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FAQ - FREQUENTLY ASKED QUESTIONS FAQ - FREQUENTLY ASKED QUESTIONS
COMPANIES COMPANIES
Companies
FREQUENTLY ASKED QUESTIONS ON COMPANIES
What is a Company?
The word Company may be defined as an association where two or more
persons come together to carry on business in common with a view to make
profit.
Is there Company Law in Zambia?
Yes, there is a provision for registration of Companies in Zambia under the
Companies Act Cap 388 of the Laws of Zambia administered by the Patents and
Companies Registration Office. This Act provides procedures for incorporation
and post incorporation requirements.
Who is eligible to register a Company in Zambia?
Any two or more persons associated for any legal purpose may form an
incorporated company by subscribing their names to an application for
incorporation and lodging it with the Registrar.
What other documents must accompany the application for incorporation?
An application for incorporation (Companies Form 2) must be lodged with:-
1. Proposed Articles of Association of the Company, if any;
2. A signed consent from each person named in the application as a Director
or Secretary of the Company(Form 5);
3. A declaration of guarantee by each subscriber if the Company is to be
limited by guarantee (Form 3); and,
4. A statutory declaration (Companies Form 11) that the requirements of the
Companies Act have been complied with, signed by:
a) a legal practitioner holding a practicing certificate who was engaged
in the formation of the Company; or
b) a person named in the application for incorporation as a first Director
or Secretary of the Company.
To facilitate immediate commencement of business upon incorporation,
companies are also required to file a declaration of compliance with minimum
capital (Form 55 and Form 12 for private and public limited companies,
respectively).
Who is NOT eligible to subscribe to an application for incorporation?
1. Any person under eighteen years of age;
2. An undischarged bankrupt under Zambian Laws;
3. Subject to an order by the court, an undischarged bankrupt under laws of
another country;
4. Anyone who is of unsound mind and has been declared so by the court or
a court of competent jurisdiction of another country.
What are Articles of Association?
These are regulations that regulate the relationship between the company and
its members.
What is the procedure for registering a Company?
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What is the procedure for registering a Company?
To register a company, the promoters who have expressed their desire to be
formed into a company with a specific name and objects and have prepared
documents (in this case the application for incorporation and other relevant
documents) should lodge these documents with the Registrar of Companies. If
these documents are in order, the company will be registered
(incorporated)upon payment of the relevant fees and the Registrar will issue
Certificates of Incorporation and Share Capital which are conclusive evidence
that the Company has been incorporated or registered as aforesaid.
What is the Minimum Authorized Share Capital for various Companies?
1. Private Company -Minimum Nominal Capital K5,000,000
2. Public Company - Minimum Capital K50,000,000
3. Bureau de Change - Minimum Capital K250,000,000
4. Financial Institution or Insurance Company K500,000,000
5. Bank - Nominal Capital K1,000,000,000
Is there a provision for a registered Company to change its name?
Yes, a company may pass a special resolution to change its name but such
name change does not affect any rights or obligations of the company nor
render defective any legal proceedings that could have been commenced or
continued against it under the former name.
How many types of companies are obtainable in Zambia?
Two types of Companies are obtainable under the Companies Act, namely:
1. Private Limited Companies; and,
2. Public Limited Companies (PLC).
Under private company, the following are available:
1. Company limited by Shares;
2. Company limited by Guarantee; and
3. Unlimited Company.
What is a Private Limited Company?
A Private Limited Company is one with share capital. It may not have more than
50 shareholders and it is prohibited from making invitations to the public to
purchase its shares or debentures. If it is wound up and its assets are
insufficient to cover its liabilities, the liability of its members/shareholders is
limited to the amount left unpaid on their shares (section 122,265 and 266).
This is the most common type of Company obtainable in Zambia.
What is a Company Limited by guarantee?
This is a company in which the liability of subscribers is limited to the amount
guaranteed. A company limited by guarantee does not have a share capital
and must not carry on business for the purpose of making a profit for its
members or anyone involved in its promotion or management. It may not have
more than 50 members. It is also prohibited from making invitation to the public
to purchase its debentures. Under this Company, each member must sign a
declaration of guarantee specifying the amount he undertakes to contribute in
the event that it is wound up. This type of Company is widely used by charitable
and quasi-charitable organizations such as school, churches, foundations, etc.
What is an Unlimited Company?
An Unlimited Company is also a private company and has the same attributes
as those of a private liability company. The only difference between the two is
that in the case of an unlimited company, if it is wound up and its assets are
insufficient to cover its liabilities, the liability of its shareholders is unlimited.
What should be the membership of a Private Company?
A private company should have a minimum of two (2) and a maximum 50
members.
What is a Public Company?
A Public Company is one with share capital and has capacity to enter into any
business unless restricted by its Articles. Its name always ends with the words
Plc (an abbreviation for Public Limited Company). Unlike a private company, it
can float its shares to the public. Further, this type of Company places no
restrictions on the right to transfer Shares provided there is no unpaid liability
and in the case of wound up, the liability of shareholders is limited to the
amount left unpaid on their shares (Sections 265 & 266). The minimum
membership of a Public Company is seven.
What is the minimum number of members in a Public Company?
A Public Company should have a minimum of seven (7) members. There is no
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A Public Company should have a minimum of seven (7) members. There is no
prescribed maximum, however.
Are there any post incorporation requirements that a company needs to
comply with after it has been registered?
Yes, a company is required to lodge annual returns as well as notify the
Registrar of alterations in capital, Change in Directors, transfer of shares,
allotment of unissued shares, just to mention but a few. For more, check under
post incorporation requirements for companies.
What is an Annual Return?
This is a statutory form that every company must file with the Registrar within
three months after the end of its financial year. The Annual Return should state
the position of the company as at the date at which the return was made or, if
there was an annual general meeting, as at the date of such general meeting.
What information must an Annual Return contain?
An Annual Return must state the full address of the companys registered office,
particulars of directors and secretary and its main activities. If the company has
a share capital, it must provide particulars of share capital and shareholders.
What is the consequence of failure to file an annual return?
If a company fails to file annual returns, the company and each officer in default
commit an office. Consequently, the company may be struck off from the
register and its officers prosecuted.
When should Annual Returns be filed?
Annual Returns must be filed within three months after the end of the
Companys financial year or within one month after the annual general meeting
(AGM), if such meeting is held three months after the end of the financial year.
What other document is lodged with the annual return of a private company?
Annual Returns filed by a private company should be accompanied with a
Certificate of Compliance (Form 53) which should show that the company has
not, since its last annual return or date of incorporation, issued any invitation to
the public to subscribe for any of its shares or debentures.
What other document is lodged with the annual return of a public limited
company?
Annual Returns filed by a public company should be accompanied by a balance
sheet, profit and loss account, group accounts, directors reports and auditors
report certified by directors and the secretqary of the company.
Is there any requirement for a company to hold an annual general meeting?
Yes, every company should hold an annual general meeting (AGM) within three
months after the end of its financial.
Is there any provision for a Company to maintain Accounts?
Yes, Part VIII of the Companies Act Cap 388 placesan obligation on a company
to maintain accounting records explaining the transactions and financial position
of the company. Annual Accounts should be prepared every year and must
include a full account of the companys position. The Act also imposes an
obligation on a company to appoint an auditor within three months from the
date of incorporation (applies to public limited companies).
BUSINESS NAMES BUSINESS NAMES
Business Names
FREQUENTLY ASKED QUESTIONS ON BUSINESS NAMES
What is a business names?
A Registered Business Name or Firm is an unincorporated body of one or more individuals
or one or more corporations who have entered into partnership with one another for the
purpose of carrying on business for profit. Therefore, a Business Name or Commercial
name as it is sometimes referred to is a designation which identifies an enterprise.
Why do you have to register your business with PACRO?
Firstly, it is a legal requirement that you register your company or business name. Section 3
of the Registration of Business Act No. 16 of 2011 requires that anyone carrying on business
in a name other than their personal names should register. Over and above this, registration
ensures protection of a Business Name.
Are there any post registration obligationsregarding Business Names?
Section 15 of the Registration of Business Names Act requires that if any change(s) occur
regarding any particulars registered in respect of a firm or an individual, such firm or
individual should within 14 days of such change furnish the Registrar with a statement in the
prescribed form (Business Name Form IV) signed by all partners, stating the nature and date
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of change.
Section 12 of the Registration of Business Names Act No. 16 of 2011 requires every
business registered under the Act to submit annual returns.
What is the difference between a business/firm and a company?
1. A Business Name has no legal personality while a Limited Company is a body corporate
and therefore an artificial person;
2. In a Business Name, liability of shareholders is unlimited whereas under a Company,
shareholder liability is limited to the amount unpaid on the shares;
3. In a Business Name, transfer of shares requires the consent of all those registered as
partners whereas in a Limited Company, shares are freely transferable; and,
4. A Business Name is not permanent - death usually dissolves it whereas a company has
perpetual succession.
What should I do if my business name ceases to operate?
If any individual or firm that has been registered ceases to carry on business, it is the duty of
the persons who are partners at the time it ceases carrying on business to file within three
(3) months after such cessation a notice in a prescribed form (Business Form VII) that the
firm or individual has ceased to carry on business.
FOREIGN COMPANIES FOREIGN COMPANIES
Foregin Companies
FREQUENTLY ASKED QUESTIONS ON FOREIGN COMPANIES?
What is a Foreign Company?
A foreign company is a body corporate registered under or by virtue of the laws of another
country. It is registered in Zambia as a branch of the company in the country of origin.

What is the minimum and maximum number of local directors required in a Foreign
Company?
A foreign company must at all times have at least one(1) and no more than nine(9) local
directors empowered and authorized to conduct and manage all the affairs, properties,
business and other operations of the company in Zambia. At least one local director must
be resident in Zambia, and if the company has more than two local directors, more than
half of them shall be residents of Zambia.
Who is not eligible to be a local director in a Foreign Company?
A person shall not be appointed as or continue to hold office as a local director of a
foreign company if that person is:-
1. A body corporate;
2. An infant or any other person under legal disability;
3. Any person prohibited or disqualified from so acting by any order of a court; or,
4. An undischarged bankrupt.

What is the registration fee for a Foreign Company?
The Registration Fee of for a Foreign Company is K1,350,000. Name clearance costs
K25,000.
What documents are used in the registration of a Foreign Company?
The following are required:-
1. Two sets of application forms (Form 46) costing K20,000.
2. A certified copy of the Certificate of Incorporation from the country of origin attached to
Form 46.
3. Charter, statutes, regulations, memorandum and articles, or other instrument relating
to the mother company.

What, if any, are the post registration requirements for a Foreign Company?
A Foreign Company is required to file, annually, a Statement in the Form of a Balance
Sheet and in the case of changes in the registered particulars, a Notice of Alteration of the
Registered Particulars and, where amendments are made to the constitution, articles or
other relevant instruments, a Notice of Alteration of the Registered Instrument
Constituting or Defining the Constitution.
What is the filling fee of a Statement in the form of a Balance Sheet?
A fee of K150,000 should accompany the Statement in the Form of a Balance. As stated
above, this Statement should be filed annually. A fee of K150,000 is also payable in
respect of the Notice of Alteration of the Registered Particulars and the Notice of Alteration
of the Registered Instrument Constituting or De fining the Constitution. It is important to
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note that if the Statement in form of Balance Sheet is filed three months after the end of
the financial year, a penalty of K145,000 must be paid together with the normal filing fee.
How can a Foreign Company change its name?
A Foreign Company may pass a special resolution to change its name. A Notice of
Alteration of the Registered Particulars of a Foreign Company (Form 48) must be
submitted within twenty-one (21) days after the date of the resolution. The company must
indicate in the prescribed form that it intends to change its name to the name specified in
the resolution in as a "new name". The fee for change of foreign company names is
K400,000. If the company name is accepted, a new Certificate of Registration will be
issued. However, if the name of the company is rejected, the applicant will be required to
fill in a name clearance form and pay a search fee of K25,000.
What should a local director do if a foreign company is wound-up or dissolved in the
country of incorporation?
A Notice of Winding-Up or Dissolution of a Foreign Company in the country of
Incorporation (Form 49) must be lodged with the Companies Registry accompanied with a
resolution or court order, as the case may be, stating that the company is dissolved or
otherwise has ceased to exist according to the law of the country of its incorporation. The
documentary agents and local directors of the foreign company must lodge the notice
within twenty-eight days after the event. On lodgment of (Form 49) and payment of the
filing fees, the Registrar shall cause a notice to be published in the Government Gazette,
as the case may be.
What fees are payable in relation to dissolution of a Foreign Company in country of
origin?
The fees are as follows:-
Form 49 K300,000
Gazette Notice Handling Fee K50,000
Gazette Notice Advertisement Fee K100,000
Total Amount: K450,000

What are the consequences of carrying on business on behalf of a Foreign Company that
has been dissolved in the country of origin?
A person who carries on, or purports to carry on, in Zambia, business on behalf of a
foreign company after the date on which it was dissolved or otherwise ceased to exist in
the country of its incorporation, shall be guilty of an offence and shall be liable on
conviction to a fine not exceeding thirty monetary units for each day that he carries on or
purports to carry on the business.
What should local directors or documentary agents do when the Foreign Company ceases
operation in Zambia?
If a foreign company ceases to have an established place of business in Zambia, the
documentary agent or a local director or manager must lodge a notice of that fact in the
prescribed form (Form 50) with the Registrar of Companies within twenty-eight days after
so ceasing. On lodgment of (Form 50) and payment of the filing fees the Registrar shall
cause a notice to be published in the Government Gazette, as the case may be.
What fees are payable in relation to cessation of operations of a Foreign Company in
Zambia?
The fees are as follows:-
Form 50 K300,000
Gazette Notice Handling Fee K50,000
Gazette Notice Advertisement Fee K100,000
Total Amount: K450,000

What are the consequences of carrying on business on behalf of a Foreign Company that
has ceased to operate in Zambia?
A person who carries on, or purports to carry on, in Zambia, business on behalf of
a foreign company after the date on which it was dissolved or otherwise ceased to exist in
Zambia, shall be guilty of an offence and shall be liable on conviction to a fine not
exceeding thirty monetary units for each day that he carries on or purports to carry on the
business.
PATENTS PATENTS
Patents
FREQUENTLY ASKED QUESTIONS ON PATENTS
What is the distinction between invention and innovation?
Appreciating the distinction between invention and innovation is essential. An invention is
generally defined as a new and inventive solution to a technical problem. It may relate to
the creation of an entirely new device, product, method or process or may simply be an
incremental improvement on aknown process or product. Innovation, on the other hand,
refers to the translation of the invention into a marketable product or process.
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Why should you consider patenting your invention?
There are several reasons for patenting an invention. These include the following:-
1. A patent grants the owner exclusive rights to prevent or stop others from commercially
using the patented invention thereby reducing uncertainty, risk and competition from
freeloader.
2. Arising from (i) above, the inventor is able to be rewarded for the amount of time and
money spent in developing the invention.
3. Similarly, a patent facilitates action against imitators and free riders thereby ensuring
a strong market and competitive position.
4. Facilitate access to technology through cross licensing arrangements.
5. Facilitating assignment of an invention.

How should one prepare a complete specification?
A completed specification should:
1. Fully describe the invention and the manner in which it is to be performed; and,
2. Disclose the best method of performing the invention known to the applicant at the
time. The complete specification must normally contain the following parts: title of the
invention, brief introduction of the field of the invention, background of the invention,
objective(s) or aims of the invention, brief introduction of the drawings (where the
specification contains drawings), a detailed description of the invention and a set of
claims defining the subject matter for which protection is claimed.
INDUSTRIAL DESIGNS INDUSTRIAL DESIGNS
Industrial Designs
FREQUENTLY ASKED QUESTIONS ON INDUSTRIAL DESIGNS
What is a design?
A design is the appearance of an article produced by an industrial process. The shape and
decorative ornaments constitute an industrial design.

Is there a design law in Zambia?
Yes. There is provision for protection of designs through registration under the Registered
Designs Act Cap 402 of the Laws of Zambia.
Who is eligible to apply for an industrial design?
The originator of the design or his assignee which may be a company, individual or group
of persons.
What are the conditions for registration of a design?
A design must be new and original. A design cannot be registered if it is similar to a
design already on the Designs Register.
How long is a design protected?
A design is initially valid for a period of five years from the date of filing the application.
In order to maintain the validity of the registration for the full 15 year term, registration of
the design must be renewed for a second and third period of five years each.
Can anyone copy a design?
Yes and No. Firstly, it is illegal for anyone to imitate for commercial purposes a design
which is still under a valid registration in Zambia. However, it is legal to copy a design that
is registered in another country but has no registration in Zambia. For instance, if the
design is registered in South Africa but not in Zambia, a local company may register the
same design in Zambia.
TRADEMARKS TRADEMARKS
Trademarks
FREQUENTLY ASKED QUESTIONS ON TRADEMARKS
How are rights of a registered trademark proprietor enforced?
Enforcement of rights accruing from trademark registration is generally the responsibility
of the registered proprietor or user. Where a trademark is infringed (by counterfeiting for
example), the proprietor can sue in the High Court claiming compensation (damages) or,
where the infringement is continuous, an injunction. Sometimes, however, infringement of
a trademark may also amount to violation of criminal law and thus attract the involvement
of public law enforcement agencies.
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For how long is a trademark valid?
A trademark is valid, initially, for a period of seven (7) years from the date of application.
Thereafter , it can be renewed indefinately for periods of fourteen (14) years upon
payment of requisite renewal fees. Thus, a trademark can last for an indefinite period as
long as is renewed every time it falls due for renewal. A non-renewed trademark lapses
and may be removed from the register.
Is there a requirement to place the proprietors name on the trademark label?
There is no legal obligation for a registered trademark to bear the name of its proprietor.
However, some proprietors find it convenient to do so, particularly if the product is
manufactured and sold by a licensee and there is need to distinguish, for the information
of the customer, between the licensee and the registered proprietor. An example is the
Fanta trademark which is followed by the wording Bottled under authority of the Coca Cola
Company., the owner of the Fanta trademark.
What are well known marks?
These are marks deemed to be so well known by the competent authorities of particular
countries and therefore considered not to require registration to be accorded the
protection enjoyed by registered trademarks. They are exceptionally popular trademarks
and therefore enjoy protection across all classes. Under international law which has not yet
however been domesticated in Zambia, the following are among the factors to be taken
into account in determining whether a mark is well known:-
1. The degree of knowledge or recognition of the mark in the relevant sector of the public;
2. The duration, extent and geographical area of any use of the mark;
3. The duration, extent and geographical area of any promotion of the mark, including
advertising or publicity and the representation at fairs or exhibitions of the goods to
which the mark applies;
4. The duration and geographical area of any registration, and/or any applications for
registration of the mark to the extent that they reflect use or recognition of the mark;
5. The record of successful enforcement of rights in the mark, in particular, the extent to
which the mark was recognized as well as known by competent authorities; and,
6. The value associated with the mark.

Under current Zambian law, the only marks entitled to protection across classes are those
registered as defensive marks.
What does the symbol mean and when is it legally appropriate for use on the Zambian
market?
The symbol means registered. It is a means by which the proprietor warns the public
that the trademark is registered and that he/she is therefore entitled to exclusive rights
to its use. The symbol is thus only legally appropriate for use if it is registered in Zambia
for product(s) in respect of which it is used. A trademark that is not registered is identified
by the symbol .
Is the symbol appropriate for use in export markets?
Yes, but only if it is registered and kept in constant valid registration in such export
countries. Considering the fact that intellectual property rights are territorial, any
trademark registration obtained in Zambia is only effective (for the registrations validity
period) within the countrys borders. Accordingly, it is legally wrong to use the symbol in
territories where it is not registered or was registered but no longer valid. Where, however,
it is strongly felt necessary to warn the public of the owners claim to ownership rights in
an unregistered mark, the symbol could instead be used.
How does a trademark differ from a service mark?
Whereas a trademark distinguishes tangible products, service marks distinguish (as the
name suggests) services. Examples of services are transportation, hotel accommodation,
banking, laundry, motor vehicle repair and hair salon. However, the Zambian Trade Marks
Act does not recognise service marks.
What is the difference, if any, between a trademark and a brand?
Although a brand name is mainly used for marketing purposes, the two terms can be
used interchangeably. A brand can also be registered as a trade mark.
What is the difference between a Patent and a Trade Mark?
Although both are forms of intellectual property, the two differ significantly. Whereas a
trademark identifies the product with the producer, a patent protects an invention. A
patent is a statutory protection from the state to make use of the invention for a fixed
period, in Zambia being sixteen years. Therefore, one has to invent something to be
granted a patent. By contrast, one may only register (not patent) a trade mark by
devising a distinctive name or symbol and having it registered.
What is the Patents and Trade Marks Journal?
This is a monthly publication by the Patents and Companies Registration Office in which
Patents and Trade Marks being considered for granting and registration as well as those
that have been renewed or have lapsed are advertised. It enables patent and trademark
holders to be aware of any infringements.
Is it compulsory for a producer of goods to register a trademark?
There is no compulsory legal requirement to register a trademark. It is nonetheless
advisable for producers desiring effective legal protection of their brands to have their
marks registered as trademarks.
What is a preliminary search?
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