the company to be a true copy, of every balance sheet, profit and loss account, group accounts, directors’ report (if any) and auditors’ report sent to the members of the company in the preceding year.(4)Upon compliance with the requirements of the foregoing provisions of this section, the registrar shall issue a new certificate of incorporation worded to meet the circumstances of the case; and thereupon the same consequences shall follow as to the rights, powers, and duties of the company as if it had originally been incorporated as a public company; but the conversion shall not alter the identity of the company, nor affect any rights or obligations of the company or render defective any legal proceedings by or against the company.(5)The registrar shall make all such entries in the appropriate registers as are necessary to give effect to and evidence such conversion.(6)If default is made in complying with subsection (3), the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.
29. Consequences of default in complying with conditions constituting a company a private company
Where the memorandum or articles of a company include the provisions which under section 5 (3) are required to be included 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 under this Act: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.
30. Power to dispense with "limited" in name of charitable and other companies
(1)Where it is proved to the satisfaction of the Minister that a company has been incorporated or is about to be incorporated as a company limited by guarantee for promoting charity, education, art, science, religion or any other useful object, the Minister may by licence direct that the company be registered without the addition of the word "Limited" to its name, and the company may be registered accordingly.(2)A licence under this section may be granted on such conditions as the Minister may think fit, and those conditions shall be binding on the company and shall, if the Minister so directs, be inserted in the memorandum or the articles of the company.(3)A company to which a licence is granted under this section shall be exempt from the provisions of this Act relating to the use of the word "Limited" as part of its name, and from the provisions of section 130, and from the provisions of the Second Schedule regarding the sending of lists of members to the registrar.[Second Schedule](4)A licence under this section may at any time be revoked by the Minister, and upon revocation the registrar shall enter the word "Limited" upon the register as part of the name of the company, and the company shall cease to enjoy the exemptions and privileges granted by this section:Provided that before any licence under this section is so revoked, the Minister shall give to the company notice in writing of his intention, and shall afford it an opportunity of being heard in opposition to the revocation.(5)Where a company in respect of which a licence under this section is in force alters the provisions of its memorandum with respect to its objects, it shall give notice thereof to the Minister within twenty-one days after the date on which the resolution altering the company’s objects was passed.(6)If a company has so altered the provisions of its memorandum the Minister may revoke or vary the licence as he may think fit.(7)If a company makes default in complying with subsection (5), the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.(8)Any such license granted to an existing company under the repealed Act shall remain in force, but may be revoked or varied under this section.
Part III – Shares and membership
31. Membership of company
(1)The subscribers of the memorandum of a company shall be members of the company, and 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.(3)In the case of a company limited by shares and an unlimited company, each member shall be a shareholder of the company and shall hold at least one share, and every holder of a share shall be a member of the company.
32. Register of members
(1)Every company shall keep a register of its members and enter therein the following particulars—(a)the full name, address and occupation of each member; and in the case of a company limited by shares or an unlimited company a statement of the shares held by each member, distinguishing each share by. its number so long as the share has a number, and of the amount paid or agreed to be considered as paid on the shares of each member;(b)the date at which each person was entered in the register as a member; and(c)the date at which any person ceased to be a member.(2)The register of members shall be kept at the registered office of the company:Provided that—(a)if the work of making it up is done at another office of the company, it may be kept at that other office; and(b)if the company arranges with some other person for the making up of the register to be undertaken on behalf of the company by that other person, it may be kept at the office of that other person at which the work is done, so, however, that it shall not be kept at any place outside Malawi.(3)Every company shall send notice to the registrar of companies of the place where its register of members is kept and of any change in that place:Provided that a company shall not be bound to send notice under this subsection where the register has, at all times, been kept at the registered office of the company.(4)Where a company has more than fifty members the register shall contain an index of the names of the members in such a form as to enable the account of each member to be readily found.(5)Where a company makes default in complying with this section the company and every officer of the company who is in default shall be liable to a fine often Kwacha for every day during which the default continues.(6)If by reason of the default of the person mentioned in subsection (2) (b), the company makes default in complying with this Act, he shall be liable to the same penalties as if he were an officer of the company, and the power of the court under section 129 shall extend to the making of orders against that person and his officers and servants.
33. Inspection of register
Except when the register of members is closed in accordance with section 34, the register and index of the names of the members of the company shall be available for inspection by any member of the company or other person in accordance with section 129.
34. Power to close register
A company may, on giving notice by advertisement in a newspaper circulating generally throughout Malawi, close for any time or times not exceeding in the whole thirty days in each year the register of members of the company or the part thereof relating to members holding shares of any class.
35. Power of court to rectify register
(1)If—(a)the name of any person is, without sufficient cause, entered in or omitted from the register of members of a company; or(b)default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member,the person aggrieved or any member of the company or the company may apply to the court for rectification of the register.(2)Where an application is made under this section, the court may order rectification of the register and, if it deems fit, may order payment by the company of compensation for any loss sustained by the person aggrieved.(3)On any application under this section the court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or alleged members, or between members or alleged members on the one hand and the company on the other hand, and generally may decide any question necessary or expedient to be decided for rectification of the register.(4)The court, when making an order for rectification of the register, shall by its order direct notice of the rectification to be given to the registrar.
36. No notice of trust
(1)Subject to section 54, no notice of any trust, express, implied or constructive, need be entered on the register of members, or be received by the company or the registrar.(2)A company shall not be bound to see to the execution of any trust, whether express, implied or constructive, in respect of any of its shares.(3)The receipt by a member in whose name a share stands in the register of members shall be a valid and binding discharge of the company for any dividend or other money payable in respect of such share, whether or not notice of any such trust has been given to or received by the company.(4)A company shall not be bound to see to the application of the money paid upon such receipt.
37. Register to be evidence
The register of members shall be prima facie evidence of any matter by this Act directed or authorized to be inserted therein.
38. Power for company to keep branch register
(1)A company limited by shares or an unlimited company may, subject to its articles, cause to be kept in any country outside Malawi a branch register of members resident in that country or in any other country outside Malawi (in this Act called a "branch register").(2)The company shall give to the registrar notice of the situation of the office where any branch register is kept, and of any change in its situation, and if it is discontinued of its discontinuance, and any such notice shall be given within twenty-one days of the initial keeping of the register in that office or of the change or discontinuance, as the case may be.(3)If default is made in complying with subsection (2) the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.
39. Regulations as to branch register
(1)A branch register shall be deemed to be part of the company’s register of members (in this section called "the principal register").(2)It shall be kept and shall be open for inspection in the same manner in which the principal register is by this Act required to be kept, except that the advertisement before closing the register shall be inserted in some newspaper circulating generally in the country or State where the branch register is kept.(3)The company shall transmit to its registered office a copy of every entry in its branch register as soon as may be after the entry is made.(4)The company shall cause to be kept at the place where the company’s principal register is kept a duplicate of its branch register duly entered up from time to time. Every such duplicate shall for all the purposes of this Act be deemed to be part of the principal register.(5)Subject to the provisions of this section with respect to the duplicate register, the shares registered in a branch register shall be distinguished from those registered in the principal register, and no transaction with respect to any shares registered in a branch register shall, during the continuance of that registration, be registered in any other register.(6)A company may discontinue a branch register, and thereupon all entries in that register shall be transferred to the principal register.(7)Subject to the provisions of this Act, any company may, by its articles, make such provisions as it may think fit respecting the keeping of branch registers.(8)If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues; and where the principal register is kept at the office of some person other than the company and by reason of any default of his the company fails to comply with subsection (4), he shall be liable to the same penalty as if he were an officer of the company who was in default.
40. Stamp duties in case of securities registered in branch register
An instrument of transfer of any shareregistered in a branch register shall be deemed to be a transfer of property situate outside Malawi, and, unless executed in any part of Malawi, shall be exempt from any stamp duty chargeable in Malawi.
41. Branch registers kept in Malawi
(1)if, by virtue of the law in force in any other country, companies incorporated under that law have power to keep in Malawi branch registers of their shareholders or debenture holders, the Minister may, by Order published in the Gazette, direct that sections 33 and 35 shall, subject to any modifications and adaptations specified in the order, apply to and in relation to any such branch registers kept in Malawi as they apply to and in relation to the registers of companies within the meaning of this Act.(2)The Minister may, by Order published in the Gazette, cancel or modify any order made under subsection (1).
42. Companies ceasing to have at least two members
(1)If at any time the number of members of a company is reduced below two and it carries on business for more than six months without at least two members, every person who is a member or director of the company during the time that it so carries on business after those six months and is cognizant of the fact that it is carrying on business with fewer than two members shall be severally liable for the payment of all the debts and liabilities of the company incurred during that period.(2)The court, in any proceeding against such a member or on application being made to it by any person interested, if satisfied that it is just and reasonable to do so, may relieve any such member either wholly or partly from liability under subsection (1) on such terms as it deems fit.
43. Nature and transferability of shares
(1)The shares or other interest of any member in a company shall be personal estate and movable property, transferable by a written transfer in manner provided by the articles of the company or by this Act.(2)Notwithstanding any provision in the articles, fully-paid shares in a company limited by shares may be transferred by means of an instrument under hand in the form set out in the Sixth Schedule to this Act, executed by both the transferor and the transferee, or by some other person duly authorized on behalf of the transferor or the transferee.[Sixth Schedule](3)Nothing in subsection (2) shall be construed as affecting the validity of any instrument which would be effective to transfer shares apart from this section, or as affecting the powers of directors to accept in their discretion an instrument in any other form which may seem to them sufficient.(4)Nothing in this section shall affect any right of the directors to refuse to register a person as the holder of shares on any ground other than the form in which those shares purport to be transferred to him.
44. Numbering of shares
Each issued share in a company shall be distinguished by a definitive number:Provided that if all the issued shares of the company or all the issued shares therein of a particular class are fully paid, none of those shares need thereafter have a distinguishing number.
45. Issue of bearer securities
No company shall, after the commencement of this Act, issue any share warrants to bearer.[17 of 1990]
46. Shares not to be converted into stock
(1)No company shall, after the commencement of this Act, convert any of its shares into stock.(2)A company which has before the commencement of this Act converted shares into stock may reconvert such stock or any part thereof into shares in accordance with section 64.
47. Classification of shares
A company may provide for different classes of shares by attaching to certain of the shares preferred, deferred or other special rights or restrictions, whether in regard to dividend, voting, repayment or otherwise. Shares shall not be deemed to be of the same class unless they rank pari passu for all purposes.
48. Variation of class rights
(1)If at any time the shares of a company are divided into different classes, the rights attached to any class may not be varied except to the extent and in the manner provided by this section.(2)If the memorandum shall expressly forbid any variation of the rights of a class, or shall contain provision for such variation and shall expressly forbid any alteration of such provision, the rights or the provision for variation may not be altered except in accordance with such provision, or with the written consent of all the members of that class, or with the sanction of the court under a scheme of arrangement in accordance with section 198.(3)Except where subsection (2) applies, the rights attached to any class of shares may be varied with the written consent of the holders of three-fourths of the issued shares of that class, or with the sanction of a special resolution passed at a separate general meeting of the holders of shares of that class.(4)Any resolution of a company the implementation of which would have the effect of diminishing the proportion of the total votes exercisable at a general meeting of the company by the holders of the existing shares of a class, or of reducing the proportion of the dividends or other distributions payable at any time to the holders of the existing shares of a class, shall be deemed to be a variation of the rights of that class:Provided that this subsection shall not apply to a resolution for the creation or issue of further shares.(5)If the rights of any class of shares are varied the holders of not less in the aggregate than five per cent of the issued shares of that class may apply to the court to have the variation cancelled, and where such application is made the variation shall not have effect unless and until it is confirmed by the court.(6)An application to the court under subsection (5) shall be made within twenty-eight days of the date on which the variation was effected. If such an application is made the company shall forthwith deliver to the registrar for registration notice of that fact. The court after hearing the applicant and any other persons who apply to the court to be heard and appear to the court to be interested in the application shall, if it is satisfied that the variation would unfairly prejudice the shareholders of any class, cancel the variation and shall, if not so satisfied, confirm the variation.(7)The company shall within twenty-one days after the making of an order by the court on such application deliver a copy thereof to the registrar for registration.(8)If a company makes default in delivering to the registrar the notice or order referred to in subsection (6) or (7), the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.(9)In this section, references to the variation of rights attached to a class of shares shall be deemed to include references to their abrogation.(10)Nothing in this section shall affect or derogate from the powers of the court under sections 198 and 203.
49. Transfer of shares
(1)Notwithstanding anything in the articles of a company it shall not be lawful for the company to register a transfer of shares unless a proper instrument of transfer duly stamped (if chargeable to stamp duty) has been delivered to the company:Provided that nothing herein contained shall prejudice any power of the company to register any person to whom the right to any shares has been transmitted by operation of law.(2)Unless otherwise provided in the company’s articles or the terms of issue of the shares, the company may refuse to register any transfer unless it is accompanied by the appropriate share certificate, or the company is bound to issue a renewal or copy thereof in accordance with section 52.(3)Transfers may be lodged for registration by either the transferor or transferee.(4)If a company refuses to register a transfer the company shall, within two months after the date on which the transfer was lodged with the company, send to the transferee and transferor notice in writing of the refusal, together with a statement of the facts which are considered to justify refusal.(5)If default is made in complying with subsection (1), the company and every officer of the company who is in default shall be liable to a fine of two hundred Kwacha.(6)If default is made in complying with subsection (4), the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues, and the transferee shall be entitled to registration.
50. Restrictions on transferability
(1)Save as expressly provided in the company’s articles and in this Act, shares shall be transferable without restriction by a written transfer in accordance with section 43.(2)No restriction shall be imposed on the transferability of shares after they have been issued unless the holders thereof shall consent in writing:Provided that nothing in this subsection shall derogate from the powers of the court under sections 198 and 203.(3)Subject to subsection (4), the articles of a public company shall not impose any restriction on the right to transfer any shares of the company, and if the articles purport to impose any such restriction it shall be ineffective:Provided that this subsection shall not—(a)prohibit any restriction on the right to transfer any shares on which there is unpaid liability; or(b)prohibit any restriction on the right to transfer, or prohibit any provision for the compulsory acquisition or rights of first refusal, in favour of other members of the company or the trustees appointed under any scheme, of shares issued to directors or other officers or employees in pursuance of the exercise of any rights or options granted, or in pursuance of any scheme adopted, under the provisions of section 58.(4)Notwithstanding subsections (1) and (3), a company may refuse to register a transfer of shares to any person who is an infant or to any person found by a court of competent jurisdiction to be a person of unsound mind.
51. Certification of transfers
(1)When the holder of any shares wishes to transfer to any person part only of the shares represented by one or more certificates, the instrument of transfer together with the relative certificates may be delivered to the company with a request to certificate the instrument of transfer.(2)If a company endorses on an instrument of transfer the words "certificate lodged", or words to the like effect, this shall be taken as a representation to anyone acting on the faith of the certification that there has been produced to and retained by the company such certificates as show a prima facie title to the shares in the transferor named in the instrument of transfer but not as a representation that the certificates are genuine or that the transferor has any title to the shares.(3)Where any person acts on the faith of a false certification made by the company, the company shall be liable to compensate such person for any loss suffered as a result of so acting.(4)For the purposes of this section the certification of an instrument of transfer shall be deemed to be made by a company if—(i)the person issuing the instrument is the secretary, or any other person apparently authorized to issue certificated instruments of transfer on the company’s behalf; or(ii)the certification is signed by the secretary, or any other person apparently authorized to certificate transfers on the company’s behalf.
52. Issue of share certificates
(1)Every company shall, within two months after the allotment of any of its shares or after the registration of the transfer of any shares, deliver to the registered holder thereof a certificate under the common seal of the company stating—(a)the number and class of shares held by him, and the definitive numbers thereof (if any);(b)the amount paid on such shares and the amount (if any) remaining unpaid; and(c)the full name, address, and occupation of the registered holder.(2)If a share certificate is defaced, lost or destroyed the company, at the request of the registered holder of the shares, shall renew the same on payment of a fee not exceeding one Kwacha and on such terms as to evidence and indemnity and the payment of the company’s expenses of investigating evidence as the company may reasonably require.(3)If default is made in complying with this section the company and any officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.
53. share certificates as evidence
A share certificate shall be prima facie evidence of the title to the shares of the person named therein as the registered holder and of the amounts paid and payable thereon.
54. Transmission of shares by operation of law
(1)In the case of the death of a shareholder the survivor or survivors where the deceased was a joint holder, and the legal personal representatives of the deceased where he was a sole holder or last survivor of joint holders, shall be the only persons recognized by the company as shareholders.(2)A person upon whom the ownership of a share devolves by reason of his being the legal personal representative, receiver, or trustee in bankruptcy of the holder, or by operation of law may, upon such evidence being produced as the company may properly require, be registered himself as the holder of the share or transfer the same to some other person and such transfer shall be as valid as if he had been registered as a holder at the time of execution of transfer. The company shall have the same right, if any, to decline registration of a transfer by such person as it would have had in the case of a transfer by the registered holder but shall have no right to refuse registration of the person himself.(3)A person upon whom the ownership of a share devolves by reason of his being the legal personal representative, receiver, or trustee in bankruptcy of the holder, or by operation of law shall, prior to registration of himself or a transferee, be entitled to the same dividends and other advantages as if he were the registered holder and to the same rights and remedies as if he were a member of the company, except that he shall not, before being registered as a member in respect of the share, be entitled to vote at any meeting of the company:Provided that the company may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share, and if the notice is not complied with within three months the company may thereafter suspend payment of all dividends or other moneys payable in respect of the share until the requirements of the notice have been complied with.(4)Notwithstanding the provisions of subsection (3), where an order is made under section 109, the court may direct that any such person as is specified in subsection (3) (whether or not he is the applicant for the order) shall be entitled to exercise at the meeting the voting rights that would have been exercisable by the registered holder, and that any such person present in person or by proxy shall be deemed to constitute a meeting.
55. Evidence of grant of probate
The production to a company of any document which is by law sufficient evidence of probate of the will, or letters of administration of the estate, or confirmation as executor, of a deceased person having been granted to some person shall be accepted by the company, notwithstanding anything in its articles, as sufficient evidence of the grant.
56. Company’s lien on shares
Notwithstanding any provision in the articles, a company shall not have or claim a lien on shares on which there is no unpaid liability, nor shall any such lien extend to any sums due from the shareholder except in respect of the unpaid liability on the shares.
57. Membership of holding company
(1)Except in the cases hereinafter in this section mentioned a body corporate shall not 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 otherwise than 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 commencement of this Act, or which was, before it became a subsidiary, a member of its holding company from continuing to be a member, but—(a)such subsidiary shall have no right to vote at meetings of the holding company or any class of members thereof; and(b)such subsidiary shall not acquire further shares in the holding company except upon a general issue of fully-paid bonus shares.(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 the said subsections (1) and (3) to such a body corporate included references to a nominee for it.(5)In relation to a company limited by guarantee which is a holding company, the reference in this section to shares shall be construed as including a reference to the interest of its members as such, whatever the form of that interest.
58. Rights and options to subscribe for shares issue to directors, officers and employees
(1)Save as is otherwise provided by this section, or by its articles, a company may create and issue, whether or not in connexion with the issue of any of its shares, rights or options in favour of such persons as are referred to in subsection (3), entitling the holders thereof to acquire from the company, upon such consideration, terms and conditions as may be fixed by the board of directors, shares of any class.(2)The terms and conditions of such rights or options, including the time or times at or within which and the price or prices at which they may be exercised and any limitations on transferability, shall be set forth or incorporated by reference in the instrument or instruments evidencing such rights or options.(3)Where a company proposes to issue such rights or options to one or more directors, officers or employees of the company or of any subsidiary thereof as an incentive to service or continued service with the said company or any such subsidiary, or where it proposes to issue such rights or options to a trustee on behalf of such directors, officers or employees, such issue shall be authorized at a general meeting by special resolution, or shall be authorized by and consistent with a scheme adopted by special resolution. If, however, under the articles of association there exist any pre-emptive rights in any of the shares to be thus subject to rights or options, either such issue or such scheme, as the case may be, shall also be approved by the vote or written consent of the holders of a majority of the shares entitled to exercise preemptive rights with respect to such shares, and such vote or written consent shall operate to release the pre-emptive rights with respect thereto of the holders of all of the shares that were entitled to exercise such pre-emptive rights.(4)The scheme adopted by the shareholders for the issue of such rights or options or, where there is no such scheme, the special resolution authorizing the issue thereof, shall include the material terms and conditions upon which such rights or options are to be issued, such as (but without limitation thereof) any restrictions on the number of shares that eligible individuals may have the right or option to acquire, the method of administering the scheme (if any), the terms and conditions of payment for shares in full or by instalments, any limitations on the transferability of such shares, and the voting and dividend rights to which the holders of such shares may be entitled:Provided that under this subsection no certificate for shares shall be delivered to a shareholder, and no right to vote in respect of such shares shall be conferred on a shareholder, prior to full payment therefor.(5)In the absence of fraud in the transaction, the decision of the board of directors (or, where the directors or a sufficient quorum thereof are not themselves disinterested in the issue or scheme, the decision of the general meeting) shall be conclusive as to the adequacy of the consideration, tangible or intangible, received or to be received by the company for the issue of rights or options and for the acquisition pursuant thereto of shares in the company.(6)The provisions of this section shall not apply to the rights of holders of convertible debentures to acquire shares upon the exercise of a conversion option.
Part IV – Share capital
59. Return as to allotments
(1)Whenever a company makes any allotment of its shares, the company shall within one month thereafter deliver to the registrar for registration a return of the allotments, stating the number and amount of the shares comprised in the allotment and the full names, addresses and occupations of the allottees.(2)Where shares are allotted as paid up otherwise than wholly in cash, there shall also be delivered to the registrar for registration a contract in writing 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, such contract being duly stamped, and a return stating the number and nominal amount of shares so allotted, and the consideration for which they have been allotted:Provided that no such contract need be delivered where the company has made an issue to its members of fully-paid bonus shares.(3)Where a contract as mentioned in subsection (2) is not reduced to writing, the company shall within one month after the allotment deliver to the registrar for registration particulars of the contract stamped with the same stamp duty as would have been payable if the contract had been reduced to writing.(4)If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.
60. Payment of commissions and discounts
(1)A company may, subject to its memorandum and articles, 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 commission paid or agreed to be paid does not exceed ten per cent of the price at which the shares are issued or the amount or rate authorized by the articles, whichever is less;(b)the amount or rate per cent 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 a statement signed and delivered to the registrar for registration before payment of the commission; and(c)the number of shares which persons have agreed for a commission to subscribe absolutely is disclosed in manner aforesaid.(2)Save as aforesaid, and as provided by section 72, 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 reasonable brokerage.(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 subsection (1), regarding disclosure and registration, the company and every officer of the company who is in default shall be liable to a fine of one hundred Kwacha.
61. Application of premiums received on issue of shares
(1)Where 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, to be called "the share premium account", and the provisions of this Act relating to the reduction of the share capital of a company and to distribution of profits shall, except as provided in this section, apply as if the share premium account were paid up share capital of the company.(2)The share premium account may, notwithstanding anything in subsection (1), be applied by the company—(a)in paying-up unissued shares of the company to be issued to members of the company as fully paid bonus shares;(b)in writing off—(i)the preliminary expenses of the company; 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 on redemption of any redeemable preference shares or of any debentures of the company.(3)Where a company has before the commencement of this Act issued any shares at a premium, this section shall apply as if the shares had been issued after the commencement of this Act:Provided that any part of the premiums which has been so applied that it does not at the commencement of this Act form an identifiable part of the company’s reserves shall be disregarded in determining the sum to be included in the share premium account.
62. Power to issue redeemable preference shares
(1)Subject to this section, and to its memorandum and articles, a company may issue preference shares which are, or at the option of the company are to be, liable to be redeemed, and may convert existing shares (whether issued or not) into such redeemable preference shares:Provided that—(a)no such shares shall be redeemed except 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;(b)no such shares shall be redeemed unless they are fully paid;(c)the premium, if any, payable on redemption, must have been provided for out of the profits of the company or out of the company’s share premium account before the shares are redeemed; and(d)where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall out of profits which would otherwise have been available for dividend be transferred to a reserve fund, to be called "the capital redemption reserve fund", a sum equal to the nominal amount of the shares redeemed, and the provisions of this Act relating to the reduction of the share capital of a company and to distribution of profits shall, except as provided in this section, apply as if the capital redemption reserve fund were paid-up share capital of the company.(2)Subject to the provisions of this section, the redemption of preference shares thereunder may be effected on such terms and in such manner as may be provided by the articles of the company.(3)The redemption of preference shares under this section by a company shall not be taken as reducing the amount of the company’s authorized share capital.(4)Where in pursuance of this section a company has redeemed or is about to redeem any preference shares, it shall have power to issue shares up to the nominal amount of the shares redeemed or to be redeemed as if those shares had never been issued, and accordingly the share capital of the company shall not be deemed to be increased by the issue of shares in pursuance of this subsection.(5)The capital redemption reserve fund may, notwithstanding anything in this section, be applied by the company in paying-up unissued shares of the company to be issued to members of the company as fully paid bonus shares.
63. References to share capital
(1)No company having a share capital shall publish or issue or cause to be published or issued a statement of the amount of its authorized or issued share capital unless there is also contained in the same document an equally prominent statement of the amount of its paid-up share capital.(2)If a company acts in contravention of subsection (1), the company and every officer of the company who is in default shall be liable to a fine of four hundred Kwacha.(3)Nothing in this section shall make it unlawful to publish or issue or cause to be published or issued any statement which refers solely to the amount of the company’s paid-up share capital, or to describe the same as the company’s "share capital".
64. Power of company having shares to alter its capital
(1)A company having a share capital may, subject to its memorandum and articles, alter the conditions of its memorandum as follows, that is to say, it may—(a)increase its share capital by new shares of such amount as it thinks expedient;(b)consolidate and divide all or any of its share capital into shares of larger amount;(c)subdivide its shares, or any of them, into shares of smaller amount;(d)cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so called.(2)A company limited by shares which has before the commencement of this Act converted any of its shares into stock may re-convert that stock into paid-up shares of any denomination.(3)The powers conferred by this section shall be exercised by the company in general meeting.(4)A cancellation of shares in pursuance of this section shall not be deemed to be a reduction of share capital within the meaning of this Act.
65. Notice to registrar of alteration of share capital
(1)If a company has—(a)consolidated and divided its share capital into shares of larger amount;(b)re-converted stock into shares;(c)subdivided its shares or any of them;(d)redeemed any redeemable preference shares; or(e)cancelled any shares, otherwise than in connexion with a reduction of share capital under section 67 of this Act,it shall within twenty-one days after so doing deliver to the registrar for registration notice thereof, specifying, as the case may be, the shares consolidated, divided, subdivided, redeemed or cancelled, or the stock re-converted.(2)If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.
66. Notice of increase of share capital
(1)Where a company having a share capital has increased its share capital beyond the registered capital, it shall, within twenty-one days after the passing of the resolution authorizing the increase, deliver to the registrar for registration notice of the increase.(2)The notice shall include particulars with respect to the classes of shares affected and the conditions subject to which the new shares have been or are to be issued, and there shall be delivered to the registrar together with the notice a copy of the resolution authorizing the increase.(3)If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.
67. Special resolution for reduction of share capital
(1)Subject to sections 68 to 70 inclusive and to its memorandum and articles a company having a share capital may, by special resolution, reduce its share capital in any way, and in particular, without prejudice to the generality of the foregoing power, may—(a)extinguish or reduce the liability on any of its shares in respect of share capital not paid-up;(b)cancel any paid-up share capital which is lost or unrepresented by available assets; or(c)pay-off any paid-up share capital which is in excess of the wants of the company,and may, if and so far as is necessary, alter memorandum by reducing the amount of its share capital and of its shares accordingly.(2)A special resolution under this section is in this Act referred to as "a resolution for reducing share capital".(3)If a resolution for reducing share capital shall vary the rights attached to any class of shares, the resolution shall not be effective unless the provisions of section 48 have also been complied with.(4)No company having a share capital shall reduce its share capital, share premium account or capital redemption reserve fund except as provided by this Act.(5)If a company acts in contravention of subsection (4), every officer of the company who is in default shall be liable to imprisonment for two years and to a fine of one thousand Kwacha.
68. Application to court for confirming order
(1)Where a company has passed a resolution for reducing share capital, it shall apply to the court for an order confirming the reduction and the resolution shall not be effective until so confirmed.(2)Subject to subsection (3), where the proposed reduction of share capital involves either diminution of liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, and in any other case if the court so directs, the following provisions shall have effect—(a)every creditor of the company who at the date fixed by the court is entitled to any debt or claim which, if that date were the commencement of the winding up of the company, would be admissible in proof against the company, shall be entitled to object to the reduction;(b)the court shall settle a list of creditors so entitled to object, and for that purpose shall ascertain, as far as possible without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims, and may publish notices fixing a day or days within which creditors not entered on the list are to claim to be so entered or are to be excluded from the right of objecting to the reduction; and(c)where a creditor entered on the list whose debt or claim is not discharged or has not determined does not consent to the reduction, the court may, if it thinks fit, dispense with the consent of that creditor, on the company securing payment of his debt or claim by appropriating, as the court may direct, the following amount—(i)if the company admits the full amount of the debt or claim, or, though not admitting it, is willing to provide for it, then the full amount of the debt or claim; or(ii)if the company does not admit and is not willing to provide for the full amount of the debt or claim, or if the amount is contingent or not ascertained, then an amount fixed by the court after the like inquiry and adjudication as if the company were being wound-up by the court.(3)Where a proposed reduction of share capital involves either the diminution of any liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, the court may, if, having regard to any special circumstances of the case, it deems it proper so to do, direct that subsection (2) shall not apply as regards any class or any classes of creditors.
69. Order confirming reduction
The court, if satisfied, with respect to every creditor of the company who is entitled to object to the reduction, that either his consent to the reduction has been obtained or his debt or claim has been discharged or has determined, or has been secured, may make an order confirming the reduction on such terms and conditions as it deems fit.
70. Registration of order and minute of reduction
(1)The registrar, on production to him of an order of the court confirming the reduction of the share capital of a company, and the delivery to him of a copy of the order and of a minute approved by the court showing, with respect to the share capital of the company as altered by the order, the amount of the share capital, the number of shares into which it is to be divided, and the amount of each share, and the amount, if any, at the date of the registration deemed to be paid-up on each share, shall register the order and minute.(2)On the registration of the order and minute the resolution for reducing share capital as confirmed by the order so registered shall take effect.(3)Notice of the registration shall be published in such manner as the court may direct.(4)The registrar shall certify under his hand the registration of the order and minute, and his certificate shall be conclusive evidence that all the requirements of this Act with respect to reduction of share capital have been complied with, and that the share capital of the company is such as is stated in the minute.(5)The minute when registered shall be deemed to be substituted for the corresponding part of the memorandum, and shall be as valid and alterable as if it had been originally contained therein.(6)The substitution of any such minute as aforesaid for part of the memorandum of the company shall be deemed to be an alteration of the memorandum within the meaning of section 8.
71. Penalty for concealing name of creditor
If any officer of the company—(a)wilfully conceals the name of any creditor entitled to object to the reduction;(b)wilfully misrepresents the nature or amount of the debt or claim of any creditor; or(c)aids, abets or is privy to any such concealment or misrepresentation as aforesaid,he shall be personally liable to pay to the creditor the amount of his debt or claim to the extent that it is not paid by the company, and he shall be liable to imprisonment for six months and to a fine of one thousand Kwacha.
72. Financial assistance by company for acquisition of shares
(1)Subject as provided in this section, 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 connexion 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 subsidiarycompany, in its holding company:Provided that nothing in this section shall be taken to prohibit—(a)where the lending of money is part of the ordinary business of a company, the lending of money by the company in the ordinary course of its business;(b)the provision by a company, in accordance with any scheme for the time being in force, of money for the purchase of, or subscription for, fully paid shares in the company or a group company, being a purchase or subscription by trustees of or for shares to be held by or for the benefit of employees of the company, including any director holding a salaried employment or office in the company; or(c)the making by a company of loans to persons, other than directors, bona fide in the employment of the company with a view to enabling those persons to purchase or subscribe for fully paid shares in the company or a group company to be held by themselves by way of beneficial ownership.(2)If a company acts in contravention of this section, every officer of the company who is in default shall be liable to imprisonment for one year and to a fine of two thousand Kwacha.(3)Notwithstanding the contravention of this section, a loan, guarantee, security or other transaction may be enforced—(a)by the company; and(b)by any lender or other party who has acted bona fide and without notice of such contravention,against any person other than the company.
73. Acquisition of company’s own shares
(1)Subject to the provisions of this Act, no company having a share capital shall acquire or hold any interest in its own shares, either directly or indirectly through nominees or otherwise:Provided that where such an interest arises as a result of the acquisition of a controlling interest in the shares of another company or as a result of the enforcement of any security the shares or interest in shares shall be disposed of at the earliest practicable date, not being later than twelve months from the date the company acquired or held such interest.(2)If a company acts in contravention of subsection (1), every officer of the company who is in default shall be liable to imprisonment for one year and to a fine of two thousand Kwacha, and any transfer or allotment of shares pursuant to a transaction prohibited by that subsection shall be void.
74. Restriction on payment of dividends
No dividend approved by a company in general meeting shall exceed the unappropriated profits shown in the most recent audited accounts of the company, and any unrealized capital profits shall not be dealt with in the profit and loss account of a company, but all foreseeable future losses, whether of a capital nature or of a revenue nature, shall be provided for in the profit and loss account of a company, except as otherwise provided by this Act.
75. Prohibition of dividends or distributions by companies limited by guarantee
(1)A company limited by guarantee shall not pay any dividend or make any distribution or return of its assets to its members:Provided that any such company may—(a)pay reasonable and proper remuneration to any of its officers or members for services actually rendered to the company; and(b)pay reasonable interest on money lent to the company.(2)If any payment, distribution or return shall be made in contravention of this section, any member to whom it is made shall make restitution to the company with interest at 10 per cent per annum, and every officer of the company who is in default shall be liable to a fine of two hundred Kwacha.(3)Nothing in this section contained shall prevent a company limited by guarantee, in pursuance of or incidentally to its lawful objects, bona fide from making any reasonable concession or gift, or awarding any prize, scholarship or grant, to any one or more of its members.
Part V – Debentures and charges
76. Issue of debentures or debenture stock
(1)A company may raise loans by the issue of a debenture or of a series of debentures or of debenture stock.(2)Debentures may either be secured by a charge over the company’s property or be unsecured by any charge.(3)All debentures which by their terms, or by the terms of any resolution authorizing their creation, or by the terms of any trust deed, are declared to be of the same series shall rank pari passu in all respects notwithstanding that they may be issued on different dates.(4)Instead of issuing debentures acknowledging separate loans to the company, the loans may be funded by the creation of debenture stock of a specified total amount parts of which, represented by debenture stock certificates, are issued to separate holders. Debenture stock shall be created by deed under the common seal of the company in favour of trustees for the debenture stockholders.(5)A contract with a company to take up and pay for any debentures of the company may be enforced by an order for specific performance.(6)A condition contained in any debenture or in any trust deed for securing any debenture shall not be invalid by reason of the fact that the debenture is thereby made irredeemable or redeemable only on the happening of a contingency, however remote, or on the expiration of a period however long.
77. Documents of title to debentures
(1)Every company shall, within two months after the allotment of any of its debentures or after the registration of the transfer of any debentures, deliver to the registered holder thereof the debentures or a certificate of the debenture stock under the common seal of the company.(2)The provisions of sections 49, 51, 52 (2) and 53 to 55, shall apply to debentures and debenture stock certificates mutatis mutandis.(3)If any restriction is imposed on the right to transfer any debenture, notice of the restriction shall be endorsed on the face of the debenture or debenture stock certificate and, in the absence of such endorsement, the restriction shall be ineffective as regards any transferee for value whether or not he has notice of the restriction.(4)If default is made in complying with subsection (1), the company and any officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.
78. Trustees for debenture holders
(1)Any provision contained in a trust deed or in any contract with the holders of debentures secured by a trust deed shall be void insofar as it would have the effect of exempting a trustee thereof from, or indemnifying him against, liability for any breach of trust or failure to show the degree of care and diligence required of him as trustee having regard to the powers, authorities or discretions conferred on him by the trust deed:Provided that nothing herein contained shall be deemed to invalidate any release otherwise validly given in respect of anything done or omitted to be done by a trustee on the agreement to such release of a majority in number holding not less than three-fourths in value of the debenture holders present in person or by proxy at a meeting summoned for the purpose.(2)Notwithstanding any provisions in the debentures or trust deed the court may, on the application of any debenture holder, remove any trustee and appoint another in his place if satisfied that such trustee has interests which conflict or may conflict with those of the debenture holders or that for any reason it is undesirable that such trustee should continue to act:Upon any such application the court may order the applicant to give security for the payment of the costs of the trustee.
79. Eligibility for appointment as trustee for debenture holder
(1)None of the following persons shall be eligible for appointment or competent to act as trustee for the holders of debentures of a company—(a)an infant or any other person under legal disability;(b)any person prohibited or disqualified from so acting by any order of a court of competent jurisdiction;(c)save with the leave of the court, an undischarged bankrupt;(d)save with the leave of the court, a director or other officer or auditor of the company, or any group company, or any person who has been such a director or officer or auditor within the preceding two years;(e)any person who has been convicted, within ten years last past, of an offence involving fraud or dishonesty; or(f)any person who has been removed, within ten years last past, from an office of trust by a court of competent jurisdiction.(2)No invitation shall be made to the public to acquire debentures of a company unless the issue of debentures is secured by a trust deed under which the trustee, or one of the trustees, is approved for the purpose by the Minister.(3)Any appointment made in contravention of subsection (1) shall be void, and any person who in contravention of subsection (1) knowingly acts or continues to act as a trustee for debenture holders shall be liable to imprisonment for six months and to a fine of one thousand Kwacha.(4)If an invitation is made in contravention of subsection (2), the company shall be liable to a fine of two thousand Kwacha and every officer of the company who is in default shall be liable to a fine of two thousand Kwacha and to imprisonment for two years.
80. Right to copies of trust deed
(1)A copy of any trust deed for securing any issue of debentures shall be forwarded by the company to every holder of any such debentures at his request on payment of the sum of five Kwacha or such less sum as may be prescribed by the company.(2)If a copy is not forwarded as provided by subsection (1), the company and every officer of the company who is in default shall be liable to a fine often Kwacha for every day after the seventh day from such request during which the default continues.
81. Unsecured debentures to be so described
(1)No unsecured debenture, or debenture stock certificate or prospectus relating to unsecured debentures, shall be issued by a company unless the term "debenture" or such other term denoting a debenture used therein is qualified by the word "unsecured".(2)If any company acts in contravention of this section, the company and every officer of the company who is in default shall be liable to a fine of four hundred Kwacha.
82. Register of debenture holders
(1)A company which issues or has issued debentures in a series shall maintain a register of the holders thereof.(2)The provisions of sections 32 to 41 shall apply to such register, mutatis mutandis.(3)A company shall, upon the demand of any trustee for its debenture holders, within seven days furnish to him the names, addresses and other particulars of such debenture holders appearing on such register.(4)If a company contravenes subsection (3), it and every officer who is in default shall be liable to a fine of ten Kwacha for every day after the seventh day from such demand during which the default continues.
83. Meetings of debenture-holders
(1)The terms of any debentures or trust deed may provide for the convening of general meetings of the debenture holders and for the passing, at such meetings, of resolutions binding on all the holders of the debentures of the same class.(2)Whether or not the debentures or trust deed contain such provisions as are referred to in subsection (1), the court may at any time direct a meeting of the debenture holders of any class to be held and conducted in such manner as it thinks fit to consider such matters as it shall direct, and may give such ancillary or consequential directions as it shall think fit.(3)Subject to any provision in the debentures or trust deeds, the provisions of sections 112 to 116, inclusive, shall apply to all meetings of debenture holders, but so that the votes of debenture holders shall be reckoned in proportion to the value of debentures held.
84. Re-issue of redeemed debentures
(1)A company shall not after the commencement of this Act re-issue any debenture which has been redeemed.(2)A company shall not, after the commencement of this Act, issue a new debenture in place of a redeemed debenture on terms that the new debenture shall have the same priorities as the redeemed debenture.(3)The issue of a new debenture in place of a redeemed debenture shall not be treated as the issue of a new debenture for the purposes of any provision limiting the amount or number of debentures which may be issued.
85. Charge to secure fluctuating amount
Where a charge is expressed to be made to secure an indeterminate amount, or a fluctuating amount advanced on current account by, or due and owing to, the person entitled to the charge, the charge shall not be deemed to be redeemed by reason only of the current account having ceased to be in debit or by reason only of there being no amount due or owing, as the case maybe.
86. Registration of charges created by companies
(1)Where a company creates any charge to which this section applies, it shall be the duty of the company within twenty-one days after the date of the creation thereof to cause the prescribed particulars of the charge (together with a certified copy of instrument, if any, by which the charge is created or evidenced) to be delivered to the registrar for registration:Provided that if the instrument by which the charge is created or evidenced is registered under any Act other than this Act it shall be sufficient compliance with the requirements of this subsection if, within twenty-one days as aforesaid, particulars of the instrument sufficient to identify it, and such other particulars as may be prescribed, are delivered to the registrar for registration.(2)This section applies to the following charges—(a)a charge for the purpose of securing any issue of a series of debentures;(b)a charge on uncalled share capital of the company;(c)a charge created or evidenced by an instrument which, if executed by an individual, would require registration under the Bills of Sale Act or the Farmers Stop-Order Act:[Cap. 48:03; Cap. 69:03](d)a floating charge on the whole or part of the undertaking or property of the company;(e)a charge on land, wherever situate, or any interest therein;(f)a charge on any present or future book debts of a company;(g)a charge on calls made but not paid;(h)a charge on a ship or aircraft or any share in a ship or aircraft;(i)a charge on goodwill, on a patent or a licence under a patent, on a trade mark, or on a copyright or a licence under a copyright; and(j)a charge over shares in another body corporate, not being—(i)a charge in favour of a broker who has paid for share-purchased or applied for on behalf of the company; or(ii)a charge created by or accompanied by delivery of the certificates for those shares.(3)Where a charge comprises property outside Malawi, the prescribed particulars together with a certified copy of the instrument, if any, creating or evidencing or purporting to create or evidence the charge must be delivered for registration in accordance with subsection (1) notwithstanding that further proceedings may be necessary to make the charge valid or effectual according to the law of the country in which the property is situated.(4)Where a negotiable instrument has been given to secure the payment of any book debts of a company the deposit of the instrument for the purposes of securing an advance to the company shall not for the purposes of this section be treated as a charge on those book debts.(5)The holding of debentures entitling the holder to a charge on land shall not for the purposes of this section be deemed to be an interest in land.(6)Where a series of debentures containing, or giving by reference to any other instrument, any charge to the benefit of which the debenture holders of that series are entitled pari passu is created by a company, it shall for the purposes of this section be sufficient if there are delivered to the registrar within twenty-one days after the execution of the document containing the charge, or, if there is no such document, after the execution of any debenture of the series, the following particulars—(a)the total amount secured by the whole series;(b)the date of the resolution authorizing the issue of the series and the date of the document, if any, by which the security is created or defined;(c)a general description of the property charged; and(d)the names of the trustees, if any, for the debenture holders, together with a certified copy of the document containing the charge, or, if there is no such document, a certified copy of one of the debentures of the series:Provided that, where more than one issue is made of debentures in the series, there shall be sent to the registrar for registration particulars of the date and amount of each issue.(7)Where any commission, allowance, or discount has been paid or made either directly or indirectly by a company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any debentures of the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any such debentures, the particulars required to be sent for registration under this section shall include particulars as to the amount or rate per cent of the commission, discount, or allowance so paid or made.The deposit of any debentures as security for any debt of the company shall not for the purposes of this subsection be treated as the issue of such debentures at a discount.(8)Registration of any charge under this section may be effected on the application of any person interested therein. Where registration is effected on the application of some person other than the company, that person shall be entitled to recover from the company the amount of any fees properly paid by him to the registrar on the registration.(9)If any company makes default in sending to the registrar for registration a copy of the instrument creating or evidencing any charge created by the company, or the particulars requiring registration as aforesaid, then, unless the instrument or particulars have been duly delivered for registration by some other person, the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.(10)For the purposes of this Part—(a)the expression "charge" includes "mortgage"; and(b)land occupied by a company under or pursuant to an agreement for sale and purchase shall be deemed to be the property of the company subject to a charge created by the agreement, securing the balance of purchase money for the time being unpaid.(11)For the purposes of subsections (1) and (6) and of section 87, a certified copy is one which has endorsed thereon or annexed thereto a declaration to the effect that it is a true and complete copy of the original, made by an officer of the company or by some person interested therein otherwise than on behalf of the company. Where the original is in a language other than English the copy shall also contain an English translation similarly certified to the effect that it is an accurate translation of the original.(12)Nothing in this Part shall affect the provisions of any other written law relating to the registration of charges.
87. Duty of company to register charges existing on property acquired
(1)Where a company acquires any property which is subject to a charge of any such kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Part, the company shall cause the prescribed particulars of the charge (together with a certified copy of the instrument, if any, by which the charge was created or is evidenced) to be delivered to the registrar for registration in manner required by this Act within twenty-one days after the date on which the acquisition is completed:Provided that if the instrument by which the charge is created or evidenced has already been registered with the registrar, or is registered under any written law other than this Act, it shall be sufficient compliance with the requirements of this subsection if, within twenty-one days, particulars of the instrument sufficient to identify it, and such other particulars, if any, as may be prescribed, are delivered to the registrar for registration.(2)If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues unless it is proved to the satisfaction of the court that a copy of the instrument required to be registered was not obtainable by the company.
88. Certificate to be issued by registrar
The registrar shall issue a certificate of the registration of any charge registered in pursuance of this Part stating the date of registration and, if applicable, the amount thereby secured, and the certificate shall be conclusive evidence that the requirements of this Part as to registration have been complied with.
89. Priorities
(1)Subject to any consent (express or implied) given by the person who would otherwise be entitled to priority, charges created by a company, and other charges required to be registered pursuant to sections 86 and 87, shall in relation to one another have priority in accordance with the times at which they are respectively registered under this Act.(2)Where a charge (other than a floating charge) is of such a kind that it would require registration under some other written law (being a written law which by its terms accords priority as between successive charges affecting the same property), subsection (1) shall not apply in respect of the property affected by such written law.(3)For the purposes of this section, "charge" means a charge of a kind to which section 86 applies, as set out in subsection (2) thereof.(4)Subject to subsection (2) where a charge (other than a floating charge) gives security over property of such a kind that the charge would require registration, and also over other property, subsection (1) shall apply in respect of the first-mentioned property, but not in respect of the other property.
90. Entries of satisfaction and release of property from charge
(1)Where there is delivered to the registrar a statement in the prescribed form signed on behalf of the company and by the person entitled to the charge to the effect—(a)that the debt for which the charge was given has been paid or satisfied in whole or in part; or(b)that part of the property or undertaking charged has been released from the charge or has ceased to form part of the company’s property or undertaking,the registrar shall enter that statement in the register.(2)Any statement delivered to the registrar under this section signed by the person entitled to a charge shall, in favour of the liquidator and any creditor of the company, be binding on that person and any other person claiming under him.
91. Variation of registered charge
(1)Where in the case of any charge registered pursuant to this Act any variation is made in the terms of the charge, other than a satisfaction or release to which section 90 applies, particulars of such variation in the prescribed form shall be delivered to the registrar for registration within twenty-one days of the making of such variation.(2)Such particulars shall identify the terms of the original charge that have been varied and shall indicate the nature of the variation made in each such term.(3)Where the effect of the variation is to increase the extent of the security or the amount for which security is available, the priority accorded to a registered charge by virtue of section 89 shall be available in respect of such increase as from the date on which particulars have been delivered for registration in accordance with this section.(4)Where by its terms a registered charge secures a fluctuating amount, or an initial sum together with "further advances", the making of a further advance to the company shall not, for the purposes of this section, constitute a variation in the terms of the charge.(5)If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.
92. Registration of enforcement of security
(1)If any person obtains an order for the appointment of a receiver or manager of any of the property of a company, or appoints such a receiver or manager or enters into possession of such property as mortgagee under any powers contained in any charge, he shall, within seven days from the date of the order or of the appointment under the said powers, deliver notice to that effect in the prescribed form to the registrar for registration together with, where applicable, a certified copy of the order.(2)Where any person appointed receiver or manager of the property of a company under the powers contained in any charge ceases to act as such receiver or manager, he shall, within fourteen days of so ceasing, deliver notice to that effect in the prescribed form, if any, to the registrar for registration.(3)Where a person who is in possession of the property of a company as mortgagee goes out of possession, he shall, within fourteen days thereof, deliver notice to that effect in the prescribed form, if any, to the registrar for registration.(4)If any person makes default in complying with the requirements of this section he shall be liable to a fine of ten Kwacha for every day during which the default continues.
93. Endorsement of registration on debentures of a series
(1)The company shall cause to be endorsed on every debenture forming one of a series of debentures, and every certificate of debenture stock, which is issued by the company and the payment of which is secured by a charge particulars of which are registered under section 86 or 87—(a)a copy of the certificate of registration; or(b)a statement that registration has been affected and the date of registration:Provided that nothing in this subsection shall be construed as requiring to be so endorsed any debenture or certificate of debenture stock issued by the company before the charge was created or before the commencement of this Act.(2)Every person who knowingly authorizes or permits the delivery of any debenture or certificate of debenture stock which is required to be endorsed under the provisions of this section and which is not so endorsed shall be liable to a fine of one hundred Kwacha.(3)If any person shall cause to be endorsed on any debenture or certificate of debenture stock any purported copy of a certificate of registration or statement that registration has been effected which he knows to be false in any material particular or shall authorize or permit the delivery of any debenture or certificate of debenture stock bearing an endorsement purporting to be a copy of a certificate of registration or statement that registration has been effected which he knows to be false in any material particular he shall be liable to imprisonment for three months and to a fine of five hundred Kwacha.
94. Powers of the court
(1)Whenever a charge has become enforceable the court shall have power to appoint a receiver, or a receiver and manager, of the assets subject to the charge.(2)In the case of a floating charge, the court may, notwithstanding that the charge has not become enforceable, appoint a receiver if satisfied that the security of the debenture holder is in jeopardy. The security of the debenture holder shall be deemed to be in jeopardy if the court is satisfied that events have occurred or are about to occur which render it unreasonable in the interests of the debenture holder that the company should retain power to dispose of its assets.(3)A receiver may not be appointed as a means of enforcing debentures not secured by any charge.
95. Payment of preferential creditors
(1)Where a receiver is appointed on behalf of the holder of any debenture of the company secured by a floating charge, or possession is taken by or on behalf of such debenture holder of any property comprised in or subject to the charge, then, if the company is not at the time in course of being wound-up, the debts which in every winding up are under section 287, relating to preferential payments, to be paid in priority to all other debts, shall be paid out of any assets coming to the hands of the receiver or other person taking possession as aforesaid in priority to any claim for principal or interest in respect of the debentures.(2)The periods of time mentioned in the said section 287 shall be reckoned from the date of the appointment of the receiver or of possession being taken, as the case may be.
96. Eligibility for appointment as receiver
(1)None of the following persons shall be eligible for appointment or competent to act or to continue to act as a receiver, or receiver and manager, of the property or undertaking of a company on behalf of its debenture holders or other creditors—(a)a body corporate;(b)an infant or any other person under legal disability;(c)any person prohibited or disqualified from so acting by any order of a court of competent jurisdiction for the time being in force;(d)save with the leave of the court, an undischarged bankrupt;(e)save with the leave of the court, a director or officer of the company or any group company, or any person who has been such a director or officer within the preceding two years;(f)save with the leave of the court, a trustee under any trust deed for the benefit of debenture holders to which the company is a party;(g)any person who has been convicted, within ten years last past, of an offence involving fraud or dishonesty; or(h)any person who has been removed, within ten years last past, from an office of trust by a court of competent jurisdiction.(2)Where a company is being wound up, the liquidator may not be appointed receiver.(3)Any person who in. contravention of subsection (1) or (2) knowingly acts or continues to act as a receiver or receiver and manager shall be liable to a fine of one thousand Kwacha and to imprisonment for six months.
97. Receivers appointed by the court
A receiver of any property or undertaking of a company appointed by the court shall be an officer of the court and shall not be deemed to be an officer of the company, and shall act in accordance with the directions and instructions of the court.
98. Receivers appointed out of court
(1)A receiver of any property or undertaking of a company appointed out of court under a power contained in any instrument shall, subject to section 99, be deemed in relation to such property to be an agent and officer of the company and not an agent of the persons by or on behalf of whom he tis appointed, and he shall act in accordance with the instrument under which he is appointed and under any directions of the court made under this section.(2)Any such receiver may apply to the court for directions in relation to any matter arising in connexion with the performance of his functions, and on any such application the court may give such directions, or make such order declaring the rights of persons before the court or otherwise, as the court thinks fit.(3)The court may, on the application of the company or any liquidator of the company, by order fix the amount to be paid by way of remuneration to any such receiver and may from time to time on application made by the company or liquidator or by the receiver vary or amend the order.(4)The power of the court under subsection (3) shall—(a)extend to fixing the remuneration for any period before the making of the order or the application therefor;(b)be exercisable notwithstanding that the receiver has died or ceased to act before the making of the order or the application therefor; and(c)where the receiver has been paid or has retained for his remuneration for any period before the making of the order any amount in excess of that so fixed for that period, extend to requiring him or his personal representatives to account for the excess or such part thereof as may be specified in the order:Provided that the power conferred by this paragraph shall not be exercised as respects any period before the making of the application for the order unless, in the opinion of the court, there are special circumstances making it proper for the power to be so exercised.
99. Liabilities of receivers on contracts
(1)A receiver of any property or undertaking of a company shall be personally liable on any contract entered into by him except insofar as the contract otherwise expressly provides.(2)As regards contracts entered into by him in the proper performance of his functions a receiver shall, subject to the rights of any prior incumbrancers, be entitled to an indemnity in respect of liability thereon out of the property in respect of which he has been appointed to act as receiver.(3)A receiver appointed out of court under a power contained in any instrument shall also be entitled, as regards contracts entered into by him with the express or implied authority of those appointing him, to an indemnity in respect of liability thereon from those appointing him to the extent to which he is unable to recover in accordance with subsection (2).
100. Notification that receiver has been appointed
(1)Where a receiver of any property or undertaking of a company has been appointed, notice shall be given to the registrar in accordance with section 92, and every invoice, order or business letter issued by or on behalf of the company or the receiver or the liquidator of the company, being a document on or in which the name of the company appears, shall contain a statement that a receiver has been appointed.(2)If default is made in complying with the requirements of this section relating to invoices, orders or business letters the company and every officer, liquidator or receiver of the company who is in default shall be liable to a fine of fifty Kwacha in respect of each default.
101. Statement of affairs and accounts where receiver of undertaking appointed
(1)Where a receiver is appointed of the whole or substantially the whole of the undertaking of any company on behalf of the holders of any debentures secured by a floating charge, the provisions of sections 228 and 277 shall apply as regards the submission of a statement of affairs and of periodical accounts by the receiver as if the company had been ordered to be wound up under this Act and as if the receiver had been appointed liquidator.(2)If any person makes default in complying with the requirements of this section he shall be liable to a fine of ten Kwacha for every day during which the default continues.
102. Delivery to registrar of accounts of receivers
(1)Except where section 101 applies, every receiver of any property of a company shall—(a)within one month, or such longer period as the registrar may allow, after expiration of the period of twelve months from the date of his appointment and of every subsequent period of twelve months until he ceases to act, deliver to the registrar for registration an abstract showing his receipts and payments during that period of twelve months;(b)within one month, or such longer period as the registrar may allow, after he ceases to act as receiver deliver to the registrar for registration an abstract showing his receipts and payments during the period from the end of the twelve months to which the last abstract (if any) related, and the aggregate of his receipts and payments during the whole period of his appointment.(2)Every receiver who makes default in complying with the requirements of this section shall be liable to a fine of ten Kwacha for every day during which the default continues.
103. Application of this Part to charges in favour of Government
This Part shall bind the Government in respect of all charges to which the Government is entitled that are created, or acquired by or on behalf of the Government, after the commencement of this Act.
Part VI – Meetings and resolutions
104. Annual general meeting
(1)Except as provided in subsection (6), every company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that year, and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next:Provided that, so long as a company holds its first annual general meeting within eighteen months of its incorporation, it need not hold it in the year of its incorporation or in the following year.(2)If default is made in holding a meeting of the company in accordance with subsection (1), the registrar may, on the application of any member of the company, call, or direct the calling of, a general meeting of the company and give such ancillary or consequential directions as the registrar thinks expedient, including directions modifying or supplementing, in relation to the calling, holding and conducting of the meeting, the operation of the company’s articles; and may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.(3)A general meeting held in pursuance of subsection (2) shall, subject to any directions of the registrar, be deemed to be an annual general meeting of the company; but, where a meeting so held is not held in the year in which the default in holding the company’s annual general meeting occurred, the meeting so held shall not be treated as the annual general meeting for the year in which it is held unless at that meeting the company resolves that it shall be so treated.(4)Where a company resolves that a meeting shall be so treated a copy of the resolution shall, within twenty-one days after the passing thereof, be delivered to the registrar for registration.(5)If default is made in holding a meeting of the company in accordance with subsection (1), or in complying with any directions of the registrar under subsection (2), the company and every officer of the company who is in default shall be liable to a fine of one hundred Kwacha, and if default is made in complying with subsection (4), the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day, during which the default continues.(6)If all the members of the company entitled to attend and vote at any annual general meeting agree in writing that an annual general meeting shall be dispensed with in any year, it shall not be necessary for that company to hold an annual general meeting that year.
105. Extraordinary general meetings
Extraordinary general meetings may be convened by the directors whenever they think fit, or, if the articles so provide, by any other person in accordance with such provisions.
106. Convening of extra-ordinary general meeting on requisition
(1)The directors of a company, notwithstanding anything in its articles, shall, on the requisition of any member or members of the company holding at the date of the deposit of the requisition not less than one-twentieth of the total voting rights of all the members having a right to vote at general meetings of the company, forthwith proceed duly to convene an extraordinary general meeting of the company.(2)The requisition must state the nature of the business to be transacted at the meeting, and must be signed by the requisitionists and sent to or deposited at the registered office of the company, and may consist of several documents in like form each signed by one or more requisitionists.(3)If the directors do not within twenty-one days from the date of the deposit of the requisition proceed duly to convene a meeting the requisitionists or any of them may themselves convene a meeting, but any meeting so convened shall not be held after the expiration of three months from the said date.(4)A meeting convened under this section by the requisitionists shall be convened in the same manner, as nearly as possible, as that in which meetings are to be convened by directors.(5)Any reasonable expenses incurred by the requisitionists by reason of the failure of the directors duly to convene a meeting shall be repaid to the requisitionists by the company, and any sum so repaid shall be retained by the company out of any sums due or to become due from the company by way of fees or other remuneration in respect of their services to such of the directors as were in default.(6)For the purposes of this section the directors shall be treated as having failed duly to convene a meeting if they do not convene it for a day not more than twenty-eight days after the date on which the notice convening the meeting is given and shall, in the case of a meeting at which a resolution is to be proposed as a special resolution, be deemed not to have duly convened the meeting if they do not give such notice thereof as is required by section 120.
107. Notice of general meetings
Notwithstanding any contrary provision in the company's, articles, the following persons shall be entitled to receive notice of general meetings—(a)every member having the right to vote at such meeting;(b)every person upon whom the ownership of a share devolves by reason of his being a legal personal representative, receiver or trustee in bankruptcy of such a member;(c)every director of the company; and(d)every auditor for the time being of the company.
108. Length of notice for calling meetings
(1)Any provision in a company’s articles shall be void insofar as it provides for the calling of a meeting of the company (other than an adjourned meeting or a meeting called in accordance with subsection (3)) by a shorter notice than—(a)in the case of the annual general meeting, twenty-one days’ notice in writing; and(b)in the case of a meeting other than an annual general meeting or a meeting for the passing of a special resolution, fourteen days’ notice in writing.(2)Save insofar as the articles of a company make other provision in that behalf a meeting of the company (other than an adjourned meeting) may be called—(a)in the case of the annual general meeting, by twenty-one days’ notice in writing; and(b)in the case of a meeting other than an annual general meeting or a meeting for the passing of a special resolution, by fourteen days’ notice in writing.(3)A meeting of a company shall, notwithstanding that it is called by shorter notice than that specified in subsection (2) or in the company's articles, as the case may be, be deemed to have been duly called if it is so agreed—(a)in the case of a meeting called as the annual general meeting, by all the members entitled to attend and vote thereat; and(b)in the case of any other meeting, by a majority in number of the members having a right to attend and vote at the meeting, being a majority holding not less than ninety-five per cent of the total voting rights at that meeting of all the members:Provided that where any members are entitled to vote only on some resolutions to be moved at the meeting and not on others, those members shall be taken into account for the purposes of this subsection in respect of the former resolutions and not in respect of the latter.
109. Power of court to order meeting
(1)If for any reason it is impracticable to call a meeting of a company in any manner in which meetings of that company may be called, or to conduct the meeting of the company in manner prescribed by the articles of this Act, the court may, either of its own motion or on the application of any director of the company or any member of the company who would be entitled to vote at the meeting, order a meeting of the company to be called, held and conducted in such manner as the court thinks fit, and where any such order is made may give such ancillary or consequential directions as it thinks expedient; and may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.(2)Any meeting called, held and conducted in accordance with an order under subsection (1) shall, for all purposes be deemed to be a meeting of the company duly called, held and conducted.
110. Place of meetings
(1)Unless the company’s articles otherwise provide, all general meetings shall be held in Malawi.(2)Notwithstanding subsection (1), a general meeting of a company may be held outside Malawi if all the shareholders entitled to vote at that meeting so agree.
111. Attendance at meetings
(1)Notwithstanding any contrary provision in the company’s articles, the following persons shall be entitled to attend and to speak at any general meeting of the company—(a)every member of the company having the right to vote at such meeting;(b)every person upon whom the ownership of a share devolves by reason of his being a legal personal representative, receiver or trustee in bankruptcy of such a member;(c)every director of the company;(d)the secretary of the company; and(e)every auditor for the time being of the company:Provided that if the company’s articles so provide a member shall not be entitled to attend unless all sums presently payable by him in respect of shares in the company have been paid.(2)Nothing herein contained shall be deemed to preclude other persons from attending any general meeting with the permission of the chairman thereof.
112. General provisions as to meetings and votes
The following provisions shall have effect insofar as the articles of the company do not make other provision in that behalf—(a)two persons being members or holding proxies from members shall be a quorum;(b)any member elected by the members present at a meeting may be chairman thereof; and(c)in the case of a company limited by shares, every member shall have one vote in respect of each share held by him; and in any other case every member shall have one vote.
113. Proxies
(1)Any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person as his proxy to attend and vote instead of him, and such proxy shall have the same right as the member to speak at the meeting.(2)The right of a member of a company to appoint a proxy shall include the right to appoint separate proxies to represent respectively such number of the shares held by him as may be specified in their instruments of appointment.(3)The instrument appointing a proxy shall be in writing under the hand of the appointer or his agent duly authorized in writing or, if the appointor is a body corporate, either under seal or under the hand of an officer or agent duly authorized.(4)An instrument appointing a proxy shall be in the form prescribed by Table A or Table C or in such form as the company’s articles may provide but, notwithstanding any provision in the company’s articles, an instrument in the form prescribed by Table A or Table C shall be sufficient, as regards a company limited by shares and a company limited by guarantee, respectively.(5)Any form issued to a member of a company by the directors for use by him for appointing a proxy to attend and vote at a meeting of the company shall be such as to enable him to instruct the proxy to vote in favour of or against (or, in default of instructions, to exercise his discretion in respect of) each resolution dealing with any special business to be transacted at the meeting.(6)In subsection (5) "special business" means—(a)all business transacted at an extraordinary general meeting; and(b)all business transacted at an annual general meeting except the declaration of a dividend, the consideration of the accounts and the reports of the directors and auditors, the election of directors in place of those retiring, the fixing of the remuneration of the directors and the appointment of, and the fixing of the remuneration of, the auditors.(7)In every notice calling a meeting of a company having shares there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint one or more proxies to attend and vote instead of him, and (where such is the case) that a proxy need not also be a member; and if default is made in complying with this subsection as respects any meeting, every officer of the company who is in default shall be liable to a fine of one hundred Kwacha.(8)Any provision contained in a company’s articles shall be void insofar as it would have the effect of requiring the instrument appointing a proxy, or any other document necessary to show the validity of or otherwise relating to the appointment of a proxy, to be received by the company or any other person more than forty-eight hours before a meeting or adjourned meeting in order that the appointment may be effective thereat.(9)If for the purpose of any meeting of a company invitations to appoint as proxy a person or one of a number of persons specified in the invitations are issued at the company’s expense to some only of the members entitled to be sent a notice of the meeting and to vote thereat by proxy, every officer of the company who knowingly authorizes or permits their issue as aforesaid shall be liable to a fine of one hundred Kwacha:Provided that an officer shall not be liable under this subsection by reason only of the issue to a member at his request in writing of a form of appointment naming the proxy or of a list of persons willing to act as proxy if the form or list is available on request in writing to every member entitled to vote at the meeting by proxy.
114. Right to demand a poll
(1)Any provision contained in a company’s articles shall be void insofar 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 either—(i)by not less than three members having the right to vote at the meeting; or(ii)by a member or members representing not less than onetwentieth of the total voting rights of all the members having the right to vote at the meeting.(2)The instrument appointing a proxy to vote at a meeting of a company shall be deemed also to confer authority to demand or join in demanding a poll, and for the purposes of subsection (1) a demand by a person as proxy for a member shall be the same as a demand by the member.
115. Voting on a poll
On a poll taken at a meeting of a company or a meeting of any class of members of a company, a member entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way.
116. Representation of bodies corporate and unincorporated associations at meetings
(1)A body corporate or an unincorporated association may—(a)if it is a member of a company, by resolution of its directors or other governing body authorize such person as it thinks fit to act as its representative at any meeting of the company or at any meeting of any class of members of the company; and(b)if it is a creditor (including a debentureholder) of a company, by resolution of its directors or other governing body authorize such person as it thinks fit to act as its representative at any meeting of any creditors of the company held in pursuance of this Act or of any rules made thereunder, or in pursuance of the provisions contained in any debenture or trust deed, as the case may be.(2)A person authorized as aforesaid shall be entitled to exercise the same powers on behalf of the body corporate or unincorporated association which he represents as it could exercise if it were an individual shareholder, creditor or holder of debentures of the company.
117. Circulation of members' resolutions and supporting circulars
(1)A company shall at its own expense, on the request in writing of any member entitled to attend and vote at a general meeting, include in the notice of that general meeting notice of any resolution which may properly be moved and is intended to be moved at that meeting and, at the like request, include with such notice a statement of not more than five hundred words with respect to the matter referred to in the proposed resolution or any other business to be dealt with at that meeting:Provided that if the proposed resolution is not passed at that meeting the same resolution or one substantially to the same effect shall not be moved at any general meeting within three years thereafter unless the directors shall otherwise agree or unless the request within three years is supported in writing by members of the company representing between them not less than one-twentieth of the total voting rights of all the members having at the date of the request a right to vote on the resolution to which the request relates.(2)A company shall not be bound to give notice of any such resolution or to circulate such statement unless the written request or requests, signed by the member or members concerned, together with the resolution and statement, are deposited at the registered office of the company not less than six weeks before the meeting:Provided that if, after such documents have been deposited, a general meeting is called for a date six weeks or less thereafter, the documents shall be deemed to have been properly deposited for the purposes of this subsection.
118. Circulation of members' circulars
(1)A company shall, at the request in writing of any member entitled to attend and vote at a general meeting but (unless the company otherwise resolves) at the expense of that member, circulate to members of the company a statement of not more than one thousand words with respect to any business to be dealt with at that meeting.(2)Such statement shall be circulated to members of the company in any manner permitted for service of notice of the meeting and, so far as practicable, at the same time as notice of the meeting, or, if that is impracticable, as soon as practicable thereafter.(3)A company shall not be bound to circulate such statement unless—(a)the written request, signed by the member concerned, together with the statement, is deposited at the registered office of the company not less than ten days before the meeting; and(b)there is also deposited with the request a sum reasonably sufficient to meet the company’s expenses in giving effect thereto.
119. General provisions in regard to members’ circulars
(1)A company shall not be bound under section 117 or 118 to circulate any resolution or statement if, on the application either of the company or of any other person who claims to be aggrieved, the court is satisfied that the rights conferred by those sections are being abused to secure needless publicity for defamatory matter; and the court may order the company’s costs on an application under this section to be paid in whole or in part by the member making the request, notwithstanding that he is not a party to the application.(2)A company shall not incur liability to any person by reason only that it has circulated a resolution or statement in compliance with section 117 or 118.(3)In the event of any default in complying with section 117 or 118 every officer of the company who is in default shall be liable to a fine of one hundred Kwacha.
120. Ordinary and special resolutions
(1)A resolution shall be an ordinary resolution when it has been passed by a simple majority of votes cast by such members of the company as, being entitled so to do, vote in person or by proxy at a general meeting.(2)A resolution shall be a special resolution when it has been passed by a majority of not less than three-fourths of the votes cast by such members of the company as, being entitled so to do, vote in person or by proxy at a general meeting of which not less than twenty-one days’ notice, specifying the intention to propose the resolution as a special resolution, has been duly given:Provided that, if it is so agreed by a majority in number of the members having the right to attend and vote at any such meeting, together representing not less than ninety-five per cent of the total voting rights at that meeting of all the members, a resolution may be proposed and passed as a special resolution at a meeting of which less than twenty-one days’ notice has been given.(3)Any reference in this Act or in the memorandum or articles of any company, or in any debentures or debenture trust deed, to an ordinary or special resolution of a meeting of creditors or debentureholders or of any class of shareholders, creditors or debentureholders shall, unless a contrary intention appears, bear a like meaning to that specified in subsection (1) or (2), as the case may be, with the substitution of the members of the appropriate category or class for the members of the company.(4)Any reference in the memorandum or articles of any company or any other document to an extraordinary resolution of a company or of a meeting of creditors or debentureholders or of any class of members or creditors or debentureholders of a company shall, unless a contrary intention appears, as respects anything to be done after the commencement of this Act, be construed as a reference to a special resolution of the company or meeting.
121. Written resolutions
(1)Except as provided in subsection (2), a resolution in writing signed by all the members for the time being entitled to attend and vote on such resolution at a general meeting (or being bodies corporate by their duly authorized representatives) shall be as valid and effective for all purposes as if it had been passed at a general meeting of the company duly convened and held, and if described as a special resolution shall be deemed to be a special resolution within the meaning of this Act. Such resolution shall be deemed to have been passed on the date on which the same was signed by the last member to sign, and where the resolution states a date as being the date of his signature thereof by any member such statement shall be prima facie evidence that it was signed by that member on that date.(2)Subsection (1) shall not apply to a resolution to remove an auditor or to remove a director.
122. Registration of copies of certain resolutions
(1)A certified true copy of every special resolution of a general meeting or of a class of members and of every resolution deemed to be a special resolution under section 121 shall, within twenty-one days after the passing or making thereof, be delivered to the registrar for registration.(2)A copy of every special resolution of a general meeting of the company for the time being in force shall be embodied in or annexed to every copy of the memorandum or articles issued after the passing of the resolution:Provided that, where the sole effect of the special resolution is to amend the memorandum or articles, this subsection shall be sufficiently complied with if every copy of the memorandum or articles issued thereafter embodies the effect of the amendment and refers to the date of the passing of the special resolution.(3)If a company fails to comply with subsection (1), the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.(4)If a company fails to comply with subsection (2), the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for each default.
123. Resolutions passed at adjourned meetings
Where a resolution is passed at an adjourned meeting of—(a)a company;(b)the holders of any class of shares in a company; or(c)the directors of a company,the resolution shall for all purposes be deemed to have been passed on the date on which it was in fact passed at the adjourned meeting, and where a resolution is passed on a poll it shall for all purposes be deemed to have been passed on the day on which the result of the poll is declared, and not on any earlier day.
124. Application of sections 107 to 121 to class meetings
(1)Subject to this section, sections 107 to 121 shall apply to meetings of any class of members in like manner as they apply to general meetings of companies.(2)Where a class has only one member, that member shall constitute a meeting.(3)Subject to the company’s articles, at any meeting of any class of members other than an adjourned meeting the necessary quorum shall be—(a)if there are not more than two members of that class, one member present in person or by proxy; and(b)in any other case, two members, present in person or by proxy, holding not less than one-third of the total voting rights of that class.(4)Subject to the company’s articles, at any adjourned meeting of any class of members the necessary quorum shall be one member of that class.
125. Minutes of proceedings of meetings of company and of directors
(1)Every company shall cause minutes of all proceedings of general meetings and meetings of any class of members and meetings of its directors and of any committee of directors held after the commencement of this Act to be entered in books kept for that purpose.(2)Any such minute, if purporting to be signed by the chairman of the meeting at which the proceedings took place or of a subsequent meeting, shall be prima facie evidence of the proceedings.(3)Where minutes have been made in accordance with the provisions of this section, then, until the contrary is proved, the meeting shall be deemed to have been duly convened, held and conducted and all appointments of directors, officers, auditors and liquidators shall be deemed to be valid.(4)If a company fails to comply with subsection (1), the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.
126. Inspection of minute books
The books containing the minutes of proceedings of any general meeting or class meeting of a company shall be kept at the registered office of the company or such other place in Malawi as the company shall advise the registrar, and shall be open to inspection in accordance with the provisions of section 129, by any member, officer, auditor, receiver or liquidator of the company, and by the registrar.
Part VII – Management and administration
127. Registered office
(1)A company shall have in Malawi a registered office and a registered postal address.(2)Notice of any change in the situation of the registered office or in the registered postal address shall be given in the prescribed form to the registrar for registration within twenty-one days of the change.(3)If default is made in complying with this section the company and every officer of the company who is in default shall be liable to a fine of ten Kwacha for every day during which the default continues.(4)An existing company which has not before the commencement of this Act given notice to the registrar of the situation of its registered office or of its registered postal address shall give such notice, in a form acceptable to the registrar, in or with its first annual return made after the commencement of this Act.
128. Records and registers
(1)Any record, register or book required by this Act to be kept by a company may be kept either in a bound or loose-leaf form, or by a system of mechanical or electronic recording or otherwise.(2)A company and its officers shall take adequate precautions to prevent loss or destruction of such records, registers and books, and to prevent the falsification of entries and to facilitate the detection and correction of inaccuracies therein.(3)Where any system of mechanical or electronic recording is adopted, adequate arrangements shall be made for making the information therein available in an intelligible form to anyone lawfully inspecting the record, register or book.(4)Where any system of electronic recording is adopted a company shall for the purposes of this Act be deemed to keep any such record, register, or book at the place where the information therein is made available for inspection.(5)If default is made in complying with subsection (2) or (3) the company and every officer of the company who is in default shall be liable to a fine of one hundred Kwacha.
129. Inspection by members and others
(1)Subject to the provisions of this Act, any record, register or book required by this Act to be kept by a company and made available for inspection by any member of the company or other person shall, during business hours (subject to such reasonable restrictions as the company in general meeting may impose, so that not less than two hours in any normal working day be allowed for inspection), be open to the inspection of any member without charge and of any other person on payment of twenty tambala, or such less sum as the company may prescribe, for each inspection.(2)Any member or other person who is entitled to inspect any such record, register or book may require a copy of the whole or any part thereof on payment of twenty tambala, or such less sum as the company may prescribe, for every hundred words or fractional part thereof required to be copied.The company shall cause any copy so required by any person to be sent to that person within a period of ten days commencing on the day next after the day on which the requirement is received by the company.(3)If any inspection required under this section is refused or if any copy required under this section is not sent within the proper period, the company and every officer of the company who is in default shall be liable in respect of each default to a fine of one hundred Kwacha.(4)In the case of any such refusal or default, the court may by order compel an immediate inspection or direct that the copies required shall be sent to the persons requiring them, and may order that the company and every officer of the company who is in default, or any one or more of such persons, shall be liable to pay all costs of and incidental to the application for such order.
130. Publication of name of company
(1)Every company shall—(a)paint or affix, and keep painted or affixed, its name, in easily legible Roman letters above or adjacent to the principal entrance to its registered office and to every office or place in which its business is carried on;(b)have its name accurately mentioned in legible Roman letters in all business letters, invoices, receipts, notices, or other publications of the company, and in all negotiable instruments or orders for money, goods or services purporting to be signed or endorsed by or on behalf of the company.(2)If any company makes default in complying with subsection (1), the company and every officer of the company who is in default shall be liable to a fine of one hundred Kwacha.(3)If any officer of the company or other person shall sign or endorse or authorize the signing or endorsement on behalf of the company of any negotiable instrument or order for money, goods or services wherein the name of the company is not accurately mentioned in accordance with subsection (1) (6), such person shall be personally liable to discharge the obligation thereby incurred unless it is duly discharged by the company or otherwise, but without prejudice to any right of indemnity which such person may have against the company or any other person.
131. Company contract
(1)A contract may be made—(a)by a company, by writing under its common seal; or(b)on behalf of a company, by a person acting under its authority, express or implied.(2)Any formalities required by law in the case of a contract made by an individual shall, unless a contrary intention appears, apply to a contract made by or on behalf of a company.[26 of 2012]
132. Execution of documents
(1)A document shall be executed by a company—(a)by the affixing of its common seal; or(b)by signature in accordance with this section.(2)A document shall be validly executed by a company if it is signed on behalf of the company—(a)by two authorised signatories; or(b)by a director of the company in the presence of a witness who attests to the signature.(3)For the purposes of subsection (2), the following shall be authorised signatories—(a)every director of the company; and(b)in the case of a private company or a public company, the secretary, or any joint secretary of the company.(4)A document signed in accordance with subsection (2) and expressed, in whatever words, to be executed by the company shall have the same effect as if executed under the common seal of the company.(5)A document shall be deemed to have been executed by a company in favour of a purchaser if it purports to be signed in accordance with subsection (2).(6)In this section, "purchase" means a purchaser in good faith for valuable consideration and includes a lessee, mortgagee or other person who, for valuable consideration acquires an interest in property.(7)Where a document is to be signed by a person on behalf of more than one company, it shall not be duly signed by that person for the purposes of this section unless the person signs it separately in each capacity.(8)Reference in this section to a document being, or purporting to be, signed by a director or secretary, shall be read, in a case where that office is held by a firm, as references to its being, or purporting to be, signed by an individual authorised by the firm to sign on its behalf.(9)This section applies to a document that is, or purports to be, executed by a company in the name of, or on behalf of, another person, whether or not that person is also a company.[26 of 2012]
133. Common seal
(1)A company may have a common seal.(2)Where a company elects to have a common seal, the company shall have its name engraved in legible characters on the seal.(3)A company which elects to have a common seal which fails to comply with subsection (2) commits an offence, and shall be liable, upon conviction, to a fine of K100,000.(4)The offence under this section shall be committed by—(a)the company; and(b)every officer of the company who is in default.(5)An officer of a company, or a person acting on behalf of a company who uses or authorises the use of, a seal purporting to be a seal of the company on which its name is not engraved as required by subsection (2) commits an offence and shall be liable, upon conviction, to a fine of K100,000.[26 of 2012]
133A. Official seal for use abroad
(1)A company that has a common seal may have an official seal for use outside Malawi.(2)The official seal shall be a facsimile of the company’s common seal, with the addition on its face of the place or places where it is to be used.(3)The official seal when duly affixed to a document shall have the same effect as the company’s common seal.(4)A company having an official seal for use outside Malawi may, by writing under its common seal, authorise any person appointed for the purpose to affix the official seal to any deed or other document to which the company is party.(5)As between the company and a person dealing with such an agent, the agent’s authority continues—(a)during the period mentioned in the instrument conferring the authority; or(b)if no period is mentioned, until notice of the revocation or termination of the agent’s authority has been given to the person dealing with him.(6)The person affixing the official seal under this section shall certify in writing on the deed, or other document to which the seal is affixed, the date on which, and place at which, it is affixed.[26 of 2012]
133B. Official seal for share certificate
(1)A company that has a common seal may have an official seal for use—(a)for sealing securities issued by the company; or(b)for sealing documents creating or evidencing securities so issued.(2)The official seal—(a)shall be a facsimile of the company’s common seal, with the addition on its face of the word "Securities"; and(b)when duly affixed to the document shall have the same effect as the company’s common seal.[26 of 2012]
134. Execution of deed
(1)A document shall be validly executed by a company as a deed for the purposes of any written law if—(a)it is duly executed by the company; and(b)it is delivered as a deed.(2)For the purposes of subsection (1) (b), a document is presumed to be delivered upon its being executed, unless a contrary intention is proved.[26 of 2012]
135. Execution of deed or oilier documents by attorney
(1)A company may, by instrument executed as a deed, empower a person, either generally or in respect of specified matters, as its attorney to execute a deed or other documents on its behalf.(2)A deed or other document so executed, whether in Malawi c elsewhere, shall have the effect as if executed by the company.[26 of 2012]
136. Bills of exchange and promissory notes
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 of, or on account of, the company, by a person acting under its authority[26 of 2012]
137. Service of documents on company
(1)A document may be served on a company by leaving it atthe registered office of the company, or sending it by post to the registered postal address of the company.(2)Any document to be served by post on a company shall be posted in such time as to admit of its being delivered in due course of deliver within the time, if any, prescribed for the service thereof; and in proving service it shall be sufficient to prove that a letter containing such document was properly addressed, prepaid and posted, whether or not by registered post.(3)If a company has no registered office or no registered post! address, service upon any director or the secretary of the company or, if the company has no director or secretary or if no director or secretary ca be traced in Malawi, upon any member of the company, shall be deemed good and effectual service upon such company.(4)If it shall be proved that any document was in fact received by any director or the secretary of a company such document shall be deemed to have been served on the company notwithstanding that service may not have been effected in accordance with the foregoing subsections.(5)Nothing in this section shall derogate from any provision in this Act relating to the service of any document, or from the power of an court to direct how service shall be effected of any document relating t legal proceedings before that court.(6)Where a document is sent by post service shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the document and to have been effected at the expiration of seven day or, if it is sent to an address outside Malawi, fourteen days after the letter containing the same is posted. The letter need not be despatched b registered post but where it is sent to an address outside Malawi it sha be despatched by airmail.
138. Services of documents by company
(1)A document may be served by a company on any member, debentureholder or director or secretary of the company either personally or by sending it through the post in a prepaid letter addressed to him at his address on the register of members, debentureholders or directors and secretaries, as the case may be, or (if he has no registered address) at the address, if any, supplied by him to the company for the giving of notices to him, or by leaving it for him with some person apparently over the age of eighteen years at such address.(2)A document may be served by a company on the joint holders of any share or debenture of the company by serving it on the joint holder named first in the register of members or debentureholders in respect of the share or debenture.(3)A document may be served by a company upon the person upon whom the ownership of any share or debenture has devolved by reason of his being a legal personal representative, receiver, or trustee in bankruptcy of a member or debentureholder either personally or by sending it through the post in a prepaid letter addressed to him by name, or by the title of representative of the deceased, receiver, or trustee of the bankrupt, or by any like description, at or to the address, if any, supplied for the purpose by such person or by leaving it for him with some person apparently over the age of eighteen years at any such address, or (until any such address has been supplied) by serving the document in any manner in which the same might have been served if the death, receivership or bankruptcy had not occurred.(4)Where a document is sent by post service shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the document and to have been effected at the expiration of seven days or, if it is sent to an address outside Malawi, fourteen days after the letter containing the same is posted. The letter need not be despatched by registered post but where it is sent to an address outside Malawi it shall be despatched by airmail.
139. Liability of company not affected by officer s fraud or forgery
Where a company would be liable for the acts of any officer or agent, the company shall be liable notwithstanding that the officer or agent has acted fraudulently or forged a document purporting to be sealed by or signed on behalf of the company.
Part VIII – Directors and secretary
140. Meaning of "directors"
(1)For the purposes of this Act the expression "directors" means those persons, by whatever name called, who are appointed to direct and administer the business and affairs of the company.(2)Any person, not being a duly appointed director of a company—(a)who shall hold himself out or knowingly allow himself to be held out as a director of that company, or(b)on whose directions or instructions the duly appointed directors are accustomed to act,shall be subject to the same duties and liabilities as if he were a duly appointed director of the company:Provided that nothing in this subsection contained shall be deemed to derogate from the duties or liabilities of the duly appointed directors.(3)If any person, not being a duly appointed director of the company, shall hold himself out, or knowingly allow himself to be hold out, as a director of the company, or if the company shall hold out such person, or knowingly allow such person to hold himself out, as a director of the company, such person or the company, as the case may be, shall be liable to a fine of two hundred Kwacha.(4)No limitation upon the authority of directors, whether imposed by the memorandum or articles or otherwise, shall be effective against a person who does not have knowledge of such limitation.(5)A person shall not be, deemed to be within the meaning of any provision in this Act, a person in accordance with whose directions or instructions the directors of a company are accustomed to act, by reason only that the directors of the company act on advice given by him in a professional capacity.
141. Number of directors
(1)Every company shall have at least three directors.(2)If at any time the number of directors is less than three and the company continues to carry on business for more than two months thereafter, the company and every director and member of the company who is in default shall be liable to a fine not exceeding ten Kwacha for every day during which it so carries on business after the expiration of such two months without having at least three directors and every director and member of the company who is cognizant of the fact that it is carrying on business with fewer than three directors shall be jointly and severally liable for all the debts and liabilities of the company incurred during that time.(3)Subject as aforesaid the number of directors shall be fixed by or in accordance with the company’s articles.(4)No contravention of this section shall invalidate any transaction entered into by a company.
142. Eligibility and competence of directors
(1)None of the following persons shall be eligible for appointment, or competent to act, or to continue to act, as a director of a company—(a)a body corporate;(b)an infant or any other person under legal disability;(c)any person prohibited or disqualified from so acting by any order of a court for the time being in force; and(d)save with the leave of the court, an undischarged bankrupt.(2)A director of any company shall cease to hold office as such if—(a)he is adjudged bankrupt; or(b)he is removed by a court from an office of trust on account of misconduct.(3)Any person who knowingly, in contravention of subsection (1) or (2), directly or indirectly takes office, or acts, as a director of a company shall be liable to a fine of one thousand Kwacha and to imprisonment for a term of six months.(4)Nothing in this section shall prevent any company from applying under its articles any further limitation on, or disqualification for, the appointment of or the retention of office by a director.(5)No person shall be appointed a director of a company unless he shall prior to such appointment have consented in writing to be so appointed.(6)No contravention of this section shall invalidate any transaction entered into by a company.
143. Residential requirements of directors
(1)The majority of the directors of every company (including at least one of the managing directors, if the company has managing directors) shall be resident in Malawi:Provided that in no circumstances shall the number of directors resident in Malawi be less than three.(2)Any contravention of subsection (1) which continues for more than two months shall constitute grounds for the winding-up of the company by the court on the application of the Attorney General.
144. Directors' share qualification
(1)Unless the company’s articles otherwise provide, a director need not be a member of the company or hold any shares therein.(2)Where the articles require a director to hold a specified share qualification, every director shall obtain his qualification within two months after his appointment or such shorter period as may be fixed by the articles, and his office shall be vacated if he shall fail to do so or if at any time after the expiration of that period he ceases to hold his qualification:Provided that if the company amends its articles so as to introduce or increase the requirement of a share qualification every director holding office at the date of such alteration shall have two months thereafter to obtain his qualification and shall not vacate office under this section unless he fails to do so.(3)A person vacating office under this section shall be incapable of being reappointed a director of the company until he has obtained his qualification.
145. Vacation of office of director
(1)The office of director shall be vacated if the director becomes incompetent to act as a director by virtue of the provisions of section 142, or if he ceases to hold office by virtue of section 144, or if he resigns his office by notice in writing to the company.(2)The company’s articles may provide for the termination or vacation of office in circumstances additional to those specified in subsection (1).
146. Removal of directors
(1)Subject to subsection (7) a company may, by ordinary resolution at any general meeting, remove from office all or any of the directors notwithstanding anything in its articles or in any agreement with any director.(2)A resolution to remove a director shall not be moved at any general meeting unless notice of the intention to move it has been given to the company not less than thirty-five days before the meeting.(3)On receipt of notice of an intended resolution to remove a director under this section the company shall forthwith send a copy thereof to the director concerned and such director (whether or not he is a member of the company) shall be entitled—(a)to be heard on the resolution at the meeting; and(b)to send to the company a written statement, copies of which the company shall send with every notice of the general meeting or, if the statement is received too late, shall forthwith circulate to every person entitled to notice of the meeting in the same manner as notices of meetings are required to be given:Provided that the company need not send or circulate such statement—(i)if it is received by the company less than seven days before the meeting; or(ii)if the court, on application by the company or any other person who claims to be aggrieved, so orders upon being satisfied that the statement is unreasonably long or that the rights conferred by this section are being abused to secure needless publicity for defamatory matter; and the court may order the costs of the applicant to be paid in whole or in part by the director notwithstanding that he is not a party to the application.(4)Without prejudice to the director’s right to be heard orally on such resolution, he may, unless the court shall have made an order under subsection (3), also require that the written statement by him be read to the meeting.(5)On a resolution to remove a director no share shall, on a poll, carry a greater number of votes than it would carry in relation to the generality of matters to be voted on at a general meeting of the company.(6)A vacancy created by the removal of any director under this section, if not filled at the meeting at which he is removed, may be filled as a casual vacancy.(7)Nothing in this section shall be taken as depriving any director who has a service agreement with the company of any right to compensation to which he may lawfully be entitled under such agreement on the termination of his directorship or of any right to damages if his removal from his directorship constitutes a breach of such service agreement.
147. Alternate directors
(1)Unless prohibited by the articles a director may either generally or in respect of any period in which he is absent from Malawi or unable for any reason to act as a director, appoint another director