Types of business entities
A business may be registered as a sole proprietorship (business name), partnership, co-operative society, company limited by guarantee, private unlimited company, private limited company or a public company. Incorporation of a company or registration of a business can be done online and can be completed within three (3) to five (5) days if all relevant information is submitted.
Residency requirements for companies
At least half of the board of directors, including the executive directors, must be resident in Zambia. They do not, however, need to be Zambian citizens.
There are no residency requirements for shareholders. Certain sectors may, however, specifically require that to carry out business in that specific industry, companies must meet the prescribed threshold of Zambian shareholders. For example, in the mining industry, there are Zambian shareholder and management thresholds that must be met for companies that hold small scale mining licences.
Capital requirements for companies
The minimum capital requirement of a private company limited by shares is ZMW 15,000 and ZMW 1.5 million for a public company. Companies operating in regulated sectors have specified minimum capital required under the specific regulatory frameworks. For example, the minimum capital requirements for an insurance company is ZMW 1.5 million and ZMW 750,000 for a financial institution.
Shareholder requirements for companies
The liability of shareholders in both private and public limited companies is limited to the amount unpaid on their shares. As a general rule, each member's voting rights are determined by the number of shares they hold. A company may have more than one class of shares with different and weighted voting rights. Shareholders are further required to declare the beneficial owners of their shares.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
