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"id": 45813,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/45813/?format=api",
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"type": "speech",
"speaker_name": "Mr. Wako",
"speaker_title": "The Attorney-General",
"speaker": {
"id": 208,
"legal_name": "Sylvester Wakoli Bifwoli",
"slug": "wakoli-bifwoli"
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"content": "Mr. Deputy Speaker, Sir, if you come to page 1193, Clause 48, you will find that, for the first time, we have for now been reading the name of the company ending with the word âlimitedâ. That will continue in some cases. That âlimitedâ has been applied whether or not it is a private company or a public company. However, you find in Clause 48 that the name of a limited company will now, of course, bear the word âlimitedâ. But if that private company is also a public company, then the abbreviation âpublic limited companyâ will appear after the name with the abbreviation âPLCâ. This is coming for the first time under the new Companies Act. Of course, the word âlimitedâ will still continue, particularly, where a company is not a public company. But the word âlimitedâ under Clause 50, can be done away with, particularly in companies limited by guarantee. Normally, in companies limited by guarantee, they are formed to pursue a particular noble objective such as promoting some charitable work, social work and even some foundations. They do not use the âlimitedâ because of the fact that they are not limited in the sense that there is a share of profits. When you see a company, where approval has been given, doing away with the word âlimited,â it means that, that company is more or less a charitable company and is not supposed to declare any profits. Profits are supposed to be ploughed back to further the charitable objectives of the company. Clause 5 provides for the Register of Companies and Clause 66 gives the public and members a right to respect that Register. Mr. Deputy Speaker, Sir, I did state earlier that it will now be possible to form a one-member company. Clause 72 on page 1205 provides for that and how it should be done among other things. It also provides that it is possible for one to begin a three- member company and after two of them resign, it becomes a one-member company. In which case, the Register of Companies must so reflect so that the rules of a company with one member apply to that person. It is also possible for one to begin as an individual, form a company and then be joined by others. In this case, one must inform the Registrar so that the laws applicable to a bigger company apply. That is provided for in clause 72. It is also stated that if you are a private company under clause 22, you should have at least, one director. However, if you are a public company, you should have at least two directors. Something that was not very clear in the old Companyâs Act was that it was possible for a director to be another company because the company is a legal person in law. Therefore, it was possible to have a company but you find that the directors of that company are another company which is a legal person. Under this new law, a director must be a natural director, like you and me and not an artificial person who is a person by virtue of the legal provisions of law. That is in clause 92 of the Companies Act. Mr. Deputy Speaker, Sir, formerly it was possible even for minors to be directors of companies, particularly for small companies where, for example, you and your wife are the directors. You could appoint your first born who may be 17 years old to be a director of the company. It is a family affair as we may call it. Whereas that was possible, now the law states that a director must be one who has attained the age of 18 years. That is very clear. Any appointment in contravention of this rule shall be void. It also provides in the case of public companies that the appointment of a director for a public company shall be voted on individually. I think most of you have gone to annual general meetings where it is said that so and so have offered themselves to be reappointed and the directors are voted in collectively. Now there is an obligation that each director must be voted in individually to take individual responsibility and not an enmass reappointment of directors as it happens in annual general meetings. Mr. Deputy Speaker, Sir, there are very numerous regulations regarding how the register is to be kept and how alterations should be made and how they can be deleted and inserted again and so on. Written procedures are there. I do not have to go through them right now. Then we have part 11 of the Companies Bill which introduces another new concept which goes into the details of disqualification of directors. Clause 130 states that in the circumstances specified in this Section, a court may make a disqualification order that a person with regard to whom the order is made shall not be a director of any company. The grounds are there. Amongst the grounds is that the director may have been convicted of an offence. The director may be disqualified over fraud that he has undertaken. Another type of disqualification is that the director has been involved in running the activities of an insolvent company. If that is proved, one cannot be a director of another company. That is because of the rule of law. Mr. Deputy Speaker, Sir, the court can make those orders on proper hearing of the case. This is a very important clause. It is important because in this country, we have seen people running a company down and it becomes insolvent or runs into liquidation and so on. The same person goes elsewhere and starts to run another company. Who suffers? The people who suffer are the members of the public and the investors in those companies because the man is a sweet talker and so on. This law stops a person who has completely failed in running a company from running it to the ground. If one has been convicted of an offence in relation to running a company or if one has acted fraudulently in running companies, then he is not worth being a director not only in that company but in any other company. I think this is a very good thing. You may also find people who have failed in running those companies somehow getting appointed into corporations where again the same thing goes on. They run the corporations down and so on. Therefore, this whole chapter is carefully drafted, taking into account the rights of a person to be heard by the courts before the disqualification orders are imposed on him. Mr. Deputy Speaker, Sir, Clause 143 provides that if a person has committed those kinds of crimes abroad and he comes here, he is also disqualified from running businesses here. This happens particularly here in developing countries where people from the so-called First World run away from their creditors in those countries where they have run down companies and somehow find their way here. This becomes a haven where they quickly make profits and become millionaires. From clause 143 onwards, such people will not be allowed to run companies here. Clause 143 onwards provides for that."
}