What is a company according to the New Act?
Before defining a company, it is important for one to know that for the purposes of the new Act banking institutions are no longer governed by the Companies Act, being specifically excluded in the definition section. Section 4 of the New Act is exclusionary to the following entities:
- Banking institutions
- Building societies
- Micro Finances
- Corporative societies
- Trade unions
For the purposes of the New Act the following are Registrable business entities
(a) a public limited company;
(b) a private limited company;
(c) a company limited by guarantee;
(d) a co-operative company;
(e) a foreign company;
(f) a private business corporation
(g) subject to section 278 (“Voluntary registration of partnership agreements, etc.”), partnerships, syndicates, joint ventures and certain associations of persons.
What Companies should do?
There are immediate compliance requirements under the New Act. A few are dealt with hereunder;
- Re-registration– All existing companies are required to re-register with the Registrar of Companies within a period of 12 months from the date on which the new Companies Act became effective. By re-registration the companies will not be creating new legal entities or entirely removing the company’s existing rights and obligations. The re-registration exercise is an administrative process aimed at establishing a new and updated register of operating companies so as get rid of inactive companies which do not appear on the updated companies register.
- Record of Beneficial Owners -Companies are required to keep and maintain a register of beneficial owners and such information is required to be filed with the Registrar of Companies. A beneficial owner includes, without limitation, an individual who directly or indirectly holds more than twenty percent of the company’s shares or directly or indirectly holds more than twenty percent of the company’s voting rights. The new Companies Act further provides that not more than twenty percent shares in a company may be held by a nominee on behalf of a beneficial owner.
Any failure to comply with the filing requirements is an offence and companies are encouraged to put in place apt measures to ensure they are in full compliance with the requirements.
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