PATENTS AND COMPANIES REGISTRATION AGENCY

Transcription

1 PATENTS AND COMPANIES REGISTRATION AGENCY STAKEHOLDER CONSULTATION PAPER ON PROPOSED FEES UNDER THE CORPORATE INSOLVENCY ACT NO. 9 OF 2017 AND THE COMPANIES ACT NO. 10 OF 2017 PACRA - Repositioning for Enhanced Access, Efficiency and Effectiveness in Service Delivery

2 1.0 Introduction and Background 1.1 This a Stakeholder Consultation Paper on proposed fees under the Corporate Insolvency Act No. 9 of 2017 and the Companies Act No. 10 of 2017 (hereinafter collectively referred to as the statutes ) by the Patents and Companies Registration Agency. 1.2 The paper seeks to inform stakeholders and solicit their comments on the proposed fees. In this regard, it provides context, background and rationale for the proposed fees including reforms that have been undertaken by the Patents and Companies Registration Agency (hereinafter also referred to as PACRA or the Agency ) which, while reducing the cost of accessing its services, have resulted in increased operational costs. 1.3 PACRA is mandated to provide business and intellectual property registration services. It was hived off the mainstream civil service and commercialised under the Public Sector Reform Programme in It thus became a semi-autonomous, self-sustaining executive agency of the Ministry of Commerce, Trade and Industry. 1.4 The Agency retained all revenue generated until December 2013, when section 16 of the Patents and Companies Registration Agency Act No. 15 of 2010 was amended by the Patents and Companies Registration Agency (Amendment) Act No. 12 of Following the amendment, fees collected by the Agency form part of the general revenue of the State. Thus, effective 1 st January 2014, all fees collected are immediately transmitted to the central treasury while the Agency is in funded through grants. 1.6 The proposed fees follow the enactment of the two (2) statutes in November 2017 and thus the need to operationalise them. The Companies Act No. 10 of 2017 has repealed and replaced the Companies Act Cap 388 of the Laws of Zambia while the Corporate Insolvency Act No. 9 of 2017 contains insolvency provisions. 1

3 1.7 The statutes came into force on 15 th June 2018 following the issuance and publication of the Statutory Instrument No. 47 of 2018 (Commencement Order for the Companies Act). However, implementing regulations, including fees and forms, are yet to be issued. 1.8 The decision to operationalize the statutes was taken in view of other pieces of legislation, notably the Public Finance Management Act No. 1 of 2018, which make reference to the new Companies Act. 2.0 Brief on Corporate Law Reform 2.1 The overall objective of corporate law reform has been to create an enabling environment for a robust private sector. To this end, the Corporate Insolvency Act provides for: - (a) enhanced regulatory oversight of Insolvency Practitioners including introduction of professional qualifications and accreditation for receiver and liquidators; (b) a Business Rescue Mechanism (administration) for financially distressed but potentially viable companies; and (c) cross-border insolvency, thus facilitating international trade. 2.2 As for the Companies Act, it; a) provides for modernisation of the registry and, in particular, migration to electronic registration services and for companies to conduct business, including holding meetings, by electronic means. This measure will reduce the regulatory burden on companies as they will be able to maintain records digitally and transact electronically; b) prevents the use of corporate bodies for illegal activities by providing for disclosure of beneficial owners thus preventing corporate bodies from being used for illicit purposes such as money laundering, bribery and corruption, insider dealing, tax fraud and terrorism financing. The measure will also ensure that 2

4 Zambia complies with international obligations vis-à-vis the financing of terrorism, money laundering and tax evasion; c) provides for high standards of corporate governance by, inter alia, prescribing functions and obligations of company secretaries and directors, enhanced protection of minority shareholders and accountability of directors to shareholders. The Act further prescribes minimum standards for annual reports, thereby protecting minority shareholders who may not be directly represented on the board of directors; d) strengthens financial reporting and fosters transparency and good corporate governance; and e) promotes micro, small and medium enterprises (MSMEs) by exempting them from the requirement to have their books of accounts audited as well as the requirement to engage professional company secretaries. 3.0 Rationale and Justification for the Fees 3.1 Increased Operational Costs The proposed fees have been informed by the principle of cost recovery and thus preventing the Agency from being a burden on the central treasury. In the last five (5) years, the Agency has invested heavilly in reforms which, while reducing the cost of accessing its services, have increased its operational costs. Notable among these are the following: - (a) (b) Efficient Registration: Following re-engineering of processes and substantial investment in ICT infrastructure, the Agency has reduced the time it takes to register a business from an average of 21 days to a few hours. Online Business Registration: On-Line Business Registration has been introduced thereby bringing registration services closer to the public. Apart from easing access to registration services, the On-Line Registration System provides value added services and ready access to business records, including 3

5 registration certificates. (c) (d) (e) (f) (g) One Stop-Shop Integration System (OSSIS): The Agency, with support from the former Private Sector Development Reform Programme (PSDRP), spearheaded the development of an electronic platform, the One-Stop-Shop Integration System (OSSIS), which facilitates information sharing among Government agencies. Under the OSSIS, business related information captured by the Agency, is made available to participating Agencies at no cost. Decentralisation of Services: In order to take registration services closer to the public and consistent with the Patriotic Front Government s vision of promoting rural development, the Agency increased its presence from four (4) offices (in Lusaka, Ndola, Livingstone and Chipata), to all provincial capitals as well as Kitwe. In Lusaka, in addition to the head office in long acres, the Agency also operates from the Regulatory Service Center (formerly One-Stop-Shop) along Cairo road in Lusaka. Digitisation of Business Records: In 2013, the Agency commenced digitisation of business records in order to complement the decentralisation of services, address the challenge of filing space and ease access to business records. Thus, all physical lodgments are now digitized and stored electronically. Partnerships with Local Authorities and Mobile Registration: Given that services have only been decentralised to provincial capitals, the Agency has partnered with local authorities in the provision of its services at district level. This is supplemented by mobile registration to reach the remotest parts of the country. Establishment of a Call Center: A Call Center was established in 2015 to create a platform through which the public can engage the Agency to obtain information and seek clarification in a more cost effective manner. 3.2 Cost Implications of Reforms As observed, while improving service delivery and reducing the cost of accessing registration services, the Agency s operational costs have increased as follows: - 4

6 (a) Online Business Registration: On-line business registration has translated into software licensing and ICT maintenance costs. Further, it has taken away revenue streams such as replacement of certificates as certificates can now be stored electronically and thus reprinted by clients. Further, the public can now verify the registration status of a business at no cost. (b) One Stop-Shop Integration System (OSSIS): While the OSSIS facilitates tax compliance and social security registration, among other public services, the Agency not only has to maintain the system but has to pay for services of other Government agencies, including OSSIS participating institutions. In addition, the Agency facilitates prosecutions by testifying and providing information to law enforcement agencies at no cost. (c) Digitisation of Business Records: Digitisation of records has also increased maintenance and software licensing costs. The Agency has had to recruit data entry clerks. (d) Decentralisation of Services: Decentralisation of services has entailed added operational costs vis-a-vis staffing, rentals, utility costs and operational motor vehicles. This has been compounded by the fact that the Agency, being a service provider, has to operate even in localities that cannot meet operational costs. As a matter of fact, most of the rural based Offices are subsidised by the few along the line of rail. (e) (f) Wage Bill: The rapid decentralization of services has resulted in an expanded workforce and consequently a huge wage bill. Staffing levels have more than doubled in the last 5 years from 80 to 181. Partnerships with Local Authorities: Partnerships with local authorities have added pressure on limited resources through training of council staff and payment of commission to local authorities. (g) Call Centre: Apart from human resource related costs, the Agency has to pay annual license fees to the Zambia Information and Communication Technology Authority (ZICTA) and mantain the Call Centre System. 3.3 Cost Implications of New Mandates and Additional Responsibilities 5

7 3.3.1 The Agency s cost structure has further been impacted by the new mandates it has recently acquired, namely: - (a) Registration of Security Interests in Movable Property: Following the enactment of the Movable Property (Security Interest) Act No. 3 of 2016, the Agency is now mandated to establish and operate an on-line registry for security interests in movable property (Collateral Registry). While this intervention facilitates access to credit by small businesses, by making movable property attractive as collateral, it entails licencing, maintenance and internet related costs. (b) Establishment of Regulatory Services Centres: Under section 9 of the Business Regulatory Act No. 4 of 2014, the Agency is now mandated to establish Regulatory Services Centers (formerly known as One-Stop- Shops) while the Business Regulatory Review Agency (BRRA) oversees and coordinates their operations. This is a daunting task that entails securing office accommodation big enough to accommodate other institutions and equipping them with the necessary facilities for service delivery. (c) Administration of Copyright and Related Rights: The administration of copyright was transferred to PACRA under Gazette Notice No. 836 on Statutory Functions, Portfolios and Composition of Government of 18 th November While the measure addresses the fragmentation of intellectual property (IP) administration in the country, it places a burden on the Agency to fight copyright piracy. (d) Other IP Related Mandates: Arising from the review of intellectual property legislation, the Agency also recently acquired the following new mandates which call for investment in ICT infrastructure such as databases: - (i) Protection of Traditional Knowledge, Expressions of Folklore and Genetic Resources pursuant to The Protection of Traditional Knowledge, Genetic Resources and Expression of Folklore Act No. 16 of The Act aims at safeguarding these resources from misappropriation and fostering benefit sharing with affected communities. 6

8 (ii) (iii) (iv) (v) Protection of Lay-Out Designs of Integrated Circuits pursuant to the Layout Design of Integrated Circuits Act No. 6 of Layout designs of integrated circuits are vital components of microchips and therefore critical for the development of the electronics and engineering sectors. Utility Models: Following the repeal and replacement of the Patents Act Cap 400 by the Patents Act No. 40 of 2016, the Agency is now required to register utility models, minor inventions that do not meet the stringent patenting criteria. Geographical Indications: Once the ongoing review of the Trade Marks Act Cap 401 is completed, the Agency will also acquire a new mandate vis-à-vis the protection of Geographical Indications which is intended to provide protection for rural based indigenous products. Protection currently available to trademarks will also be extended to service marks, thereby facilitating the development of the emerging services sector in the country. Cooperatives and Simplified Registration System: Over and above the new mandates, the Agency has recently been required to attend to additional responsibilities including assisting the Department of Cooperatives in developing an automated system for registration of co-operatives. In addition, the Agency spearheaded the development of a Simplified Registration System by the Ministry of Commerce, Trade and Industry aimed at formalizing entities operating under personal names of proprietors, and therefore not covered by existing legislations. The two (2) systems are also being hosted by the Agency. Further, PACRA is poised to take over the registration of cooperatives The new mandates will entail recruitment of additional staff, staff training and investment in ICT infrastructure including development of databases and increased ICT maintenance and operational costs. 3.4 Cost Structure Going by the proposed institutional budget for 2018, the Agency requires K 89 Million to operate effectively. In turn, the Agency broadly has three (3) sources of revenue, namely: - (a) industrial property (IP); 7

9 (b) the Registration of Business Names Act No. 16 of 2011; (d) the Companies Act which has since been split into Corporate Insolvency Act No. 9 of 2017 and the Companies Act No. 10 of 2017; and (e) Since 2017, the Movable Property Security Interest Act No. 3 of The contribution of the three (3) revenue sources, during the last three (3) years, has been as shown in the tabled below: - Revenue Source Total Contrbution Over Average Contribution Over 3 Year % Contributi on 3 Year Period K K K Period 8, 541, , 827, , 745, , 114, , 038, Industrial Property Business 2, 335, 739 5, 846, 409 5, 907, , 089, 861 4, 696, Names Companies 36, 888, , 158, , 738, , 785, , 595, Movable 162, , 280 Property Total 47, 766, , 832, , 553, , 152, , 384, On average, industrial property has contributed slightly over 22%, during the in the last three (3) years while companies and busines names have contributed 69% and 8%, respectively Based on the foregoing, company incorporation would be expected contribute K Million (69 %) of the K 89 Million required by the Agency to effectively serve the public as projected in the 2018 budget It is noteworthy that most, if not all the costs relating to companies and business names, are shared between the two. For instance, the same officers process the applications and the same equipment ( e.g. computers, printers and scanners) is used in both cases. 8

10 3.5 Proposed Fees The fees are to be issued in form of Statutory Instruments(SI) under the respective statutes. Section 374 of the Companies Act and 179 of the Corporate Insolvency Act empower the Minister of Commerce, Trade and Industry to prescribe fees payable in the companies registry. To this end, it is noteworthy that under section 349(2) of the Campanies Act, a document is not deemed to have been lodged unless it is paid for The fees are to be expressed in fee Units. Further to the Fees and Fines Act Cap 45 of the Laws of Zambia, as amended by the Fees and Fines (Amendment) Act No 11 of 2013, one (1) fee Unit is equivalent to K Attached as Annex I are the proposed fees under the Companies Act No. 10 of 2017 while Annex II relates to the Corporate Insolvency Act No. 9 of It will be noted that it is proposed to increase the cost of incorporating a company from the current K 707 and K 750 (plus the fee payable for commissioning one of the documents - thus translating into a total cost of roughly K 800) for a company limited by shares and by guarantee, respectively, to a total of K 925 and K 875 (where lodged electronically), and where lodged manually, K 950 and K 1, 000, respectively, where a company being incorporated with the miminum prescribed minimum capital. The requirement for commissioning has been dispensed with As for annual returns, the proposed increase is from K 166 to K 170 for an ordinary private company (where lodged electronically), and where lodged manually, K Attached as Annexes III and IV is the projected revenue from the proposed fees under the respective statutes based on lodgements in the last 3 years. A total K 62, 868, 620 is projected. Of this amount, it is estimated that K 40 million will be generated from increase in capital. However, increase in capital is unpredicatable as it fluctuates with developments in the economy. It is demand driven. It is critical to note that the revenue to be generated from registrations remains only a third of the projected revenue Legality of the Fees: The legality of the fees has been ascertained by Ministry of Justice. Over and above the general provision refered to under clause 3.5.1, the fees arise from the various lodgements and actions precribed to be perfomed under the two (2) statutes. Nothwistandin that ascertyaionment of the nfees by Ministry of Justice, as indicated, Annexes I and II, also highlight to relevant sections of the respective statutes. 9

11 3.6 Factors Underlying the Proposed Fees While some fees have been adjusted upwards, others have been mantained or reduced. Some of the proposed fees are completely new as they relate to newly introduced features. The following were taken into account in arriving at the fees: - (a) Inflation: The erosion of the purchasing power of the national currency since the fees were last revised four (4) years ago. Related to this is the need for fees to be cost reflective. (b) Nature of Lodgement: The nature and work involved in processing a lodgement. Besides, in adition to being filed, all lodgements now need to be digitised. Further, some lodgements need to be gazetted thus attracting a gazette notice fee currently pegged at K250 per notice. Account has equally been taken of the frequency of a lodgement and whether a fee is one off or recurrent and whether it is mandatory or optional. Thus, one off lodgemets such as the application for incorporation may be slightly higher. (c) Potential Impact: While relief is given to smaller companies, it is, in some cases, compensated for by the larger businesses. Thus, fees applicable to foreign companies and public limited liability companies, which are generally larger and therefore with more capacity to pay, are higher. On the other hand, fees applicable to business rescue are lower, as concerned companies will often be financially distressed. Further, some fees have been reduced to enhance compliance and faciliate access to finance. With the exception of annual returns, all fees are one off payments. (d) Minimum Requirements of Other Regulatory Bodies: For instance, commercial banks and insurance companies have minimum share capital requirements prescribed by the Bank of Zambia and the Pensions and Insurance Authority (PIA), respectively. (e) Promoting On-Line Lodgements: In a quest to promote on-line filings, fees relating to selected on-line lodgements are discounted. 10

12 (f) Company as an Alternative Business Association: The proposed fees also take account of the fact that the Agency offers an alternative form of business formalisation, namely, business name registration, which has a relevatively lower cost. 3.7 Alternatives Considered In arriving at the proposed fees, the Agency considered the following options: - (a) (b) Maintaining the Status Quo: However, as shown under 3.4.2, the Agency would fail to meet its operational costs. Uniform Increament: The possiblility of a uniform upward adjustment was considered but found unfavourable as it would not take into account capacity to pay and unique circumstances of certain companies such as those going into supervision (business rescue). In addition, the Agency would not be able to utilise the price mechanism to encourage on-line filings and promote access to credit as discussed above. 4.0 Conclusion and Recommendation 4.1 While the Agency has eased and reduced the cost of accessing its services, it has assumed most of these costs. Decentralization of services and investment in ICT infrastructure have impacted significantly on operational costs. 4.2 The proposed fees are necessary if the Agency is to continue providing optimal service to the public. 11

13 Annex I The Companies (Fees) Regulations, 2018 A) Companies limited by shares, limited by guarantee and unlimited Companies No 1 2 Fee Name Registration of a company limited by shares and Unlimited Companies: 2.5% of the nominal capital shall be paid as registration fees, but in no case shall the nominal capital be less than: Proposed Fee (K) Current Fee (K) Difference (ZMK) 12 % Increase a) Private Company % b) Public Company 37, , % c) Bureau de Change 1, , % d) Financial Institution 18, , % e) For a Local Bank 3,900, ,900, % f) For a Foreign Bank 19,500, ,500, % g) For an Insurance Broker 19, , % h) For an Insurance Company 37, , % i) For a Re-Insurance 187, , Company 0.00% Company Limited by Guarantee i) Registration of a company limited by guarantee % Relevant Section of Act 12&139 12&139 12&139 12&139 12&139 12&139 12&139 12&139 12&139 12&139 10&12 Rational for Adjustment/Comment No Adjustment No Adjustment No Adjustment No Adjustment No Adjustment No Adjustment No Adjustment No Adjustment No Adjustment In addition to the K750, applicants currently need to commission one of the application documents. As such, the actual cost of registration is around K800. The requirement for commissioning has since been dispensed with. Further, the adjustment has been necessitated

14 No Fee Name Proposed Fee (K) Current Fee (K) Difference (ZMK) % Increase Relevant Section of Act Rational for Adjustment/Comment by the need for cost recovery and inflation. 3 ii) The guaranteed amount of a company limited by guarantee shall not be less than K15,000 The Registration fee for Incorporation of a company filed online shall be 250 fee units less than the prescribed fee under paragraph one and two Registration fee of an increase in capital after the first registration of a company shall be 2.5% of the value of 4 the increase in share capital and in no case shall the nominal capital be less than minimum nominal capital prescribed under paragraph one 5 Certificate a Incorporation % The fee for incorporation will therefore be less by K75 where the application is made electronically. The discounted fee is intended to encouraged online filing in line with international best practice. No adjustment 14 The rationale for the increase is cost recovery and provision for inflation. This is a one off payment which forms part of the total cost of incorporation of K1,

15 No 6 Fee Name Proposed Fee (K) Current Fee (K) Difference (ZMK) b Share Capital Adoption of new Articles of association by companies incorporated under Cap Filing of articles of association i) On Incorporation 1, % Increase % 9.17% ii) After Incorporation % Registration of change of name and issuance of certificate of incorporation Registration of a prospectus pursuant to section Consent to be Director or Secretary (pursuant to section 94) , , % 20.05% 80.72% Relevant Section of Act Rational for Adjustment/Comment 14 The rationale for the increase is cost recovery and provision for inflation. This is a one off payment which forms part of the total cost of incorporation of K1, 000. Besides incorporation, this fee will apply to companies that increase their capital. Further, the administrative cost associated with increase in capital are high. 376 as read with the Fourth Schedule The rationale is cost recovery and provision for inflation. This fee will only apply to companies that were incorporated before 1994 when the Memorandum of Association was applicable. 25 No Adjustment 42 The rationale for the increase is cost recovery and inflation. This fee will only apply to companies that change their name. 214 The rationale for the increase is cost recovery and inflation. This fee will only apply to Public Limited Companies that wish to list on the securities exchange. The administrative cost associated with this application is high. 94 The rationale for the increase is cost recovery and inflation. This forms part of the cost of incorporation of K1,000 14

16 No Fee Name Proposed Fee (K) Current Fee (K) Difference (ZMK) % Increase Relevant Section of Act 13 Rational for Adjustment/Comment 11 Declaration of compliance % 82&100 The rationale for the increase is cost recovery and inflation. This forms part of the cost of incorporation of K1, Alteration of registered particulars of Director or change in Director % 28 The rationale for the increase is cost recovery and inflation. This is only paid where a company changes directors or particulars of directors. 13 Alteration in registered office of company Annual Returns 0.00 a b Annual returns for a Private Company by shares not filed online Annual returns for a Private Company by shares filed online c. Public Company 1, d. Bank % 20.48% 2.41% 20.05% i Private Bank 1, , % ii Public Limited Bank. 2, , e. Insurance Company 0.00% i Private 1, , % 270, 271 & , 271 & , 271 & 272 The rationale for the increase is cost recovery and inflation. This is only paid where a company changes registered address. The rationale for the increase is cost recovery and inflation. The rationale for the increase is cost recovery and inflation. The rationale for the increase is cost recovery and inflation. 270, 271 & 272 Rounding Off 270, 271, 272 & 273 No Adjustment 270, 271 & 272 Rounding Off

17 No Fee Name Proposed Fee (K) Current Fee (K) Difference (ZMK) ii Public 2, , f. Other Financial Institutions g % Increase 0.00% i. Private 1, , % ii. Public 2, , Annual return late filing fee per year Nil 0.00% Relevant Section of Act 270, 271, 272 & 273 No Adjustment 270, 271 & 272 Rounding Off 270, 271, 272 & 273 No Adjustment 270 Rational for Adjustment/Comment Registration of mortgage, debenture or other charge: I% of the borrowed amount but in no case shall the fees be more than 15,000 fee units Registration of particulars of series of debentures where property is charged: I% of the borrowed amount but in no case shall the fees be more than 15,000 fee units Notice of discharge for the release of property from charge Application for name reservation Particulars of variation to a registered charge Notice of entry into possession of a mortgage Notice of entry out of possession of mortgage % 20.48% 20.48% 20.48% 20.48% Cost reduced to lower the cost of borrowing Cost recovery and provision for inflation Cost recovery and provision for inflation Cost recovery and provision for inflation Cost recovery and provision for inflation 16

18 No 22 Fee Name Cerification of copies of any document per page Proposed Fee (K) Current Fee (K) Difference (ZMK) Request for Information Application for name clearance Appeal against rejected name Application to dispense with the word limited Notice of alteration or reduction of share capital Application for Conversion of a company Application for Registrar to act as representative of deregistered company Notice of forfeiture or surrender of shares 1, , , , , , Notice of allotment of shares Notice to Registrar to become or cease to be a guarantor of a company limited by guarantee and declaration of guarantee Registration of amended Articles of Association Notice of transfer of shares % Increase 6.06% 8.43% 8.43% 20.48% 20.05% 8.04% 6.08% 0.10% 20.05% 20.48% 20.48% 0.00% 8.04% Relevant Section of Act 374 & , 348 & & , 49, 50, 51, 52& & Rational for Adjustment/Comment Cost recovery and provision for inflation Cost recovery and provision for inflation Cost recovery and inflation Cost recovery and inflation Cost recovery and inflation Cost recovery and inflation Cost recovery and inflation Cost recovery and inflation Cost recovery and inflation Cost recovery and inflation Cost recovery and inflation 27 No Adjustment 188 Cost recovery and provision for inflation 17

19 No Fee Name Proposed Fee (K) Current Fee (K) Difference (ZMK) 35 Notice transmission of shares Application for Duplicate Certificate Application for de-registration of a company Application for amalgamation of a company Return on distribution on accumulated profits in reduction of paid up share capital Notice of acquisition of fully paid up shares by company Notice of Acquisition of shares on securities Exchange Notice of change of financial year Declaration to provide financial assistance , , Nil % Increase % 80.72% % 20.48% Relevant Section of Act Rational for Adjustment/Comment 190 &191 To encourage compliance and considering that it is mostly involuntary as a result of death of a shareholder Cost recovery and inflation Encourage compliance. This fee includes two (2) gazette notices currently paged at K250 each (total of K500) The administrative cost is higher as it involves a merger of two (2) or more companies. 194 This applies to companies that have accumulated profits and wish to distribute the profits to shareholders in exchange for reduction of paid up capital. 163 This generally applies to companies that have excess cash and wish to buy back shares This applies to companies listed on a securities exchange that wish to buy back shares. Cost recovery and inflation New provision in the Act 18

20 No Fee Name Notice to dispense with holding of AGM Return of declaration of beneficial ownership Notice of changes in particulars in shareholding or beneficial ownership Maximum administrative penalty per day Proposed Fee (K) , Current Fee (K) Difference (ZMK) 48 Any other lodgment Notice of lodgment % Increase 20.48% Relevant Section of Act Rational for Adjustment/Comment This is a new provision in the Act which will only apply to companies that wish to dispense with the holding of an annual general meeting. The is meant to encourage companies to hold AGMs. New provision in the Act New provision in the Act 370 This is a maximum administrative fee that may be charged by the Registrar in line section 375 of the Companies Act. 349 This provides for any other lodgment without a prescribed fee B) Foreign Companies No 1 Fee Name Application for registration as a foreign company Proposed Fee (K) Current Fee (K) Difference (ZMK) 4, , % Increase 0.10% 299 Rounding Off Comment 19

21 No 2 Fee Name Notice of alteration of registered particulars of a foreign company Proposed Fee (K) Current Fee (K) Difference (ZMK) % Increase 8.04% Comment 301&302 This will apply foreign companies that alter their registered particulars. This fee includes change of name which is currently paged at K1, 666. This entails that the fee for change of name has been reduced by K Request for information % 326&348 Cost recovery and inflation 313 To encourage compliance. This Notice of cessation of 4 1, , fee includes a gazette notice fee business of foreign company % currently paged at K Notice of winding up of a foreign company Annual accounts of foreign company Application for name clearance Application by foreign or non- Zambian company to waive or modify provisions of Part X Certification of documents per page Maximum administrative penalty per day 1, , , , , Any other lodgment % 20.05% 20.48% % 311&312 To encourage compliance 306 Cost recovery and provision for inflation. This fee includes a gazette notice fee currently paged at K Cost recovery and inflation 314&315 This applies to a foreign company or body corporate that seeks to be exempted from the provisions of Part 10 of the Companies Act. The administrative cost associated with this application is higher. 349 The administrative cost associated with this application is higher. 370 This is a maximum administrative fee that may be charged by the Registrar in line section 375 of the Companies Act. 349 To deal with new provisions in the Act

22 No Fee Name 12 Notice of lodgment Proposed Fee (K) Current Fee (K) Difference (ZMK) % Increase Comment 21

23 No 1 Annex II The Corporate Insolvency (Fees) Regulations, 2018 Corporate Insolvency (Fees) Regulations Fee Multiplier Fee Name Application for accreditation or renewal of accreditation as an Insolvency Practitioner Fee Unit (K 0.3) Proposed Fee 3, , Current Fee Difference (ZMK) 2 Appointment of Receiver 3,833 1, , % 3 4 Notice of appointment as business rescue administrator Lodgement of certified copy of resolution relating to the appointment or cessation of liquidator 1, ,833 1, , % 5 Notice of cessation as Receiver , , % Notice of change of location and postal address of liquidator Lodgement of statement of company affairs or statutory declaration Notice to dispose of company assets by receiver or liquidator Notice of Resolution to commerce business rescue proceedings Notice of substantial implementation of business rescue plan % % % % Relevant Section of Act & &72 16 & Comment This fee will apply to chartered accountants and lawyers that wish to practice as insolvency practitioners This fee includes a gazette notice fee currently paged at K250 This is a new provision in the Act. The fee is relatively lower to encourage financially distressed companies to pursue business rescue. Cost recovery and inflation. This fee includes a gazette notice fee currently paged at K250 The fee has been reduced to promote business rescue. The fee includes a gazette notice fee currently paged at K250 Cost recovery and inflation Cost recovery and inflation Cost recovery and inflation New provision in the Act 43 New provision in the Act 22

24 11 12 Notice of termination of business rescue proceedings Return of final winding-up meeting and dissolution of a company ,833 1, , % 13 Any other lodgement 1, % 33 & New provision in the Act Cost recovery and provision for inflation. This fee includes a gazette notice fee currently paged at K250 Cost recovery and provision for inflation. These lodgements will generally comprise of reports which are bulky and thus costly to process 23

25 No Annex III PROJECTED REVENUE UNDER THE COMPANIES ACT A) Companies limited by shares, limited by guarantee and unlimited Companies Total Total Proposed Current Differen Total Lodgeme Lodgeme Fee Name Fee (K) Fee (K) ce Lodgemen nt for nt for (ZMK) t for Average Lodgme nts Projected Income 1 Registration of a company limited by shares and Unlimited Companies: 2.5% of the nominal capital shall be paid as registration fees, but in no case shall the nominal capital be less than: - - a) Private Company b) Public Company 37, , c) Bureau de Change 1, , d) Financial Institution 18, , ,102 e) For a Local Bank 3,900,000. 3,900, ,413, ,

26 f) For a Foreign Bank ,500, ,500, g) For an Insurance Broker 19, , h) For an Insurance Company 37, , i) For a Re-Insurance Company 187, Company Limited by Guarantee 3 Registration of a i) company limited by guarantee The guaranteed amount of a company limited by ii) guarantee shall not be less than K15,000 The Registration fee for Incorporation of a company filed online shall be 250 fee units less than the prescribed fee under paragraph one and two 187, ,

27 4 Registration fee of an increase in capital after the first registration of a company shall be 2.5% of the value of the increase in share capital and in no case shall the nominal capital be less than minimum nominal capital prescribed under paragraph one plus K ,245 40,000, Certificate - - a Incorporation ,784 1,467, b Share Capital Adoption of new Articles of association by companies incorporated under Cap , ,132 1,598, , Filing of articles of association i) On Incorporation ii) After Incorporation , Registration of change of name

28 9 10 and issuance of certificate of incorporation Registration of a prospectus pursuant to section Consent to be Director or Secretary (pursuant to section 94) 2, , , , , Declaration of compliance Alteration of registered particulars of Director or change in Director Alteration in registered office of company Annual Returns 0.00 a b Annual returns for a Private Company by shares not filed online Annual returns for a Private Company by shares filed online c. Public Company 1, d. Bank ,102 i Private Bank 1, , ,365, , , , ,182 2,836, , ,

29 14 23, ii Public Limited Bank. 2, , e. Insurance Company i Private 1, , ii Public 2, , f. Other Financial Institutions g i. Private 1, , ii. Public 2, , Annual return late filing fee per year Registration of mortgage, debenture or other charge: I% of the borrowed amount but in no case shall the fees be more than 15,000 fee units Registration of particulars of series of debentures where property is charged:e: I% of the borrowed amount but in no case shall the fees be more than Nil 4, , , , , , , , , , , ,017, ,500.00

30 17 15,000 fee units Notice of discharge for the release of property from charge Application for name reservation Particulars of variation to a registered charge Notice of entry into possession of a mortgage Notice of entry out of possession of mortgage Certification of copies of any document per page , , , , Request for Information ,402 1,746, Application for name clearance ,495 1,214, Appeal against rejected name , Application to dispense with the 1, word limited , Notice of alteration or reduction of share capital , Application for Conversion of a 1, ,

31 29 30 company 5 7, Application for Registrar to act as representative of deregistered company Notice of forfeiture or surrender of shares 4, , , Notice of allotment of shares Notice to Registrar to become or cease to be a guarantor of a company limited by guarantee and declaration of guarantee Registration of amended Articles of Association Notice of transfer of shares Notice transmission of shares Application for Duplicate Certificate Application for de-registration of a company Application for amalgamation of a company Return on distribution on accumulated profits in reduction of paid up share capital , , , , , , , , , , , , , , , Nil

32 40 41 Notice of acquisition of fully paid up shares by company Notice of Acquisition of shares on securities Exchange Notice of change of financial year Declaration to provide financial assistance Notice to dispense with holding of AGM Registration of prospectus 2, , Return of declaration of beneficial ownership Notice of changes in particulars in share holding or beneficial ownership Maximum administrative penalty per day , Any other lodgment Notice of lodgement , , , , , , , , B) Foreign Companies

33 1 2 Application for registration as a foreign company Notice of alteration of registered particulars of a foreign company 4, , Request for information Notice of cessation of business of foreign company Notice of winding up of a foreign company Annual accounts of foreign company 1, , , , , Application for name clearance Application by foreign or non- Zambian company to waive or modify provisions of Part X Certification of documents per page Maximum administrative penalty per day 2, , Any other lodgment Notice of lodgment , , , , , , , , , , Total 62,810,

34 33 00

35 Annex IV PROJECTED REVENUE UNDER THE CORPORATE INSOLVENCY ACT Corporate Insolvency (Fees) Regulations No 1 Fee Name Application for accreditation or renewal of accreditation as an Insolvency Practitioner Proposed Fee (ZMK) 1, Current Fee (ZMK) Difference (ZMK) Total Lodgments for 2015 Total Lodgments for 2016 Total Lodgments for 2017 Average Lodgments Projected Income , Appointment of Receiver 1, , , Notice of appointment as business rescue administrator , Lodgment of certified copy of resolution relating to the appointment or cessation of liquidator 1, , ,

36 5 Notice of cessation as receiver 1, , , Notice of change of location and postal address of liquidator Lodgment of statement of company affairs or statutory declaration Notice to dispose of company assets by receiver or liquidator , Notice of Resolution to commerce business rescue proceedings , Notice of substantial implementation of business rescue plan ,

37 11 Notice of termination of business rescue proceedings , Return of final winding-up meeting and dissolution of a company 1, , Any other lodgment Total ,