Corporate Insolvency Act 2017

Corporate Insolvency [No.
9 of 2017 279
THE CORPORATE INSOLVENCY ACT, 2017
ARRANGEMENT OF SECTIONS
PART I
PRELIMINARY PROVISIONS
Section
1. Short title and commencement
2. Interpretation
PART II
RECEIVERSHIP
3. Reference to receiver under enabling instrument
4. Appointment of receiver
5. Notification of appointment of receiver
6. Statement of company’s affairs
7. Offences relating to statement of affairs
8. Payment of preferential creditors
9. Eligibility for appointment as receiver
10. Disqualification of body corporate or firm from appointment as receiver
11. Remuneration of receiver
12. Receivers appointed by Court
13. Receivers appointed under deed of appointment
14. Liabilities of receivers on contracts
15. Statement of appointment of receivership on stationery
16. Management of assets before disposal
17. Statement of affairs and accounts where receiver appointed
18. Accounts of receivers
19. Report by receiver
20. Vacation of office by receiver
PART III
BUSINESS RESCUE P ROCEEDINGS
21. Resolution to begin business rescue proceedings
22. Objections to resolution to begin business rescue proceedings
23. Court order to commence business rescue proceedings
Single copies of this Act may be obtained from the Government Printer,
P. O. Box 30136, 10101 Lusaka. Price K228.00 each
280 No. 9 of 2017] Corporate Insolvency
24. Duration of business rescue proceedings

25. General moratorium on legal proceedings against company
26. Protection of property interests
27. Post-commencement finance
28. Effect of business rescue on employees and contracts
29. Invalidation of transfer of securities other than by ordinary course of
business
30. Qualifications of business rescue administrators
31. Removal and replacement of business rescue administrator
32. General powers and duties of business rescue administrator
33. Investigation of affairs of company
34. Directors to co-operate with and assist business rescue administrator
35. Remuneration of business rescue administrator
36. Participation by creditors
37. Participation by holders of company’s securities
38. Participation by shareholders
39. First meeting of creditors
40. Functions, duties and membership of committees of creditors and
employees
41. Proposal of business rescue plan
42. Meeting to determine future of company
43. Consideration and approval of business rescue plan
44. Failure to adopt business rescue plan
45. Discharge of debts and claims
PART IV
SCHEMES OF ARRANGEMENTS AND COMPROMISE
46. Compromise between company, creditors and members
47. Effect of compromise or arrangement with creditors and members
48. Reconstruction and amalgamation of companies
PART V
WINDING-UP COMPANIES GENERALLY
49. References to member of company
50. Modes of winding-up
51. Liability of members on winding-up
Corporate Insolvency [No. 9 of 2017 281
52. Limitation of liability

53. Nature of liability of member
54. Liability on death or bankruptcy of member
PART VI
WINDING-UP BY COURT
55. Jurisdiction over winding-up proceedings
56. Petition to wind-up company
57. Circumstances for winding-up by Court
58. Commencement of winding-up by Court
59. Payment of preliminary costs
60. Powers of Court on hearing petition
61. Power to stay or restrain proceedings against company
62. Avoidance of dispositions
63. Avoidance of attachments
64. Registration of copy of order
65. Provisional liquidator
66. Stay of actions
67. Appointment of liquidator by Court and performance of functions in
absence of liquidator
68. Lodging of notice of appointment with Official Receiver and access to
company
69. Control of liquidators by Official Receiver
70. Remuneration of liquidators
71. Custody and vesting of company’s property
72. Statement on company’s affairs
73. Report by liquidator
74. Powers of liquidator
75. Exercise and control of liquidator’s powers
76. Committee of inspection
77. Constitution and proceedings of committee of inspection
78. Application for order of release of liquidator and dissolution of company
79. Order for release and dissolution
80. Power to stay winding-up
81. Appointment of special manager
82. Claims of creditors and distribution of assets
83. Inspection of books by creditors and members

84. Power to summon persons connected with company
85. Power to order public examination
86. Power to arrest absconding member or officer
87. Cumulative powers of Court
PART VII
VOLUNTARY WINDING-UP
88. Voluntarily winding-up
89. Commencement of voluntary winding-up
90. Effect of voluntary winding-up
91. Declaration of solvency
92. Appointment and remuneration of liquidator
93. Duty of liquidator to call creditors
94. Staying of members’ voluntary winding-up
95. Creditors’ voluntary winding-up
96. Appointment of committee of inspection
97. Fixing of liquidators’ remuneration and vesting of directors’ powers in
liquidator
98. Stay of proceedings after commencement of creditor’s voluntary winding
up
PART VIII
MISCELLANEOUS PROVISIONS ON WINDING-UP
99. Distribution of assets of company
100. Court appointed liquidator
101. Reviewing remuneration during voluntary winding-up
102. Powers and duties of liquidators during voluntary winding-up
103. Liquidator to accept shares, etc., as consideration for sale of property
of company
104. Annual meeting of members and creditors
105. Final meeting and dissolution of company
106. Arrangement entered before or during voluntary winding-up binding
107. Applications to determine questions or exercise of powers
108. Costs
109. Limitation on the right to voluntary wind-up
110. Meetings of creditors
111. Conduct of meetings of creditors
112. Eligibility for appointment as liquidator

113. Acts of Lquidator valid
114. General provisions on liquidators
115. Disposal of company’s assets by liquidator
116. Powers of Official Receiver where no committee of inspection
117. Appeal against decision of liquidator
118. Service of document on liquidator
119. Liquidator’s accounts
120. Notification of company in liquidation
121. Records of company
122. Payment of surplus funds to members
123. Unclaimed assets
124. Expenses of winding-up where assets insufficient
125. Meetings to ascertain wishes of members or creditors
126. Proof of debts
127. Preferential debts
128. Voidance of certain acts
129. Voidance of floating charge
130. Liquidator’s right to recover in respect of certain sales to or by company
131. Disclaimer of onerous property
132. Restriction of rights of creditor on execution or attachment
133. Duties of sheriff for goods in execution
134. Liability for contracting debt
135. Power of Court to assess damage against delinquent officers
136. Prosecution of delinquent officer and members
137. Frauds by officers of companies in liquidation
138. Winding-up of other bodies corporate
139. Winding-up of other foreign bodies corporate
PART IX
INSOLVENCY P RACTITIONERS
140. Insolvency practitioners
141. Qualifications for appointment as insolvency practitioners
142. Accreditation of insolvency practitioner
143. Register of Insolvency Practitioners
144. Insolvency practitioner acting in foreign State
145. Eligibilty for accreditation
PART X
CROSS BORDER INSOLVENCY
146. Application
147. Court to have jurisdiction
148. Public policy exceptions
149. Additional assistance under other laws
150. Limited jurisdiction
151. Access of foreign representative to Court
152. Application for recognition of foreign proceedings
153. Recognition of foreign proceeding by the Court
154. Subsequent information
155. Interim relief during proceedings for recognition
156. Relief granted upon recognition of foreign proceeding
157. Co-operation and communication between insolvency administrator
and foreign representatives
158. Forms of co-operation
159. Communication of proceedings in Zambia after recognition of foreign
main proceeding
160. Co-ordination in concurrent proceedings
161. Payment in concurrent proceedings
162. Regulations on cross-border insolvency
PART XI
MISCELLANEOUS PROVISIONS
163. Electronic transactions and processes
164. Netting off
165. Exercise of discretionary power
166. Request for information
167. Registration of documents
168. Extension of time
169. Documents to be in official language
170. Administrative penalties
171. Offences by officers of companies relating to winding-up or other
proceedings
172. Inducement relating to insolvency practitioner
173. Destruction, alteration, mutilation or falsifying of book, etc
174. Liability where proper accounts not kept
175. Responsibility for fraudulent trading
176. Offence by body corporate and principal officer or shareholders of
body corporate or unincorporated body
177. General penalty
178. Rules by Chief Justice
179. Regulations
180. Transitional provisions
GOVERNMENT OF ZAMBIA
ACT
No. 9 of 2017
I hereby signify my assent to the Bill
Date of Assent: 17th November, 2017
An Act to provide for corporate receiverships, appointment

of receivers and the duties and responsibilities of
receivers; business rescue, appointment, duties and
responsibilities of business rescue administrators, rights
of affected persons during business rescue proceedings
and business rescue plans; schemes of arrangements or
compromise with creditors; winding up of companies,
appointment of liquidators and the duties and
responsibilities of liquidators, committees of inspection,
special managers and the Official Receiver; insolvency
practitioners and the duties and responsibilities of
insolvency practitioners; cross-border insolvency; and
matters connected with, or incidental to, the foregoing.
[20th November, 2017
ENACTED by the Parliament of Zambia Enactment
PART I
PRELIMINARY PROVISIONS
1. This Act may be cited as the Corporate Insolvency Act, Short title
2017, and shall come into operation on the date appointed by the and
Minister for the coming into operation of the Companies Act, 2017. commencement
2. (1) In this Act, unless the context otherwise requires— Interpretation

“accounts” means the financial statements of a company or
group of companies together with accompanying notes,
excluding the auditors’ report or annual report of the
company;
“ account fairly stated ” means the annual accounts stated in

a manner that ensures sufficient disclosure, reasonable
detail and absence of bias;
“ accounting records ” include—
(a) invoices, receipts, orders for the payment of money,
bills of exchange, cheques, promissory notes,
vouchers and other documents of prime entry; and
(b) such working papers and other documents as are
necessary to explain the methods and calculations
by which the accounts are made up;
“ affected person ” includes a regulator, shareholder, member,
director, creditor or an employee, a former employee of a
company, registered trade union representing employees
of the company and the Registrar;
“ Agency ” means the Patents and Companies Registration
Agency established in accordance with the Patents and
Act No. 15 Companies Registration Agency Act, 2010;
of 2010
“ agent of the company ” includes any banker or legal
practitioner of the company and any person appointed by
the company as auditor;
“ annual accounts ” means the annual financial statements of
a company that give a true and fair view of the financial
performance, financial position and cash flows of the
company, including the consolidated financial statements
for a group of companies that give a true and fair view of
the group of companies’ financial performance, financial
position and cash flows;
“ auditor ” has the meaning assigned to the word in the
Act No.13 Accountants Act, 2008;
of 2008
“ bailiff ” means an officer appointed in accordance with the
Cap. 37 Sheriffs Act;
“ bank ” has the meaning assigned to the word in the Banking
Act No. 7 of and Financial Services Act, 2017;
2017
“ beneficial owner ” has the meaning assigned to the word in
Act No. 10 the Companies Act, 2017;
of 2017
“ body corporate ” has the meaning assigned to the word in
of 2017
“ book ” has the meaning assigned to the word in the
Act No. 10 Companies Act, 2017;
of 2017
“ board of directors ” means the board of directors of a
company and “ board ” shall be construed accordingly;
“ business ” includes a trade or profession;
“ business rescue administrator ” means a person qualified in
accordance with section 30 and appointed as an
administrator for purposes of business rescue proceedings;
“ business rescue plan ” means a plan provided for in
accordance with section 41;
“ business rescue proceedings ” means the process of
facilitating the rehabilitation of a company that is financially
distressed by providing for —
(a) the temporary supervision of the company and
management of its affairs, business and property;
(b) a temporary moratorium on the rights of claimants
against the company or in respect of property in
its possession; or
(c) the development and implementation, if approved in
accordance with this Act, of a plan to rescue the
company by restructuring its affairs, business,
property, debt and other liabilities and equity in a
manner that maximises the likelihood of the
company continuing in existence on a solvent basis
or, if it is not possible for the company to so continue
in existence, results in a better return for the
company’s creditors or shareholders than would
result if the company was to be liquidated;
“ charge ” has the meaning assigned to the word in the
Companies Act, 2017; Act No. 10
of 2017
“ committee of inspection ” means a committee of inspection
appointed in the course of a winding up in accordance with
this Act;
“ company ” has the meaning assigned to the word in the
Companies Act, 2017; Act No. 10
of 2017
“ contingent creditor ” means a prospective or anticipated
creditor;
“ control ” means the control of a company by a person who—
(a) beneficially owns more than twenty-five percent of
the issued share capital of the company;
(b) is entitled to vote a majority of the votes that may be
cast at a general meeting of the company, or has
the ability to control the voting of a majority of
those votes, either directly or through a controlled
entity of that person;
(c) is able to appoint or to veto the appointment of a

majority of the directors of the company;
(d) is a holding company and the company is a subsidiary
Act No. 10 of that company as provided for in the Companies
of 2017 Act, 2017;
(e) in the case of a company that is a trust, has the
ability to control the majority of the votes of the
trustees, to appoint the majority of the trustees or
to appoint or change the majority of the
beneficiaries of the trust; or
(f) has the ability to materially influence the policy of
the company in a manner comparable to a person
who, in ordinary commercial practice, can exercise
an element of control referred to in paragraphs
(a) to (e);
“ corporate ” means an entity, including a company or body
corporate, that is separate and distinct from its owners
and which is recognised as such by law and acts as a
single entity;
“ Court ” means the High Court for Zambia;
“ creditor ” means a person who is entitled to claim that debt is
owing to that person by a company and includes a person
entitled to enforce a final judgment or order of the Court;
“ creditors ’ voluntary winding up” means a voluntary winding
up of a company by the creditors where no declaration of
insolvency was made;
“ current liability ” means a liability that would, in the ordinary
course of events, be payable within twelve months after
the end of the financial year to which the accounts of a
company or group of companies relate;
“ debenture ” means a document issued by a corporate that
evidences or acknowledges a debt of the corporate,
whether or not it constitutes a charge on property of the
corporate, in respect of money that is or may be deposited
with or lent to the corporate, other than a document of the
following kinds:
(a) a document acknowledging a debt incurred by the
corporate in respect of money that is or may be
deposited with or lent to the corporate by a
person—
(i) in the ordinary course of a business carried

on by the person; and
(ii) in the ordinary course of such business of
the corporate as is not part of a business
of borrowing money and providing
finance;
(b) a document issued by a bank in the ordinary course
of its banking business that evidences or
acknowledges indebtedness of the bank arising in
the ordinary course of that business;
(c) a cheque or order for the payment of money or bill
of exchange; and includes—
(i) a unit of a debenture;
(ii) debenture stock;
(iii) a bond; and
(iv) any other security issued by a company,
whether constituting a charge on the
assets of the company or not;
“ debenture holder ” includes a debenture stockholder;
“ declaration ” means a declaration of insolvency made by
the Official Receiver;
“ declaration of solvency ” means a declaration made in
accordance with section 91;
“ deed of appointment ” means the instrument by which the
holder of a charge appoints a receiver;
“ dissolution ” means the termination of a company’s legal
existence by liquidation in accordance with this Act;
“ director ” means a person appointed as a director of a
company in accordance with the Companies Act, 2017 and Act No. 10
the words “the directors” means the directors acting of 2017
collectively;
“ establishment ” means any place of operations where a
debtor carries out non-transitory economic activity;
“ financial institution ” has the meaning assigned to the word
in the Banking and Financial Services Act, 2017; Act No. 7 of
2017
“ financially distressed ” means a company is likely to be
insolvent within the immediately ensuing six months;
“ financial year ” has the meaning assigned to the word in the
Companies Act; Act No. 10
of 2017
“ foreign Court ” means a judicial or other authority competent

to determine foreign proceedings;
“ foreign main proceeding ” means proceedings taking place
in the State where the debtor’s main interests are situated;
“ foreign non-main proceeding ” means foreign proceedings,
other than a foreign main proceeding, taking place in a
State where the debtor has an establishment;
“ foreign proceeding ” means a judicial or administrative
proceeding in a foreign State, including an interim
proceeding, pursuant to a law relating to insolvency in which
the assets and affairs of the debtor are subject to
determination by a foreign Court, for the purpose of re-
organisation or liquidation;
“ foreign representative ” means a person or body, including
one appointed on an interim basis, authorised in a foreign
proceeding to administer the re-organisation or the
liquidation of the debtor’s assets or affairs or to act as a
representative for the foreign proceedings;
“ general meeting ” means an annual general meeting or an
extraordinary general meeting;
“ goods ” includes personal property;
“ liquidator ” means a person appointed to wind up the affairs
of a company;
“ judgment receiver” means a receiver who collects or diverts
funds from a judgment debtor to the creditor;
“ independent creditor ” means a person who is—
(a) a creditor of the company, including an employee of
the company; and
(b) not related to the company, a director, or the business
rescue administrator;
“ insolvency practitioner ” means the Official Receiver or a
person who is qualified to be appointed—
(a) a receiver, receiver manager or judgment receiver;
(b) a liquidator; or
(c) business rescue administrator;
of a company, as specified in sections 139 and 142;
“ insolvency proceeding ” means a judicial or administrative
proceeding relating to bankruptcy, liquidation, receivership,
judicial or statutory management or voluntary
administration;
“ insolvent ” means having liabilities that exceed the value of

assets, having stopped paying debts in the ordinary course
of business or being unable to pay them as they fall due;
“ liquidation ” means the process of converting the property
of a company into cash in order to settle the company’s’
debt and other liabilities;
“ member ” means a shareholder or stockholder of a company
or a subscriber to a company limited by guarantee;
“ members voluntary winding-up ” means the termination of
a corporation, initiated by the board of directors and
approved by the shareholders;
“ officer ” includes a—
(a) director, secretary or executive officer of a body
corporate; and
(b) local director of a foreign company;
“ Official Receiver ” means the person appointed as official
receiver under the Bankcruptcy Act; Cap. 82
“ Oath ” has the meaning assigned to the word in the Constitution; Cap. 1
“ ordinary resolution ” has the meaning as assigned to the word
in the Companies Act, 2017; Act No. 10
of 2017
“ property ” means the assets of the company, including money,
goods, choses in action and land, whether real or personal,
legal or equitable and situated in Zambia or elsewhere,
and obligations, easements and every description of estate,
interest and profit, present or future, vested or contingent
and arising out of, or incidental to the property;
“ proposal ” means a proposal for a voluntary arrangement or
for extension of time;
“ provable claim ” includes any claim or liability provable in
proceedings commenced or lodged in accordance with this
Act by a creditor;
“ provisional liquidator ” means the Official Receiver or any
person appointed provisionally by the Court after the
presentation of a winding up petition but before the making
of a winding up order;
“ receiver ” means a disinterested individual appointed as a
receiver, receiver manager or judgment receiver, in
accordance with this Act, for a corporate or other person,
for the protection or collection of property that is the subject
of diverse claims, is litigated or has been litigated or income
arising from the property of the corporate or other person,
and includes the Official Receiver;
“ recognised professional body ” means a professional body

recognised by the Minister as a professional body, in
accordance with this Act;
“ record ’’ includes a computer record and any other non-
documentary record;
“ Register of Liquidators ” means a Register of liquidators kept
by the Registrar in accordance with this Act;
“ Register of Insolvency Practitioners ” means the Register kept
by the Registrar in accordance with section 143;
“ Register of receivers ” means a Register of receivers kept by
the Registrar in accordance with this Act;
“ Registrar ” means the Registrar appointed under the Patents
Act No. 15 of and Companies Registration Agency Act, 2010;
2010 “ relative ” in relation to an individual means—
(a) a parent, spouse, son, daughter, brother, sister,
nephew, niece, uncle, aunt, grandparent or cousin
of the individual;
(b) a parent, child, brother or sister of the spouse of the
individual; or
(c) a nominee or trustee of any of the persons specified
in paragraph (a) or (b);
“ secured creditor ” means a person holding a mortgage, pledge,
charge or lien on, or against, the property of the debtor or
any part thereof as security for a debt due or accruing to
that person from a debtor, or a person whose claim is based
on, or secured by, a negotiable instrument held as collateral
security and on which the debtor is only indirectly or
secondarily liable;
“ securities ” means—
(a) shares;
(b) debt securities;
(c) public debt securities;
(d) derivatives;
(e) any rights, options or derivatives in respect of any
such shares, debt securities or public debt
securities;
(f) any rights under a contract to secure a profit or avoid
a loss by reference to fluctuations in—
(i) the value or price of any shares, debt securities

or public debt securities;
(ii) the value or price of a group of shares, debt
securities or public debt securities; or
(iii) an index of shares, debt securities or public
debt securities;
(g) unit trusts and interests under collective investment
schemes;
(h) commercial paper;
(i) depository receipts;
(j) warehouse receipts; or
(k) any other instrument commonly known as securities
or which are prescribed by a relevant authority;
excluding bills of exchange, promissory notes, certificates of
deposit issued by a bank;
“security agreement” means an agreement under which property
becomes subject to a security for the performance of an
obligation;
“ service provider ” means an entity or person who supplies water
and sanitation services, electricity, telecommunications or
such other services as may be prescribed;
“ shares ” means an ownership interest or stocks issued or
proposed to be issued by a company in the capital of the
company;
“ shareholder ” has the meaning assigned to the word in the
Companies Act, 2017, and includes a person who is the
beneficial owner of, holds shares in, or is in a position to
exert control over more than fifteen percent of the shares
of a company or body corporate;
“ solvency test ” means a test to determine that—
(a) a company is able to pay its debts as they become
due in the normal course of business; and
(b) the value of the company’s assets is greater than
the value of its liabilities, including contingent
liabilities;
“ special manager ” means a person appointed in accordance
with section 81 to manage an estate or business of a
company, or the interests of the creditors or members
generally, where the liquidator is satisfied of the necessity
of such an appointment due to the nature of the estate or
business;
“ special resolution ” has the meaning assigned to the word in

of 2017
“ successor in title ” means the successor of a person and
includes an heir, executor, liquidator, administrator or other
legal representative of a person, as the case may be;
“ supervision ” means the oversight imposed on a company during
that company’s business rescue proceedings;
“ transaction ’’ includes a gift, agreement or arrangement, and
“entering into a transaction” shall be construed accordingly;
“ trustee ” means a trustee in bankruptcy of a member, as
provided in section 54;
“ voluntary arrangement ” means an arrangement entered into
by a company and that company’s creditors by way of—
(a) a composition for the satisfaction of the company’s
debts;
(b) a scheme; or
(c) arrangement of the company’s affairs.
“ voting interest ” means an interest that is appraised and valued
in accordance with section 39; and
“ winding up ” means the process of settling accounts and
liquidating assets in anticipation of a company’s dissolution.
Act No. 10 (2) A word or term used in this Act which is not defined but is
of 2017 defined in the Companies Act, Securities Act, 2016, or the Banking
Act No. 41 and Financial Services Act, 2017, shall have the meaning assigned
of 2016
Act No. 7 of
to it in those Acts.
2017
PART II
RECEIVERSHIP
Reference to 3. A reference in this Act to the appointment of a receiver
receiver under powers vested in any instrument, includes a reference
under
enabling
to an appointment made under powers which, by virtue of any
instrument law, are implied in, and have effect as if, vested in that
instrument.
Appointment 4. (1) Where a charge over property of a company has become
of receiver enforceable, the Court may, on the application of the chargee,
appoint a receiver of the property.
(2) The Court may, in the case of a floating charge, whether or
not the charge has become enforceable, on the application of the
chargee, appoint a receiver of the property and undertaking of the
company if the charge is satisfied that events have occurred or are

about to occur which render it unjust to the chargee that the
company should retain power to dispose of the company’s assets.
(3) A person may appoint a receiver under deed of appointment.
(4) An individual shall not be appointed as a receiver unless the
individual is eligible for appointment as provided in section 9.
(5) A person shall not be appointed as receiver as a means of
enforcing a debenture where there is no secured interest.
5. (1) A person who obtains an order for the appointment of a Notification
receiver, or who appoints a receiver under a deed of appointment, of
appointment
as specified in section 4, shall, within fourteen days after obtaining of receiver
the order or making the appointment, lodge a notice of the order or
appointment with the Registrar, in the prescribed form.
(2) A person who is appointed as a receiver shall, within fourteen
days after the appointment, lodge with the Registrar and the Official
Receiver a notice in the prescribed form.
(3) Where a person ceases to be a receiver, the person shall,
within seven days after ceasing to be a receiver, lodge with the
Registrar a notice that the person has ceased to be a receiver.
(4) The Registrar shall, on the lodgment of a notice as specified
in subsection (1) or (3), cause a notice of the appointment of the
person as receiver or the cessation of the person as receiver, to be
published in the Gazette.
6. (1) Where a receiver is appointed over all or a part of the Statement of
assets of a company, unless the Court otherwise directs, the company’s
directors of a company shall, within three months of the appointment affairs
of the receiver, prepare and submit to the receiver a statement as
to the affairs of the company as at the date of the appointment of
the receiver, showing—
(a) the particulars of the company’s assets and liabilities;
(b) the names and addresses of the company’s creditors;
(c) the securities held by each of the creditors;
(d) the dates when the securities were respectively given;
and
(e) such further information as may be prescribed or as the
receiver may require.
(2) The statement, referred to in subsection (1), shall be verified
by a statutory declaration of at least one director or the secretary
of the company not later than seven days after the preparation of
the statement.
(3) Where the directors of a company fail or neglect to prepare

the statement referred to in subsection (1), the receiver shall, not
more than three months after the expiry of the period referred to in
subsection (1), prepare a statement of the affairs of the company,
from the available information.
(4) A receiver may, subject to the direction of the Court, by notice
in the prescribed manner and form, require a person to verify, by
statutory declaration, such part of the statement, specified in subsection
(1), as that person is in a position to verify, if that person —
(a) is, or was, within two years before the date of the
appointment of the receiver, an officer of the company;
or
(b) took part in the formation of the company, if the company
was formed less than two years before the date of the
appointment of the receiver.
(5) A person required to verify a statement, in accordance with
subsection (4), shall, within fourteen days after receiving the notice
referred to in that subsection, or within such extended period as
the receiver or the Court may specify, submit a statutory declaration
verifying the statement specified in subsection (3) or such part of
the statement as that person is in a position to verify.
(6) A receiver shall, within twenty-one days after receiving the
statement submitted in accordance with subsection (1) or a statutory
declaration submitted in accordance with subsection (5), cause
copies to be—
(a) filed with the Court, if the receiver is appointed by the
Court;
(b) lodged with the Registrar;
(c) delivered to the Official Receiver, if the Official Receiver
is not the receiver; and
(d) lodged with the holder of the charge by virtue of which
the receiver was appointed.
(7) A person required under this section to verify a statement
shall be paid, out of the assets of the company, such costs and
expenses incurred in and relating to the verification of information,
as the receiver considers reasonable, subject to an appeal to the
Court.
(8) The Registrar may, where a receiver does not—
(a) submit a statement of affairs, in accordance with
subsection (1), issue a reminder to the receiver to submit
the statement within fourteen days; and
(b) comply with the notice issued by the Registrar under

paragraph (a), cause the receiver to be disqualified from
acting as a receiver under this Act.
(9) A statement made in accordance with this section may be
used as evidence in any proceedings against a person making it.
7. (1) Where a person or an officer contravenes section 6, Offences
the person or officer commits an offence and is liable, on conviction- relating to
statement of
(a) to a fine not exceeding one hundred thousand penalty affairs
units or to imprisonment for a period not exceeding one
year, or to both; and
(b) in the case of a continuing offence, to a fine not exceeding
fifty thousand penalty units for each day that the failure
continues or to imprisonment for a period not exceeding
eighteen months, or to both.
(2) Despite the generality of subsection (1), a person that
provides false or misleading information with respect to a statement
of affairs made in accordance with section 6 commits an offence
and is liable, on conviction, to a fine not exceeding two hundred
thousand penalty units or to imprisonment for a period not exceeding
two years, or to both.
8. Where a receiver is appointed on behalf of the holder or Payment of
trustee of any debenture of a company that is secured by a floating preferential
charge, or possession is taken by or on behalf of the holder or creditors
trustee of the debenture of property comprised in or subject to the
charge, if the company is not at the time in the course of being
wound-up, the debts which in every winding-up are to be paid in
priority to all other debts, as provided in this Act, shall—
(a) be paid out of any assets coming into the hands of the
receiver or the person taking possession in priority to
any claim for principal or interest in respect of the
debentures; and
(b) the date of the appointment of the receiver or of possession
being taken, shall be considered to be the date of
commencement of the winding-up.
9. (1) An individual is eligible for appointment as a receiver if Eligibility
that individual has been practicing as a chartered accountant or a for
appointment
legal practitioner for a period of at least seven years and is as receiver
accredited by the Registrar as an insolvency practitioner.
(2) An individual who wishes to perform the function of a
receiver shall apply for accreditation in the prescribed manner and
form and pay the prescribed fee.
(3) An individual shall not be appointed, act or continue to act

as a receiver of the property or undertaking of a company if the
individual is—
(a) by reason of a mental disability incapable of performing
the functions;
(b) prohibited or disqualified from so acting by any order of a
court of competent jurisdiction;
(c) a mortgagee or chargee of the company;
(d) an undischarged bankrupt;
(e) a person who is, or has been within the previous two
years, a director or officer of the company or any related
body corporate, except with the leave of the court;
(f) a trustee under any trust deed for the benefit of debenture
holders of the company, except with the leave of the
court;
(g) a person who has been convicted, within the previous
five years, of an offence involving fraud or dishonesty;
or
(h) a person who has been removed, within the previous five
years, from an office of trust by order of a court of
competent jurisdiction.
(4) Accreditation as a receiver is valid for a period of one year
from the date of accreditation and is subject to renewal in the
prescribed manner and form and upon payment of the prescribed
fees.
(5) Accreditation that is not renewed in accordance with
subsection (4) is void.
(6) A person who acts or continues to act as a receiver, contrary
to this Act, commits an offence and is liable, on conviction, to a fine
not exceeding two hundred thousand penalty units or to imprisonment
for a period not exceeding two years, or to both.
Disqualification 10. (1) Subject to subsection (2), a body corporate or firm is
of body not qualified for appointment as a receiver and a body corporate or
corporate or
firm from firm which acts as such is liable to a fine not exceeding two hundred
appointment thousand penalty units.
as receiver
(2) This section does not apply to the Official Receiver.
Remuneration 11. (1) Subject to subsection (2), a receiver is entitled to the
of receiver payment of a fee which shall be a percentage of the proceeds of
the receivership.
(2) Despite the generality of subsection (1), the fee payable to

a receiver shall not exceed an amount that may be prescribed by
statutory instrument.
(3) Despite subsections (1) and (2), the Court may, on the
application of a company, liquidator or receiver by order, fix the
amount to be paid by way of remuneration to a receiver and may,
on application made by the company, or liquidator or receiver, vary
or amend the order.
(4) The power of the Court as specified in subsection (3) shall —
(a) extend to fixing the remuneration for any period before
the making of the order or the application therefor, where
the Court is satisfied that there are special circumstances
making it proper to do so;
(b) be exercisable despite the receiver dying or ceasing to be
the receiver before the making of the order or the
application therefor; and
(c) extend to requiring the receiver or the personal
representatives of the receiver to account for any
amount that the receiver may have been paid or retained
for remuneration, before the making of the order, that is
in excess of the remuneration fixed for that period.
(5) A receiver who collects a fee in excess of the prescribed
fees, shall be personally liable, to reimburse the amount of the excess
fees so collected or to a fine not exceeding one hundred thousand
penalty units or to imprisonment for a period not exceeding one
year, or to both.
12. A receiver appointed by the Court shall be an officer of Receivers
the Court and shall be considered, in relation to the property or appointed
by Court
undertaking, not to be an officer of the company, and shall act in
accordance with the directions and instructions of the Court.
13. (1) A receiver appointed under a deed of appointment Receivers
shall, subject to section 14, be considered to be an agent and officer appointed
under deed
of the company, and not an agent of the persons by or on behalf of
of
whom the receiver is appointed, and the receiver shall act in appointment
accordance with the deed of appointment under which the receiver
is appointed, and with any directions of the Court specified in an
order of the Court.
(2) The Court may, on the application of a receiver, make such
order as it considers necessary to provide direction, in any matter
relating to the performance of the receiver’s functions or declaring
the rights of persons before the Court or otherwise.
Liabilities of 14. (1) Where a contract was entered into by a receiver in

receivers on the proper performance of the receiver’s functions, the receiver
contracts has, subject to the rights of any prior encumbrances, an indemnity
in respect of any liability relating to the property.
(2) Where the receiver was appointed under a deed of
appointment, and a contract was entered into by the receiver with
the express or implied authority of the person appointing the receiver,
the receiver is indemnified from liability, to the extent to which the
receiver is unable to recover on any assets under a charge, in
accordance with the deed of appointment.
(3) A receiver is personally liable on any contract entered into
by the receiver in contravention of this Act.
Sta tement of 15. (1) Where a receiver has been appointed, every invoice,
a ppointment
of
order or business letter issued by or on behalf of the company or
receivership receiver, being a document on or in which the name of the company
on stationery appears, shall contain a statement that a receiver has been
appointed.
(2) If the company fails to comply with this section, the company,
receiver or any officer concerned, commits an offence and is liable,
on conviction, to a fine not exceeding three thousand penalty units
for each document not containing the statement.
Management 16. (1) A receiver shall, before disposing of any asset under
of assets a charge, manage the asset so as to realise the monies owed to the
before
secured creditor without disposing the asset by sale, unless the
disposal
management of the asset shall be further depleted or not satisfy
the debts owed to the secured creditor.
(2) Subject to subsection (1), a receiver shall, where the receiver
decides to dispose of an asset under a charge by sale, dispose of
the asset at the highest possible amount and shall, after satisfying
the secured creditor’s debt and the receiver ’s fees, pay the
difference to the company.
(3) A receiver shall, unless directed by the Court or by a
resolution of creditors or members passed at a general meeting or
by a committee of inspection—
(a) dispose of an asset under a charge by public tender or by
the most transparent manner in the circumstances; and
(b) not less than 21 days before the disposal, notify the
Registrar in the prescribed manner and form, of the
intention to dispose of the asset.
(4) A receiver who contravenes this section commits an offence
and is liable, on conviction, to a fine not exceeding fifty thousand
penalty units.
17. Where a receiver is appointed of the whole, or substantially Statement of

affairs and
the whole of the undertaking of a company, on behalf of the holders accounts
of any debentures secured by a floating charge, sections 73, 118 where
and 126 apply as if the company had been ordered to be wound-up receiver
appointed
and the receiver had been appointed liquidator.
18. (1) Except where section 17 applies, a receiver shall within Accounts of
receivers
thirty days, or such longer period as the Registrar may allow—
(a) after the end of the period of six months from the date of
the receiver’s appointment, and of every subsequent
period of three months until the receiver ceases to act,
lodge simultaneously with the Registrar and Official
Receiver an abstract showing the receiver’s receipts
and payments during that period of three months; and
(b) within thirty days, or such longer period as the Registrar
may allow, after ceasing to be receiver, lodge with the
Registrar an abstract showing the receiver’s receipts
and payments during the twelve month period from the
last abstract, if any, and the total of the receipts and
payments during the whole period of the receiver’s
appointment.
(2) The Registrar may require a receiver to produce any
document, or information concerning the affairs of the company.
(3) A receiver who contravenes this section commits an offence
and is liable, on conviction, to a fine not exceeding one thousand
penalty units for each day that the failure continues.
19. (1) A receiver shall, as soon as is practicable, report the Report by
matter, in writing, to the Registrar or official Receiver, where the receiver
receiver, in the course of performing the functions and duties of a
receiver determines that—
(a) there is a contravention of, or failure to comply with, any
of the provisions of this Act by any person; and
(b) the circumstances are such that the matter has not been
or will not be adequately dealt with by bringing the matter
to the notice of the directors of the company or, if the
company is a subsidiary, of the directors of the holding
company.
(2) The Court may, on its own motion, or on the application of
the Registrar or Official Receiver, or of any person interested in
the appointment of the receiver, require the receiver to submit a
report, to the Registrar or Official Receiver, on any matter relating
to the company in which the receiver has information.
Vacation of 20. (1) The office of a receiver becomes vacant where the
office by receiver—
receiver
(a) dies;
(b) becomes ineligible for appointment as specified in section
9;
(c) is removed by order of the Court; or
(d) is removed from the Register of Insolvency Practitioners
in accordance with section 143.
(2) A receiver may resign from office by giving one month’s
notice, in writing, to the appointing authority or the Court, of the
receiver’s intention to resign.
(3) A receiver may be removed by the Court, on application to
the Court by the holder of a charge by virtue of which the receiver
was appointed, or by revocation of the deed of appointment.
(4) Where a receiver vacates office—
(a) the receiver’s remuneration and any expenses properly
incurred by the receiver; and
(b) any indemnity to which the receiver is entitled out of the
property of the company;
shall be paid out of the property of the company which is subject to
a charge and such remuneration shall have priority in accordance
with this Act as a secured creditor.
(5) Where a receiver ceases to be receiver or is removed by
the Court, the holder of the charge by virtue of which the receiver
was appointed shall, within fourteen days of the cessation of the
receivership or removal of the receiver, notify the Registrar and
Official Receiver in the prescribed form and manner of the cessation
or removal and the Registrar shall enter the notice in the Register
of Receivers.
(6) If, by the expiry of a period of thirty days following the
removal of a receiver or the cessation of a receivership and no
other receiver is appointed, the deed by virtue of which the receiver
was appointed shall cease to attach to the property.
(7) A person who contravenes this section commits an offence
and is liable, upon conviction, to a fine not exceeding one hundred
one year, or to both.
PART III
BUSINESS RESCUE P ROCEEDINGS
21. (1) Subject to subsection (2) (a), the member may by Resolution
special resolutions, resolve that the company voluntarily begins to begin
business
business rescue proceedings and place the company under
rescue
supervision, if the board has reasonable grounds to believe that— proceedings
(a) the company is financially distressed; and
(b) there appears to be a reasonable prospect of rescuing the
company;
and there is need to—
(i) maintain the company as a going concern;
(ii) achieve a better outcome for the company’s creditors as
a whole than is likely to be the case if the company
were to be liquidated; or
(iii) realise the property of the company in order to make a
distribution to one or more secured or preferential
creditors.
(2) A resolution made in accordance with subsection (1)—
(a) shall not be adopted if liquidation proceedings have been
initiated by or against the company; and
(b) becomes effective after it has been filed with the Registrar.
(3) Within thirty days after the board has filed the resolution,
referred to in subsection (1), or such longer time as the Registrar,
on application by the company, may allow, the company shall—
(a) give notice of the resolution and its effective date, to every
affected person in the prescribed manner; and
(b) appoint a business rescue administrator.
(4) The company shall, after appointing a business rescue
administrator—
(a) file a notice with the Registrar of the appointment of the
business rescue administrator, within seven business
days after making the appointment; and
(b) publish a copy of the notice of appointment of the business
rescue administrator to each affected person, within
twenty-one business days after the notice is filed.
(5) If a company fails to comply with subsection (3) or (4)—
(a) the company’s resolution to begin business rescue
proceedings and place the company under supervision
shall lapse after a period of sixty days from the adoption
of the resolution; and
(b) the company shall not file a further resolution for a period
of three months after the date on which the resolution
lapsed unless the Court approves the company filing a
further resolution.
(6) A company that adopts a resolution to begin business rescue
proceedings shall not adopt a resolution to begin liquidation
proceedings, unless the resolution has lapsed as specified in
subsection (5), or until the business rescue proceedings have ended
as provided in section 24 (2).
(7) Where the board has reasonable grounds to believe that
the company is financially distressed but does not adopt the
resolution to begin business rescue proceedings, the board shall
deliver a notice to each affected person and its reasons for not
adopting such a resolution.
Objections 22. (1) Subject to subsection (2), at any time after the adoption
to resolution of a resolution as specified in section 21 and until the adoption of a
to begin
business rescue plan in accordance with section 43, an affected
business
rescue person may apply to a Court for an order—
proceedings (a) setting aside the resolution on the grounds that—
(i) there is no reasonable basis for believing that the
company is financially distressed;
(ii) there is no reasonable prospect for rescuing the
company; or
(iii) the company has failed to satisfy the procedural
requirements set out in section 21;
(b) setting aside the appointment of the business rescue
administrator, on the grounds that the business rescue
administrator—
(i) is not qualified as provided in section 30;
(ii) is not independent of the company or its
management; or
(iii) lacks the necessary skills, having regard to the
company’s circumstances; or
(c) requiring the business rescue administrator to provide
security in an amount and on terms and conditions that
the Court considers necessary, to secure the interest of
the company and any affected person.
(2) A director who voted in favour of a resolution to begin
business rescue proceedings as provided in section 21 shall not
apply to the Court, as specified in subsection (1), to set aside the
resolution or the appointment of the business rescue administrator,
unless the director satisfies the Court that in supporting the resolution,
the director acted in good faith, on the basis of information that
was subsequently found to be false or misleading.
(3) An affected person making an application, in terms of
subsection (1), shall—
(a) serve a copy of the application on the company and the
Official Receiver; and
(b) notify each affected person of the application in the
prescribed manner.
(4) An affected person may participate in the hearing of an
application made in terms of this section.
(5) The Court may, when determining an application made in
accordance with paragraph (a) of subsection (1)—
(a) set aside the resolution—
(i) on any ground set out in that subsection; or
(ii) if, having regard to all of the evidence, the Court
determines that it is otherwise just and equitable
to do so; and
(b) afford the business rescue administrator sufficient time
to form an opinion whether—
(i) the company appears to be financially distressed;
or
(ii) there is a reasonable prospect of rescuing the
company;
and after receiving a report from the business rescue
administrator, may set aside the company’s resolution,
if the Court determines that the company is not
financially distressed or there is no reasonable prospect
of rescuing the company.
(6) The Court may, where it makes an order under paragraph
(a) or (b) of subsection (5) make any further appropriate order,
including—
(a) an order placing the company under liquidation; or
(b) if the Court finds that there were no reasonable grounds
for believing that the company is insolvent, make an
order for costs against any director who voted in favour
of the resolution to begin business rescue proceedings,
unless the Court is satisfied that the director acted in
good faith.
(7) If, after considering an application made in accordance with
paragraph (b) of subsection (1), the Court makes an order setting
aside the appointment of the business rescue administrator —
(a) the Court shall appoint another business rescue administrator

who is qualified as specified in section 30, recommended
by, or accepted by, the holders of a majority of the
independent creditors’ voting interests who were
represented in the hearing before the Court; and
(b) the provisions of paragraph (b) of subsection (5), if relevant,
shall apply to the business rescue administrator.
Court order 23. (1) An affected person may apply to the Court for an order
to commence to place the company under supervision and begin business rescue
business proceedings, unless a company has adopted a resolution to commence
rescue
proceedings
business rescue proceedings in accordance with section 21.
(2) An applicant referred to in subsection (1) shall—
(a) serve a copy of the application on the company and the
Registrar and the Official Receiver; and
(b) notify each affected person of the application in the
prescribed manner.
(3) An affected person has a right to participate in the hearing
of an application under this section.
(4) The Court may after considering an application made in
accordance with subsection (1)—
(a) make an order placing the company under supervision
and begin business rescue proceedings, if the Court
determines that—
(i) the company is financially distressed;
(ii) the company has failed to pay any amount in terms
of an obligation under a contract with respect
to employment-related matters; or
(iii) it is otherwise just and equitable to do so for
financial reasons, and there is a reasonable
prospect of rescuing the company; or
(b) dismiss the application and make a further appropriate
order, including an order placing the company under
liquidation.
(5) The Court shall, where an application is made in accordance
with subsection (1), appoint the Official Receiver as the interim
business rescue administrator pending an appointment of a business
rescue administrator by an affected person or the creditors.
(6) An affected person or the creditors shall, where the Court
makes an order as specified in subsection (4)(a), appoint a business
rescue administrator.
(7) If liquidation proceedings have been commenced by or

against a company at the time an application is made as provided in
subsection (1), the liquidation proceedings shall be suspended until-
(a) the Court has adjudicated upon the application; or
(b) the business rescue proceedings terminate, if the Court
makes the order applied for.
(8) A company that has been placed under supervision in
accordance with this section shall—
(a) not adopt a resolution placing itself in liquidation until the
termination of the business rescue proceedings; and
(b) notify each affected person of the order within five days
after the date of the order.
24. (1) Business rescue proceedings shall commence when Duration of
the Court makes an order placing the company under supervision business
rescue
in accordance with this Act. proceedings
(2) Business rescue proceedings shall terminate when—
(a) the Court—
(i) sets aside the resolution or order that began the
proceedings; or
(ii) conver ts the proceedings to liquidation
proceedings;
(b) a business rescue administrator files with the Registrar
and the Official Receiver a notice of the termination of
the business rescue proceedings; or
(c) a business rescue plan is—
(i) proposed and rejected in accordance with this Part,
and no affected person applies to revise the plan
in accordance with section 44; or
(ii) adopted in accordance with this Part, and the
business rescue administrator subsequently files
a notice of substantial implementation of the plan.
(3) If a company’s business rescue proceedings have not
terminated within twelve months after the start of those
proceedings, or such longer time as the Court, on application by the
business rescue administrator, may allow, the business rescue
administrator shall—
(a) prepare a report on the progress of the business rescue
proceedings and update the report at the end of each
subsequent month until the end of the business rescue
proceedings; and
(b) deliver the report and each update, in the prescribed manner,
to each affected person and to the—
(i) Court, if the proceedings have been the subject of
a Court order; and
(ii) Registrar and Official Receiver, in all cases.
General 25. (1) A legal proceeding shall not be brought, against a
moratorium company or in relation to any property belonging to the company
on legal or lawfully in its possession, during business rescue proceedings,
proceedings
against
except—
company (a) with the written consent of the business rescue
administrator;
(b) with the leave of the Court and in accordance with any
terms and conditions the Court considers suitable in any
particular matter related to the business rescue
proceedings;
(c) as a set-off against any claim made by the company in
any other legal proceedings, irrespective of whether
those proceedings commenced before or after the
business rescue proceedings began;
(d) criminal proceedings against any of the company’s directors
or officers; or
(e) proceedings concerning any property or right over which
the company exercises the powers of a trustee.
(2) A guarantee or surety by a company in favour of any other
person may not be enforced by any person against the company
during business rescue proceedings, except with leave of the Court
and in accordance with any terms and conditions the Court
considers just and equitable in the circumstances.
(3) If any right to commence proceedings or otherwise assert a
claim against a company is subject to a time limit, the measurement
of that time shall be suspended during business rescue proceedings.
Protection of 26. (1) Subject to subsections (2) and (3), during business
property rescue proceedings—
interests
(a) a company may dispose, or agree to dispose, of property
only—
(i) in the ordinary course of its business;
(ii) in a bona fide transaction at arm’s length for fair
value and approved in advance, in writing by
the business rescue administrator; or
(iii) in a transaction specified within, and undertaken

as part of the implementation of, a business
rescue plan that has been approved as provided
in section 43;
(b) a person who, as a result of an agreement made in the
ordinary course of the company’s business before the
business rescue proceedings began, is in lawful
possession of any property owned by the company, may
continue to exercise any right in respect of that property
as specified in that agreement, subject to section 29;
and
(c) a person shall not exercise any right in respect of any
property in the lawful possession of the company,
irrespective of whether the property is owned by the
company, except to the extent that the business rescue
administrator consents in writing.
(2) A business rescue administrator shall not unreasonably
withhold consent as specified in subsection (1) (c), having regard
to—
(a) the purposes of this Part;
(b) the circumstances of the company; and
(c) the nature of the property and the rights claimed in respect
of it.
(3) Where the company, during business rescue proceedings,
wishes to dispose of any property over which another person has a
security or title interest, the company shall —
(a) obtain the prior consent of that person, unless the proceeds
of the disposal is sufficient to fully discharge the
indebtedness protected by the person’s security or title
interest; and
(b) promptly—
(i) pay to the person an amount, from the proceeds
of the sale of the property, that the company
owes the person; or
(ii) provide security for the amount the company owes
the person.
27. (1) Where a company is required to pay any remuneration, Post-
reimbursement for expenses or other amount of money, relating to commencement
finance
an employee, during business rescue proceedings, and the company
fails to pay, the money shall be—
(a) regarded as post-commencement financing; and
(b) paid in the order of preference set out in subsection (3)
(a).
(2) The company may, during business rescue proceedings,
obtain financing, other than as specified in subsection (1), which—
(a) may be secured to the lender by an asset of the company
to the extent that the asset is not otherwise encumbered;
and
(b) shall be paid in the order of preference set out in subsection
(3) (a).
(3) After the payment of the business rescue administrator
remuneration and expenses, referred to in section 35, and other
costs arising out of the business rescue proceedings, all claims
specified in—
(a) subsection (1) shall be treated equally, but shall have
preference overall—
(i) claims specified in subsection (2), irrespective of
whether they are secured or unsecured; and
(ii) unsecured claims against the company; and
(b) subsection (2) shall have preference in the order in which
they were incurred over all unsecured claims against
the company.
(4) Where business rescue proceedings are superseded by a
liquidation order, the preference conferred in terms of this section
shall remain in force, except to the extent of any claims arising out
of the costs of liquidation.
Effect of 28. (1) Despite a provision of an agreement to the contrary—
business
rescue on
(a) the employees of the company immediately before the
employees beginning of business rescue proceedings shall, during a
and company’s business rescue proceedings, continue in
contracts employment on the same terms and conditions, unless—
(i) changes occur in the ordinary course of attrition; or
(ii) the employees and the company, in accordance
with applicable labour laws, agree to different
terms and conditions; and
(b) any redundancy or retrenchment of such an employee as
specified in the business rescue plan shall be subject to
Cap. 1 Cap. the Constitution, Employment Act and other applicable
268 employment legislation.
(2) Despite a provision of an agreement to the contrary, a
business rescue administrator may, with leave of the Court during
business rescue proceedings, cancel entirely or partially or
conditionally suspend a provision of an agreement to which the

company was a party at the beginning of business rescue
proceedings, other than an agreement of employment.
(3) A party to an agreement that has been suspended or
cancelled, or a provision which has been suspended or cancelled,
in terms of subsection (2), may assert a claim against the company
only for damages.
(4) Where liquidation proceedings are converted into business
rescue proceedings, the liquidator shall be a creditor of the company
to the extent of any outstanding claim by the liquidator for any
remuneration due for work performed or compensation for expenses
incurred before the business rescue proceedings began.
29. (1) An alteration in the classification or status of any issued Invalidation
securities of a company, during business rescue proceedings, other of transfer
than by a transfer of securities in the ordinary course of business, of
securities
shall be invalid unless— other than
(a) the Court otherwise directs; or by
(b) it is specified in an approved business rescue plan. ordinary
course of
(2) A director of the company shall during business rescue business
proceedings—
(a) continue to exercise the functions of a director, subject to
the authority of the business rescue administrator;
(b) exercise any management function within the company,
in accordance with the express instructions or direction
of the business rescue administrator, to the extent that it
is reasonable so to do; and
(c) remain bound by the common law and statutory duties of
a director.
(3) A director shall, during business rescue proceedings, attend
to the requests of the business rescue administrator and provide
the business rescue administrator with any information about the
company’s affairs.
(4) A board or director shall not, during business rescue
proceedings, take any action on behalf of the company without
obtaining the approval of the business rescue administrator.
(5) A business rescue administrator may, during the business
rescue proceedings, remove a director from office on the grounds
that the director has—
(a) failed to comply with a requirement of this Part; or
(b) by act or omission impeded or is impeding the—
(i) business rescue administrator in the performance
of the administrators powers and functions;
(ii) business rescue administrator’s management of

the company; or
(iii) development or implementation of a business
rescue plan in accordance with this Part .
Qualifications 30. (1) A person may be appointed as a business rescue
of business administrator if that person qualifies to be appointed as a receiver
rescue
or has other qualification as prescribed.
administrators
(2) Accreditation as a business rescue administrator is valid for
a period of one year from the date of accreditation and shall be
subject to renewal annually.
Removal and 31. (1) A business rescue administrator may be removed from
replacement office—
of business
rescue (a) by a Court order as provided in section 22; or
administrator (b) as provided in section 143.
(2) If a business rescue administrator dies, resigns or is removed
from office, the company or creditor who appointed the business
rescue administrator shall, within twenty-one days, appoint another
business rescue administrator.
General 32. (1) A business rescue administrator, during business
powers and rescue proceedings, has, in addition to any other powers and duties
duties of
business
set out in this Part—
rescue (a) full management control of the company without the board
administrator and management;
(b) the power to delegate any power or function to a person
who was part of the board or management of the
company;
(c) the power to—
(i) remove any person from office who was part of
the management of the company; or
(ii) appoint a person as part of the management of a
company, subject to subsection (2); and
(d) the responsibility to—
(i) develop a business rescue plan to be considered
by affected persons, in accordance with this
Part;
(ii) implement a business rescue plan that is adopted
in accordance with this Part; and
(iii) issue any notices required to be issued in relation
to the business rescue proceedings.
(2) A business rescue administrator shall not, except with the

approval of the Court, appoint a person as part of the management
of the company or an advisor to the company or business rescue
administrator, if that person—
(a) has any relationship with the company that would lead a
reasonable and informed third party to conclude that
the integrity, impartiality or objectivity of that person is
compromised by that relationship; or
(b) is related to a person who has a relationship with the
company as provided in paragraph (a).
(3) A business rescue administrator, during business rescue
proceedings—
(a) is an officer of the Court and shall report to the Court in
accordance with any rules of, or orders made by, the
Court with respect to the proceedings;
(b) shall have the responsibilities, duties and liabilities of a
director of the company; and
(c) is not liable for any act or omission done in good faith in
the exercise of the powers and performance of the
functions of the administrator, except—
(i) as provided in paragraph (b); and
(ii) in accordance with any relevant law for the
consequences of any act or omission amounting
to gross negligence in the exercise of the powers
and performance of the functions of the business
rescue administrator.
(4) A business rescue administrator shall not, where the
business rescue process terminates with an order placing the
company in liquidation, be appointed as liquidator of the company.
33. (1) A business rescue administrator shall, as soon as Investigation
practicable after being appointed, investigate the affairs, business, of affairs of
company
property and financial situation of the company, and consider
whether there is any reasonable prospect of the company being
rescued.
(2) If, during business rescue proceedings, the business rescue
administrator concludes that—
(a) there is no reasonable prospect of the company being
rescued, the business rescue administrator shall—
(i) inform, in the prescribed manner the Court, the
company and all affected persons; and
(ii) apply to the Court for an order to discontinue the
business rescue proceedings and place the
company into liquidation;
(b) there are no reasonable grounds to believe that the
company is financially distressed, the business rescue
administrator shall inform, in the prescribed manner, the
Court, company and all affected persons and—
(i) if the business rescue process was confirmed by
Court order or initiated by an application to the
Court, as provided in this Part, apply to the Court
for an order terminating the business rescue
proceedings; or
(ii) file a notice of termination of the business rescue
proceedings with the Registrar.
(3) A business rescue administrator shall forward evidence to
an appropriate authority for further investigation and direct the
management to take any necessary steps to rectify the matter,
including recovering any misappropriated assets of the company
where there is evidence, before the business rescue proceedings
began, of—
(a) voidable transactions or a failure by a company or any
director in the performance of any material obligation
relating to the company; or
(b) reckless trading, fraud or other contravention of any law
relating to the company.
Directors to 34. (1) A director shall, within fourteen days after business
co-operate rescue proceedings commence, deliver to the business rescue
with and
administrator books and records relating to the affairs of the
assist
business company and are in the director’s possession.
rescue (2) A director who knows where the books and records relating
administrator
to the company are kept shall, within fourteen days after business
rescue proceedings commence, inform the business rescue
administrator of such locations.
(3) A board shall, within thirty days after business rescue
proceedings commence, or such longer period as the business rescue
administrator allows, provide the administrator with a statement of
affairs containing, at a minimum, particulars of—
(a) any material transaction involving the company or the
assets of the company, and occurring within twelve
months immediately before the business rescue
proceedings commenced;
(b) all Court, arbitration or administrative proceedings, including

pending enforcement proceedings, involving the
company;
(c) the assets and liabilities of the company, and the company’s
income and disbursements within the immediately
preceding twelve months;
(d) the number of employees and any collective agreements
or other agreements relating to the rights of employees;
(e) any debtors and their obligations to the company; and
(f) any creditors and their rights or claims against the company.
(4) A person is not entitled to retain possession of any book or
record of the company, or to claim or enforce a lien over such book
or record as against the business rescue administrator.
(5) A director who contravenes this section, commits an offence
and is liable, on conviction, to a fine not exceeding one hundred
one year, or to both.
35. (1) A business rescue administrator shall be entitled to Remuneration
payment of a fee as shall be prescribed by the Minister, by statutory of business
rescue
instrument.
administrator
(2) A business rescue administrator who knowingly collects
remuneration in excess of the prescribed amount is personally liable
to reimburse the amount of the excess remuneration so collected
and commits an offence and is liable, on conviction, to a fine, not
exceeding three hundred thousand penalty units or to a term of
imprisonment not exceeding three years or both.
(3) A business rescue administrator’s claim for remuneration
shall, to the extent that the claim remains unpaid, rank in priority to
the claims of all other secured and unsecured creditors.
36. (1) A creditor is entitled to— Participation
by creditors
(a) notice of every Court proceeding, decision, meeting or
other event concerning the business rescue proceedings;
(b) participate in any Court proceedings arising during the
business rescue proceedings; and
(c) participate in business rescue proceedings to the extent
provided in this Part.
(2)In addition to the rights set out in subsection (1), a creditor
has—
(a) the right to vote to amend, approve or reject a proposed
business rescue plan, as provided in this Part; and
(b) a further right, if the proposed business rescue plan is rejected,

to—
(i) propose the development of an alternative plan
as provided in this Part, within thirty days; or
(ii) present an offer to acquire the interests of any or
all of the other creditors as provided in this Part,
within thirty days.
(3) The creditors of a company are entitled to form a creditors’
committee through which the creditors are entitled to be consulted,
by the business rescue administrator, during the development of
the business rescue plan.
(4) In making a decision under this Part—
(a) a secured or unsecured creditor shall have a voting interest
equal to the value of the amount owed to that creditor
by the company; and
(b) a concurrent creditor who would be subordinated in a
liquidation shall have a voting interest, as independently
and expertly appraised and valued at the request of the
business rescue administrator, equal to the amount that
the creditor could reasonably expect to receive in a
liquidation of the company.
(5) A business rescue administrator shall—
(a) determine whether a creditor is independent for the
purposes of this Part;
(b) request a suitably qualified person to independently and
expertly appraise and value an interest referred to in
subsection (4) (b); and
(c) give a written notice of the appraisal and valuation to the
person concerned, at least fifteen days before the date
of the meeting to be convened under section 42.
(6) A person aggrieved with the business rescue administrator’s
determination, as provided in subsection (5), may, within fourteen
days after receiving a notice of a determination, apply to the Court
to—
(a) review the business rescue administrator’s determination
that the person is, or is not, an independent creditor; or
(b) review, re-appraise and re-value that person’s voting
interest, as specified in subsection (5).
Participation 37. A holder of any issued security of the company is, during
by holders the business rescue proceedings, entitled to—
of
company’s
(a) a notice of each Court proceeding, decision, meeting or
securities other relevant event concerning the business rescue
proceedings;

business rescue proceedings;
(c) participate in the business rescue proceedings to the extent
provided for in this Part;
(d) vote to approve or reject a proposed business rescue plan
as provided in this Part, if the plan would alter the rights
associated with the class of securities held by that
person; and
(e) where the business rescue plan is rejected—
(i) propose the development of an alternative plan, as
provided in this Part; or
all of the creditors or other holders of the
company’s securities as provided in this Part.
38. A shareholder is during the business rescue proceedings, Participation
entitled to— by
shareholders
(a) a notice of each Court proceeding, decision, meeting or
other relevant event concerning the business rescue
proceedings;
business rescue proceedings;
(c) participate in business rescue proceedings to the extent
provided for in this Part;
(d) vote to approve or reject a proposed business rescue plan
as provided in this Part, if the plan would alter the rights
associated with the class of shares held by that person;
(e) where the business rescue plan is rejected –
(i) propose the development of an alternative plan, as
provided in this Part, or
all of the creditors or other holders of the
company’s securities as provided for in this Part.
39. (1) A business rescue administrator shall, within thirty First meeting
days, after being appointed, convene and preside over a first meeting of creditors
of creditors, at which—
(a) the business rescue administrator—
(i) shall inform the creditors on whether a reasonable
prospect of rescuing the company exists; and
(ii) may receive proof of claims by creditors; and
(b) the creditors may appoint a committee of creditors.
(2) A business rescue administrator shall give seven days’ notice

of the convening of the first meeting of creditors to every creditor
whose name and address is known or can reasonably be obtained
setting out the—
(a) date, time and place of the meeting; and
(b) agenda for the meeting.
(3) At a meeting of creditors, other than a meeting convened
in accordance with section 42, a decision shall be passed by a
simple majority vote of the independent creditors’ voting on a matter.
Functions, 40. (1) A committee of creditors, appointed in accordance
duties and with this Part—
membership
of (a) may consult with the business rescue administrator on
committees any matter relating to the business rescue proceedings,
of creditors but shall not direct or instruct the business rescue
and administrator on any matter related to the proceedings;
employees
(b) shall, on behalf of the general body of creditors receive
and consider reports relating to the business rescue
proceedings; and
(c) shall act independently of the business rescue administrator
to ensure fair and unbiased representation of creditors’
interests.
(2) A person may be a member of a committee of creditors if
that person is—
(a) an independent creditor of the company;
(b) an agent, proxy or attorney of an independent creditor or
other person acting under a general power of attorney;
or
(c) authorised in writing by an independent creditor to be a
member.
Proposal of 41. (1) A business rescue administrator shall, after consulting
business the creditors, the management of the company, and where
rescue plan applicable, shareholders, prepare a business rescue plan for
consideration and possible adoption at a meeting held in accordance
with section 42.
(2) A business rescue plan shall contain all the information
reasonably required to assist the affected persons in making the
decision to accept or reject the plan, which plan shall be divided
into three Parts as follows:
(a) Part A shall contain background information and shall
include—
(i) a complete list of all the material assets of the company, indicating
which assets were held as security at the commencement of
the business rescue proceedings;
(ii) a complete list of creditors at the commencement of the business
rescue proceedings and a categorisation of creditors as
secured, statutory preferential creditors, concurrent or
unsecured;
(iii) the probable dividend that would be received by creditors, in
their specific classes, if the company were to be placed in
liquidation;
(iv) a complete list of the holders of the company’s issued securities;
(v) a copy of the written agreement relating to the business rescue
administrator’s remuneration;
(vi) a statement as to whether the business rescue plan includes a
proposal made informally by a creditor; and
(vii) a statement as to the basis for the business rescue
administrator’s remuneration;
(b) Part B shall include the following proposals:
(i) the nature and duration of any moratorium for which the business
rescue plan makes provision;
(ii) the extent to which the company is to be released from the
payment of its debts, and the extent to which any debt is
proposed to be converted to equity in the company or another
company;
(iii) the ongoing role of the company, and the treatment of any
existing agreements;
(iv) the property of the company that is to be available to pay
creditors’ claims in terms of the business rescue plan;
(v) the order of preference in which the proceeds of the property
of the company shall be applied to pay creditors if the business
rescue plan is adopted;
(vi) the benefits of adopting the business rescue plan as opposed to
the benefits that would be received by creditors if the company
were to be placed in liquidation; and
(vii) the effect that the business rescue plan shall have on the holders
of each class of the company’s issued securities;
(c) Part C shall contain assumptions and conditions, including the following:
(i) a statement of the conditions that need to be satisfied for the
business rescue plan to come into operation and be fully
implemented.
(ii) the effect, if any, that the business rescue plan

shall have on the number of employees and their
terms and conditions of employment;
(iii) the circumstances in which the business rescue
plan will terminate; and
(iv) a projected financial statement for the next three
years, prepared on the assumption that the
proposed business plan is adopted.
(3) The financial statements referred to in subsection (2) (c)
(iv)—
(a) shall include a notice of any material assumptions on which
the projections are based; and
(b) may include alternative projections based on varying
assumptions and contingencies.
(4) A business rescue administrator shall conclude a proposed
business rescue plan with a declaration stating that—
(a) information provided appears to be accurate, complete
and up to date; and
(b) projections provided are based on estimates made in good
faith and on factual information and assumptions as set
out in the statement.
(5) A company shall publish the business rescue plan within
thirty days after the date on which the business rescue administrator
was appointed, or such longer time as may be allowed by—
(a) the Court, on application by the company; or
(b) the holders of a majority of the creditors’ voting interests.
Meeting to 42. (1) A business rescue administrator shall, within twenty
determine one days after publication of the business rescue plan, convene
future of and preside over a meeting of affected persons called for the
company
consideration of the plan.
(2) A business rescue administrator shall, at least ten days
before the meeting convened in accordance with subsection (1),
deliver a notice of the meeting to all affected persons setting out—
(a) the date, time and place of the meeting;
(b) the agenda of the meeting; and
(c) a summary of the rights of affected persons to participate
in and vote at the meeting.
(3) A meeting convened in accordance with this section may
be adjourned, as necessary or expedient, but for a period not
exceeding sixty days, until a decision regarding the company’s future
has been taken in accordance with this Part.
43. (1) A business rescue administrator shall, at a meeting Consideration
convened in accordance with section 42— and approval
of business
(a) introduce a proposed business rescue plan for consideration rescue plan
by the affected persons and, where applicable, by the
shareholders;
(b) inform the meeting on whether a reasonable prospect of
the company being rescued continues to exist;
(c) invite discussion and conduct a vote on any motions to—
(i) amend the proposed plan as proposed and seconded
by the affected person which have a positive
effect on the business rescue plan; or
(ii) adjourn the meeting in order to revise the plan for
further consideration; and
(d) call for a vote for preliminary approval of the proposed
business rescue plan or the plan as amended, if
applicable, unless the meeting has first been adjourned
in accordance with subsection (2) (c) (ii).
(2) A proposed business rescue plan shall be approved, at a
meeting convened in accordance with section 42, on a preliminary
basis if in a vote called in accordance with subsection (1) (d)—
(a) it is supported by the holders of more than seventy-five
percent of the affected persons’ voting interests; and
(b) the votes in support of the proposed plan include at least
fifty percent of the independent creditors’ voting
interests, if any.
(3) Where a proposed business rescue plan—
(a) is not approved on a preliminary basis, as provided in
subsection (2), the plan shall be considered as having
been rejected and may be considered further as provided
in section 44;
(b) does not alter the rights of the holders of any class of the
company’s securities, the approval of the plan on a
preliminary basis as provided in subsection (2) shall
constitute the final adoption of the plan, subject to
satisfaction of any conditions on which that plan is
contingent; or
(c) alters the rights of any class of holders of the company’s
securities—
(i) the business rescue administrator shall immediately
hold a meeting of the holders of the class or
classes of securities whose rights would be
altered by the plan and require them to vote on

the adoption of the proposed business rescue
plan; and
(ii) if, in a vote referred to in subparagraph (i), a
majority of the holders support the adoption of
the plan, the plan shall be adopted, subject to
any conditions imposed or reject the plan, the
plan may be considered further as provided in
section 44.
(4) A business rescue plan that has been adopted shall bind the
company, every creditor, affected person and holder of the
company’s securities, whether or not that person—
(a) was present at the meeting;
(b) voted in favour of adoption of the plan; or
(c) had proven their claims against the company.
(5) A company, under the direction of the business rescue
administrator, shall take all necessary steps to—
(a) satisfy any conditions that have been imposed relating to
a business rescue plan; and
(b) implement the business rescue plan as adopted.
(6) A business rescue administrator may, in order to implement
a business rescue plan that has been adopted—
(a) determine the consideration for, and issue, any authorised
Act No. 10 securities of the company, despite the Companies Act,
of 2017 2017 or Securities Act, 2016 relating to the procedures
Act No. 41
of 2016
to be followed for the issuance of shares and for the
determination of consideration to be received for the
issued shares; and
(b) amend the company’s articles of association to authorise
and determine the preferences, rights, limitations and
other terms of any securities that are not otherwise
authorised, but may be issued in terms of the business
rescue plan, notwithstanding the provisions of the
Act No. 10 Companies Act, 2017, or the Securities Act, 2016, relating
of 2017 to amendment of the articles of association, the
Act No. 41 authorisation of shares to be issued and the preferences,
of 2016
rights, limitations and other terms that apply to those
shares.
(7) Except to the extent that an approved business rescue plan

provides otherwise, a pre-emptive right of any shareholder of the
company, as provided in the Companies Act, 2017, or Securities Act No. 10
Act, 2016, shall not apply to an issue of shares by the company in of 2017
terms of the business rescue plan. Act No. 41
(8) A business rescue administrator shall, when the business of 2016
rescue plan has been substantially implemented, file a notice of the
substantial implementation of the business rescue plan with the
Registrar and official Receiver.
44. (1) A business rescue administrator may where a business Failure to
rescue plan has been rejected as provided in this Part— adopt
business
(a) seek a vote of approval from the holders of voting interests rescue plan
to prepare and publish a revised plan as prescribed; or
(b) advise the meeting that the company shall apply to the
Court to set aside the result of the vote on the grounds
that it was inappropriate.
(2) Where a business rescue administrator does not take any
action under subsection (1) (a), any affected person present at the
meeting may—
(a) call for a vote of approval from the holders of voting
interests requiring the business rescue administrator to
prepare and publish a revised plan;
(b) apply to the Court to set aside the result of the vote on the
grounds that the vote was inappropriate; or
(c) make a binding offer, either as an individual or as a
combination of affected persons, to purchase the voting
interests of one or more persons who opposed adoption
of the business rescue plan, at a value independently
and expertly determined, on the request of the business
rescue administrator, to be a fair and reasonable estimate
of the return to that person, or those persons, if the
company were to be liquidated.
(3) A business rescue administrator shall, where the business
rescue administrator, or an affected person, informs the meeting
that an application shall be made to the Court, as provided in
subsections (1) and (2), adjourn the meeting—
(a) for ten days, unless that application is made to the Court
during that time; or
(b) until the Court has disposed of the application.
(4) A business rescue administrator shall, when directed by
the meeting to prepare and publish a revised business rescue plan—
(a) conclude the meeting after that vote and prepare and
publish a new or revised business rescue plan within ten
days; and
(b) the provisions of this Part shall apply afresh to the
publication and consideration of that new or revised plan.
(5) A business rescue administrator shall, where an affected
person makes an offer under subsection (2)(c)—
(a) adjourn the meeting for not more than ten days, as may
be necessary to afford the business rescue administrator
an opportunity to make necessary revisions to the
business rescue plan to appropriately reflect the results
of the offer; and
(b) set a date for resumption of the meeting, without further
notice.
(6) A business rescue administrator shall, where no person takes
any action in accordance with subsection (1), promptly file a notice
of the termination of the business rescue proceedings.
(7) A holder of a voting interest, or a person acquiring that
interest in terms of a binding offer, may apply to the Court to review,
re-appraise and re-value a determination by an independent expert
in terms of subsection (1) (b).
Discharge of 45. (1) A business rescue plan may provide that, where the
debts and plan is implemented in accordance with the approved terms and
claims
conditions, a creditor who has acceded to the discharge of the
whole or part of a debt owing to that creditor shall lose the right to
enforce the relevant debt or part of it.
(2) Where a business rescue plan has been approved and
implemented in accordance with this Part, a creditor shall not be
entitled to enforce any debt owed by the company immediately
before the beginning of the business rescue proceedings, except to
the extent provided for in the business rescue plan.
PART IV
SCHEMES OF ARRANGEMENTS AND COMPROMISE
Compromise 46. (1) In this section, “arrangement” includes a re-
between organisation of the share capital of the company by the consolidation
company,
creditors and
of shares of different classes, or by the division of shares in shares
members of different classes or by both methods.
(2) This section applies to a company, irrespective of whether
or not it is financially distressed.
(3) A company, creditor or member of a company may apply

to the Court for an order that a meeting of the creditors or members
or class of members, as the case may be, be convened and
conducted to consider the compromise or arrangement.
(4) Where a compromise or arrangement is proposed between—
(a) a company and its creditors or any class of its creditors;
or
(b) a company and its members or any class of its members;
the Court may, on the application referred to in subsection (3),
or, in the case of a company being wound-up, of the liquidator,
order a meeting of the creditors, class of creditors, members or
class of members, as the case may be, to be convened and
conducted to consider the compromise or arrangement.
(5) Subject to an order of the Court, the Companies Act, 2017 Act No. 10
shall apply to a meeting of members or a class of members ordered of 2017
to be convened as specified in this section.
(6) Subject to an order of the Court, the Companies Act, 2017 Act No. 10 of
shall apply, with the necessary modifications, to a meeting of 2017
creditors or class of creditors ordered to be convened as specified
in this section.
(7) Unless the Court orders otherwise, the voting power at a
meeting of creditors ordered to be convened as specified in this
section shall be assigned to the creditors in proportion to the amount
of the debt outstanding from the company to each creditor.
(8) Where a meeting, by extraordinary resolution, agrees to a
compromise or arrangement, the compromise or arrangement—
(a) shall be binding on all the creditors or class of creditors or
on the members or class of members, as the case may
be; and
(b) shall be binding on the company if and when—
(i) it has been approved by order of the Court; and
(ii) a copy of the order of the Court has been lodged
with the Registrar.
(9) Where an extraordinary resolution agreeing to a compromise
or arrangement has been passed at a meeting convened as specified
in this section, the company or any person who was entitled to vote
at the meeting may apply to the Court for approval of the
compromise or arrangement.
(10) At a hearing by the Court of the application for approval
of the compromise or arrangement, a member or creditor of the
company claiming to be affected thereby is entitled to be
represented and to object.
(11) The Court may prescribe such terms, as it considers

appropriate, as a condition of its approval, including a condition that
a member shall have the right to require the company to purchase
shares at a price fixed by the Court or to be determined in a manner
provided in the order, and, in that case, for the reduction of the
company’s capital accordingly.
(12) Where an order is made approving the compromise or
arrangement—
(a) the company shall lodge a copy of the order with the
Registrar within twenty-one days after the making of
the order; and
(b) a copy of the order shall be annexed to or incorporated in
every copy of the articles issued after the order was
made.
(13) Where an order, made under this section, has the effect of
altering the share capital of the company, the Registrar, on lodgment
of the copy of the order, shall issue a replacement certificate of the
share capital of the company, worded to meet the circumstances
of the case.
(14) If a company fails to comply with subsection (11) (a), the
company, and each officer in default, commits an offence and is
liable, on conviction, to a fine not exceeding three thousand penalty
units for each day that the failure continues.
(15) If a company issues a copy of its articles that does not
comply with subsection (11) (b), the company and each officer in
default commits an offence and is liable, on conviction, to a fine
not exceeding three thousand penalty units in respect of each copy
issued.
Effect of 47. (1) Where a meeting of creditors or any class of creditors
compromise or of members or any class of members is convened in accordance
or with this Part, the company shall prepare a statement explaining
arrangement
with the effect of the compromise or arrangement and in particular stating
creditors and any material interests of the directors in the company or a related
members body corporate, whether as directors or as members or as creditors
of the company or otherwise, and the effect of the compromise or
arrangement, in so far as it is different from the effect on the like
interests of other persons.
(2) Where a compromise or arrangement affects the rights of
debenture holders of the company, the statement, prepared in
accordance with subsection (1), shall apply to debenture holders of
a company or trustee related thereto.
(3) A copy of the statement specified in subsection (1) shall be

sent to every creditor or member with the notice of the meeting to
be convened in accordance with this Part.
(4) A notice of a meeting, to be convened in accordance with
this Part, shall be issued by advertisement in a newspaper of general
circulation in Zambia and in any other media and shall include a
copy of the statement or specify where the members or creditors
entitled to attend the meeting may obtain copies of the statement,
which statement shall be given free of charge to any creditor or
member.
(5) If a company fails to comply with this section, the company,
and each officer in default, commits an offence and shall be liable,
on conviction, to a fine not exceeding fifteen thousand penalty units.
(6) It is a defence to a prosecution under subsection (5) to show
that failure was due to the refusal of another person to supply the
necessary particulars relating to an interest in the company or related
body corporate.
48. (1) Where an application is made to the Court, as specified Reconstruction
in this Part, to approve a compromise or arrangement and it is and
amalgamation
shown to the Court that—
of
(a) the compromise or arrangement has been proposed for companies
the purposes of, or in connection with, a scheme for-
(i) the reconstruction of any company or group of
companies; or
(ii) the amalgamation of any two or more companies;
and
(b) under the scheme, the whole or any part of the undertaking
or property of a company, in this section referred to as
“ the transferor company ”, is to be transferred to another
company, in this section referred to as “ the transferee
company ”;
the Court may, by order approving the compromise or
arrangement or by a subsequent order, provide for any of the
following:
(i) the transfer to the transferee company of the whole
or any part of the undertaking and property or
liabilities of the transferor company;
(ii) the allotment or appropriation by the transferee
company of any shares, debentures, policies or
other like interests in the transferor company
which under the compromise or arrangement
are to be allotted or appropriated by the
transferor company to or for any person;
(iii) the continuation by or against the transferee
company of any legal proceedings pending by
or against the transferor company;
(iv) the dissolution, without winding-up, of the
transferor company;
(v) the provision to be made for any persons who,
within such time and in such manner as the Court
directs, dissent to the compromise or
arrangement; or
(vi) such incidental, consequential and supplementary
matters as are necessary to secure that the
reconstruction or amalgamation is fully and
effectively carried out.
(2) Where an order, made in accordance with this section,
provides for the transfer of property or liabilities—
(a) the property shall, by virtue of the order, be transferred
to, and vest in, the transferee company and shall, if the
order so directs, be freed from any charge which is
under compromise or arrangement to cease to have
effect; and
(b) the liabilities shall, by virtue of the order, be transferred
to, and become the liabilities of, the transferee company.
(3) Where an order is made, in accordance with this section,
every company in relation to which the order is made shall cause a
copy of the order to be lodged with the Registrar within fifteen
days after the making of the order.
(4) If a company fails to comply with subsection (3), the
company, and each officer in default, commit an offence and are
liable, on conviction, to a fine not exceeding ten thousand penalty
PART V
WINDING-UP OF COMPANIES GENERALLY
References 49. For the purposes of this Part, a reference to a “member”
to member includes, unless the context otherwise requires, a reference to a
of company
person claiming or alleged to be liable to contribute to the assets of
the company in a winding up for the purpose of any proceedings
for determining, and proceedings prior to the final determination of,
the persons who are so liable, including the presentation of a
winding-up petition.
50. The winding-up of a company in accordance with this Part Modes of
shall be by any of the following modes: winding-up
(a) winding-up by the Court; or

(b) voluntary winding-up, being a—
(i) members’ voluntary winding-up; or
(ii) creditors’ voluntary winding-up.
51. (1) This section applies to a company limited by guarantee, Liability of
an unlimited company and a company having shares which are not members on
winding-up
fully paid up.
(2) Where a company is wound-up, every member at the time
of the commencement of the winding-up shall, subject to section
40, be liable to contribute to the assets of the company an amount
sufficient for payment of its debts and liabilities and the costs,
charges and expenses of the winding-up and for the adjustment of
the rights of the members among themselves.
(3) A sum due to a member by way of dividends or otherwise—
(a) shall not be regarded as a debt of the company payable to
that member in a case of competition between the
member and any other creditor who is not a member;
and
(b) may be taken into account for the purpose of the final
adjustment of the rights of the members among
themselves.
52. (1) Despite any other provision in this Act, in the case of Limitation of
a public company or a private company limited by shares, a member liability
is not required to make a contribution exceeding the amount, if any,
unpaid on the shares in respect of which the person is liable as a
member.
(2) Despite any other provision in this Act, in the case of a
company limited by guarantee, a member is not required to make
a contribution exceeding the amount that the member undertook, in
the declaration of guarantee, to contribute to the assets of the
company in the event of its being wound-up.
53. The liability of a member shall create a specially accruing Nature of
debt due from that member at the time when the member’s liability liability of
commenced, but payable at the times when calls are made for member
enforcing the liability.
54. (1) Where a member dies, whether before or after the Liability on
member is placed on the list of persons liable to contribute to the death or
bankruptcy
assets of a company, that member’s personal representative is liable
of member
in the due course of administration and, if that representative fails
to pay any money ordered to be paid, proceedings may be taken

for administering the estate of the deceased member and for
compelling payment from the estate of the money due.
(2) If a member becomes bankrupt, before or after the member
is placed on the list of persons liable to contribute to the assets of a
company—
(a) the member’s trustee in bankruptcy shall represent that
member for purposes of the winding-up and is liable to
contribute accordingly; and
(b) there may be proved against the estate of the
bankrupt the estimated value of the member’s liability
to future calls as well as to calls already made.
PART VI
WINDING-UP BY COURT
Jurisdiction 55. The Court has jurisdiction to wind-up in accordance with
over winding this Act, a body corporate incorporated in—
up
proceedings (a) Zambia; and
(b) a foreign country and—
(i) registered as a foreign company in Zambia; or
(ii) having any business, undertaking or assets in
Zambia.
Petition to 56. (1) Subject to this section, a company may be wound-up
wind-up by the Court on the petition of—
company
(a) the company;
(b) a creditor, including a contingent or prospective creditor
of the company;
(c) a member;
(d) a person who is the personal representative of a
deceased member;
(e) the trustee in bankruptcy of a bankrupt member;
(f) a liquidator of the company appointed in a voluntary
liquidation; or
(g) the Registrar or Official Receiver.
(2) In the case of a public company or a private company limited
by shares, a member is not entitled to present a winding-up petition
unless the member’s shares, or some of them—
(a) were originally allotted to the member;
(b) have been held by the member and registered in that
member’s name for at least six months; or
(c) have devolved on the member by operation of law.

(3) The Court shall not hear a winding-up petition presented by
a contingent or prospective creditor until-
(a) the creditor gives security for costs as the Court
considers reasonable; and
(b) a prima facie case for winding-up has been established
to the satisfaction of the Court.
(4) Where a company is being wound-up voluntarily, the Court
shall not make a winding-up order, if it determines that the voluntary
winding-up cannot be continued with due respect to the interests
of the creditors or members.
57. (1) The Court may order the winding-up of a company Circumstances
on the petition of a person other than the Official Receiver if— for winding-
up by Court
(a) the company has by special resolution resolved that it be
wound-up by the Court ;
(b) the company is unable to pay its debts;
(c) the period, if any, fixed for the duration of the company by
the articles expires, or an event occurs in respect of
which the articles provide that the company is to be
dissolved;
(d) the number of members is reduced below two;
(e) the company was formed for an unlawful purpose;
(f) the incorporation of the company was obtained fraudulently;
or
(g) in the opinion of the Court, it is just and equitable that the
company should be wound-up.
(2) The Court may order the winding-up of a company on the
petition of the Registrar or the Official Receiver on the grounds
specified in subsection (1) (b), (d), (e) or (f) or on the ground that
the company has persistently failed to comply with any of the
provisions of this Act.
(3) For purposes of this section, a company is unable to pay its
debts if—
(a) there is due, from the company to any creditor, including
a creditor by assignment, a prescribed fee, and—
(i) the creditor has, more than thirty days previously,
served on the company a written demand
requiring the company to pay the amount due;
and
(ii) the company has failed to pay the sum or to
secure or compound it to the reasonable
satisfaction of the creditor;
(b) execution or other process issued on a judgment, decree
or order of any Court in favour of a creditor of the
company is returned unsatisfied in whole or in part; or
(c) the company is unable to pay its debts as they fall due.
(4) The Court shall, in determining whether a company is unable
to pay its debts, take into account the contingent and prospective
liabilities of the company.
Commencement 58. (1) Where, before the presentation of the petition for the
of winding- winding-up of a company by the Court, a “special” resolution is
up by Court
passed by the company for voluntary winding-up, the winding-up
of the company shall be considered to have commenced at the
time of the passing of the resolution, and, unless the Court otherwise
directs, all proceedings taken in the voluntary winding-up shall have
been validly taken.
(2) In any other case, the winding-up of a company shall be
considered to have commenced at the time of the presentation of
the petition for the winding-up by the Court.
Payment of 59. (1) A person, other than the company or the liquidator on
preliminary whose petition a winding-up order is made shall, at that person’s
costs own cost, prosecute all proceedings in the winding-up until a liquidator
is appointed.
(2) A liquidator shall, unless the Court otherwise orders,
reimburse the petitioner out of the assets of the company, and the
taxed costs incurred by the petitioner in the proceedings referred
to in subsection (1).
(3) Where a winding-up order is made on the petition of the
company or the liquidator the costs incurred shall, subject to an
order of the Court, be paid out of the assets of the company as if
they were the costs of any other petitioner.
Powers of 60. (1) The Court may, on hearing a winding-up petition—
Court on
(a) grant the petition;
hearing
petition (b) dismiss it with or without costs;
(c) adjourn the hearing conditionally or unconditionally; or
(d) make any interim order or other order as it considers
appropriate in the circumstances.
(2) The Court shall not refuse to make a winding-up order on
the ground only that the assets of the company have been mortgaged
to an amount equal to or in excess of those assets, the company
has no assets or, in the case of a petition by a member, there will be

no assets available for distribution amongst the members.
(3) The Court may, on the hearing of a petition or at any time on
the application of the petitioner, a company or person who has given
notice of the intention to appear on the hearing of the petition—
(a) direct that any notice be given or steps taken before or
after the hearing of the petition;
(b) dispense with any notice being given or steps being taken
which are required by or in accordance with this Act or
by any prior order of the Court;
(c) direct that oral evidence be taken on the petition or any
matter relating to it;
(d) direct a speedy hearing or trial of the petition or any issue
or matter;
(e) allow the petition to be amended or withdrawn; and
(f) give such directions as to the proceedings as the Court
considers appropriate in the case.
(4) Where a petition is presented by members on the ground
that it is just and equitable that a company should be wound-up and
the Court determines that the petitioners are entitled to relief by
winding-up the company or by some other means, it shall make a
winding-up order, unless some other remedy is available to the
petitioners who are acting unreasonably in seeking to have the
company wound-up instead of pursuing the other remedy.
61. A person referred to in section 56 (1) may, after the Power to
presentation of a winding-up petition of a company and before a stay or
restrain
winding-up order is made, where an action or proceeding against proceedings
the company is pending, apply to the Court to stay or restrain further against
proceedings in the action or proceeding, and the Court may stay or company
restrain the proceedings on such terms as it considers appropriate
in the matter.
62. A disposition of the property of a company, including things Avoidance of
in action, and any transfer of shares or alteration in the status of dispositions
members of the company, made after the commencement of a
winding-up by the Court, is void unless the Court otherwise orders.
63. An attachment, sequestration, distress or execution put in Avoidance of
force against the estate or assets of a company after the attachments
commencement of a winding-up by the Court is void.
64. (1) A petitioner shall, within fourteen days after the Registration
making of a winding-up order— of copy of
order
(a) lodge a copy of the order with the Registrar;
(b) cause a copy of the order to be served on the secretary

of the company or on such other person, in such manner
as the Court directs;
(c) deliver a copy of the order to the Official Receiver, if the
Official Receiver has not been appointed as liquidator
or if no liquidator has been appointed; and
(d) deliver a copy to the liquidator, if any, with a statement
that the requirements of this subsection have been
complied with.
(2) The Registrar shall, on receipt of a copy of a winding-up
order lodged in accordance with subsection (1), as soon as it is
reasonably practicable, cause a notice of the order to be published
in the Gazette.
(3) A petitioner who fails to comply with subsection (1) commits
an offence and is liable, on conviction, to a fine not exceeding three
hundred and fifty penalty units for each day that the failure
continues.
Provisional 65. (1) The Court may provisionally appoint the Official
liquidator Receiver or any other person to be the liquidator after the
presentation of a winding-up petition and before the making of a
winding-up order.
(2) A provisional liquidator shall have and may exercise all the
powers and perform the function of a liquidator subject to such
limitations and restrictions as may be prescribed, or as the Court
specifies in the appointing order.
(3) A provisional liquidator, except the Official Receiver, shall
be a person accredited by the Registrar in accordance with this
Act.
Stay of 66. Where a winding-up order is made or a provisional liquidator
actions is appointed, an action or proceeding shall not be proceeded with,
or commenced against, a company except by leave of the Court
and subject to such terms and conditions as the Court may impose.
Appointment 67. (1) The Court may, in a winding-up order, appoint an
of liquidator individual who is accredited by the Registrar, in accordance with
by Court
and
this Act, as liquidator or may give directions as to the appointment
performance of a liquidator by the members or creditors of a company.
of functions (2) Where a winding-up order makes no direction as to the
in absence of appointment of a liquidator, the Official Receiver shall be the
liquidator
liquidator of the company.
(3) A provisional liquidator shall continue to exercise the powers
and perform the functions of a liquidator until the appointment of a
liquidator.
(4) Where a provisional liquidator is not appointed, the Official
Receiver shall be the provisional liquidator until the appointment of
a liquidator.
(5) The Official Receiver shall be the liquidator during any
vacancy in the office of liquidator.
(6) A vacancy in the office of liquidator may be filled by the
Court.
(7) A liquidator may resign or, on cause shown, be removed by
the Court.
(8) A liquidator shall be described, except the Official Receiver,
as “the Liquidator” and not by individual name.
(9) The Official Receiver when appointed liquidator may be
described as “ the Official Receiver and Liquidator ”.
(10) Where more than one liquidator is appointed by the Court,
the Court shall declare whether anything by this Act required or
authorised to be done by the liquidator is to be done by all or any
one or more of the persons appointed.
(11) The Registrar shall cause the name, business address and
details of the appointment or release of the liquidator to be notified
in the Gazette.
68. (1) Where a person, other than the Official Receiver, is Lodging of
appointed liquidator by the Court, that person shall— notice of
appointment
(a) act as liquidator if the person lodges a notice of the with Official
appointment with the Official Receiver and gives security Receiver and
as may be directed by the Court or by Official Receiver; access to
company
and
(b) give the Official Receiver information and access to
facilities of the company for the inspection of the books
and documents of the company, and generally give such
aid as may be requisite to enable the Official Receiver
to perform the functions specified in this Act.
69. (1) In a winding-up of a company by the Court, the Official Control of
Receiver shall inquire into the matter, and take such action as the liquidators
by Official
Official Receiver considers appropriate— Receiver
(a) if the liquidator is not faithfully performing the functions
of liquidator; or
(b) where a complaint has been made to the Official Receiver
by a creditor or member of the company relating to the
winding-up.
(2) The Official Receiver may, require a liquidator appointed
by the Court to answer any inquiry in relation to the winding-up
and may apply to the Court to examine the liquidator or any other
person on oath concerning the winding-up.
(3) An Official Receiver may, for purposes of this section—
(a) direct an investigation to be made of the books and
vouchers of a liquidator;
(b) recommend the prosecution of a liquidator, where the
Official Receiver reasonably believes that the liquidator
has committed an offence under this Act; or
(c) recommend the disqualification of the liquidator.
Remuneration 70. (1) Subject to this Act, a liquidator, may receive such
of salary or remuneration by way of commission or otherwise as is
liquidators
determined—
(a) by agreement between the liquidator and the committee
of inspection, if any;
(b) by an extraordinary resolution passed at a meeting of
creditors convened by the liquidator, by a notice to each
creditor to which was attached a statement of all receipts
and expenditure by the liquidator and the amount of
remuneration sought failing an agreement or where there
is no committee of inspection; or
(c) by the Court, failing a determination under paragraph (a)
or (b).
(2) Where the salary or remuneration of a liquidator is
determined, as specified in subsection (1) (a), the Court may, on
the application of one or more members whose shareholdings
represent, in total, not less than five percent of the issued capital of
the company, or who, in the case of a company having no share
capital, constitute not less than five percent of the members, confirm
or vary the determination.
(3) Where the salary or remuneration of a liquidator is
determined, as specified in subsection (1) (b), the Court may, on
the application of the liquidator or one or more members, as provided
in subsection (2), confirm or vary the determination.
(4) Subject to an order of the Court, the Official Receiver, when
liquidator or provisional liquidator, may receive such remuneration
by way of commission or otherwise as may be prescribed.
(5) Despite the generality of this section, the rate payable to
the liquidator shall not exceed such amount as may be prescribed.
(6) A liquidator who knowingly collects remuneration in excess
of the prescribed amount is personally liable to reimburse the amount
of the excess remuneration so collected and commits an offence
and is liable, on conviction, to a fine not exceeding three hundred

thousand penalty units or to a term of imprisonment not exceeding
three years, or both.
71. (1) Where a winding-up order is made or a provisional Custody and
liquidator is appointed, the liquidator or provisional liquidator as the vesting of
case may be, shall take into custody or under control the property company’s
property
and things in action to which the company is or appears to be
entitled.
(2) The Court may by order, on the application of a liquidator or
provisional liquidator, direct that all or any part of the property of
whatsoever description belonging to the company or held by
trustees, on behalf of the company, be vested in the liquidator or
provisional liquidator, and the property to which the order relates
shall vest accordingly.
(3) A liquidator or provisional liquidator may, after giving such
indemnity, if any, as the Court directs, bring or defend any action or
other legal proceedings which relate to any property vested in the
liquidator or provisional liquidator or which it is necessary to bring
or defend for effectively winding-up of the company and recovering
its property.
(4) Where an order is made in accordance with this section,
the liquidator or provisional liquidator shall, within fourteen days
after the making of the order—
(a) lodge a copy of the order with the Registrar and the Official
Receiver; and
(b) in the case of property vested in the liquidator or provisional
liquidator relating to the transfer of the property which
by any other law requires to be registered, deliver a
copy of the order to the appropriate authority for
registration together with a written application.
(5) A liquidator or provisional liquidator who fails to comply
with subsection (4) commits an offence and is liable, on conviction,
to a fine not exceeding three hundred and fifty thousand penalty
(6) A vesting order, referred to in this section, shall not have
any effect or operation in transferring or otherwise vesting the
property referred to in subsection (3) (b) until delivered to the
Registrar and the Official Receiver.
72. (1) A company shall, within three months of the Statement on
appointment of a liquidator, prepare and submit to the company’s
liquidator a statement on the affairs of the company as at the date affairs
of the winding-up order, unless the Court otherwise directs,
showing—
(a) the particulars of its assets, debts and liabilities;

(b) the names and addresses of its creditors;
(c) the securities held by each of the creditors;
(d) the dates when the securities were respectively given;
and
(e) such further information as may be prescribed or as the
liquidator requires.
(2) The statement, referred to in subsection (1), shall be verified
by a statutory declaration as at the date of the winding-up order, of
at least one director and the secretary of the company.
(3) A liquidator may, subject to the direction of the Court, by
notice in writing, require a person to verify, by statutory declaration,
such parts of the statement as that person is in a position to verify,
who—
(a) is, or was within two years before the date of the winding-
up order, an officer of the company; or
(b) took part in the formation of the company, if the company
was formed less than two years before the date of the
winding-up order.
(4) A liquidator may serve a notice on a person, specified in
subsection (3), either personally or by sending it by post to the last
known address of the person or through a daily newspaper of general
circulation in Zambia or by other media.
(5) A person required to verify a statement on the affairs of a
company shall, within twenty one days after receiving a notice, as
specified in subsection (4), or within such extended time as the
liquidator or the Court may specify, submit a statutory declaration
verifying those matters in the statement which the person is in a
position to verify and specifying any matters in the statement which
are incorrect.
(6) A liquidator shall, within fourteen days after receiving the
statement on the affairs of a company or any statutory declaration,
as specified in subsection (3), cause copies of the statement to be
—
(a) filed with the Court; and
(b) delivered to the Registrar and the Official Receiver, if the
Official Receiver is not the liquidator.
(7) A person required to verify a statement on the affairs of a
company, as provided in this section, may be allowed, and be paid
out of the assets of the company, such costs and expenses incurred
in, and relating to, doing so, as the liquidator considers reasonable,
subject to an appeal to the Court.
(8) A company which fails to comply with subsection (1), and
an officer in default, commits an offence and is liable, on conviction,
to a fine not exceeding fifteen thousand penalty units for each
week that the failure continues.
(9) A person who fails to comply with subsection (5), commits
an offence, and is liable, on conviction, to a fine not exceeding two
hundred thousand penalty units or to imprisonment for a period not
exceeding two years, or to both.
(10) A statement on the affairs of a company, made in
accordance with this section may be used as evidence in any
proceedings against any person making it.
(11) A liquidator who fails to comply with subsection (6)
commits an offence and shall be liable, on conviction, to a fine not
exceeding three hundred and fifty penalty units for each day that
the failure continues.
73. (1) A liquidator shall, not later than three months or such Report by
longer period as the Court may allow after receipt of a statement liquidator
on the affairs of a company, submit to the Court, Registrar, holder
of a charge by virtue of which the liquidator was appointed and
any trustee of the secured creditors of the company a report on the
state of affairs relating to the property in liquidation, including—
(a) the amount of capital issued, subscribed and paid up and
the estimated amount of assets and liabilities;
(b) the cause of the failure of the company, if the company
has failed;
(c) whether, in the opinion of the liquidator, further inquiry is
desirable as to any matter relating to the promotion,
formation or failure of the company or the conduct of
its business;
(d) particulars of assets comprising the property in liquidation;
(e) particulars of the debts and liabilities to be satisfied from
the property in liquidation;
(f) the names and addresses of the creditors with an interest
in the property in liquidation;
(g) particulars of any encumbrance over the property in
liquidation held by a creditor, including the date on which
it was created;
(h) particulars of any default by the grantor in making
relevant information available;
(i) the events leading up to the liquidator’s appointment, so
far as the liquidator is aware of them;
(j) the disposal or proposed disposal, by the liquidator, of any

property of the company and the carrying on or proposed
carrying on, by the liquidator, of any business of the
company;
(k) the amount of the principal and interest payable to
preferential creditors;
(1) the amount, if any, likely to be available for the payment
of other creditors; and
(m) such other information as may be prescribed by the
Minister by statutory instrument.
(2) A liquidator may make further reports stating—
(a) the manner in which the company was formed;
(b) whether any fraud has been committed or any material
fact has been concealed by—
(i) a person in its promotion or formation; or
(ii) an officer in relation to the company since its
formation;
(c) whether an officer of the company has contravened or
failed to comply with any of the provisions of this Act;
and
(d) any other matter which, in the liquidator’s opinion, is
desirable to bring to the notice of the Court.
(3) The Registrar may, where a liquidator—
(a) does not submit a report as specified in subsection (1),
issue a reminder to the liquidator to submit the report
within twenty one days of the receipt of the reminder;
or
(b) does not comply with the notice issued in accordance
with paragraph (a), remove the liquidator from the
Register of Insolvency Practitioners, disqualify the
person from being appointed as a liquidator and inform
the Official Receiver of such r emoval and
disqualification as prescribed.
Powers of 74. (1) A liquidator may, during the four weeks following the
liquidator date of a winding-up order, carry on the business of the company
so far as is necessary for the satisfactory winding-up of the
company.
(2) A liquidator may, with the authority of the Court or committee
of inspection—
(a) pay any class of creditors in full, subject to this Act;
(b) make any compromise or arrangement with creditors,

persons claiming to be creditors or persons having or
alleging themselves to have a claim against the company,
whether present or future, certain or contingent,
ascertained or sounding only in damages or through
which the company may be rendered liable;
(c) compromise any debts and liabilities capable of resulting
in debts and any claims of any kind, whether present or
future, certain or contingent, ascertained or sounding
only in damages, that subsist or are supposed to subsist
between the company on the one hand and a member,
debtor or person apprehending liability on the other;
(d) make agreements on questions relating to or affecting the
assets or winding-up of a company;
(e) dispose of assets by public tender or the most transparent
manner under the circumstances and, not less than
twenty-one days before such disposal, furnish the
Registrar with a notice of intention to dispose of the
asset; and
(f) take security for the discharge of a debt, liability or claim
and give a complete discharge in respect of that debt.
(3) A liquidator may, for the purpose of a winding-up and
distributing the assets of the company—
(a) bring or defend an action or other legal proceeding in the
name and on behalf of the company;
(b) compromise any debt due to the company, other than a
debt due from a member, where the amount claimed by
the company to be due to it does not exceed an amount
prescribed by the Minister by statutory instrument;
(c) sell the real and personal property and things in action of
the company by public auction, public tender or private
contract;
(d) execute, in the name and on behalf of the company, all
deeds, receipts and other documents, and for that
purpose, use, where necessary, the company’s seal;
(e) prove, rank and claim in the bankruptcy of any member or
debtor for any balance against the member’s estate and
receive dividends in the bankruptcy in respect of the
balance as a separate debt due from the bankrupt and
rateable with other separate creditors;
(f) draw, accept, make and endorse any bill of exchange or

promissory note in the name and on behalf of the
company as if the bill or note had been drawn, accepted,
made or endorsed by or on behalf of the company in the
course of its business;
(g) raise on the security of the assets of the company any
money necessary;
(h) take out letters of administration of the estate of any
deceased member or debtor, and do any act necessary
for obtaining payment of any money due from a member,
debtor or the member’s or debtor’s estate which cannot
be conveniently done in the name of the company, in
which case, for the purposes of enabling the liquidator
to take out the letters of administration or recover the
money and money shall be due and payable to the
liquidator;
(i) appoint a legal practitioner to assist the liquidator;
(j) appoint an agent to undertake any functions which the
liquidator is unable to perform personally;
(k) give notice of the winding-up to affected persons by
notice published in a daily newspaper of general
circulation in Zambia and in any jurisdiction where the
company undertakes business; and
(l) do such things as are necessary for the winding-up and
distributing the assets of the company.
(4) The performance by the liquidator specified in this section
shall be subject to the control of the Registrar, and any creditor or
member may apply to the Court on the performance or proposed
performance of any of the functions.
Exercise and 75. (1) Subject to this Act, a liquidator shall, in the
control of administration of the assets of the company and in the distribution
liquidator’s of the assets, among its creditors, have regard to directions given
powers
by resolution of the creditors or members at a general meeting or
the committee of inspection; and directions given by the creditors
or members shall, in case of conflict, override any direction given
by the committee of inspection.
(2) A liquidator may summon meetings of creditors or members
for various purposes related to the winding up or summon meetings
at such times as the creditors or members by resolution direct or
whenever requested in writing to do so by—
(a) members whose shareholding represent not less than one

twentieth of the issued capital of the company, in the
case of a company with share capital;
(b) not less than one tenth of the members, in the
case of a company limited by guarantee; or
(c) creditors representing, in the aggregate, not less
than five percent of the value of the creditors of the
company.
(3) A liquidator may, under the winding-up, apply to the Court
for directions on any matter.
(4) Subject to this Act, the liquidator shall use sound judgment
in the management of the affairs and property of the company and
the distribution of its assets.
76. (1) A liquidator may, and if requested by a creditor or Committee
member shall, summon separate meetings of the creditors and of inspection
members for the purpose of—
(a) determining whether or not the creditors or members
require a committee of inspection to act with the
liquidator; and
(b) appointing members of the committee, if a committee is
required.
(2) A committee of inspection shall be appointed by the meetings
of creditors and members in such proportions as agreed, and if
there is no agreement, as determined by the Court.
(3) If there is a difference between the determinations of the
meetings of the creditors and members, the Court shall decide the
matter and make such order as it considers appropriate in the matter.
77. (1) A committee of inspection shall consist of creditors Constitution
and members of the company or persons holding— and
proceedings
(a) general powers of attorney from creditors or members; of committee
or of inspection
(b) special authority from the creditors or members of the
company.
(2) A committee of inspection shall meet at such times and
places as the committee may determine.
(3) A liquidator or any member of a committee of inspection
may call a meeting of the committee as the liquidator or member
considers necessary.
(4) A committee of inspection may act by a majority of members
present at a meeting, but shall not act unless a majority of the
members of the committee are present.
(5) A member of the committee of inspection may resign by

notice, in writing, signed by the member and delivered to the
liquidator.
(6) The office of a member of a committee of inspection falls
vacant if the member—
(a) dies
(b) is subject to a legal disability;
(c) becomes bankrupt;
(d) assigns the member’s estate for the benefit of the creditors
or makes an arrangement with creditors in terms of any
law relating to bankruptcy; or
(e) is absent from three consecutive meetings of the committee
of inspection without the prior leave or subsequent
consent of a majority of those members who together
with that member represent the creditors or members,
as the case may be.
(7) A member of the committee of inspection may be removed
by an ordinary resolution at a meeting of creditors, if the member
represents creditors, or of members, if the member represents
members, of which twenty one days’ notice in writing has been
given stating the object of the meeting.
(8) A vacancy in a committee of inspection may be filled by the
appointment by the committee of the same or another creditor or
member or person holding a general power or special authority, as
referred to in subsection (1).
(9) A liquidator may, on the liquidator’s own motion, and shall,
within twenty one days after the request, in writing, of a creditor or
member, summon a meeting of creditors or members, as the case
requires, to consider any appointment made as specified in
subsection (8), and the meeting may—
(a) confirm the appointment; or
(b) revoke the appointment and make another appointment.
(10) The continuing members of a committee of inspection, if
not less than two, may act despite any vacancy in the committee.
Application 78. A liquidator may apply to the Court for an order of release
for order of and dissolution of the company, where the liquidator—
release of
liquidator (a) has realised the property of the company or so much of
and the property as can be realised without needlessly
dissolution protracting the liquidation, distributed a final dividend, if
of company any, to the creditors, adjusted the rights of the members
and made a final return, if any, to the members and
creditors; or
(b) resigns or has been removed from office.
79. (1) In deciding whether to grant an application, made Order for

in accordance with section 78, the Court— release and
dissolution
(a) may cause a report on the accounts of a liquidator, to be
prepared by the Official Receiver or an auditor appointed
by the Court; and
(b) shall take into consideration—
(i) the report;
(ii) any objection which is made against the release
of the liquidator by the Official Receiver, auditor,
any creditor or member or other interested
person; and
(iii) whether the liquidator has complied with the
requirements of the Court relating to the
winding-up.
(2) Where the Court is satisfied that all necessary requirements
relating to the winding-up and the accounts and report are made in
accordance with subsection (1), the Court may by order, release
the liquidator and dissolve the company.
(3) The Court may, where it does not grant the release of a
liquidator as applied for in accordance with section 78, on the
application of any creditor or member or other interested person, if
the Court considers it just and equitable, make an order that the
liquidator be liable to the person concerned for damages for an act
or omission by the liquidator which is contrary to the functions of a
liquidator under this Act or any other law.
(4) An order of the Court releasing a liquidator shall discharge
the liquidator from liability in respect of any act done or default
made by the liquidator in the administration of the affairs of the
company or otherwise in relation to the conduct of the person as
liquidator, but the order may be revoked on proof that it was obtained
by fraud or by suppression or concealment of any material fact.
(5) Where a liquidator has not previously resigned or been
removed, the liquidator’s release shall operate as a removal from
office.
(6) Where the Court makes—
(a) an order that the liquidator be released; or
(b) an order that the liquidator be released and that the
company be dissolved;
a copy of the order shall, within twenty-one days after the making
of it, be lodged by the liquidator with the Registrar and the Official
Receiver.
(7) A liquidator who fails to comply with subsection (6) commits

thousand penalty units for each day that the failure continues.
(8) Where the Court makes an order that a company be
dissolved, the Registrar shall, on lodgment of a copy of the order,
strike the name of the company off the register and put a notification
of the striking out in the Gazette, and the company shall be dissolved
as at the date of the Court Order.
Power to 80. (1) The Court may, after an order for winding-up is made,
stay on the application of the liquidator, a creditor or member, make an
winding-up order staying the proceedings, on such terms and conditions as the
Court considers appropriate in the matter.
(2) The Court may, before making an order as specified in this
section, order the liquidator to furnish a report with respect to any
relevant facts or matters.
(3) A copy of an order, made under this section, shall be lodged
by the person receiving the order with the Registrar and Official
Receiver within twenty-one days after the making of the order and
the Registrar shall cause the order to be published, within fourteen
days, in a daily newspaper of general circulation in Zambia and
other media.
(4) A person, referred to in subsection (3), who fails to comply
with that subsection commits an offence and is liable, on conviction,
to a fine not exceeding three hundred and fifty penalty units for
each day that the failure continues.
Appointment 81. (1) A Court may, on application by a liquidator, appoint a
of special special manager to act during such time as the Court directs, with
manager
such powers, including any of the powers of a receiver as the
Court may vest in the manager.
(2) A special manager appointed under subsection (1)—
(a) shall give such security as the Court may direct;
(b) shall receive such remuneration as approved by the Court;
(c) may resign after giving not less than one month’s notice in
writing to the liquidator; and
(d) may be removed by the Court.
Claims of 82. (1) The Court may fix a date on or before which creditors
creditors and are to prove their debts or claims and after which they will be
distribution
excluded from the benefit of any distribution made.
of assets
(2) The Court may adjust the rights of the members among
themselves and distribute any surplus among the persons entitled.
(3) The Court may, in the event of the assets being insufficient
to satisfy the liabilities, make an order as to the payment out of the
assets of the costs, charges and expenses incurred in the winding-
up in such order of priority as the Court thinks fit.
83. The Court may, after making a winding-up order, make Inspection
any order for inspection of the records of the company by creditors of books by
creditors and
and members that the Court considers necessary in the members
circumstances of the matter, and any records in the possession of
the company may be inspected by creditors or members in
accordance with the order.
84. (1) The Court may cause appearance by summons, of an Power to
officer of a company or person known or suspected to be in summon
persons
possession of any property of the company, or indebted to the
connected
company or of any other person whom the Court considers capable with
of giving information concerning the promotion, formation, trade, company
dealings, affairs or property of the company.
(2) The Court may examine an officer of a company or other
person, on oath, concerning the matters referred to in subsection
(1), orally or by written interrogatories, and may reduce the oral
answers in writing and require the officer or other person to sign
them and which may be used in evidence in any legal proceedings
against the officer or person.
(3) The Court may require an officer of a company or other
person to produce any books and papers in the officer’s or person’s
custody or power relating to the company, except that where the
officer or other person claims a lien on any book or paper, the
production shall be without prejudice to the lien, and the Court shall
have jurisdiction to determine questions relating to the lien.
(4) An examination made in accordance with this section may,
if the Court so directs, be held before the Registrar of the High
Court.
(5) A person summoned for examination in accordance with
this section may, at that person’s own cost, engage a legal
practitioner.
(6) Where a person who is summoned as provided in this section
and after being provided with a reasonable sum for that person’s
expenses, refuses to appear before the Court at the time appointed,
not having a lawful excuse made known to the Court at the time of
the sitting as approved by the Court, the Court may cause that
person to be apprehended and brought before the Court for
examination.
Power to 85. (1) Where a liquidator makes a report stating that—

order public (a) a fraud has been committed in the company;
examination
(b) any material fact has been suppressed or concealed by
any person in the promotion or formation of the company
or by any officer in relation to the company;
(c) any officer of the company has acted dishonestly or has
been guilty of any impropriety or recklessness in relation
to the affairs of the company;
the Court may, after considering the report, direct that—
(i) the person or officer of the company;
(ii) any other person who was previously an officer
of the company, is known or suspected to be
in possession of any property of the company,
or is or is supposed to be indebted to the
company; or
(iii) any person whom the Court considers capable
of giving information concerning the promotion,
formation, trade, dealings, affairs or property
of the company;
attend before the Court on a day appointed and be examined
and, in the case of an officer or former officer of the company, as
to that officer’s conduct and dealings related or relating to the
company.
(2) A liquidator, creditor or member may take part in the
examination, specified in this section, personally or represented by
a legal practitioner.
(3) The Court may put or allow to be put such questions to the
person examined as the Court considers appropriate in the matter.
(4) A person examined, in accordance with this section, shall
be examined on oath and shall answer questions put by the Court
or otherwise put to the person during the proceedings.
(5) Where a person is ordered to attend before the Court, as
provided in this section, applies to the Court from any charge made
or suggested against that person to be dropped, the liquidator shall
appear on the hearing of the application and call the attention of
the Court to any matter which appears to the liquidator to be relevant,
and if the Court, after hearing any evidence given or witnesses
called by the liquidator, grants the application, the Court may allow
the applicant such costs as it considers appropriate in the case.
(6) A person ordered to be examined, as specified in this
section—
(a) shall, before the examination, be furnished with a

copy of the liquidator’s report; and
(b) may, at that person’s own cost, engage a legal practitioner.
(7) An examination undertaken in accordance with this
section—
(a) shall be recorded and reduced in writing;
(b) shall be read over to and signed by the person being
examined; and
(c) may be used in evidence in any legal proceedings
relating to the winding-up or against the person.
(8) The written transcript of the examination, undertaken in
accordance with this section, shall at all reasonable times, be open
to inspection by a creditor or member.
(9) An examination, undertaken in accordance with this section,
may, if the Court so directs, be held before the Registrar of the
High Court.
(10) For purposes of this section, “ officer ” includes a banker,
legal practitioner or auditor of the company.
86. (1) The Court may, before or after the making of a Power to
winding-up order, order the arrest and detention of the member, arrest
officer, former member or officer until such time as the Court orders absconding
member or
that any book, paper or movable or personal property be seized on officer
proof of probable cause for believing that a member or officer or
former member or officer of the company is about to -
(a) leave Zambia;
(b) abscond from Zambia; or
(c) remove or conceal any property for the purpose of evading
payment of any money due to the company or avoiding
examination in respect of the affairs of the company.
(2) For purposes of this section, “ officer ” includes a banker,
legal practitioner or auditor of the company.
87. Any power conferred on the Court, by this Act shall be in Cumulative
addition to, and not in derogation of, any power of instituting powers of
court
proceedings against any member or debtor of a company or estate
of a member or debtor for the recovery of any debt or other sum.
PART VII
VOLUNTARY WINDING-UP
Voluntarily 88. (1) Subject to subsection (2), a company may be wound-
winding-up up voluntarily by special resolution of the members or creditors.
(2) Where the period fixed by the articles of association for the
duration of the company has expired, or an event for the dissolution
of the company has occurred, the company shall stand dissolved.
(3) Where a special resolution for a voluntary winding-up has
been passed in accordance with subsection (1), the company shall,
within fourteen days after the passing of the resolution lodge a
copy of the resolution with the Registrar and the Registrar shall,
within seven days after the lodgment, cause notice of the resolution
to be published in the Gazette.
company, and each officer in default, commits an offence and shall
be liable, on conviction, to a fine not exceeding three hundred penalty
Commencement 89. For the purposes of this Act, a voluntary winding-up
of voluntary commences at the time of the passing of the special resolution for
winding-up
voluntary winding-up, made in accordance with section 88.
Effect of 90. (1) A company shall from the commencement of winding-
voluntary up, as provided in section 89, cease to carry on its business, except
winding-up as the liquidator considers necessary for the effective and efficient
winding-up of the company.
(2) After the commencement of the winding-up, the shares of
members shall not be transferred or altered without the approval
of the liquidator.
(3) A transfer or alteration of shares in contravention of
subsection (3) is void.
Declaration 91. (1) The directors may declare in writing that a full inquiry
of solvency has been made into the affairs of the company and that they are
satisfied that the company meets the solvency test before issuing a
notice for a meeting to wind up the company voluntarily as provided
in section 88.
(2) The directors shall attach to a declaration made in
accordance with subsection (1), a statement relating to the affairs
of the company showing the—
(a) assets of the company and the total amount expected to
be realised from the assets, therefrom;
(b) liabilities of the company; and
(c) the estimated expenses of winding-up, as of the date

before the making of the declaration.
(3) A declaration, made in accordance with subsection (1), shall
only have effect for the purposes of this Act if it is—
(a) made at a meeting of directors referred to in subsection
(1);
(b) made at least thirty days before the passing of the
resolution for voluntary winding-up, as specified in
subsection (1); and
(c) lodged with the Registrar on or before the date on which
the notice, referred to in subsection (1), is issued.
(4) A director who makes a written declaration, in accordance
with this section, knowing that the company does not satisfy the
solvency test commits an offence and is liable, on conviction, to a
fine not exceeding fifty thousand penalty units or to imprisonment
for a period not exceeding six months, or to both.
92. (1) After the commencement of the winding-up of the Appointment
company, the company shall, by special resolution, appoint one or and
remuneration
more liquidators and fix the remuneration to be paid to the liquidator.
of liquidator
(2) Where a liquidator has been appointed, the powers of the
directors shall cease, unless the liquidator, or the members, by
ordinary resolution, with the consent of the liquidator, appropriate
continued exercise of the powers in specified circumstances
approved by the liquidator.
(3) The company shall, within fourteen days of appointing the
liquidator, lodge a certified copy of the ordinary resolution with the
Registrar upon payment of the prescribed fee and the Registrar
shall cause a notice to be published in a daily newspaper of general
circulation in Zambia.
(4) The company may, by special resolution, of which the
requisite notice has been given to the members, creditors and
liquidators, remove the liquidator, subject to any direction of the
Court on the application of a member, creditor or liquidator.
(5) Where a liquidator dies, resigns, is removed from office or
otherwise vacates the office, the company may, by ordinary
resolution, passed at a general meeting, fill the vacancy.
(6) The company shall, within fourteen days of filling the vacancy
specified in subsection (4), lodge a certified copy of the ordinary
resolution with the Registrar upon payment of the prescribed fee,
and the Registrar shall cause a notice to be published in a daily
newspaper of general circulation in Zambia.
Duty of 93. (1) If a liquidator is satisfied that the company is not able
liquidator to to pay or provide for the payment of its debts in full within the
call creditors
period stated in the declaration of solvency, the liquidator shall
immediately convene a meeting of the creditors and lay before the
meeting a statement of the assets and liabilities of the company.
(2) Within twenty-one days after a meeting has been held, in
accordance with subsection (1), the liquidator shall lodge with the
Registrar and the Official Receiver a statement that the meeting
was held in accordance with subsection (1) and stating the decisions,
if any, taken at the meeting.
(3) Where a meeting was held in accordance with subsection
(1), the winding-up shall proceed as if it was a creditors’ voluntary
winding-up, except that the liquidator shall not summon an annual
meeting of creditors at the end of the first year from the
commencement of the winding-up if the meeting was held less
than three months before the end of that year.
(4) The creditors may, at a meeting convened in accordance
with subsection (1) and where the winding-up becomes a creditors
voluntary winding-up, appoint another liquidator in place of the
liquidator appointed by the company.
(5) A liquidator who fails to comply with subsection (1) or (2)
commits an offence and is liable on conviction to a fine not
exceeding seven hundred penalty units for each day that the failure
continues.
Staying of 94. (1) The company may, during the course of a voluntary
members’ winding-up prior to the dissolution of the company, by special
voluntary
resolution, resolve that the winding-up proceedings be stayed.
winding-up
(2) After the passing of the special resolution specified in
subsection (1), the liquidator or any member of the company may
make an application to the Court for an order that the winding-up
be stayed, that the liquidator be discharged and that the directors
resume the management of the company.
(3) The applicant shall give not less than twenty-eight days
written notice of the hearing of the application to the Official
Receiver, Registrar, every director of the company, and to the
liquidator of the company and the Official Receiver shall cause a
copy of the notice to be published in the Gazette not later than
seven days after receipt of the notice.
(4) A director, liquidator, creditor or member may appear on
the hearing of the application made in accordance with subsection
(2) and to call witnesses and give evidence.
(5) A company shall within twenty-one days of the Court making

an order pursuant to an application made in accordance with
subsection (2), lodge a copy of the order, with the Registrar, who
shall cause a copy of the order to be published in the Gazette.
(6) On the publication of the order, the winding-up shall cease
and the company shall resume operations as a going concern subject
to terms and conditions stated in the order.
company, and each officer in default, commits an offence, and
shall be liable, on conviction, to a fine not exceeding five hundred
penalty units for each day that the failure continues.
95. (1) Where a resolution for the voluntary winding-up of a Creditors’
company has been proposed, and no declaration of solvency was voluntary
made, the company shall convene a meeting of the creditors at winding-up
which the resolution for a creditor’s voluntary winding-up shall be
put, and passed by the creditors.
(2) A company shall issue a notice of a meeting convened in
accordance with subsection (1) to each creditor not less than seven
days before the date set for the meeting.
(3) A notice referred to in subsection (2) shall be accompanied
by a statement showing the names of all creditors and the amounts
of their claims.
(4) A company shall publish, in the Gazette and in any newspaper
of general circulation in Zambia, a notice issued in accordance
with subsection (2), at least twenty-one days before the date of the
meeting.
(5) A company shall—
(a) at a meeting convened in accordance with subsection (1),
produce a full statement of the company’s affairs
showing the method and manner in which valuation of
the company’s assets was arrived at, a list of the creditors
and the estimated amount of their claims; and
(b) appoint a director.
(6) A director appointed, as specified in subsection (5) (b), and
the secretary shall attend the meeting and disclose to the meeting
the company’s affairs and the circumstances leading to the proposed
winding-up.
(7) The creditors at a meeting held in accordance with this
section, may appoint one of their number or the director appointed
under subsection (5) to preside at the meeting.
(8) The company shall nominate a liquidator for the winding-
up.
(9) The creditors may by resolution at a meeting convened in

accordance with subsection (1) appoint a liquidator nominated by
the company in accordance with subsection (8) or another person
as liquidator.
(10) If the creditors and the company nominate different
persons, the person nominated by the creditors shall be liquidator.
(12) If no liquidator is nominated by the creditors, the company
shall proceed to appoint the liquidator.
(13) If a liquidator resigns or otherwise vacates office, the
creditors may fill the vacancy and shall, within 7 days of filling the
vacancy, notify the Registrar in the prescribed manner and form.
(14) If a company fails to comply with subsection (1), (2), (3),
(4) or (5), the company, and each officer in default, commits an
offence and is liable, on conviction, to a fine not exceeding five
hundred thousand penalty units.
(15) A director appointed to attend a meeting as specified in
subsection (5) (a), or the secretary of the company who fails to
comply with subsection (6), commits an offence and is liable, on
conviction, to a fine not exceeding five hundred thousand penalty
units.
Appointment 96. The creditors shall, by resolution, appoint a committee of
of committee inspection for the winding-up of a company and appoint such number
of inspection
of creditors and members of the company or other persons in
accordance with section 77, to be members of the committee.
Fixing of 97. (1) A committee of inspection, appointed as specified in
liquidators’ section 96, shall fix the remuneration to be paid to the liquidator in
remuneration an amount not exceeding the amounts prescribed by regulations by
and vesting
of directors’ the Minister.
powers in (2) On the appointment of a liquidator, the powers of the directors
liquidator shall vest in the liquidator, and the powers and authority of every
director shall cease, except so far as the committee of inspection
shall authorise.
Stay of 98. (1) Any attachment, sequestration, distress or execution
proceedings in force before the commencement of a creditors’ voluntary
after winding-up against the estate of a member or assets of a company
commencement
of creditor’s shall be stayed.
voluntary (2) After the commencement of a winding-up, no action or
winding up proceeding shall be proceeded with or commenced against the
company, except by leave of the Court and subject to such terms
and conditions as the Court directs.
PART VIII
MISCELLANEOUS PROVISIONS ON WINDING-UP
99. Subject to this Act and any other law relating to preferential Distribution
payments, the assets of a company shall, on its voluntary winding- of assets of
company
up, be distributed in equal priority in satisfaction of the Company’s
liabilities, and shall be distributed among the members according to
their rights and interests in the company as specified in the articles.
100. (1) If for any reason, there is no liquidator in a voluntary Court
winding-up, the Court may appoint a liquidator. appointed
liquidator
(2) The Court may, on cause shown, during a voluntary winding-
up, remove a liquidator and appoint another liquidator.
101. A member, creditor or liquidator may, during a voluntary Reviewing
winding-up, apply to the Court to review the remuneration of the remuneration
during
liquidator. voluntary
winding-up
102. (1) A liquidator may, during a voluntary winding-up— Powers and

duties of
(a) in the case of a members’ voluntary winding-up approved liquidators
by a resolution of the company exercise the liquidator’s during
powers under this Act in a winding-up by the Court’; voluntary
winding-up
(b) in the case of a creditors’ voluntary winding-up, by leave
of the Court or approval of the committee of inspection
exercise the powers given by this Act to a liquidator in a
winding-up by the Court; and
(c) convene meetings of the company for the purpose of
obtaining the sanction of the company in respect of any
matter or for any other purpose the liquidator considers
necessary.
(2) When several liquidators are appointed during a voluntary
winding-up, a power given by this Act may be exercised by one or
more of the liquidators as determined at the time of appointment,
or in default of such determination, by any number of liquidators
being not less than two.
103. (1) Where a liquidator determines that the whole Liquidator to
or part of the business or property of a company be transferred or accept
shares, etc.,
sold to another corporate, the liquidator may with the—
as
(a) special resolution of the company, in the case of a consideration
members’ voluntary winding-up; for sale of
property of
(b) leave of the Court; or company
(c) approval of the committee of inspection, in the case
of a creditors’ voluntary winding-up;
transfer or sell the business or property of a company

and, in compensation or part compensation for the
transfer or sale of the business or property of the
company—
(i) receive fully paid shares, cash, debentures or other like
interests in the corporate for distribution among the
members; or
(ii) in lieu of shares, cash, debentures or other like interests,
enter into any other arrangement where the members
may participate in the profits of, or receive any other
benefit from, the corporate.
(2) If, within one year of the commencement of a voluntary
winding-up, the winding-up becomes a winding-up by the Court,
the transfer or sale of the business or property of a company shall
not be valid unless approved by the Court.
(3) A transfer or sale of the business or property of a company,
as specified in this section, is binding on the company and the
members and each member shall be considered to have agreed
with the other corporate to accept the fully-paid shares, debentures
or other like interests to which the member is entitled.
(4) A special resolution, passed in accordance with this section,
is not valid unless it is passed before or concurrently with a
resolution for voluntary winding-up.
(5) Nothing in this section shall authorise a variation or
abrogation of the rights of a creditor or member.
Annual 104. (1) Where a voluntary winding-up continues for more
meeting of than one year, the liquidator shall—
members and
creditors (a) in the case of a members’ voluntary winding-up
convene a general meeting of the company; and
(b) in the case of a creditors’ voluntary winding-up, convene
separate meetings of the creditors and the company;
within fifteen months after the commencement of the winding-
up and in each succeeding year, and shall lay before every such
meeting an account of the liquidator’s acts, dealings and conduct
of the winding-up during the preceding year.
(2) In the case of a creditors’ voluntary winding-up, the meeting
of the company shall be held within one month after the meeting of
creditors.
(3) A liquidator who fails to comply with this section commits
hundred penalty units for each day that the failure continues.
105. (1) As soon as the affairs of a company are fully wound- Final
up, the liquidator shall make up a report showing how the voluntary meeting and
winding-up was conducted and the assets of the company disposed dissolution
of company
of for the purpose of laying before the meeting the report and
giving any explanation of the report and thereupon shall —
(a) in the case of a members’ voluntary winding-up, convene
a general meeting of the company; and
(b) in the case of a creditors’ voluntary winding-up, convene
a meeting of the creditors of the company.
(2) In the case of a creditors’ voluntary winding-up, the meeting
of the company shall be held within one month after the meeting of
creditors.
(3) A notice of the meetings, required to be convened in this
section, shall be published at least one month before each meeting,
in the Gazette and in a newspaper of general circulation in Zambia
or other media, which notice shall specify the time, place and object
of each meeting.
(4) The quorum at a meeting of a company for both members
and creditors shall be one half of the members or creditors, as the
case maybe.
(5) If a quorum is not formed at a meeting, convened in
accordance with this section, the liquidator shall lodge with the
Registrar and the Official Receiver a return stating that the meeting
was duly summoned and that a quorum was not formed at the
meeting.
(6) The liquidator shall, within twenty-one days after a meeting
convened in accordance with this section, lodge with the Registrar
and Official Receiver a return, in the prescribed form, of the holding
of the meeting and the date of the meeting attaching a copy of the
report of the meeting.
(7) The Registrar shall, on the lodgement of a return in
accordance with subsection (6), strike the name of the company
off the register and cause a notice of the fact to be published in the
Gazette, and the company shall stand dissolved on the date of the
publication of the notification.
(8) A liquidator who fails to comply with this section commits
hundred penalty units for each day that the failure continues.
106. (1) Any arrangement entered into between a company Arrangement
about to be or in the course of being wound-up voluntarily and its entered
before or
creditors shall, subject to the right of appeal, as specified in this during
section, be binding on the company and the creditors, if approved voluntary
by respective resolutions. winding up
binding
(2) A dispute on the value of a security or lien or the amount of

a debt or set-off, that is the subject of an arrangement, may be
settled by the Court on the application of the company, liquidator or
creditor.
(3) A creditor or member of the company may, within twenty-
one days after the completion of an arrangement, appeal to the
Court against the arrangement, and the Court may amend, vary or
confirm the arrangement as it considers appropriate.
Applications 107. (1) A liquidator, member or creditor may apply to the
to determine Court—
questions or
exercise of (a) to determine any question arising in the voluntary winding-up
powers of a company; or
(b) to exercise all or any of the powers which the Court
may exercise if the company were being wound-up by
the Court.
(2) The Court may, if satisfied that the determination of a
question or the exercise of power may be just or beneficial to the
winding-up, accede wholly or partially to an application made in
accordance with sub section (1), on such terms and conditions as
the Court may consider appropriate or may make such other order
as it considers just.
Costs 108. The costs, charges and expenses of, and incidental to,
the voluntary winding-up, including the remuneration of the liquidator,
shall be payable out of the assets of the company in priority to all
other claims.
Limitation 109. Where a petition has been presented to the Court for the
on the right voluntary winding-up of a company on the ground that it has failed
to voluntary
wind-up
to satisfy the solvency test, the company shall not resolve that the
company be wound-up voluntarily without the leave of the Court.
Meetings of 110. The Court may, during the course of a winding-up, direct
creditors a meeting of creditors of any class to be convened and conducted
in such manner as the Court considers appropriate for an effective
and efficient winding-up.
Conduct of 111. (1) A person shall be considered a creditor for purposes
meetings of of a meeting of creditors, as provided in this Part if, on an account
creditors
fairly stated, after allowing the value of security or liens held by the
person and the amount of any debt or set-off owing to the company,
there appears to be a balance due to that person.
(2) At a meeting of creditors, unless the Court otherwise orders —
(a) each creditor shall have votes in proportion to the

amount of the balance owed to the creditor by the
company, on an account fairly stated, after allowing the
value of security or liens held by the creditor and the
amount of any debt or set-off owing by the creditor to
the company; and
(b) the provisions of the Companies Act, 2017 relating to Act No. 10 of
meetings of a company shall apply to the meeting of 2017
creditors, with the necessary modifications.
(3) Subject to this Part and to any order given by the Court, the
company shall within fourteen days of the Order give notice, either
personally or in a newspaper of general circulation in Zambia, before
the convening of a meeting of creditors.
112. (1) An individual shall be eligible for appointment as a Eligibility for
liquidator if that person qualifies to be appointed as a receiver. appointment
as liquidator
(2) A person shall not be eligible for appointment or competent
to act or to continue to act as liquidator of a company if that person
—
(a) is a body corporate;
(b) has a mental or physical disability that would make the
person incapable of performing the functions;
(c) is prohibited or disqualified from so acting by any order of
a court;
(d) is an undischarged bankrupt;
(e) is a director or secretary of the company or any related
company, or any person who has been such a director
or secretar y within the two years before the
commencement of the winding-up, save with the leave
of the Court;
(f) has at any time been convicted of an offence involving
fraud or dishonesty; or
(g) has at any time been removed from an office of trust by
order of a Court.
(3) A person who acts or continues to act as liquidator of a
company in contravention of this section shall be guilty of an
offence, and is liable on conviction to a fine not exceeding fifty
thousand penalty units or to a term of imprisonment not exceeding
six months, or to both.
Acts of 113. (1) Subject to this Act, the acts of a liquidator shall be
liquidator valid notwithstanding any defect in the appointment or qualification
valid of the liquidator.
(2) Any conveyance, assignment, transfer, mortgage, charge
or other disposition of a company’s property, made by a liquidator,
shall, despite a defect or irregularity affecting the validity of the
winding-up or appointment of the liquidator be valid.
(3) A person making or permitting a disposition of property to a
liquidator shall be protected and indemnified in so doing, despite a
defect or irregularity affecting the validity of the winding-up or the
appointment of the liquidator that is unknown by that person.
(4) For the purposes of this section, a disposition of property
includes a payment of money.
General 114. (1) A liquidator shall keep proper records at the
provisions liquidator’s office in which the liquidator shall cause to be made
on
entries or minutes of proceedings of meetings and such other
liquidators
matters, if any, as may be prescribed.
(2) A creditor or member of the company may, personally or by
an agent, inspect the liquidator’s records kept in accordance with
subsection (1).
(3) The Court shall take cognisance of the conduct of liquidators,
and if a liquidator does not faithfully perform the functions of a
liquidator, observe prescribed requirements or the requirements of
the Court, or if a complaint is made to the Court by a creditor or
member of the company or by the Official Receiver, the Court
shall inquire into the matter and take such action as it considers
appropriate.
(4) The Registrar or Official Receiver may report to the Court
any matter which is a misfeasance, constitutes neglect or an
omission on the part of the liquidator and the Court may order the
liquidator to make good any loss which the estate of the company
has sustained and make such other order as it may consider
appropriate.
(5) The Court may require a liquidator to answer any inquiry in
relation to the winding-up and may examine the liquidator or any
other person on oath and direct an investigation to be made of the
records of the liquidator.
(6) The Court may require a member, trustee, receiver, banker,
agent or officer of the company to pay, deliver, convey, surrender
or transfer to the liquidator or provisional liquidator, immediately or
within such time as the Court orders, any money, property or records
which the company is, on the face of it entitled to.
(7) Subject to this Act, a liquidator shall act in good faith, not
make a secret profit and avoid any conflict of interest in the
performance of the functions of liquidator.
115. A liquidator shall— Disposal of
company’s
(a) dispose of the assets of the company by public tender or assets by
the most transparent manner in the circumstances; and liquidator
(b) not less than seven days before the disposal, furnish the
Registrar with a notice, in the prescribed manner and
form, upon payment of a prescribed fee, of the intention
to dispose of an asset.
116. (1) Where a person, other than the Official Receiver, is Powers of
the liquidator and there is no committee of inspection, the Official Official
Receiver may, on the application of the liquidator, do any act or Receiver
where no
thing or give any direction or permission which is by this Act committee of
authorised or required to be done or given by a committee of inspection
inspection.
(2) Where the Official Receiver is the liquidator and there is
no committee of inspection, the Official Receiver may, do any act
or thing which is by this Act required to be done by, or subject to,
any direction or permission given by the committee.
117. A person aggrieved by an act or a decision of the liquidator Appeal
may apply to the Court, which may confirm, reverse, or modify the against
decision of
act or decision complained of and make such order as it considers liquidator
just.
118. (1) A liquidator shall, within twenty-one days after being Service of
appointed, lodge with the Registrar and the Official Receiver a document on
notice of the appointment and the location of the liquidator’s office liquidator
and postal address and if the location and postal address changes
within twenty-one days, lodge a notification with the Registrar and
the Official Receiver.
(2) It shall be good service on the liquidator and company if
service is made by leaving a document at the office of the liquidator
or by sending it in a properly addressed and prepaid registered
letter to the postal address stated in a notice, lodged and specified
in subsection (1).
(3) A liquidator who fails to comply with this section, commits
penalty hundred units for each day that the failure continues.
119. (1) A liquidator shall, within thirty days after— Liquidator’s
accounts
(a) the end of the period of six months from the date of
being appointed;
(b) the end of every subsequent period of six months; and

(c) ceasing to be liquidator or obtaining an order of release;
lodge with the Registrar and, if the liquidator is not the Official
Receiver, with the Official Receiver, accounts of the liquidator’s
receipts and payments, or a statement of the company‘ s position
at the winding-up, verified by a statutory declaration.
(2) The Official Receiver may cause the accounts of a liquidation
to be audited by an auditor approved by the Official Receiver, and
for the purpose of the audit, the liquidator shall furnish the auditor
with such vouchers and information as the auditor requires, and
the auditor may require the production of and inspection of any
books or accounts kept by the liquidator.
(3) A copy of the accounts whether audited or not shall be kept
by the liquidator at the liquidator’s office and shall be open for
inspection by a member of the company, creditor or any other
interested person.
(4) The liquidator shall, when forwarding accounts of liquidator’s
receipts and payments or a statement, made in accordance with
subsection (1), to the creditors and members of the company—
(a) give notice to every member and creditor stating that the
accounts have been prepared; and
(b) inform members and creditors that the accounts may be
inspected at the liquidator’s office and stating the times
during which inspections may be made.
(5) The cost of an audit undertaking, as required in this section,
shall be fixed by the Official Receiver and be part of the expenses
of winding-up.
(6) A liquidator, other than the Official Receiver, who fails to
lodge with the Registrar receipts, payments and a statement of the
position of the winding-up, verified by a statutory declaration
commits an offence and is liable to a fine not exceeding five hundred
five years, or to both.
Notification 120. (1) After the commencement of the winding-up of a
of company company every document issued from the company on which the
in liquidation
name of the company appears, shall have the words, “in liquidation”
added after the name of the company.
(2) If a company fails to comply with subsection (1), the company,
and each officer in default, commits an offence, and is liable, on
conviction, to a fine not exceeding three hundred penalty units in
respect of each document.
121. (1) Subject to this section and any other law, when a Records of
company has been dissolved, the liquidator shall keep the records company
of the company for a period of ten years from the date of dissolution
of the company unless the Court on application by the liquidator,
orders otherwise.
(2) A liquidator who fails to comply with subsection (1) commits
an offence, and is liable on conviction to a fine not exceeding five
hundred penalty units.
122. (1) Where a committee of inspection is satisfied that a Payment of
company in liquidation has surplus funds, the committee of inspection surplus
may direct the liquidator to pay the members, unless the Court on funds to
members
application by a creditor, orders otherwise.
(2) Where the liquidator is satisfied that a company in liquidation
has surplus funds and the company does not have a committee of
inspection, the liquidator may pay the members, unless the Court
on application of a creditor orders otherwise.
123. (1) Where a company is in liquidation, the liquidator shall Unclaimed
deposit in the Company‘s Liquidation Account any— assets
(a) funds or dividends that have not been claimed for more
than six months from the date that funds or dividends
became payable;
(b) funds arising from the sale of property of the company
that have not been claimed or distributed.
(2) The Court may at any time—
(a) on the application of the Official Receiver, order a liquidator
to submit an account, verified by an affidavit, of any
funds or dividends in the Liquidator’s hands or under
the Liquidator’s control, that have not been claimed or
distributed.
(b) direct an audit of the accounts; and
(c) direct the liquidator to deposit the funds in the Company‘s
Liquidation Account.
(3) This section does not deprive a person of a right or remedy
to which that person is entitled against the liquidator or company.
(4) If a claimant demands for any funds or dividends deposited
in the Company’s Liquidation Account, the Official Receiver shall,
on being satisfied that the claimant is entitled to the money, authorise
payment to be made to the claimant.
(5) A person dissatisfied with the decision of the Official
Receiver in respect of a claim made in accordance with subsection
(4), may appeal to the Court, which may confirm, refuse or vary
the decision of the Official Receiver.
(6) Where another person makes a claim to money paid to a

claimant in accordance with subsection (4), such other person shall
not be entitled to a payment out of the Company‘s Liquidation
Account, but may have recourse against the claimant to whom the
unclaimed moneys have been paid.
(7) The unclaimed monies in the Company‘s Liquidation Account,
shall, on the expiration of six years from the date of the payment of
the monies to the credit of the account, be paid to the former
members pro rata.
Expenses of 124. (1) A liquidator shall not incur any expense in relation to
winding-up
a winding-up except with express direction from the Official
where assets
insufficient Receiver as specified in subsection (2), and unless there are
sufficient available assets.
(2) On the application of any creditor or member, the Official
Receiver may direct a liquidator to incur a particular expense on
condition that the creditor or member indemnify the liquidator in
respect of the recovery of the amount expended and, give security
to secure the amount of the indemnity as prescribed.
Meetings to 125. (1) The Court may, with regards to matters relating to
ascertain the winding-up of a company, consider the reliefs sought by the
wishes of members or creditors, and may, order the members or creditors to
members or
creditors convene a meeting to be held and conducted in a manner as the
Court determines, and the Court shall appoint a person to act as
chairperson who shall report the result of the meeting to the Court.
(2) With regards to creditors seeking relief from the Court under
subsection (1), the Court shall take into consideration, the value of
each creditor’s debt.
(3) With regards to members seeking relief from the Court under
subsection (1), the Court shall take into consideration the number
of votes held by each member.
Proof of 126. (1) In every winding-up, debts payable on a contingency,
debts and all claims against the company, present or future, certain or
contingent, ascertained or sounding only in damages, shall be
admissible as proof against the company and where a debt or claim
does not have a certain value, a just estimate of the value shall be
made by the liquidator.
(2) Subject to this Act, subsection (1) shall apply in the winding-
up of an insolvent company with regard to the—
(a) respective rights of secured and unsecured creditors and
debts provable; and
(b) the valuation of annuities, future and contingent liabilities.
127. (1) In a winding-up, the following shall be paid in priority Preferential
to all other unsecured debts— debts
(a) costs and expenses of a winding-up including the

payable taxed costs of a petitioner, the remuneration of
the liquidator, and the costs of an audit carried out;
(b) amounts due, including—
(i) wages or salary accruing to every employee within
the period of three months before the
commencement of the winding-up;
(ii) leave accruing to every employee within the period
of two years before the commencement of the
winding-up;
(iii) paid absence, not being leave, accruing to every
employee within the period of three months
before the commencement of the winding-up;
(iv) recruitment or other expenses or other amounts
repayable under a contract of employment;
(c) severance pay to each employee, equal to three months’
wages or salary;
(d) all amounts due in respect of workers’ compensation which
accrued before the commencement of the winding-up;
(e) any tax, duty or rate payable by the company for any
period prior to the commencement of the winding-up;
(f) Government rents less than five years in arrears at the
commencement of the winding-up;
(g) rates payable to a local authority that were due and payable
within three years before the date of commencement
of the winding-up; and
(h) any other creditors.
(2) Debts referred to in subsection (1) shall rank as follows -
(a) firstly, debts referred to in subsection (1) (a);
(b) secondly, debts referred to in subsection (1) (e), (f) and
(g);
(c) thirdly, debts referred to in subsection (1) (b), (c) and (d);
and
(d) fourthly, debts referred to in subsection (1) (h).
(3) Debts with the same priority shall rank equally between
themselves, and shall be paid in full.
(4) Where the property and assets of a company are insufficient
to meet the debts specified in subsection (3), the debts shall abate
in equal proportions between themselves.
(5) Where a person lends money to an employee of the company,

the lender shall, in a winding-up, have a right of priority in respect
of the money lent, up to the amount the employee would have been
entitled to, and shall have the same right of priority in respect of
that amount as the employee would have had if the payment had
not been made.
(6) Where the available assets of a company are insufficient to
meet any preferential debts specified in subsection (1), and any
amount payable in priority as specified in subsection (3), the
debenture holders under any floating charge created by the company,
shall have priority over creditors, and shall be paid in accordance
with the priority ranking specified in the Moveable Property
Act No. 3 (Security Interest) Act, 2016.
of 2016
(7) Where a company entered into a contract of insurance
against liability to third parties, before the commencement of a
winding-up, and liability is incurred by the company, either before
or after commencement of the winding-up, and an amount in respect
of that liability has been received by the liquidator from the insurer,
the amount shall be paid by the liquidator to the third party to the
extent necessary to discharge that liability, in priority to all payments
in respect of the debts referred to in subsection (1).
(8) Subsections (5) and (6) shall have effect despite any
agreement to the contrary, entered into after the commencement
of this Act.
(9) Despite the provisions of subsection (1)—
(a) paragraph (d) of subsection (1) shall not apply in relation
to a winding-up in which—
(i) a company entered into a contract with an insurer
in respect of liability in accordance with a
law relating to workmen’s compensation;
(ii) a company is being wound-up voluntarily for the
purpose of reconstruction or amalgamation
with another company;
(iii) a right to compensation has, on a reconstruction
or amalgamation, been preserved for the person
entitled to the right; and
(b) where a company has given security for the
payment or repayment of an amount to which paragraph
(e), (f) or (g) of subsection (1) relates, that paragraph
shall apply only in relation to the balance of any such
amount remaining due after deducting from the net
amount realised from the security.
(10) Where, in a winding-up—

(a) assets have been recovered under an indemnity for costs
of litigation given by certain creditors;
(b) assets have been protected or preserved by the payment
of moneys or the giving of indemnity by creditors; or
(c) expenses in relation to which a creditor had indemnified
a liquidator have been recovered;
the Court may make an order for the distribution of assets and
expenses recovered for purposes of giving the creditors, specified
in paragraphs (a), (b) and (c), an advantage over other creditors in
consideration of the risk run by them.
128. (1) Where a company has been wound up, any act Voidance of
relating to the property of a company, done by or against a company, certain acts
which, had it been done by or against an individual, would be void
or voidable in bankruptcy law, shall, if the company is wound-up,
be void or voidable in the same way.
(2) A transfer or assignment by a company of all its property
to trustees done with the intention to defraud the company’s creditors
is void.
129. A floating charge on property of a company, created Voidance of
within one year before the commencement of the winding-up, is floating
charge
void, unless it is proved that the company, immediately after the
creation of the charge, was solvent.
130. (1) Where the acquisition of property or an undertaking Liquidator’s
by a company, within the period of two years before the right to
commencement of the winding-up, from— recover in
respect of
(a) a person who, at the time of the acquisition was a director certain sales
of the company; or to or by
company
(b) another company which, at the time of the acquisition,
had a director who was also a director of the first
company;
and a valuation report shows that the consideration given in
respect of the acquisition exceeded the value of the property, the
liquidator shall recover the difference from the director or company.
(2) The value of the property, business or undertaking stated in
subsection (1) includes the value of goodwill or profits that have
been made by the business or undertaking, and any similar
consideration.
131. (1) Where the property of a company consists of— Disclaimer
of onerous
(a) an estate or interest in land which is encumbered with
property
onerous covenants;
(b) shares in a corporate that are subject to restrictions on

transfer;
(c) unprofitable contracts; or
(d) property that cannot be sold, or is not readily saleable, by
reason of binding the possessor to the performance of
an onerous act, or to the payment of a sum of money;
the liquidator may with the leave of the Court or the consent of
committee of inspection in writing, disclaim the property at any
time within twelve months after the—
(i) commencement of the winding-up; or
(ii) property in question came to the knowledge of
the liquidator, if not within one month after the
commencement of the winding-up; or within
such extended period as allowed by the Court.
(2) From the date of disclaimer, the disclaimer shall operate to
determine, the rights, interests and liabilities of the company, in
respect of the property disclaimed, but shall not, except so far as is
necessary for releasing the company and the property of the
company from liability, alter the rights or liabilities of any interested
person.
(3) The Court or committee of inspection, may before, or on
granting leave or consent to disclaim as specified in subsection (1),
require notices to be given to persons interested in the property of
a company, and impose terms as a condition for granting leave or
consent, and may make other orders as the Court or committee
considers it necessary.
(4) The liquidator shall not disclaim property where—
(a) an application in writing, has been made to the liquidator
by a person interested in the property, requiring the
liquidator to decide whether or not property will be
disclaimed; and
(b) the liquidator has not, within twenty-eight days after the
receipt of the application, informed the applicant that
the liquidator intends to apply to the Court or the
committee for leave or consent to disclaim.
(5) If the liquidator does not disclaim the contract, after an
application referred to in subsection (4), within twenty-eight days
of the application, the liquidator shall be deemed to have adopted
the contract.
(6) On the application of a person who is entitled to the benefit
or subject to a burden of a contract made in accordance with
subsection (5), the Court may make an order rescinding the contract
on such terms as to payment of damages for the non-performance
of the contract, and any damages payable in accordance with the
order may be proved as a debt in the winding-up.
(7) On the application of a person who claims an interest in a
disclaimed property, or, is under a liability not discharged in respect
of a disclaimed property, the Court may, on such terms as the Court
considers necessary, make an order for the vesting of the property
in—
(a) a person entitled to the property;
(b) a person entitled to compensation for a liability in
accordance with this section; or
(c) a trustee for such a person.
(8) A copy of an order made in accordance with subsection (7),
shall be lodged with the—
(a) Registrar;
(b) Official Receiver; and
(c) Registrar of Lands and Deeds, if the order relates to land.
(9) Where the property disclaimed is held under a lease, the
Court shall not make a vesting order in favour of a person claiming
from the company, whether as sub-lessee or as mortgagee, except
where the Court, makes the mortgagee or sub-lessee, subject to
the same liabilities and obligations as those to which the company
was subject under the lease at the commencement of the winding-
up.
(10) A mortgagee or sub-lessee who declines a vesting order
on the terms and obligations referred to in subsection (9), shall be
excluded from the interests in, and security on the property.
(11) Where a person making a claim in accordance with
subsection (9) is not willing to accept a vesting order on the condition
stated in the order, the Court may vest the estate and interest of
the company in the property, in the liquidator, to perform the lessee’s
covenants in the lease.
(12) A person injured by the operation of a disclaimer under
this section is deemed to be a creditor of the company to the amount
of the injury, and may prove the amount as a debt in the winding-
up.
132. (1) Where the Court has issued execution against the Restriction of
assets of a company, or has attached any debt due to the company, rights of
creditor on
and the company is subsequently wound-up, the creditor shall not
execution or
be entitled to retain the benefit of the execution or attachment attachment
against the liquidator, unless the creditors has completed the

execution or attachment before—
(a) the date on which the creditor had notice of a meeting at
which a resolution for voluntary winding-up was
proposed; or
(b) the creditor received from the company, notice of the
date of commencement of the winding-up.
(2) A person who in good faith purchases assets of a company
on sale by the sheriff, on which execution has been levied, acquires
good title to them.
(3) The Court may set aside the rights conferred by subsection
(1), on the liquidator, in favour of a creditor, to such extent and
subject to such terms as the Court considers necessary.
Duties of 133. (1) Subject to subsection (3), where assets of a company
sheriff for are taken in execution and, before the sale or completion of the
goods in execution, by the receipt or recovery of the full amount of the levy,
execution
notice is served on the sheriff that a—
(a) provisional liquidator has been appointed;
(b) winding-up order has been made; or
(c) resolution for voluntary winding-up has been passed;
the sheriff shall, on receiving the notice, deliver to the liquidator
the assets and money seized or received in part satisfaction of the
execution.
(2) The costs of the execution shall be a first charge on the
goods or moneys so delivered, and the liquidator may sell the goods,
or a sufficient portion of them, for the purpose of satisfying that
charge.
(3) Where on execution in respect of a judgment for a sum
exceeding fifteen thousand penalty units, the goods of a company
are sold or money is paid in order to avoid sale of the goods, the
sheriff shall deduct the costs of the execution from the proceeds of
the sale or the money paid, and shall retain the balance for fourteen
days.
(4) If, within the period of fourteen days specified in subsection
(3), notice is served on the sheriff, of an application for the winding-
up of the company having been presented, or of a meeting having
been called at which there is to be proposed a resolution for the
voluntary winding-up, the sheriff shall, pay the balance specified in
subsection (3) to the liquidator, who shall be entitled to retain it as
against the execution creditor.
(5) The rights conferred by this section on the liquidator may

be set aside by the Court in favour of the creditor to such extent
and subject to such terms as the Court considers appropriate in the
case.
134. (1) Where an officer of a company is a party to the Liability for
contracting of a debt by a company and has, at the time the debt is contracting
contracted, no reasonable ground for believing that the company debt
shall be able to pay the debt, the officer commits an offence, and is
liable, on conviction, to a fine not exceeding two hundred thousand
penalty units or to imprisonment for a period not exceeding two
years, or to both.
(2) Where a person has been convicted of an offence specified
in subsection (1), on the application of the liquidator, creditor or
member of the company, the Court may make an order that the
person shall be personally responsible, without any limitation of
liability, for the debts or other liabilities of the company, or as the
Court orders.
(3) An order of the Court made in accordance with subsection
(2) may state that the liabilities shall be a charge on any debt or
obligation due from the company to the person liable, or on any
interest in the company of which the person has a benefit, directly
or indirectly.
135. (1) Where, in the course of a winding-up, it appears that Power of
a promoter, liquidator or officer of a company may have— Court to
assess
(a) misapplied, retained, become liable or accountable for any damage
money or property of the company; or against
(b) committed a misfeasance or breach of trust or duty in delinquent
officers
relation to the company;
the Court may, on the application of a liquidator, creditor or member,
inquire into the conduct of that liquidator, officer or promoter.
(2) The Court may order a person to repay or restore money or
property or to compensate the company, to the extent that the person
was unjustly enriched, where the Court is, after conducting an
inquiry specified in subsection (1), satisfied that a liquidator or officer
had—
(a) misapplied, retained, become liable or accountable for any
money or property of the company, or
(b) committed a misfeasance or breach of trust or duty in
relation to the company.
(3) This section shall apply to matters specified in subsection
(1) that occurred during the two years preceding the commencement
of a winding-up.
Prosecution 136. (1) If in the course of either a winding-up by the Court

of delinquent or a voluntary winding-up, it appears to the liquidator that any past
officer and or present officer, or any member, of the company has committed
members
an offence, the liquidator or member shall report the matter to the
Director of Public Prosecutions and the appropriate investigative
wing.
(2) In the case of a winding-up by the Court, where the Director
of Public Prosecutions receives a report in accordance with
subsection (1), the Director of Public Prosecutions may refer the
matter to the Registrar for further inquiry, and the Registrar shall
investigate the matter.
(3) The Registrar may in accordance with subsection (2), apply
to Court for an order conferring on any person designated by the
Court, all such powers of investigating the affairs of the company,
in accordance with the Act.
(4) If the Director of Public Prosecutions institutes proceedings
in a matter reported, in accordance with subsection (1), the liquidator
and every officer and agent of the company, past and present,
other than the defendant in the proceedings, shall give the Director
of Public Prosecutions the assistance required in the prosecution
of the matter.
Fraud by 137. Where an officer of a company being wound-up—
officers of
(a) induces a person to give credit to the company by false
companies in
liquidation pretences or by fraudulent means;
(b) makes a gift, transfers property or induces the levying of
a fictitious execution against, the property of the
company with intent to defraud creditors of the
company; or
(c) conceals or removes any part of the property of a
company within two months before the date of any
unsatisfied judgment or order for payment of money
obtained against the company with intent to defraud
creditors of the company;
the officer, commits an offence, and is liable on conviction, to a
fine not exceeding two hundred thousand penalty units or to
imprisonment for a period not exceeding two years, or to both.
Winding-up 138. (1) Subject to this section, this Part shall apply, with
of other necessary modifications, to any body corporate incorporated in
bodies
corporate
Zambia, not being a company.
(2) This section shall not apply to a body corporate incorporated
by or under any law of Zambia if the law makes specific provisions
for the winding-up of bodies corporate formed by or under it.
(3) A winding-up by the Court under this section may be made

only on the petition of the body corporate specified in subsection
(1).
139. (1) Subject to this section, this Part applies with the Winding-up
necessary modifications to the operations, business and assets in of other
Zambia of a foreign company, as if the foreign company was foreign
bodies
incorporated in Zambia, carrying on the operations or business of a corporate
foreign company in Zambia, whose only assets are the assets of
the foreign company in Zambia.
(2) A foreign company may be wound-up under this section
whether or not it has been dissolved or has ceased to exist according
to the law of the country of its incorporation.
(3) A foreign company may be wound-up on the following
grounds, in addition to the grounds for winding up in accordance
with this Act —
(a) if the company is in the course of being wound-up,
voluntarily or other wise, in the country of its
incorporation;
(b) if the company is dissolved in the country of its
incorporation or has ceased to carry on business in
Zambia, or is carrying on business for the purposes only
of winding-up its affairs; or
(c) if the Court is satisfied that the company is being operated
in Zambia for any unlawful purposes.
(4) The Court may, in a winding-up order or on subsequent
application by a liquidator, order that all transactions in Zambia by,
or with a foreign company, be deemed to be valid, despite the
transactions executed after the dissolution of the foreign company.
PART IX
INSOLVENCY P RACTITIONERS
140. (1) An insolvency practitioner may be appointed— Insolvency
practitioners
(a) for purposes of, and in accordance with, this Act; or
(b) as a supervisor of a voluntary winding up approved by a
company in accordance with this Act.
(2) A company or body corporate is not qualified to be appointed
or accredited as an insolvency practitioner.
(3) A person qualifies to be accredited as an insolvency
practitioner if that person qualifies to be appointed as a receiver.
(4) A person who carries out the functions of an insolvency
practitioner when that person is not qualified to do so, commits an
offence and is liable, on conviction, to a fine not exceeding two
hundred thousand penalty units or to imprisonment for a period not
exceeding two years, or to both.
(5) This section does not apply to the Official Receiver.
Qualifications 141. A person shall not be appointed, act or continue to act as
for an insolvency practitioner if the person—
appointment
as (a) has a mental or physical disability that would make the
insolvency person incapable of performing the functions;
practitioners
(b) is prohibited or disqualified from so acting by an order of
a Court of competent jurisdiction;
(c) is a body corporate or firm;
(d) is not resident in Zambia;
(e) is not qualified to be appointed as a director of a company;
(f) is a mortgagee or chargee of the company under
receivership or an employee or officer of a mortgagee
or chargee;
(g) has an association with a company that could lead a
reasonable and informed third party to conclude that
the integrity, impartiality or objectivity of the person is
compromised by the association;
(h) is related to a person who has an association with the
company;
(i) is an un-discharged bankrupt or has one’s estate
sequestrated;
(j) is, or has been within the previous two years, a director or
officer of the company or any related body corporate,
except with the leave of Court;
(k) is a trustee under a trust deed for the benefit of debenture
holders of the company, except with the leave of Court;
(l) has been convicted, within the previous five years, of an
offence involving fraud or dishonesty;
(m) has been removed, within the previous five years, from
an office of trust by order of a Court of competent
jurisdiction;
(n) has contravened a provision of this Act in a manner which
has or may materially affect creditors or contributors or
persons dealing in good faith with the company;
(o) is no longer in good standing with that person’s recognised

professional body, as a result of professional misconduct
by that person;
(p) has, within the period of two years immediately preceding
the commencement of the receivership, had an interest,
direct or indirect, in a share issued by the charger; or
(q) is disqualified from acting as a receiver by the instrument
that confers the power to appoint a receiver.
142. (1) A person who wishes to be an insolvency Accreditation
practitioner shall apply for accreditation to the Registrar in the of
insolvency
prescribed manner and form accompanied by the prescribed fee. practitioner
(2) An application, made in accordance with subsection (1),
may be withdrawn at any time before the application is granted or
refused.
(3) The Registrar shall accredit an applicant as an insolvency
practitioner if the applicant meets the qualifications specified in
this Act.
(4) Accreditation as an insolvency practitioner is valid for a
period of one year from the date of accreditation and shall be subject
to renewal.
(5) Accreditation as an insolvency practitioner may be renewed
annually in the prescribed manner and form upon payment of the
prescribed fee.
(6) The Registrar shall withdraw the accreditation granted, in
accordance with this section, if the insolvency practitioner—
(a) is no longer a member of, or has been suspended by, the
accounting or legal professional body;
(b) fails to comply with any provision of this Act; or
(c) furnishes the Registrar or Official Receiver, as the case
may be, with false, inaccurate or misleading information.
(7) The Minister may, by statutory instrument, prescribe —
(a) the criteria and procedure for the variation and revocation
of an accreditation granted in accordance with this
section; and
(b) the terms and conditions attaching to the grant, refusal,
transfer or revocation of an accreditation;
(c) the renewal period of an accreditation certificate; and
(d) the publication of names of insolvency practitioners.
Register of 143. (1)The Registrar shall—

Insolvency
Practitioners
(a) cause to be kept a Register of Insolvency Practitioners;
and
(b) notify the recognised professional body of any misconduct
of an insolvency practitioner or any removal of an
insolvency practitioner from the Register of Insolvency
Practitioners.
(2) The Registrar may, on the application of an affected person,
or on the Registrar’s own motion, remove a person from the Register
of Insolvency Practitioners for a period not exceeding five years
on any of the following grounds:
(a) incompetence, incapacity or failure to perform the functions
and duties of an insolvency practitioner;
(b) failure to exercise the proper degree of care in the
performance of an insolvency practitioner’s functions;
(c) the insolvency practitioner has engaged in illegal acts or
conduct;
(d) the insolvency practitioner no longer satisfies the
requirements set out in this section; or
(e) conflict of interest or lack of independence.
(3) An insolvency practitioner appointed by the Court may be
removed only by the Court on the application of an affected person
on the grounds set out in this Act.
(4) The Registrar shall, within fourteen days, cause a notice to
be published, in the Gazette or other media, of the removal of a
person from the Register of Insolvency Practitioners and the period
that the person shall not be appointed as an insolvency practitioner.
(5) A person who, in contravention of this section continues as
a insolvency practitioner commits an offence and is liable, on
conviction, to a fine not exceeding two hundred thousand penalty
units or to imprisonment for a period not exceeding two years, or to
both.
Insolvency 144. An insolvency practitioner may be appointed to undertake,
practitioner
acting in
or participate in, an insolvency proceeding in a foreign State as
foreign State provided in this Act and as permitted by the applicable foreign law.
Eligibility 143. A person is eligible for accreditation as an insolvency
for
accreditation practitioner if that person is a chartered accountant or a legal
practitioner, as defined in the Accountants Act, 2008 or Legal
Act No. 13 Practitioners Act, respectively.
of 2008
Cap. 30
PART X
CROSS BORDER INSOLVENCY
146. (1) This Part applies where— Application
(a) a foreign court or representative requests for assistance
in the prescribed manner and form in connection with a
foreign proceeding;
(b) a foreign State requests for assistance in the prescribed
manner and form, in connection with an insolvency
proceeding being undertaken in Zambia;
(c) a foreign proceeding and an insolvency proceeding being
undertaken in Zambia are taking place concurrently with
respect to the same debtor; or
(d) creditors or other interested persons in a foreign State
have an interest in the commencement of, or participation
in, an insolvency proceeding being undertaken in Zambia.
(2) This Part shall not apply to a bank or financial institution,
registered in accordance with the Banking and Financial Services Act No. 7 of
Act, 2017. 2017
147. The functions referred to in this Part relating to recognition Court to

of foreign proceedings and co-operation with foreign courts shall have
jurisdiction
be performed by the Court, or by such other persons as the Court
may direct.
148. (1) Nothing in this Part shall prevent the Court from Public
refusing to act or participate in a matter governed by this Part if policy
the action is contrary to the public policy of Zambia. exceptions
(2) Before the Court refuses to act or participate, as provided in

subsection (1), the Court shall make an order on whether it is
necessary for the Attorney-General to appear and be heard on the
question of the public policy of Zambia.
149. Nothing in this Part limits the power of the Court or an Additional
assistance
insolvency practitioner from providing assistance to a foreign under other
representative in accordance with other laws of Zambia. laws
150. A foreign representative or the foreign assets and affairs Limited

of a debtor shall not be subject to the jurisdiction of the Court for jurisdiction
any purpose other than an application commenced in accordance
with this Part.
151. (1) In an insolvency proceeding undertaken in Access of
accordance with this Part, a creditor or foreign representative shall foreign
representative
not have direct access to, or commence or participate in proceedings
to Court
before, the Court.
(2) For purposes of subsection (1), a creditor or foreign
representative shall appoint an insolvency practitioner for purposes
of such proceedings.
(3) A creditor or foreign representative shall only participate in
an insolvency proceeding with leave of the Court.
(4) Subsection (2) shall not affect the ranking of claims in a
proceeding undertaken in accordance with this Act or any other
law, or the exclusion of foreign tax and social security claims.
Application 152. (1) An insolvency practitioner may apply to the Court,
for in the prescribed manner, for an order for recognition of a foreign
recognition proceeding.
of foreign
proceedings (2) An application for an order for recognition of a foreign
proceeding shall be accompanied by an order of the foreign Court
confirming the—
(a) existence of the foreign proceeding before
the foreign court; and
(b) appointment of the foreign representative.
(3) An application for recognition, as specified in this section,
shall be accompanied by a statement, made in the prescribed manner,
of all foreign proceedings in respect of a debtor that are known to
the foreign representative.
(4) All documents produced in support of an application for
recognition shall be in English, and if not in English, shall be translated
and certified as an accurate translation.
Recognition 153. A foreign proceeding shall be recognised by the Court as a—
of foreign
proceeding
(a) foreign main proceeding if it is taking place in the State
by Court where the debtor has the centre of its main interests; or
(b) foreign non-main proceeding if the debtor is incorporated
and registered in accordance with the laws of another
State.
Subsequent 154 An insolvency practitioner appointed for purposes of this
information Part shall, within seven days of the appointment, inform the Court
of any—
(a) substantial change in the status of a foreign proceeding or
appointment of a foreign representative; and
(b) other foreign proceedings regarding the debtor;
that becomes known to the insolvency practitioner.
Interim relief 155. (1) Where relief is urgently needed to protect the assets
during of a debtor or the interests of creditors, the Court may, on the
proceedings application of an insolvency practitioner, appointed for purposes of
for
recognition
this Part, grant any interim relief the Court considers just, including,
an order—
(a) staying the execution of a debtor’s assets;

(b) entrusting to the liquidator or insolvency practitioner, the
administration or realisation of all or part of the debtor’s
assets located in Zambia; or
(c) for the protection and preservation of assets that are
perishable, susceptible to devaluation or in jeopardy.
(2) The Court may refuse to grant the relief specified in
subsection (1), if such relief would interfere with the administration
of a foreign main proceeding.
156. (1) Where the Court makes an order of recognition Relief
of a foreign proceeding in accordance with this Part, an insolvency granted upon
recognition
practitioner, appointed for purposes of this Part, may apply to the
of foreign
Court for an order— proceeding
(a) staying an individual action or proceeding concerning the
assets, rights, obligations or liabilities of a debtor;
(b) staying execution against a debtor’s assets;
(c) suspending a right to transfer, encumber, or dispose of
any assets of a debtor;
(d) providing for the examination of witnesses, the taking of
evidence, or the delivery of information concerning a
debtor’s assets, affairs, rights, obligations or liabilities
outside Zambia;
(e) entrusting the administration or realisation of all or part of
the debtor’s assets located in Zambia to an insolvency
practitioner appointed for purposes of this Part; or
(f) entrusting the distribution of all or part of the debtor’s
assets, located in Zambia, to the insolvency practitioner,
provided that the Court is satisfied that the interests of
creditors in Zambia are adequately protected.
(2) In granting relief in accordance with subsection (1), the
Court shall be satisfied that the relief relates to assets that, in
accordance with the Laws of Zambia, shall be administered in the
foreign non-main proceeding or concerns information required in
that proceeding.
(3) The Court may, on the application of an insolvency
practitioner, debtor or other interested person, make an order, subject
to such conditions as the Court considers appropriate in the matter,
that the stay or suspension, granted in accordance with subsection
(1), shall not apply to a particular action or proceeding, execution
or disposal of assets.
(4) Subsection (1) does not affect the right to commence

individual actions or proceedings to the extent necessary to preserve
a claim against the debtor.
(5) Subsection (1) shall not affect a right to apply for leave to
commence insolvency proceedings under this Act or the right to
file claims in those proceedings.
(6) In granting, denying, modifying or terminating relief, made
in accordance with this Part, the Court shall be satisfied that the
interests of the creditors and other interested persons, including
the debtor, are adequately protected.
(7) The Court may, on an application made by an insolvency
practitioner or a person affected by the relief, granted in accordance
with this Part, modify or terminate the relief granted if—
(a) an application for recognition has been made in respect
of a debtor that is a bank; or
(b) the debtor is placed in statutory management after the
relief has been granted.
Co- 157. (1) In proceedings commenced in accordance with this
operation Part, the Court shall co-operate and communicate with a foreign
and
communication court or foreign representative, either directly or through an
between insolvency practitioner or foreign representative.
insolvency
administrator
(2) The insolvency practitioner is entitled, subject to the
and foreign supervision of the Court, to cooperate or communicate directly
representatives with a foreign court or foreign representative.
Forms of co- 158. Cooperation and communication, made in accordance

operation with this Part may be implemented by appropriate means, including
by the—
(a) appointment of a person or body to act, at the direction of
the Court;
(b) transmission and receipt of information;
(c) coordination of the administration and supervision of assets
or property of a debtor; and
(d) coordination of concurrent proceedings relating to a debtor.
Communication 159. (1) After recognition by the Court of a foreign main
of proceeding, an insolvency proceeding may be commenced only if
proceedings the debtor has assets in Zambia.
in Zambia
after (2) The effects of an insolvency proceeding commenced in
recognition accordance with subsection (1), shall be restricted to the assets of
of foreign a debtor that are located in Zambia and to other assets of the
main debtor that, under any other law, should be administered in that
proceeding
proceeding.
160. Wher e a for eign pr oceeding and an insolvency Co-
proceeding, undertaken in accordance with this Act, are taking ordination in
place concurrently regarding the same debtor, the Court shall seek concurrent
proceedings
cooperation and coordination in accordance with this Part, and the
following shall apply:
(a) when an insolvency proceeding is taking place at the time
the application for recognition of the foreign proceeding
is lodged, any relief granted in accordance with this Part,
shall be consistent with the insolvency proceedings; and
(b) when an insolvency proceeding is commenced after
recognition or after the filing of the application for
recognition of the foreign proceeding—
(i) any relief granted by the Court in accordance with
this Part, shall be reviewed by the Court and
shall be modified or terminated if inconsistent
with the insolvency proceedings; and
(ii) if the foreign proceeding is a foreign main
proceeding, a stay or suspension, made in
accordance with this Part, shall be modified or
terminated, if inconsistent with the insolvency
proceedings; and
(c) in granting, extending, or modifying relief granted in
accordance with this Part, the Court shall be satisfied
that the relief relates to assets that, under any other
law, should be administered in the foreign proceedings
or concerns information required in the proceeding.
161. A creditor who has received part payment in respect of Payment in
its claim in a foreign proceeding, may not receive payment for the concurrent
same claim in an insolvency proceeding undertaken in accordance proceedings
with this Act regarding the same debtor, unless the payment to the
other creditors of the same class is proportionately less than the
payment the creditor has already received.
162. (1) The Minister may, by statutory instrument, make Regulations
regulations for the better carrying out of the provisions of this Part. on cross-
border
(2) Without limiting the generality of subsection (1), regulations insolvency
made in accordance with this section may provide for—
(a) notification to foreign creditors of proceedings relating to
insolvency;
(b) requirements for applications for recognition of foreign
proceedings;
(c) requirements for recognition and notifications of foreign
proceedings;
(d) cooperation between the Court and other competent

authorities in Zambia and foreign states involved in cases
of cross-border insolvency;
(e) greater legal certainty for trade and investment;
(f) fair and efficient administration of cross-border insolvencies
and acts that protect the interests of creditors and other
interested persons, including debtors;
(g) protection and maximisation of the value of the debtor’s
assets;
(h) procedures for intervention by foreign representatives in
proceedings in Zambia;
(i) cooperation and direct communication between the
insolvency practitioner and foreign representative;
(j) coordination of more than one foreign proceeding; and
(k) facilitation of the business rescue proceedings, for purposes
of this Part, to protect investment and preserve
employment.
PART XI
MISCELLANEOUS PROVISIONS
Electronic 163. (1) A document authorised or required to be lodged
transactions with, or delivered to, the Registrar as specified in this Act, may be
and
processes
lodged or delivered by electronic means.
(2) Electronic means may be used for the compliance of a
process or transaction.
(3) An electronic register of shares and debentures may be
established and ownership of shares and debentures which are
registered electronically shall be recognised for all purposes relating
to such matters.
(4) A document or certificate required to be signed, granted,
issued or kept by the Registrar, may be signed, granted, issued or
kept in electronic form.
Netting off 164. An unperformed obligation arising out of an agreement
in respect of an asset which has been transferred for purposes of
collateral security shall, on sequestrations of the estate, of either
party to such agreement, terminate automatically at the date of
sequestration and the value of the obligations shall be calculated at
market value as at that date and shall be netted off and the net
amount shall be paid.
Exercise of 165. Subject to this Act, where any discretionary or other
discretionary power is given to the Registrar, the Registrar shall not exercise
power
that power adversely or arbitrarily and a person challenging a
decision of the Registrar shall have the right to apply to the Court.
166. Subject to this Act, the Registrar shall, on the request of Request for
any person and on payment of the prescribed fee, or furnish a information
certificate in respect of the document or copies of any document,
which is open to public inspection and which is lodged in the Register
or any other register, maintained in accordance with this Act.
167. (1) Where this Act requires a document or particulars Registration
to be lodged with the Registrar, the Registrar shall register them in of documents
the form and manner prescribed or, if no manner is prescribed for
the document or particulars, the Registrar shall determine the
manner and form of lodgement.
(2) For purposes of this Act, a document or particulars shall be
taken not to have been lodged with the Registrar until a fee,
prescribed in accordance with this Act, has been paid to the Registrar.
(3) Subject to this Act, where this Act requires a document or
particulars to be lodged, a company shall lodge a separate document
or set of particulars.
(4) Where the Registrar considers that a document or particulars
lodged with the Registrar—
(a) contain matter which is contrary to any written law;
(b) by reason of an error, omission or misdescription, have
not been duly completed;
(c) are insufficiently legible;
(d) are written on material insufficiently durable; or
(e) otherwise do not comply with the requirements of this
Act;
the Registrar may refuse to register the document or particulars
in that state and direct that they be amended or completed in a
specified manner and re-submitted.
(7) Where the Registrar gives a direction, as specified in
subsection (4), the document or particulars shall be considered not
to have been lodged.
(8) The Registrar may require a document or a fact stated in a
document, lodged with the Registrar, to be verified by statutory
declaration.
(9) Where the Registrar is required or permitted by this Act to
cause a copy or particulars of a document lodged, with the Registrar,
to be published in the Gazette or in a daily newspaper of general
circulation in Zambia, the Registrar may require the lodgement,
with the Registrar, of any such document in duplicate or the provision
of any such particulars, and may withhold registration of the
document until the requirement has been complied with.
(10) Where this Act provides that a document to be lodged
shall be “ in the prescribed form ”, the Registrar shall accept for
lodgement and registration a document that contains all the
information required and varies from the prescribed form inessential
respects only.
Extension of 168. (1) The Registrar may, before the end of the period fixed
time for lodgement of a document or particulars, at the request of the
person concerned, extend the period for lodgement by such period,
and on such terms as the Registrar considers reasonable in the
circumstances.
(2) Subject to this section, where a document or particulars are
lodged with the Registrar, after the end of the period fixed for their
lodgement, the Registrar shall accept the document or particulars
for registration on payment of such additional fee as may be
prescribed.
(3) The Registrar may reduce or waive an additional fee
imposed, in terms of subsection (2), if the Registrar is satisfied that
the failure to lodge the document or particulars was caused or
continued solely through administrative oversight and that no person
is likely to have suffered damage or to have been prejudiced as a
result of the failure.
Documents 169. (1) Subject to this Act, where this Act requires a
to be in document or register to be prepared, kept, maintained or lodged,
official the document shall be in English.
language
(2) Where the Registrar approves the lodgement of a document
which, or part of which, is in a language other than English, the
Registrar may require a certified translation into English to be
annexed to it.
Administrative 170. (1) The Registrar may impose an administrative penalty
penalties on a person for any failure to comply with this Act.
(2) An administrative penalty, referred to in subsection (1), shall
not exceed the amount prescribed by the Minister for each day
during which such failure continues.
(3) An administrative penalty, imposed in accordance with
subsection (1), shall be paid to the Agency within the period specified
by the Registrar.
(4) If any person fails to pay an administrative penalty, within
the period specified in subsection (2), the Registrar may, by way of
civil action in a competent court, recover the amount of the
administrative penalty from such person as an amount due and
owing to the Agency.
171. (1) A past or present officer of a company who— Offences by
officers of
(a) fails to disclose to an insolvency practitioner when, how, companies
to whom and for what consideration the company relating to
disposed of any movable or immovable property, except winding up
such part as has been disposed of in the ordinary course or other
of the business of the company; proceedings
(b) on the direction of an insolvency practitioner does not

deliver up—
(i) movable and immovable property; or
(ii) records;
belonging to the company and in the officer’s custody, or under
the officer’s control, which the officer is required by law to deliver
up;
(c) within twelve months before the commencement of winding
up or other proceedings, undertaken in accordance with
this Act, or any time thereafter—
(i) conceals property of the company, or conceals a
debt due to or from the company;
(ii) fraudulently removes property of the company;
(iii) conceals, destroys, mutilates, falsifies, or is privy
to the concealment, destruction, mutilation or
falsification of, any records relating to the
property or affairs of the company;
(iv) makes or is privy to the making of any false entry
in any record relating to the property or affairs
of the company;
(v) fraudulently parts with, alters or makes an omission
in, or is privy to fraudulent parting with, altering
or making of an omission in any document
relating to the property or affairs of the
company;
(vi) procures or obtains, by fraud or by falsely
representing that the company is a going
concern, property for or on behalf of the
company on credit; or
(vii) pawns, pledges or disposes of any property of
the company which has been procured or
obtained on credit and has not been paid for,
unless such pawning, pledging or disposing was
in the ordinary course of business of the
company;
(d) makes a material omission in a statement relating to the
affairs of the company;
(e) knowing that a false debt has been proved by any person,
fails for a period of one month, to inform the insolvency
practitioner of it;
(f) prevents the production of any record relating to the
property or affairs of the company;
(g) has accounted for the property of the company stating
fictitious losses or expenses; or
(h) has made a false or fraudulent representation in respect
of the affairs of the company or winding up and other
proceedings, for purposes of obtaining the consent of
the creditors or a party to an agreement;
commits an offence and is liable, on conviction, to a fine not
exceeding two hundred thousand penalty units or to imprisonment
for a period not exceeding two years, or to both.
(2) A person that pawns, pledges or disposes of property or
participates in a pawn, pledge or receives the property knowing it
to be pawned, pledged or disposed of in circumstances which amount
to an offence as specified in subsection (1), commits an offence
and is liable, on conviction, to a fine not exceeding two hundred
thousand penalty units, or to imprisonment for a period not exceeding
two years, or to both.
Inducement 172. Without prejudice to the Anti-Corruption Act 2012, a
relating to person who gives to, or participates in the giving of, consideration
insolvency
for securing or preventing a person’s appointment or nomination as
practitioner
Act No. 3 of an insolvency practitioner commits an offence and is liable, on
2012 conviction to a fine not exceeding five hundred thousand penalty
units or to imprisonment for a period not exceeding six months, or
to both.
Destruction, 173. An officer or member who, with intent to defraud—
alteration,
mutilation or (a) receives property of a corporate other than in payment of
falsifying of a just debt or demand;
book, etc
(b)fails to make a full and true entry in the books and accounts
of the corporate or fails to cause or direct such an entry
to be made;
(c) destroys, alters, mutilates or falsifies any entry in a book,
document, security or account or is privy to any such
act; or
(d) makes, or is privy to the making of, a false entry in a
book, document or account;
commits an offence and is liable, on conviction to a fine not

exceeding five hundred thousand penalty units or to imprisonment
for a period not exceeding five years, or to both.
174. (1) If, on an investigation undertaken in accordance Liability
with this Act or where a corporate is wound up, is in receivership where
proper
or under business rescue proceedings, it is shown that proper books accounts not
of account were not kept by the company in the period of two kept
year s immediately preceding the commencement of the
investigation or any such proceedings, every officer in default
commits an offence and is liable, on conviction, to a fine not
exceeding one hundred thousand penalty units or to imprisonment
for a period not exceeding one year, or to both.
(2) For purposes of this section, proper books of account shall
be considered not to have been kept properly, if not kept in a manner
that enables the books of account to be conveniently and properly
audited, whether or not the company has appointed an auditor.
(3) If, during the course of proceedings specified in subsection
(1), or in any other proceedings against a company, it is shown that
an officer of the company who participated in the contracting of a
debt had, at the time the debt was contracted, no reasonable ground
for believing that the company was able to meet its liabilities at the
time, commits an offence and is liable, on conviction, to a fine not
exceeding fifty thousand penalty units or to imprisonment for a
term not exceeding six months, or to both.
175. (1) If, in the course of the winding up, receivership or Responsibility
business rescue proceedings or in any other proceedings against a for
company, it is shown that business of a company has been carried fraudulent
trading
on for fraudulent purposes, or with intent to defraud creditors, the
Court shall, on the application of an insolvency practitioner or
creditor, order that any person who was knowingly a party to the
carrying on of the business in that manner shall be personally
responsible, without any limitation of liability, for the debts or liabilities
of the company as the Court orders.
(2) Where the Court makes an order, in accordance with
subsection (1), it may give such further directions as it considers
appropriate in the matter for purposes of giving effect to the order
and, in particular, make the liability a charge on—
(a) a debt or obligation due from the company to that person;
(b) an interest in any charge on any assets of the company
held by or vested in that person or corporate on the
person’s behalf; or
(c) any person claiming as trustee;
and may make such further order as is necessary for the purpose
of enforcing a charge imposed as specified in this subsection.
(3) If it appears to the Court, in the course of a voluntary winding
up, receivership or business rescue proceedings that any past or
present officer or member of the company has committed an
offence as specified in this section and that a report with respect to
the matter has not been made by the insolvency practitioner, on the
application of any person interested in the proceedings, or of the
Court its own motion, the Court may order the insolvency practitioner
to make the report.
(4) Any charges on the assets and debts of the company to
which priority is given by this Act and all costs and expenses
incidental to the proceedings, specified in this section, shall be payable
out of the assets of the company.
Offence by 176. Where an offence under this Act is committed by a body
body corporate or unincorporated body, and the director, manager or
corporate and
principal
shareholder of that body is suspected to have committed the offence
officer or and is charged of that offence, that director, manager or shareholder
shareholders of the body corporate or unincorporated body is liable, upon
of body conviction, to the penalty specified for the offence, unless the director
corporate or
unincorporated
or manager proves to the satisfaction of the court that the act
body constituting the offence was done without the knowledge, consent
or connivance of the director or manager or that the director or
manager took reasonable steps to prevent the commission of the
offence.
General 177. A person who is convicted of an offence as specified in
penalty this Act for which no penalty is provided is liable to a fine not
exceeding one hundred thousand penalty units or to imprisonment
for a period not exceeding one year, or to both.
Rules by 178. The Chief Justice may, by statutory instrument, make
Chief Justice rules regulating appeals provided for in this Act.
Regulations 179. (1) The Minister may, by statutory instrument, make

regulations for the better carrying out of the provisions of this Act.
(2) Without limiting the generality of subsection (1), regulations
made in accordance with subsection (1) may—
(a) prescribe fees or charges payable in respect of any matter
arising under, provided for, or authorised by this Act;
(b) prescribe the forms for applications, licences, approvals,
registers, notices, orders and other documents required
for the purposes of this Act;
(d) prescribe the information to be given in returns and other

documents delivered or made for the purposes of this
Act;
(e) provide the procedure for the service of notices, orders
and documents as specified in this Act and the times at
which they shall be taken to have been served;
(f) prescribe the rate of remuneration for liquidators and other
insolvency practitioners; and
(g) prescribe the procedure for objections, reviews and public
inquiries for purposes of this Act, and the making,
consideration, hearing and determination of objections,
reviews and public inquiries.
180. A person who was a receiver or liquidator of a company Transitional
at the coming into operation of this Act shall continue as a receiver Provisions
or liquidator as if accredited in accordance with this Act.

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Corporate Insolvency [No.

24. Duration of business rescue proceedings

52. Limitation of liability

83. Inspection of books by creditors and members

112. Eligibility for appointment as liquidator

I hereby signify my assent to the Bill

Date of Assent: 17th November, 2017

An Act to provide for corporate receiverships, appointment

2. (1) In this Act, unless the context otherwise requires— Interpretation

“ account fairly stated ” means the annual accounts stated in

(c) is able to appoint or to veto the appointment of a

(i) in the ordinary course of a business carried

“ foreign Court ” means a judicial or other authority competent

“ insolvent ” means having liabilities that exceed the value of

“ recognised professional body ” means a professional body

(i) the value or price of any shares, debt securities

“ special resolution ” has the meaning assigned to the word in

company if the charge is satisfied that events have occurred or are

(3) Where the directors of a company fail or neglect to prepare

(b) comply with the notice issued by the Registrar under

(3) An individual shall not be appointed, act or continue to act

(2) Despite the generality of subsection (1), the fee payable to

Liabilities of 14. (1) Where a contract was entered into by a receiver in

17. Where a receiver is appointed of the whole, or substantially Statement of

(a) the Court shall appoint another business rescue administrator

(7) If liquidation proceedings have been commenced by or

(iii) in a transaction specified within, and undertaken

conditionally suspend a provision of an agreement to which the

(ii) business rescue administrator’s management of

(2) A business rescue administrator shall not, except with the

(b) all Court, arbitration or administrative proceedings, including

(b) a further right, if the proposed business rescue plan is rejected,

(b) participate in any Court proceedings arising during the

(2) A business rescue administrator shall give seven days’ notice

(ii) the effect, if any, that the business rescue plan

altered by the plan and require them to vote on

(7) Except to the extent that an approved business rescue plan

(3) A company, creditor or member of a company may apply

(11) The Court may prescribe such terms, as it considers

(3) A copy of the statement specified in subsection (1) shall be

(a) winding-up by the Court; or

to pay any money ordered to be paid, proceedings may be taken

(c) have devolved on the member by operation of law.

has no assets or, in the case of a petition by a member, there will be

(b) cause a copy of the order to be served on the secretary

and is liable, on conviction, to a fine not exceeding three hundred

(a) the particulars of its assets, debts and liabilities;

(j) the disposal or proposed disposal, by the liquidator, of any

(b) make any compromise or arrangement with creditors,

(f) draw, accept, make and endorse any bill of exchange or

(a) members whose shareholding represent not less than one

(5) A member of the committee of inspection may resign by

79. (1) In deciding whether to grant an application, made Order for

(7) A liquidator who fails to comply with subsection (6) commits

Power to 85. (1) Where a liquidator makes a report stating that—

(a) shall, before the examination, be furnished with a

(c) the estimated expenses of winding-up, as of the date

(5) A company shall within twenty-one days of the Court making

(9) The creditors may by resolution at a meeting convened in

102. (1) A liquidator may, during a voluntary winding-up— Powers and