A NEW Companies Act — which seeks to improve the ease of doing business through investor protection, transparency and increased accountability — is set to be signed into law by President Mnangagwa in the near future, amid indications the Bill is in the Attorney-General’s Office for proofreading.
The Act will replace the existing one that has been widely condemned for anomalies, including allowing the functions of shareholders to overlap, causing chaos in the operations of companies and bureaucracy.
Team leader for the technical working group on “Starting a Business and Protection of Minority Investors”, Mr Willie Mushayi – who is also the Deputy Chief Registrar of Companies under the Ministry of Justice – told The Herald that delays in bringing a new Companies Act into force were necessitated by continued stakeholder consultations and input, including from the World Bank.
“This is a major law of the country and all contributions had to be included (but) there is movement; it was passed by Parliament,” he said.
“It’s now with the Attorney-General’s Office going through what they call proofreading before it’s signed into law.”
Government wants the old law to go as some of its sections and/or provisions have become obsolete, and frustrate potential investors.
Moves to overhaul the Companies Act started in August 2015 but serious stakeholder participation saw the draft Companies Bill being rejected as it was felt that it excluded key contributions by stakeholders.
Since the coming in of the Second Republic led by President Mnangagwa, it is no longer business as usual, especially as Government spearheads the “Zimbabwe is Open for Business” policy.
Mr Mushayi said the new Act seeks, among other things, to increase protection of minority shareholders, promote transparency and replace most criminal penalties with civil penalties.
“There is increased accountability, disclosure and transparency of directors; improved protection for minority shareholders; replacement of most criminal penalties with civil penalties, and an obligation to companies to disclose beneficial ownership of shares,” he said.