Introduction
Last week on 3 August 2023, I wrote an article titled “Private company pre and post formation formalities”. I received positive feedback from any readers. Some asked me to address formalities relating to public companies hence this article. As I explained last week in addition to the Companies and Other Business Entities Act (Chapter 24:31), (“the COBE Act” or “the Act”) one needs to be familiar with the Statutory Instrument 46 of 2020 on Companies and Other Business Entities (Pre – Formation and Post – Formation Formalities) Regulations, 2020 (“the regulations”) to understand pre-formation steps and post- formation formalities for public companies.
Pre-formation steps for public companies
This is covered in section 13, Pre-Formation Steps, of the regulations. The key steps are summarised hereunder.
- A person seeking to form a public company shall ascertain whether a name is available for registration by submitting form CR2, a Name search, with the prescribed fee.
- After considering the form submitted the Registrar decides whether to accept or reject the proposed name. He or she issues the applicant with form CV4.
- If the proposed name has been approved and form CV4 issued by the Registrar the applicant must within 30 days of receiving such notice submit in duplicate the Memorandum and Articles of Association of the private company and two copies of CR5 (“Registered office address”) and form CR6 (“List of directors and secretaries”), form CR19 (“Affidavit in terms of section 158 of the COBE Act), form CR20 (“Consent to act as Directors of a Public Company”, form CR21 (“List of persons to act as directors”), a copy of prospectus or a statement in lieu of a prospectus and duplicate copies of the Memorandum and Articles of Association of the public company together with the prescribed fees.
- The Registrar then issues to a successful applicant a certificate of incorporation.
- A public company must convene a mandatory statutory meeting before applying for a certificate to commence.
Post formation formalities for public companies
This is covered in section 14 of the regulations to the COBE Act. The key formalities are summarised below.
Annual return
Just like a private company, a public company must submit an annual return within 21 days after the date of its anniversary.
Subsequent changes
According to section 14(2) of the COBE regulations when a company intends to:
- Change its address the company secretary must file a notice of change of address in form CR5 (“Registered office address”).
- Change the list of its directors and secretaries, the company secretary must file such notice in form CR6 (“List of directors and secretaries”).
- Change its name, the company secretary must file such in form CR7 (“Notice of change of company name”) and CR8 (“Special Resolution”) together with proof of advert.
- Amend or substitute its Memorandum and Articles of Association, the company secretary must file such notice in form CR8 (“Special Resolution”).
- Vary its share capital, the company secretary must file such notice of variation in form CR9 (“Notice of conversion, consolidation and split of share capital”) accompanied by form CR8 (“Special Resolution”).
- Increase its share capital the company secretary must file such notice in form CR10 (“Notice of increase of share capital”) and CR8 (“Special Resolution”).
- Allot shares, the company secretary must file such notice of allotment of shares in form CR11 (“Return of allotment”).
- Change the address at which the register of mortgages and debentures is kept or any change in that place by filing form CR12 (“Mortgages and debentures”).
- Change of address at which the branch register of members is kept or any change in that place the company secretary must file such notice of change in address in form CR13 (“Branch register”).
- Notify the registrar of the amount or rate paid or agreed to be paid by way of commission in respect of shares, the company secretary must file such notice in form CR22 (“Statement by company of the amount or rate paid or agreed to be paid by way of commission in respect of shares”).
Further formalities
- If after the formation of a public company any shareholder of a public company becomes the nominee shareholder for a beneficial owner who holds more than 20% of the shares of that company, such nominee shareholder shall disclose the particulars of such beneficial ownership through form CR16 (“Declaration of beneficial ownership”). Any changes to a nominee shareholder including shareholding in the private company should be notified through form CR16.
- When a company has held an annual general meeting (“AGM”) in terms of section 167 of the COBE Act, the company secretary must file a declaration of such meeting in form CR17 (“Declaration that an annual general meeting has been held”).
- After the formation of a public company and before the statutory meetings in terms of section 166(1) of the COBE Act, the directors of a company are required to cause the certification of a statutory report with the registrar in form CR23 (“Statutory Report”).
Conclusion
When one considers company law he or she has to at read the COBE Act, the COBE regulations and the company’s Articles of Association as a minimum to ensure compliance.
Disclaimer
This simplified article is for general information purposes only and does not constitute the writer’s professional advice.
Profile
Godknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), Hons B.Compt (UNISA), CA(Z), MBA(EBS, Heriot- Watt, UK) is the Managing Partner of Hofisi & Partners Commercial Attorneys, chartered accountant, insolvency practitioner, registered tax accountant and advises on deal and transactions. He has extensive experience from industry and commerce and is a former World Bank staffer in the Resource Management Unit. He writes in his personal capacity. He can be contacted on +263 772 246 900 or gohofisi@gmail.com
