Prior to 2013, Malawi was using The Companies act of 1984. This 1984 Companies Act was repealed in 2013 when The Companies Act of 2013 became into effect. Malawi government had to consult stakeholders on the draft 2013 Companies Act to simplify formation and registration of companies. Before 2013, it was taking a long time for potential investors to register companies and government described this as frustrating. This was one of the areas that caused Malawi to fare badly on sustainable economic opportunity category of the 2012 Ibrahim Index of African Governance (2012 IIAG) despite the country being placed on position 17 out of 52 countries in Africa. Malawi had also slipped six steps from 151 to 157 on World Bank Ease of Doing Business 2013 (DB13). The 2013 Companies act is a unique piece of legislation; it introduces a “one person company”, strengthens the office of the office of the registrar of companies and in many respects aims at reducing the cost of doing business. (Allan Hans Muhome, 2016)
• THE 1984 AND 2013 COMPANIES ACTS SALIENT FEATURES AND CASES • The Office of The Registrar of Companies The office of the registrar is now given prominence as it appears in section 3 of the Companies Act of 2013 rather than section 324 of the 1984 Companies Act. The enhanced functions include: • Administering the 2013 companies act and supervising incorporation and registration of companies. Various monetary penalties are provided for non- compliance. • The registrar is mandated to establish and maintain a company registry in the Malawi Business Registration Database established under the Business Registration Act. • The registrar performs such other functions as may be specified by the 2013 companies act or any other written law and undertakes such other activities as may be necessary or expedient to give full effect to the 2013 companies act for example supplying information to the ministry of lands as outlined in section 380. • Registration of Documents The 2013 companies act provides for two modes of filing documents; the traditional hard copy filing and the modern electronic mode of filing as outlined in section 7 of the act. Section 135 – 155 also allows for electronic dealing of shares. The benefits of electronic filing include: • Improved customer service • Faster turnaround times • Improved accuracy and audit trails • Reduced processing cost The major disadvantage of electronic filing however is the increase in cyber crime as evidenced by the cash gate scandal.
• Local Participation • The 1984 companies act specifically provided for local participation in companies, the 2013 companies act has departed from that arrangement. • This was necessitated by the slow implementation of local participation by the government. • Government has other avenues of achieving similar intentions through expropriation under the constitution, terms of concession like the Paladin/Kayelekela arrangement and indirectly through taxation and corporate social responsibility.
- Spring '20
- Corporation, Types of companies, One Person Company, State Owned Company